Wells Fargo & Co. (NYSE:WFC) reported third-quarter 2026 earnings above Wall Street expectations on Tuesday, supported by higher lending volumes, increased deposits and improved operating efficiency, although revenue fell short of analyst forecasts.
The US banking group posted net income of $6.0 billion, equivalent to $1.87 per diluted share, exceeding the consensus earnings estimate of $1.84 per share.
Revenue increased 2% year on year to $21.87 billion, compared with $21.44 billion in the third quarter of 2025, but missed analysts’ expectations of $22.31 billion.
Net interest income rose 5% to $12.52 billion, slightly below the market forecast of $12.59 billion.
Wells Fargo shares declined 1.1% in pre-market trading following the announcement.
Wells Fargo reported diluted earnings per share of $1.87 for the third quarter, representing an increase of 13% from $1.66 in the corresponding period last year.
The result exceeded analysts’ expectations by $0.03 per share.
Net income reached $6.0 billion, reflecting growth across several of the bank’s operating divisions and improvements in its cost structure.
Despite the earnings beat, quarterly revenue of $21.87 billion was approximately $440 million below the consensus estimate.
The figures indicate that Wells Fargo achieved higher profitability despite revenue growth falling short of market expectations.
Chairman and Chief Executive Officer Charlie Scharf highlighted the improvement in financial performance.
“Our third quarter results reflect broad-based growth, higher earnings, and stronger returns,” Scharf said.
“Diluted earnings per share increased to $1.87 in the third quarter, up 13% from a year ago.”
Wells Fargo generated net interest income of $12.52 billion during the quarter, an increase of 5% compared with the previous year.
However, the result was slightly below the analyst consensus estimate of $12.59 billion.
Net interest income represents the difference between interest earned on assets such as loans and securities and the interest paid on deposits and other funding sources.
It remains an important component of revenue for traditional banking businesses.
The annual increase was accompanied by growth in both average loans and deposits.
Average loans rose 11% year on year to $1.03 trillion, while average deposits increased 11% to $1.48 trillion.
The expansion of the loan portfolio contributed to the bank’s interest-earning asset base, while deposit growth supported its funding position.
The company did not provide a detailed breakdown of the factors behind the net interest income shortfall relative to expectations in the supplied announcement.
Wells Fargo reported broad growth in its balance sheet during the third quarter.
Average loans reached $1.03 trillion, an increase of 11% from the same period in 2025.
Average deposits also advanced 11%, reaching $1.48 trillion.
Higher loan balances can support interest income, although they may also increase exposure to credit risk and require additional provisions for potential losses.
Deposit growth provides funding for lending and other banking activities, with profitability depending partly on the cost of those deposits.
The increases in both measures indicate that Wells Fargo expanded its core banking operations during the quarter.
However, the bank also recorded higher provisions for credit losses, partly reflecting the growth of its loan portfolio.
Wells Fargo reported revenue increases across several major business segments.
Wealth and Investment Management recorded the strongest percentage growth, with revenue rising 12% year on year.
Commercial Banking revenue increased 6%, while Consumer Banking and Lending generated growth of 5%.
Corporate and Investment Banking revenue advanced 3% compared with the previous year.
Within that division, investment banking fees increased 10%, supported by stronger activity in advisory and capital markets services.
Equities revenue grew 21%, reflecting improved performance in the bank’s equity-related markets operations.
The increases across these businesses contributed to the overall 2% rise in group revenue, although the consolidated figure remained below analyst expectations.
Wells Fargo reported an improvement in operating efficiency during the third quarter.
The bank’s efficiency ratio declined to 63%, compared with 65% in the same period last year.
A lower efficiency ratio indicates that a smaller proportion of revenue is being used to cover operating expenses.
Noninterest expenses decreased 1% year on year to $13.74 billion.
The reduction came despite a 15% increase in revenue-related expenses, suggesting that lower spending in other areas helped offset costs associated with business activity.
The improvement in the efficiency ratio contributed to stronger earnings and profitability.
Return on average tangible common equity increased to 16.3%, compared with 15.2% a year earlier.
This measure assesses profitability relative to tangible common shareholders’ equity and is commonly used to evaluate returns generated by banking institutions.
Wells Fargo recorded a provision for credit losses of $1.03 billion during the third quarter, compared with $681 million in the corresponding period of 2025.
The increase was primarily attributed to higher allowances for commercial and industrial loans and automotive lending.
The bank said the additional provisions were driven partly by growth in its loan portfolio.
Credit loss provisions represent amounts recognised to account for expected losses on loans and other credit exposures.
They can increase as lending expands or when a bank adjusts its expectations regarding borrowers’ ability to repay.
Wells Fargo also reported net charge-offs of $983 million.
This represented an annualised rate of 0.38% of average total loans.
Net charge-offs measure loans written off as uncollectible after accounting for recoveries.
The figures highlight the importance of credit performance as Wells Fargo continues to expand its lending activities.
Wells Fargo reported a Common Equity Tier 1 (CET1) capital ratio of 10.0% at the end of the third quarter.
This compared with 11.0% in the same period last year, representing a decline of one percentage point.
The CET1 ratio measures a bank’s highest-quality regulatory capital relative to its risk-weighted assets.
It is an important indicator of a financial institution’s ability to absorb losses while maintaining regulatory capital requirements.
Although the ratio declined year on year, the supplied announcement did not provide a detailed explanation of the factors behind the change.
The bank’s capital position will remain relevant as it balances lending growth, shareholder returns and regulatory requirements.
Wells Fargo’s third-quarter results showed improved profitability, supported by higher lending volumes, deposit growth and lower operating expenses.
Earnings per share increased 13% to $1.87, exceeding market expectations, while return on average tangible common equity improved to 16.3%.
Revenue rose 2% to $21.87 billion but fell short of the $22.31 billion consensus forecast.
Net interest income also missed expectations despite increasing 5% year on year.
Meanwhile, higher credit loss provisions and a decline in the CET1 capital ratio provided additional factors for investors to assess.
The bank’s future performance will depend partly on continued loan and deposit growth, operating cost management, credit quality and interest rate conditions.
Although Wells Fargo delivered stronger earnings, the weaker-than-expected revenue performance contributed to a 1.1% decline in its shares during pre-market trading.
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