01—Abstract
Summary
Summary of the 8-K filed October 13, 2026. Cited figures are marked; the original filing is the authoritative source.
Wells Fargo reported third quarter 2026 net income of $5.95 billiona, or $1.87 per diluted share, versus $5.59 billion and $1.66 a year earlier, a 13% increase in EPS year over year.
Quarter-over-quarter, net income fell 7% and EPS fell 6% from $2.00b, driven by a 3% drop in total revenue to $21.9 billion as noninterest income declined 9% on lower trading, equity and venture gains. Year over year, revenue rose 2% and net interest income grew 5% to $12.5 billion, while noninterest expense fell 1% to $13.7 billion, supported by an 8% reduction in headcount. Return on average tangible common equity improved to 16.3% from 15.2% a year ago, and average loans and deposits each grew 11% year over year.
Credit costs rose modestly. The provision for credit losses increased to $1.03 billionc from $681 million a year earlier, and net charge-offs were $983 million, or 0.38% of average loans, up from 0.34% in the prior quarter. Credit quality metrics improved sequentially, however: nonperforming assets fell $585 million to 0.70% of total loans, driven by lower commercial real estate nonaccrual loans.
Capital moved lower over the quarter. The CET1 ratio under the Standardized Approach declined to 10.0% from 10.3% in the second quarter, largely due to higher interest rates reducing accumulated other comprehensive income, and the company repurchased $2.5 billiond of stock and raised its quarterly dividend to $0.50 per share. All results are preliminary and subject to final review in the Form 10-Q.
Management's commentary emphasized broad-based growth across Wealth and Investment Management (revenue up 12%), Commercial Banking (up 6%), Consumer Banking and Lending (up 5%) and Corporate and Investment Banking (up 3%). Management also guided 2026 net interest income to plus or minus $50 billion, expects 4Q26 net interest income of about $13 billion, and expects 2026 noninterest expense of about $55.7 billion. Results included a $170 million discrete tax benefit, and the year-over-year comparison is aided by the absence of $296 million in severance expense in 3Q25.
02—Key points
Key Highlights
- Diluted EPS of $1.87 rose 13% year over year but fell 6% from the second quarter's $2.00; net income of $5.95 billion was up 6% year over year and down 7% sequentially.
- Total revenue of $21.9 billion was up 2% year over year, with net interest income up 5% to $12.5 billion and noninterest income down 1% to $9.4 billion.
- Noninterest expense fell 1% year over year to $13.7 billion, and efficiency ratio improved to 63% from 65%, with headcount down 8% to 194,369.
- ROTCE rose to 16.3% from 15.2% a year ago, and ROE rose to 13.8% from 12.8%.
- CET1 ratio declined to 10.0% from 10.3% in the prior quarter (and 11.0% a year ago), while the company repurchased $2.5 billion of common stock and raised its quarterly dividend to $0.50.
- Credit provisions rose to $1.03 billion from $681 million year over year, and net charge-offs of 0.38% were up from 0.34% sequentially, though nonperforming assets fell $585 million to 0.70% of loans.
- Average loans and deposits each grew 11% year over year to $1.03 trillion and $1.48 trillion, respectively.
03—Questions
Frequently Asked Questions
Why did Wells Fargo's EPS decline from the prior quarter if it grew strongly year over year?
Sequentially, revenue fell 3% largely because noninterest income dropped 9%, driven by lower trading gains, a sharp decline in equity securities gains from venture capital investments (which were strong in 2Q26), and lower mortgage banking income. Income tax expense also rose to a lower effective rate benefit comparison: 2Q26 had a 17.4% rate versus 16.4% in 3Q26 including a $170 million discrete benefit. Year over year, the comparison benefits from higher net interest income and lower expenses, which is why EPS is up 13%.
Is the capital position weakening, and what does it mean for capital returns?
The CET1 ratio fell to 10.0% from 10.3% in the second quarter and 11.0% a year earlier, mainly because higher interest rates reduced accumulated other comprehensive income. The ratio remains above the 8.5% regulatory minimum plus buffers. Despite this, the company repurchased $2.5 billion of stock in the quarter and increased its dividend to $0.50 per share. Investors should watch whether continued buybacks at this pace keep CET1 near current levels, since the decline partly reflects rate-driven AOCI changes rather than operating weakness.
What is the outlook for net interest income and expenses?
Management expects 2026 net interest income of plus or minus $50 billion, unchanged from prior guidance, and about $13 billion for 4Q26. Noninterest expense for 2026 is expected to be about $55.7 billion, also unchanged. The NII outlook is sensitive to rate levels, the shape of the yield curve, deposit mix and pricing, and loan demand.
Are credit quality trends improving or deteriorating?
The picture is mixed. Net charge-offs rose to $983 million (0.38% of average loans) from $876 million sequentially, with higher commercial real estate and commercial and industrial charge-offs. However, total nonperforming assets declined $585 million to $7.4 billion, or 0.70% of loans, driven by lower CRE nonaccrual loans. The consumer net charge-off rate improved to 0.70%, and credit card net charge-offs fell. The allowance for credit losses for loans rose slightly to $14.5 billion.
Are these results final?
No. The results are preliminary and may differ materially from the final figures in the Form 10-Q for the quarter ended September 30, 2026, due to final review procedures, subsequent events, or newly discovered information. Several capital and liquidity metrics, including the CET1 ratio, TLAC ratio, SLR, and LCR, are explicitly identified as preliminary estimates.
04—Continue