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WELLS FARGO & COMPANY/MN (WFC)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $20.15B and diluted EPS was $1.39; EPS rose 16% YoY, aided by $0.09 discrete tax benefits and a $0.06 gain on a servicing sale, partially offset by a $(0.03) loss from securities repositioning .
  • Versus S&P Global consensus, EPS beat ($1.39 vs $1.22*) while revenue was slightly below ($20.15B vs $20.76B*); the miss was driven by lower net interest income on floating-rate assets and deposit mix effects while fee income grew .
  • Guidance maintained: 2025 net interest income expected to be ~1–3% higher than 2024 and noninterest expense ~$54.2B (unchanged) .
  • Capital return catalysts: repurchased $3.5B in Q1 and announced a new $40B buyback authorization; declared a $0.40 common dividend (payable June 1) .
  • Regulatory progress: termination of the 2018 CFPB compliance consent order; 12 orders closed since 2019, supporting narrative of improved risk and control .

*Values retrieved from S&P Global.

What Went Well and What Went Wrong

  • What Went Well

    • Fee-based revenue breadth: investment banking fees +24% YoY; advisory/brokerage +7% YoY; Markets revenue up 22% QoQ with strong customer activity .
    • Expense discipline: noninterest expense down 3% YoY, with lower operating losses and FDIC assessments; efficiency ratio stable at 69% .
    • Credit normalization: net loan charge-offs fell to 0.45% of average loans (annualized), with commercial charge-offs down to 0.16% and office CRE losses easing vs Q4 .
    • Management quote: “We produced solid results… fee-based revenue growth… continued expense discipline, improved credit results” — CEO Charlie Scharf .

  • What Went Wrong

    • Net interest income (NII) pressure: NII down 6% YoY and 3% QoQ, reflecting lower rates on floating assets, deposit mix/pricing shifts, lower loan balances, and fewer days .
    • Consumer lending softness: Auto revenue down 21% YoY and 10% QoQ on lower loan balances and spread compression; Personal Lending down 10% YoY on lower balances .
    • Mixed venture results: “All other” noninterest income down QoQ due to lower venture capital results; equity securities posted losses .
    • Analyst concerns: NII trajectory skewing to low-end of the guide amid rate volatility and uncertain loan growth cadence (CFO commentary) .

Financial Results

MetricQ1 2024Q4 2024Q1 2025
Total Revenue ($USD Billions)$20.86 $20.38 $20.15
Net Interest Income ($USD Billions)$12.23 $11.84 $11.50
Noninterest Income ($USD Billions)$8.64 $8.54 $8.65
Diluted EPS ($USD)$1.20 $1.43 $1.39
Margins & ReturnsQ1 2024Q4 2024Q1 2025
Net Interest Margin (tax-equivalent)2.81% 2.70% 2.67%
Efficiency Ratio69% 68% 69%
ROE10.5% 11.7% 11.5%
ROTCE12.3% 13.9% 13.6%
Credit & Balance SheetQ1 2024Q4 2024Q1 2025
Net Loan Charge-offs ($USD Millions)$1,149 $1,211 $1,009
NCO Ratio (annualized)0.50% 0.53% 0.45%
Allowance for Credit Losses for Loans ($USD Billions)$14.86 $14.64 $14.55
Nonperforming Assets ($USD Billions)$8.24 $7.94 $8.23
CET1 Ratio (Standardized)11.2% 11.1% 11.1%
Average Loans ($USD Billions)$928.1 $906.4 $908.2
Average Deposits ($USD Billions)$1,341.6 $1,353.8 $1,339.3
Segment Revenue ($USD Millions)Q1 2024Q4 2024Q1 2025
Consumer Banking & Lending$9,091 $8,980 $8,913
Commercial Banking$3,152 $3,171 $2,925
Corporate & Investment Banking$4,982 $4,613 $5,064
Wealth & Investment Management$3,742 $3,958 $3,874
Corporate$323 $104 $(177)
Segment Net Income ($USD Millions)Q1 2024Q4 2024Q1 2025
Consumer Banking & Lending$1,706 $1,602 $1,689
Commercial Banking$986 $1,203 $794
Corporate & Investment Banking$1,981 $1,580 $1,941
Wealth & Investment Management$381 $508 $392
Corporate$(435) $186 $78
KPIsQ1 2024Q4 2024Q1 2025
Debit Card Purchase Volume ($USD Billions)$121.5 $131.0 $126.0
Credit Card Purchase Volume ($USD Billions)$39.1 $45.1 $42.5
Mortgage Originations ($USD Billions)$3.5 $5.9 $4.4
Net Gains from Trading Activities ($USD Millions)$1,454 $950 $1,373

