Wells Fargo third-quarter net income rises to $6.0 billion; Shares drop -3% pre-market

Wells Fargo & Company (WFC) reported third-quarter 2026 net income of $6.0 billion, or $1.87 per diluted share, up from $1.66 a year earlier, the company said in a news release furnished with a regulatory filing on Oct. 13.

Revenue rose 2% to $21.9 billion, with higher net interest income offsetting lower noninterest income.

Here's how the company did:

• Diluted earnings per share: $1.87 vs. $1.66 a year earlier
• Revenue: $21.87 billion vs. $21.44 billion a year earlier
• Net income: $5.95 billion vs. $5.59 billion a year earlier

Diluted average common shares fell 5% to 3,051.5 million from 3,223.5 million a year earlier.

Net interest income rose 5% to $12.5 billion. The company cited higher loan and investment securities balances, balance sheet growth in its Markets business and fixed rate asset repricing. Those gains were partly offset by lower rates on floating rate assets and higher deposit costs. The net interest margin was 2.43%, down from 2.61%.

Noninterest income fell 1% to $9.4 billion. Higher investment advisory fees, deposit-related fees, investment banking fees and card fees were more than offset by lower trading gains, lower lease income after the first-quarter sale of its rail car leasing business, and lower venture capital equity gains.

Noninterest expense fell 1% to $13.7 billion. The filing attributes the decline to efficiency initiatives, including an 8% reduction in headcount, and lower severance expense, partly offset by higher revenue-related compensation.

Chairman and Chief Executive Officer Charlie Scharf said, "Our third quarter results reflect broad-based growth, higher earnings, and stronger returns."

Business segments

Consumer Banking and Lending revenue rose 5% to $10.7 billion, and net income rose 21% to $2.8 billion.

Wealth and Investment Management revenue rose 12% to $4.1 billion, and net income rose 19% to $603 million.

Commercial Banking revenue rose 6% to $3.2 billion, and net income rose 3% to $1.2 billion.

Corporate and Investment Banking revenue rose 3% to $5.0 billion, but net income fell 2% to $1.9 billion. Markets revenue was $1.8 billion, down 1%, with equities revenue up 21%.

Corporate posted a net loss of $526 million, compared with a loss of $315 million a year earlier. Lower net interest income, lower venture capital results and lower lease income drove the revenue decline.

Credit quality

The provision for credit losses was $1.0 billion, up from $681 million a year earlier. Net loan charge-offs were $983 million, or 0.38% of average loans on an annualized basis, compared with $942 million.

Nonperforming assets were $7.4 billion, or 0.70% of total loans, and the filing shows them down $585 million from the second quarter. The allowance for credit losses for loans was $14.5 billion, or 1.38% of total loans.

Capital and shareholder returns

The company repurchased 28.6 million shares, or $2.5 billion, of common stock in the quarter. Its common stock dividend increased to $0.50 per share from $0.45 in the second quarter.

The Common Equity Tier 1 ratio was 10.0%, down from 11.0% a year earlier, and the company said the figure is preliminary. A decrease in accumulated other comprehensive income, driven by higher interest rates, reduced the ratio 38 basis points from the second quarter.

Return on average tangible common equity was 16.3%, up from 15.2%, and the efficiency ratio was 63%, against 65% a year earlier. Headcount was 194,369 at quarter end, down from 210,821 a year earlier. The effective tax rate was 16.4%, including $170 million of discrete tax benefits related to the resolution of prior period matters.

Outlook

The company expects 2026 net interest income of plus or minus $50 billion, unchanged from prior guidance, and about $13 billion in fourth-quarter 2026 net interest income. For 2026 noninterest expense, it expects about $55.7 billion, also unchanged from prior guidance.

Scharf said, "While economic uncertainty exists and consumer sentiment remains mixed, our data shows that our consumer and business customers are doing well."

The company said the results are preliminary, and final figures in its Quarterly Report on Form 10-Q for the quarter ended Sept. 30, 2026 may differ materially.

Shares were down 3.08% to $80.73 during pre-market trading on Tuesday