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Wells Fargo Q3 Earnings Beat Estimates on Fee Income Growth, Stock Up
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Key Takeaways
Wells Fargo's Q3 EPS of $1.73 beat estimates, rising from $1.54 a year earlier.
Revenue grew 5.2% to $21.44B, driven by fee income and higher loan balances.
Credit quality improved with provisions down 36% and non-performing assets lower.
Shares of Wells Fargo & Company (WFC - Free Report) gained 4.4% in the post-market trading session today as the company reported third-quarter 2025 adjusted earnings per share of $1.73, which surpassed the Zacks Consensus Estimate of $1.55. In the prior-year quarter, the company reported earnings per share of $1.54.
Results have benefited from an improvement in net interest income (NII), higher non-interest income and lower provisions. Higher loan balances and improved deposits were other positives. However, an increase in expenses acted as a spoilsport.
Results excluded 7 cents per share of severance expense. After including this, net income (GAAP basis) was $5.59 billion, which increased 9.3% from the prior-year quarter.
Wells Fargo’s Revenues Improve, Expenses Rise
Total revenues were $21.44 billion, surpassing the Zacks Consensus Estimate of $21.19 billion. Also, the top line increased 5.2% from the year-ago quarter.
NII was $11.95 billion, up 2.2% year over year. The increase was driven by fixed-rate asset repricing, improved results in the company’s Markets business, and higher investment securities and loan balances, partially offset by deposit mix changes.
The net interest margin (on a taxable-equivalent basis) contracted 6 basis points year over year to 2.61%.
Non-interest income grew 9.3% year over year to $9.49 billion. The increase reflected the absence of $447 million of net losses recorded in the prior-year quarter due to the repositioning of the investment securities portfolio. The current quarter also benefited from higher asset-based fees in Wealth and Investment Management on higher market valuations and an increase in investment banking fees.
Non-interest expenses of $13.85 billion increased 5.9% year over year. The rise was primarily driven by higher severance costs, revenue-related compensation expenses predominantly in Wealth and Investment Management, increased technology and equipment expenses and higher advertising expenses, partially offset by the impact of efficiency initiatives.
Wells Fargo's efficiency ratio of 65% was higher than 64% in the year-ago quarter. An increase in the efficiency ratio indicates a deterioration in profitability.
WFC’s Loan Balance & Deposits Improve
As of Sept. 30, 2025, total average loans were $928.7 billion, which increased 1.3% on a sequential basis. Total average deposits were $1.34 trillion, up marginally on a sequential basis.
Wells Fargo’s Credit Quality Improves
The provision for credit losses was $681 million, down 36% from the prior-year quarter.
Net loan charge-offs were 0.40% of average loans in the reported quarter, down from 0.49% in the year-ago quarter. Non-performing assets fell 6.6% year over year to $7.83 billion.
WFC’s Capital Ratios Decline
As of Sept. 30, 2025, the Tier 1 common equity ratio was 11% under the Standardized Approach, down from 11.3% in the third quarter of 2024.
Wells Fargo’s Profitability Ratios Improve
Return on assets was 1.10%, up from the prior-year quarter’s 1.06%. Return on equity of 12.8% increased from 11.7% a year ago.
WFC’s Share Repurchase Update
In the reported quarter, Wells Fargo repurchased 74.6 million shares, or $6.1 billion of common stock.
Our View on Wells Fargo
WFC’s fee income growth, along with improving loan and deposit balances, is likely to support its top line in the upcoming period. Lower provisions are another positive. However, rising expenses could weigh on profitability.
Wells Fargo & Company Price, Consensus and EPS Surprise
Truist Financial Corporation (TFC - Free Report) is slated to report quarterly results on Oct. 17. The Zacks Consensus Estimate for Truist’s third-quarter earnings has been revised upward over the past seven days. This indicates a 2.1% rise from the prior-year quarter. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
BankUnited, Inc. (BKU - Free Report) is scheduled to report quarterly results on Oct. 22. The Zacks Consensus Estimate for BankUnited’s third-quarter earnings has been unchanged over the past seven days. This implies a 3.7% growth from the prior-year quarter.