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Interest Income (YoY vs 2024)FY 2025~+1% to +3% ~+1% to +3% Maintained
Noninterest ExpenseFY 2025~$54.2B ~$54.2B Maintained
Common Stock DividendQ2 2025$0.40/share declared Q1 $0.40/share payable Jun 1 Maintained
Share RepurchasesOngoingActive program New $40B authorization (post current) Raised capacity

Management noted NII likely tracking to the low-end of the range given recent rate and loan-growth dynamics (volatility acknowledged) .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
NII trajectory and rate sensitivity“Close to trough,” deposit mix stabilization; asset-sensitive but moderating FY25 NII +1–3%; flattish H1, ramp H2 Low-end of range more likely amid rate volatility; flattish H1, more growth H2 Cautious near-term, improving H2
Regulatory/legal progressOCC formal agreement context; asset cap process explained Risk & control prioritization; efficiency vs investment balance 5 consent orders closed in Q1; CFPB 2018 order termination; confidence in closing remaining Positive momentum
Fee-business build (IB/Markets/Wealth)Markets +6% YoY; hires in CIB; Wealth fees up Diversified fee growth; venture gains H2 IB fees +24% YoY; Markets +22% QoQ; asset-based fees strong Strengthening
Consumer lending (Card/Auto/Home)Card spend up; auto balances still declining Card profitability maturing; auto troughing; home lending streamlining Card revenue +2% YoY; auto revenue -21% YoY; mortgage originations +26% YoY Mixed: Card up, Auto soft
Macro/tariffs & customer sentimentLoan demand cautious; early signs of deposit repricing Business-friendly policy view; balanced investments Expect volatility; prepared for slower 2025; customers resilient; watch tariffs Volatile but resilient

Management Commentary

  • “We produced solid results… fee-based revenue growth across many of our core businesses, continued expense discipline, improved credit results, and an 8% reduction in diluted common shares” — CEO Charlie Scharf .
  • “We still expect 2025 net interest income will be approximately 1% to 3% higher than in 2024… currently expect full-year NII to be in the low end of the range” — CFO Mike Santomassimo .
  • “Five consent orders were closed this past quarter and eleven have been closed since 2019… confident that we will complete the work needed to close our other open consent orders” — CEO Charlie Scharf .
  • “Capital position remains strong, with our CET1 ratio stable at 11.1%… repurchased $3.5B of common stock in the first quarter” — CFO Mike Santomassimo .

Q&A Highlights

  • NII sensitivities: CFO emphasized puts/takes across rates, deposits, loan growth; guided to low-end of the range given volatility, with potential upside/downside as conditions evolve .
  • Reserves and scenarios: Reserve release muted by conservative downside weighting (unemployment to ~5.8% in scenarios) and qualitative overlays; CRE office remains the key stress area .
  • Commercial loan growth: Modest QoQ growth driven mainly by utilization increases (mid-corporate and asset-based lending) rather than tariff pre-positioning .
  • Markets and IB outlook: Trading strong and consistent; IB led by DCM; ECM contingent on volatility abating; continued disciplined talent investment .
  • Capital return: Ample excess capital; buybacks paced by client opportunities and risk assessment; capacity to continue repurchases .
  • Asset cap: Immediate impact areas post-removal would be wholesale deposits and markets financing capacity; otherwise linear, controlled growth approach .

Estimates Context

MetricS&P ConsensusActual
Diluted EPS ($USD)$1.22*$1.39
Total Revenue ($USD Billions)$20.76*$20.15

*Values retrieved from S&P Global.

Implications: EPS beat reflects discrete tax benefits ($0.09) and gain on servicing sale ($0.06), partially offset by securities losses ($0.03) . Revenue softness versus consensus came from NII headwinds (floating assets rates, deposit mix/pricing, lower loans), while noninterest income was stable to slightly up .

Key Takeaways for Investors

  • EPS beat vs consensus driven by discrete tax and transaction gains; core revenue slightly below expectations as NII headwinds persist amid rate/mix dynamics .
  • Fee engines (IB, Markets, WIM) continue to offset NII pressure; Markets and DCM activity were notable QoQ positives .
  • Expense trajectory controlled; efficiency ratio stable; full-year opex guide reaffirmed at ~$54.2B despite seasonal Q1 personnel costs .
  • Credit normalization ongoing with improved commercial charge-offs; CRE office remains the key area to monitor; allowance coverage steady .
  • Capital return remains a central part of the story with $3.5B Q1 buybacks and a new $40B authorization; dividend maintained at $0.40/share .
  • Regulatory de-risking advances (CFPB 2018 order terminated); management confidence rising on risk/control progress, a potential long-term multiple catalyst .
  • Near-term trading lens: expect NII near low end of guide if rates stay volatile; fee momentum and disciplined buybacks are likely to support the stock’s narrative pending macro clarity .