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Fortune AIQ 75

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Fortune Global 500

With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

The 300 companies on this year’s list brought in over $12.5 trillion in revenue for the latest 12 months, with the median revenue figure at $24 billion.

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Fortune AIQ 50

The corporations on our annual list of the world's 500 largest companies combined to generate $41.7 trillion in revenue over the past year.

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

The corporations on our annual list posted aggregate revenues of $41 trillion for the second year in a row.

Industries included in the sector are banks, insurance, and real estate companies.

Fortune Sector Leaders: Financials

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The corporations on our annual list of the world’s largest companies delivered a record $41 trillion in aggregate revenues.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

F500-2023-047-Wells-Fargo

The fourth biggest bank in the U.S. in terms of revenue dropped six spots on this year’s list amid a tumultuous period marked by rising interest rates. 
<ul> 
 	<li>The bank posted revenues of $82.8 billion for 2022, up 0.5% from the year prior. It accrued $13 billion in profits in 2022, down 38.8% from the previous year.</li> 
 	<li>In May 2023 Wells Fargo paid $1 billion to settle a class action lawsuit in which shareholders accused the bank of overstating its progress toward fixing practices that had gotten it into legal trouble in the 2010s. Most prominent of those scandals was a fake-accounts scheme in which bank employees frequently opened accounts without depositors’ knowledge to meet sales goals.</li> 
</ul>

Aggregate sales hit $37.8 trillion last year—an increase of 19%, the highest annual growth rate in the list’s history.

This year’s Fortune 500 marks the 68th running of the list.

F500 2022-Wells Fargo

Wells Fargo is the third-largest bank in the U.S. by assets, with $1.79 trillion as of February. It serves one in three U.S. households and more than 10% of small businesses in the country. Its stock surged more than 61% in 2021, as Wells Fargo produced a massive $21.5 billion in earnings—fueled in part by a post-pandemic resurgence in lending. But the financial giant continues to labor under a balance-sheet cap imposed by the Federal Reserve after its 2016 fake-accounts scandal. Other legal problems have bubbled up in 2022: In March, Wells Fargo was sued in California for alleged discrimination against Black mortgage borrowers. (The bank has denied that it discriminates in its lending.)

Total revenue for the world’s biggest companies fell 4.8% to $31.7 trillion this year—the first decline in half a decade.

G500 103 Wells Fargo

Wells Fargo continues to experience fallout from its 2016 fake accounts scandal, even five years on. An asset cap imposed in 2018 in response to the bank’s misdeeds prevented the company from taking some deposits during the pandemic. Net income for 2020 slipped to $3.3 billion, compared with $19.5 billion in the year prior. And with a smaller trading and investment banking arm compared with its megabank peers, Wells Fargo also missed out on much of the surge in equities during the year. Still, the bank is seeing a flicker of light: The Fed accepted a proposal to overhaul the bank’s risk management in early 2021, signaling a first step toward lifting the bank’s asset cap. But that comes after Wells Fargo’s continued struggles have worn on investor patience: Warren Buffett’s Berkshire Hathaway, once one of the company’s largest shareholders, culled its holdings by 83% in 2020.

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-37-Wells Fargo

This year's Fortune Global 500 generated $33.3 trillion in revenues and $2.1 trillion in profits.

G500-2020-069-Wells-Fargo

Three years after Wells Fargo's fake accounts scandal erupted, the cleanup continues. There have been countless lawsuits, two CEO exits (three, if you count the departure of an interim leader), and, this February, a new $3 billion fine to resolve further investigations. A $1.95 trillion asset cap on Wells Fargo, imposed by the Federal Reserve in 2018, continues to limit the bank’s growth compared with its peers. Now, CEO Charles Scharf, who joined in October 2019, is tasked with reforming Wells Fargo’s image in the eyes of consumers and regulators alike. Scharf, a former CEO of Bank of New York Mellon, and before that, Visa, is the first top leader brought in from outside Wells Fargo in more than a century; so far he has reorganized reporting lines and brought in more outside executives.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-030-Wells-Fargo

This year's Fortune Global 500 generated $27.7 trillion in revenues and $1.5 trillion in profits.

