Wells Fargo & Company

Solid Q3 financial momentum (good): EPS +13% YoY to $1.87; ROTCE up to 16.3% this quarter (from 14.7% in 1H/first 9 months of 2025); broader “growth + returns” theme - Revenue +2% YoY with growth across all segments (offset by expected items: lower venture capital revenue and lower lease income after rail car leasing sale). - Strong segment revenue growth: Wealth & Investment Mgmt +12%, Commercial Banking +6%, Consumer Banking & Lending +5%, Corporate & Investment Banking +3%. - Expenses declined modestly YoY; efficiency improved: noninterest expense improved (efficiency ratio 63%, down 2 pts YoY). - Balance sheet growth broad-based: average loans +11% YoY and average deposits +11% YoY.

NII outlook confirmed with Q4 step-up from balance-sheet growth (forecast): Full-year 2026 NII expected $50B ±$0.5B; Q4 NII ≈ $13B - Net interest income (NII) +$567M (+5%) YoY; +2% QoQ; NIM stable QoQ. - Management expects NII to grow faster in Q4 vs Q3 due to: - Higher loan and deposit balances - Fixed-rate asset repricing / higher investment securities balances - Benefits from deployment/efficiency improvements in markets balance sheet. - Clarification on markets vs non-markets NII: because Wells Fargo is asset-sensitive outside markets but liability-sensitive in markets, higher rates may slightly pressure markets NII, but the impact is expected to be offset by markets noninterest income (management suggested markets NII slightly below $2B, ~$1.8B in Q4, with the remainder made up via non-markets NII).

Credit performance remains strong, with early-cycle vigilance (good + risk framed): charge-offs low; “no signs” of broad deterioration - Net loan charge-off ratio 38 bps (down YoY). - Commercial charge-offs stable YoY (18 bps; up slightly QoQ), consumer net charge-offs 70 bps (down YoY). - Commentary emphasized that credit is still resilient but they are monitoring inflation, higher-for-longer rates, geopolitical uncertainty, and AI-related disruption; they explicitly said no broad-based credit deterioration signals yet.