Wells Fargo stock: Q3 beat meets higher NII and cautious outlook

Wells Fargo & Company posted a third-quarter 2026 earnings beat, with net interest income and lower operating expenses supporting profitability despite weaker fee income. The figures were reviewed in a Zacks Equity Research analysis published on Yahoo Finance on Thursday, November 12.

Earnings per share came in at 1.87 US dollars for the quarter ended September 30, above the 1.85-dollar consensus and the 1.73 dollars reported in the year-earlier period. Net income increased 6.5 percent to 5.95 billion US dollars. Revenue rose 2 percent to 21.87 billion US dollars but missed the 22.15-billion-dollar consensus.

Net interest income leads results

Net interest income advanced 4.7 percent year over year to 12.52 billion US dollars. The increase reflected higher loan and investment securities balances, fixed-rate asset repricing and growth in the Markets business. Higher deposit costs and lower rates on floating-rate assets limited the benefit.

The net interest margin on a taxable-equivalent basis narrowed 18 basis points from the prior year to 2.43 percent. Non-interest income declined 1.4 percent to 9.35 billion US dollars, as lower trading gains, mortgage banking income, equity investment gains and lease income outweighed stronger advisory, deposit-related and investment banking fees.

Non-interest expenses fell nearly 1 percent to 13.74 billion US dollars. Efficiency initiatives, including an 8 percent reduction in headcount, helped reduce the efficiency ratio to 63 percent from 65 percent a year earlier. Revenue-related compensation and technology spending partly offset the savings.

Loan growth meets credit caution

Average loans reached 1.03 trillion US dollars as of September 30, an increase of nearly 1 percent from the previous quarter. Average deposits rose 1.2 percent sequentially to 1.48 trillion US dollars. The provision for credit losses increased 51.1 percent year over year to 1.03 billion US dollars, reflecting higher allowances for commercial and industrial loans and auto loans.

Credit indicators were mixed. Net loan charge-offs fell to 0.38 percent of average loans from 0.40 percent in the year-earlier quarter, while non-performing assets declined 6 percent to 7.36 billion US dollars. The standardized Common Equity Tier 1 ratio, however, decreased to 10.0 percent from 11.0 percent.

Management maintains 2026 targets

Wells Fargo expects fourth-quarter net interest margin to remain flat from the third quarter and projects net interest income of 13 billion US dollars. Management expects loan growth to exceed the previously projected mid-single-digit increase, supported by commercial, auto and credit card lending.

For full-year 2026, the bank continues to target net interest income of 50 billion US dollars. Net interest income excluding Markets is expected at 48 billion US dollars, while Markets net interest income is now projected at 1.8 billion US dollars rather than 2 billion US dollars. The shortfall is expected to be offset by stronger net interest income outside Markets. Non-interest expenses are projected at 55.7 billion US dollars.

Wells Fargo & Company stock traded at 77.49 euros on Lang & Schwarz at 1:59:53 p.m. CET on Friday, November 13.

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