Sign in
WF

WELLS FARGO & COMPANY/MN (WFC)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 was a solid beat versus consensus: revenue of $21.436B (+5% YoY, +3% QoQ) and diluted EPS of $1.66; consensus EPS was ~$1.54 and revenue ~$21.16B, implying an EPS beat of ~$0.12 and a revenue beat of ~$0.27B. Bold beats were driven by fee growth (IB/trading, WIM), while NII rose modestly *.
  • Management raised full‑year 2025 noninterest expense guidance to ~$54.6B (from ~$54.2B) due to ~$200M higher severance and ~$200M higher revenue‑related comp; Q4 noninterest expense guided to ~$13.5B. Full‑year NII remains guided roughly in line with 2024’s $47.7B; Q4 NII ~$12.4–$12.5B .
  • Capital returns accelerated: $6.1B gross buybacks in Q3 (74.6M shares), dividend raised to $0.45 per share, and Q4 buybacks expected “roughly in line” with Q3. CET1 stood at 11.0%, with medium‑term plans to manage CET1 down to ~10–10.5% and target ROTCE of 17–18% .
  • Key catalysts: the new 17–18% ROTCE target, continued fee momentum in IB/Markets/WIM, balance sheet growth post asset cap removal, and ongoing capital optimization (buybacks/dividend) .

What Went Well and What Went Wrong

What Went Well

  • Broad‑based fee growth: Noninterest income rose 9% YoY (+$810M), led by investment advisory and brokerage (+$202M), investment banking fees (+$168M), and card fees (+$127M) .
  • Credit trends improved: Net loan charge‑off ratio fell to 0.40% (from 0.49% YoY and 0.44% QoQ), with consumer NCO rate down to 0.73% and nonperforming assets down 2% QoQ .
  • Strategic momentum: CEO emphasized the path to higher returns post asset cap removal, setting a medium‑term ROTCE target of 17–18% while maintaining risk discipline; WIM and IB showed strong revenue growth YoY .

What Went Wrong

  • Efficiency ratio deteriorated: Efficiency ratio rose to 65 (vs. 64 YoY/QoQ), reflecting higher severance ($296M) and revenue‑related compensation .
  • NIM compressed: Net interest margin declined to 2.61% (from 2.68% QoQ), largely due to growth in lower‑yielding Markets trading assets .
  • Commercial Banking headwinds: Segment revenue fell 9% YoY on lower NII from rates and lower balances (partially due to transfer of certain business customers to CBL), despite higher noninterest income .

Financial Results

Core P&L vs Prior Periods and Estimates

MetricQ3 2024Q2 2025Q3 2025Q3 2025 ConsensusNotes
Total Revenue ($USD Billions)$20.366 $20.822 $21.436 $21.164*Actual beat est. by ~$0.272B
Net Interest Income ($USD Billions)$11.690 $11.708 $11.950 —+2% QoQ; +2% YoY
Noninterest Income ($USD Billions)$8.676 $9.114 $9.486 —+4% QoQ; +9% YoY
Diluted EPS ($)$1.42 $1.60 $1.66 $1.540*Actual beat est. by ~$0.12
Efficiency Ratio (%)64 64 65 —Higher due to severance, comp
Net Loan Charge‑offs ($USD Billions)$1.111 $0.997 $0.942 —Down QoQ/YoY

Estimates disclaimer: Values retrieved from S&P Global.*

Segment Revenue and Net Income (Q3 2025)

SegmentRevenue ($USD Billions)Net Income ($USD Billions)
Consumer Banking & Lending (CBL)$9.650 $2.185
Commercial Banking (CB)$3.041 $1.162
Corporate & Investment Banking (CIB)$4.879 $1.966
Wealth & Investment Management (WIM)$4.196 $0.591
Corporate$0.176 ($0.315)

KPIs

KPIQ3 2024Q2 2025Q3 2025
ROE (%)11.7 12.8 12.8
ROTCE (%)13.9 15.2 15.2
NIM (TE, %)2.67 2.68 2.61
CET1 Ratio (%)11.3 11.1 11.0
LCR (%)127 121 121
TLAC Ratio (%)25.3 24.4 24.6
Avg Deposit Cost (%)1.91 1.52 1.54
Net Loan Charge‑off Ratio (%)0.49 0.44 0.40

