TenQ

The Wells Fargo story

Wells Fargo is a large US consumer and commercial bank testing whether growth after the removal of its asset cap can strengthen returns without weakening credit or capital.

Written from Wells Fargo's own filings with the SEC, and rewritten when it publishes a new earnings release. Updated 2026-09-30.

  • $80.81share price, last close
  • $244.4Bmarket value
  • 17/36TenQ Score checks passed

The story in brief

  • Growth restrictions eased. After the Federal Reserve removed its asset growth limit in June 2025, average loans increased 12% from a year earlier in the quarter to June 2026.
  • Revenue outpaced expenses. In the quarter to June 2026, revenue rose 9% and expenses rose 2% from a year earlier, while diluted earnings per share increased 25% to $2.00.
  • Capital has competing uses. Wells Fargo repurchased $3.0 billion of common stock in the quarter to June 2026 while expanding lending, with its common equity Tier 1 capital ratio at 10.3% versus 11.1% a year earlier.

What drives the business

  • Wells Fargo's central transition is from constrained balance sheet growth to renewed expansion after the Federal Reserve removed its asset cap in June 2025, although other provisions of the consent order remained in place.
  • Its deposit and lending franchise spans Consumer Banking and Lending and Commercial Banking, with $986.2 billion of loans and $1.4 trillion of deposits across the company at December 31, 2025.
  • Consumer Banking and Lending provides checking accounts, cards, mortgages and other consumer loans, while Commercial Banking provides business credit and treasury services, and each segment increased revenue 6% from a year earlier in the quarter to June 2026.
  • Corporate and Investment Banking serves corporate, government and institutional clients, and its revenue increased 16% in the quarter to June 2026, including 20% growth in Banking and 24% in Markets.
  • Wealth and Investment Management adds advisory, brokerage and private banking services, with revenue increasing 13% in the quarter to June 2026 as higher market valuations supported investment advisory fees.

What the price assumes

The growth assumption embedded in the price is not measured because a bank's free cash flow does not measure its earnings, so TenQ does not run a reverse DCF for Wells Fargo.

At $80.81 per share, Wells Fargo trades at 11.6x earnings and fails TenQ's check for an earnings multiple below its own history.

Revenue grew 6.2% over the last twelve months, faster than its 4.0% annual pace over the last three years but below the 9.9% sector benchmark in TenQ's growth check.

What could change the story

  • Remaining Federal Reserve consent order provisions and the OCC agreement requiring stronger anti-money laundering and sanctions controls leave regulatory work unfinished despite the asset cap's removal.
  • Balance sheet growth is offsetting pressure on lending economics, with net interest income rising 5% from a year earlier in the quarter to June 2026 even as net interest margin declined to 2.43% from 2.68%.
  • TenQ's efficiency check remains a weakness, with an expense-to-revenue ratio of 64.0% against its sector benchmark of 57.5%.
  • At the end of June 2026, Wells Fargo carried $37.0 billion of unrecognized bond losses, leaving a gap between the bonds' carrying values and market values.
  • Dividends and share repurchases amounted to 104.4% of profits in TenQ's distribution coverage check, making the balance between capital returns and expansion important.

What to watch next

  • The July 2026 release set an expected common dividend of $0.50 per share for the third quarter of 2026, up from $0.45 per share and subject to board approval.
  • The next releases will show whether lending growth and shareholder distributions preserve the significant buffers above regulatory capital minimums that management described, alongside any changes from proposed capital rules.
  • Credit measures will test the quality of expansion after annualized net loan charge-offs fell to 0.34% of average loans and nonperforming assets reached 0.77% of total loans in the quarter to June 2026.
  • Earnings comparisons will need to distinguish operating progress from the $132 million, or $0.04 per share, of discrete tax benefits recorded in the quarter to June 2026.

Sources

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