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This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Global business is back. After limping through a worldwide financial crisis and economic slowdown, the 500 largest companies ranked by revenues shattered all sorts of performance records in 2013: They racked up combined revenues of $31.1 trillion, up 2.5% from 2012, and profits soared 27% to nearly $2 trillion. China’s 95 companies (up from 89 last year) posted $5.8 trillion in revenues. The U.S. has four fewer companies on the list than last year but remains (for now) the country leader, with 128 corporations on the list—including No. 1 Wal-Mart Stores—reporting $8.6 trillion in revenues. 

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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Wells Fargo was among the top six U.S. banks in terms of total assets in 2026. It provides consumer, commercial, corporate, and investment banking services, as well as wealth and investment management.

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Wells Fargo (WFC): Company Profile, Stock Price, News, Rankings

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Wells Fargo

wells fargo

Welcome. Thank you for joining the Wells Fargo second quarter 2026 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like a question during this time, simply press star one. If you would like to withdraw your question, start. Please note that today's call is being recorded. I would now like to turn the call over to John Campbell, Director of Investor Relations. Sir, you may begin the conference.

Good morning, everyone. Thanks for joining our call today where our CEO, Charlie Scharf, and our CFO, Mike Santomassimo, will discuss second quarter results and answer your questions. This call is being recorded. Before we get started, I would like to remind you that our second quarter earnings materials, including the release, financial supplement, and presentation deck, are available on our website at wellsfargo.com. I'd also like to caution you that we may make forward-looking statements during today's call that are subject to risks and uncertainties. Factors that may cause actual results to differ materially from expectations are detailed in our SEC filings, including the Form 8-K filed today containing our earnings materials.

Information about any non-GAAP financial measures referenced, including a reconciliation of those measures to GAAP measures, can also be found in our SEC filings and the earnings materials available on our website. I will now turn the call over to Charlie.

Thanks, John. I'm going to provide some comments about our results and the momentum we are seeing across our businesses. I'll turn the call over to Mike to review second quarter results in more detail before we take your questions. Let me start with slide two of the presentation deck, where I will walk you through the broad-based strength we see in our business. We grew diluted earnings per share to $2 in the second quarter, up 25% from a year ago. Revenue grew 9% from a year ago. Growth was broad-based, with every one of our operating segments generating higher net interest income and non-interest income. We are clearly benefiting from the economic strength we see in the U.S., but the investments we are making and our improved operating discipline drove strong momentum and continued to result in improved performance.

Net interest income grew 5% from a year ago, non-interest income grew 13% as we're making good progress against our goal to create a more balanced revenue mix by growing fee-based revenues. Expenses increased 2% from a year ago, reflecting investments we are making, offset by continued expense discipline. Expenses, excluding revenue-related compensation, declined. One of the ways you can clearly see the results of our efficiency initiatives is through headcount, which has declined for 24 consecutive quarters. In the second quarter, our headcount was 197,000, down 79,000 from six years ago, 15,000 from last year, and 3,500 from last quarter. We are using these efficiencies to offset broad-based investments across the company to drive growth, including adding branch bankers, investment advisors, commercial banking relationship managers, investment bankers, and traders.

We are also increasing our marketing investments, accelerating product development, investing in AI, and increasing our cyber defenses. Consumer and commercial credit quality remains strong across all portfolios, net loan charge-offs declined 10 basis points from a year ago. After years of not being on a level playing field with our competitors because we couldn't grow our balance sheet, we had strong growth during the first half of this year, including in the second quarter, with average loans up 12% and average deposits up 10% from a year ago. Just a reminder, growth can be risky, and we are carefully deploying capital to grow and support our clients by taking risks that we think are prudent through economic cycles, not just the strong environment we see today.