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Interest IncomeFY 2025Roughly in line with 2024 ($47.7B) Unchanged: roughly in line with 2024 ($47.7B) Maintained
Net Interest IncomeQ4 2025—~$12.4–$12.5B New detail
Noninterest ExpenseFY 2025~$54.2B ~$54.6B (↑ due to ~$200M severance, ~$200M revenue‑related comp) Raised
Noninterest ExpenseQ4 2025—~$13.5B New detail
Share RepurchasesQ4 2025—“Roughly in line” with Q3 ($6.1B gross) New color
CET1 Operating TargetMedium‑termAt/above ~11% in recent qtrs Manage down to ~10–10.5% Lower targeted operating level
ROTCE TargetMedium‑term15% prior medium‑term aspiration 17–18% Raised
DividendCurrent$0.40 (Q2) $0.45 per share (Q3; next payable Dec 1, 2025) Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025, Q2 2025)Current Period (Q3 2025)Trend
Asset cap removal & growthExpect balance sheet/funding flexibility; cautious pacing; fee diversification emphasized Using capacity to grow trading‑related assets, loans; accelerate deposits/credit card; scale CIB; ROTCE target raised Positive momentum
Capital returns & CET1CET1 11.1%; dividend hike planned; buybacks ongoing; SCB expected to decline CET1 11.0%; $6.1B buybacks; dividend $0.45; Q4 buybacks “roughly in line”; manage CET1 to 10–10.5% medium‑term Continued optimization
NII and NIM outlookNII flattish 1H; ramp 2H; markets NII offset in fees; NIM pressured by trading assets Full‑year NII ~2024; Q4 NII ~$12.4–$12.5B; NIM down 7 bps QoQ on growth in lower‑yielding Markets assets Mixed: NII stable, NIM lower
Efficiency & expensesSignificant efficiency agenda; ability to self‑fund investments; headcount declines FY expense raised to $54.6B due to severance/comp; continued efficiency focus (third‑party, real estate, automation) Near‑term higher, structural improvement
Credit quality & CREOffice stress stabilizing; cautious but within expectations NCO ratio down; CRE office ACL down to 7.5%; nonaccrual CRE down; expect lumpy but within expectations Improving/stable
AI/technology initiativesEarly pilots; automation potential; improved digital engagement Ongoing automation/AI to aid efficiency; WIM advisor productivity tools; branch refurb/digital growth Building gradually
Macro/tariffsClients cautious; wait‑and‑see on trade; deposit flows stable Similar tone; deposit betas: commercial high, consumer lower amid easing Cautious but resilient

Management Commentary

  • “We are now targeting a 17–18% ROTCE; managing our CET1 ratio down to 10–10.5%... We believe we have additional opportunities to improve our returns.” — CEO, slide deck .
  • “Fourth quarter net interest income is expected to grow from the third quarter to approximately $12.4–$12.5 billion.” — CFO .
  • “We repurchased $6.1 billion of common stock in the third quarter… we currently expect fourth quarter repurchases to be roughly in line.” — CFO .
  • “Net loan charge‑offs declined… Office valuations continue to stabilize… although we expect additional losses which could be lumpy, they should be well within our expectations.” — CFO .
  • “We have simplified and refined our business mix… invested in higher returning businesses—Credit Card, Wealth Management, CIB.” — CEO, slides .

Q&A Highlights

  • ROTCE timeline: Medium‑term 17–18% target; depends on macro/regulatory; not “next year,” but not an “extended period” either .
  • NII ramp drivers: Q4 uplift from Markets NII, loan growth (C&I, card, auto), fixed asset repricing; markets NII often offset by fee revenue .
  • Capital/buybacks: Flexibility to return capital while funding organic growth; Q4 buybacks roughly in line with Q3; managing CET1 toward 10–10.5% pending regulatory clarity .
  • NDFI exposure: Focused on large PE capital call facilities; granular underwriting of middle‑market loans; diversified exposure across asset classes; capital framework monitored .
  • Deposit betas: Commercial betas remain high in easing cycle; consumer betas lower; pricing competition not meaningfully rising .

Estimates Context

  • Versus Wall Street consensus (S&P Global): Q3 2025 diluted EPS of $1.66 vs Primary EPS consensus ~$1.54 (beat by ~$0.12); revenue $21.436B vs consensus ~$21.164B (beat by ~$0.27B). Near‑term estimate revisions likely skew positive for fees and CIB/Markets; NIM may face continued mix pressure from trading assets *.
  • Target price consensus ~$93.54; recommendation text not available in this pull [GetEstimates]*.

Estimates disclaimer: Values retrieved from S&P Global.*

Key Takeaways for Investors

  • The quarter delivered broad‑based fee growth and improved credit, yielding an EPS and revenue beat; watch continuation of IB/Markets and WIM fee momentum into Q4 *.
  • NIM compression reflects strategic growth in Markets; management stresses total return optimization (fee offsets) over NIM maximization—model NII stable, fees stronger .
  • Expense guide moved up on severance and revenue‑linked comp, but underlying efficiency agenda (third‑party, real estate, automation/AI) remains intact—expect operating leverage to improve medium term .
  • Capital return remains robust (dividend to $0.45, $6.1B buybacks, Q4 similar) with CET1 > regulatory minimums; medium‑term CET1 down‑shift to 10–10.5% supports ROTCE uplift to 17–18% .
  • Credit risk is manageable; office CRE allowances and nonaccruals declined, and NCOs improved—monitor lumpy CRE losses but within expectations .
  • Post‑asset‑cap growth vectors: consumer checking/card, auto (VW/Audi program), CIB hiring and client onboarding; these are likely to underpin balance sheet and fee expansion into 2026 .
  • Near‑term trading implications: positive reaction to raised ROTCE target and sustained buybacks/dividend; any NIM negativity likely tempered by fee strength. Medium‑term thesis: ROTCE accretion via capital optimization and mix shift toward fee businesses .

Additional Notes and Press Releases

  • Dividend: Board approved $0.45 quarterly dividend, payable Dec 1, 2025 .
  • Prime rate: Wells Fargo Bank decreased prime rate to 7.00% (effective Oct 30, 2025) .
  • Earnings release logistics: Q3 results and call details provided on Oct 14, 2025 .

All company data cited from Form 8‑K exhibits and Q3 2025 supplemental materials unless noted.