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Wells Fargo Q3 Earnings Beat Estimates on Fee Income Growth, Stock Up
Key Takeaways
Shares of Wells Fargo & Company (WFC - Free Report) gained 4.4% in the post-market trading session today as the company reported third-quarter 2025 adjusted earnings per share of $1.73, which surpassed the Zacks Consensus Estimate of $1.55. In the prior-year quarter, the company reported earnings per share of $1.54.
Results have benefited from an improvement in net interest income (NII), higher non-interest income and lower provisions. Higher loan balances and improved deposits were other positives. However, an increase in expenses acted as a spoilsport.
Results excluded 7 cents per share of severance expense. After including this, net income (GAAP basis) was $5.59 billion, which increased 9.3% from the prior-year quarter.
Wells Fargo’s Revenues Improve, Expenses Rise
Total revenues were $21.44 billion, surpassing the Zacks Consensus Estimate of $21.19 billion. Also, the top line increased 5.2% from the year-ago quarter.
NII was $11.95 billion, up 2.2% year over year. The increase was driven by fixed-rate asset repricing, improved results in the company’s Markets business, and higher investment securities and loan balances, partially offset by deposit mix changes.
The net interest margin (on a taxable-equivalent basis) contracted 6 basis points year over year to 2.61%.
Non-interest income grew 9.3% year over year to $9.49 billion. The increase reflected the absence of $447 million of net losses recorded in the prior-year quarter due to the repositioning of the investment securities portfolio. The current quarter also benefited from higher asset-based fees in Wealth and Investment Management on higher market valuations and an increase in investment banking fees.
Non-interest expenses of $13.85 billion increased 5.9% year over year. The rise was primarily driven by higher severance costs, revenue-related compensation expenses predominantly in Wealth and Investment Management, increased technology and equipment expenses and higher advertising expenses, partially offset by the impact of efficiency initiatives.
Wells Fargo's efficiency ratio of 65% was higher than 64% in the year-ago quarter. An increase in the efficiency ratio indicates a deterioration in profitability.
WFC’s Loan Balance & Deposits Improve
As of Sept. 30, 2025, total average loans were $928.7 billion, which increased 1.3% on a sequential basis. Total average deposits were $1.34 trillion, up marginally on a sequential basis.
Wells Fargo’s Credit Quality Improves
The provision for credit losses was $681 million, down 36% from the prior-year quarter.
Net loan charge-offs were 0.40% of average loans in the reported quarter, down from 0.49% in the year-ago quarter. Non-performing assets fell 6.6% year over year to $7.83 billion.
WFC’s Capital Ratios Decline
As of Sept. 30, 2025, the Tier 1 common equity ratio was 11% under the Standardized Approach, down from 11.3% in the third quarter of 2024.
Wells Fargo’s Profitability Ratios Improve
Return on assets was 1.10%, up from the prior-year quarter’s 1.06%. Return on equity of 12.8% increased from 11.7% a year ago.
WFC’s Share Repurchase Update
In the reported quarter, Wells Fargo repurchased 74.6 million shares, or $6.1 billion of common stock.
Our View on Wells Fargo
WFC’s fee income growth, along with improving loan and deposit balances, is likely to support its top line in the upcoming period. Lower provisions are another positive. However, rising expenses could weigh on profitability.
Wells Fargo & Company Price, Consensus and EPS Surprise
Wells Fargo & Company price-consensus-eps-surprise-chart | Wells Fargo & Company Quote
Currently, Wells Fargo carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Release Dates of Other Major Banks
Truist Financial Corporation (TFC - Free Report) is slated to report quarterly results on Oct. 17. The Zacks Consensus Estimate for Truist’s third-quarter earnings has been revised upward over the past seven days. This indicates a 2.1% rise from the prior-year quarter. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
BankUnited, Inc. (BKU - Free Report) is scheduled to report quarterly results on Oct. 22. The Zacks Consensus Estimate for BankUnited’s third-quarter earnings has been unchanged over the past seven days. This implies a 3.7% growth from the prior-year quarter.