Wells Fargo & Company WFC reported second-quarter 2026 adjusted earnings per share of $1.96, which surpassed the Zacks Consensus Estimate of $1.73. In the prior-year quarter, the company reported earnings per share of $1.54.

Shares of the company rose nearly 1.5% in the early trading session. A full day’s trading session will depict a clearer picture.

Results 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, increased non-interest expenses remained a headwind.

Results included 4 cents per share of discrete tax benefits related to the resolution of prior-period matters. After considering this, net income (GAAP basis) was $6.41 billion, representing a 16.6% increase from the prior-year quarter.

Wells Fargo’s Revenues Improve, Expenses Rise

Total revenues were $22.62 billion, surpassing the Zacks Consensus Estimate of $21.80 billion. Also, the top line increased 8.6% from the year-ago quarter.

NII was $12.32 billion, up 5.2% year over year. The increase was driven by lower deposit costs, higher loan and investment securities balances, balance sheet growth in the Markets business and higher interest-bearing commercial deposits, partially offset by the impact of lower interest rates on floating-rate assets and a modest decline in noninterest-bearing deposits.

The net interest margin (on a taxable-equivalent basis) contracted 25 basis points year over year to 2.43%.

Non-interest income grew 13.1% year over year to $10.31 billion. The increase was driven by strong performance from venture capital investments, higher investment advisory fees on improved market valuations, higher investment banking fees and increases in most other fee categories, partially offset by lower lease income related to the sale of the railcar leasing business.

Non-interest expenses of $13.66 billion increased 2.1% year over year. The increase was due to higher revenue-related and incentive compensation, increased technology and equipment expense and higher advertising expense, partly offset by lower lease expense and continued efficiency initiatives, including a 7% reduction in headcount.

Wells Fargo's efficiency ratio of 60% was lower than 64% in the year-ago quarter. A decline in the efficiency ratio indicates improvement in profitability.

WFC’s Loan Balance & Deposits Improve

As of June 30, 2026, total average loans were $1.03 trillion, which increased 3.1% on a sequential basis. Total average deposits were $1.47 trillion, up 3.6% on a sequential basis.

Wells Fargo’s Credit Quality Improves

The provision for credit losses was $914 million, down 9.1% from the year-ago quarter.

Net loan charge-offs were 0.34% of average loans in the reported quarter, down from 0.44% in the year-ago quarter. Non-performing assets declined marginally year over year to $7.94 billion.

WFC’s Capital Ratios Decline

As of June 30, 2026, the Common Equity Tier 1 ratio under the Standardized Approach was 10.3%, down from 11.1% in the prior-year quarter.

Wells Fargo’s Profitability Ratios Improve

Return on assets was 1.15% compared with 1.14% in the prior-year quarter. Return on equity was 15.0%, up from 12.8% a year ago.

WFC’s Share Repurchase Update

During the reported quarter, Wells Fargo repurchased 37.4 million shares, or $3 billion, of common stock.

Our View on Wells Fargo

WFC’s higher NII, strong fee income growth and improving loan and deposit balances continue to support revenue growth. Broad-based strength across Consumer Banking, Commercial Banking, Corporate & Investment Banking and Wealth & Investment Management is encouraging. Nevertheless, higher expenses remain a key concern.

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 Dates & Expectations of Other Banks

M&T Bank MTB is slated to report second-quarter 2026 numbers on July 15.

Over the past week, the Zacks Consensus Estimate for M&T Bank’s quarterly earnings has remained unchanged at $4.66 per share. This indicates an 8.9% rise from the prior-year quarter’s reported figure.

U.S. Bancorp USB is scheduled to release second-quarter 2026 earnings on July 16.

The Zacks Consensus Estimate for U.S. Bancorp’s quarterly earnings has been revised upward to $1.28 per share over the past seven days. This indicates a 15.3% rise from the prior-year quarter’s actual.

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