We returned over $9.8 billion of capital to shareholders in the first half of this year, including repurchasing $7 billion of common stock while continuing to maintain the significant amount of excess capital. As we previously announced, we expect to increase our third-quarter common stock dividend by 11% to $0.50 per share, subject to approval by our board of directors at its meeting later this month. Our continued focus on improving returns was evident, with ROTCE increasing from 15.2% a year ago to 17.7% in the second quarter and 16.1% in the first half of 2026. While outsized venture capital equity gains favorably affected our returns this quarter, we have said that they can be lumpy, but that we do expect strong returns from these investments over time.

More importantly, the growth and efficiency improvements that we have seen over the past several years are now broader based, and it is these trends that give us confidence in reaching our goal of a sustainable ROTCE of 17%-18%. We are often asked about the timing of achieving this goal, I know you all understand that interest rates, markets, and credit impact us and are hard to predict, making it difficult to give a definitive answer. Assuming favorable conditions continue to exist, we remain confident that our favorable trends will allow us to achieve this goal in a reasonable timeframe and then reset the bar higher for the future. As we show on slide three, our strategy is driving growth across all of our businesses. Let me start with consumer banking lending, with 6% revenue growth from a year ago. 

After years of little to no growth in checking accounts, our investments in marketing and digital account openings are paying off, and we have grown consumer primary checking accounts year-over-year for 13 consecutive quarters. We have significant opportunity to increase the pace of growth, this, along with offering our broad set of products, including credit cards, investments, and mortgages, should drive low-cost deposits higher over time. Over the past five years, we have enhanced our credit card products and improved the customer experience, which has driven new account and balance growth, including new accounts increasing 46% in the second quarter from a year ago. Building a larger credit card business is an investment that puts pressure on profitability in the initial years, with new products having significant upfront costs related to marketing, promotional rates, onboarding, and allowance.

It takes approximately two to three years for vintages to season and burn through these upfront costs. Our 2022 through 2024 vintages are now adding to profitability. Our 2025 and 2026 vintages are bigger as account openings have accelerated, they offset some of the positive contribution from the earlier vintages. Importantly, we have seen strong performance versus our original assumptions regarding new account acquisition and credit performance, which gives us confidence that we should see profitability and returns increase. I do want to note that the rate of growth is a decision point for us. We could have higher profitability in the shorter term by reducing our growth, we are prioritizing longer-term results given the quality of the accounts we are generating.

We evaluate this each quarter and will continue to do so. The momentum in our digital offerings continued, with mobile active users increasing to 33.7 million in the second quarter. That's 1.6 million more than a year ago. The investments we have been making to improve the customer experience were reflected in the 2026 J.D. Power Mobile App study, where we moved up to number two in mobile app satisfaction. We are also doing more for our affluent clients. We've been hiring licensed bankers and branch-based financial advisors, that investment is helping to drive better results, with premier client assets up 13% from a year ago. Our auto business returned to growth last year after intentionally scaling back to improve our capabilities, the momentum has continued.

Originations increased 41% from a year ago, and average balances were up 31%, in part due to becoming the preferred financing provider for Volkswagen and Audi vehicles in the U.S. Importantly, credit performance has remained strong and in line with our expectations. Turning to wealth and investment management. Revenue grew 13% from a year ago. Wealth and investment management client assets grew 15% from a year ago to over $2.4 trillion, driven by increased market valuations and also benefiting from four consecutive quarters of positive net flows. We have invested over $1 billion over the past several years to modernize the technology platform, in the second quarter, we launched Advisor Gateway, a new desktop technology with GenAI capabilities that gives advisors better tools to serve clients and grow their practices.

Investments like this are improving productivity, strengthening the client experience, and driving improved advisor hiring and retention. We are also working to be our clients' primary bank by expanding our deposit and lending capabilities and are seeing strong results, with average deposits up 10% and average loans up 12% from a year ago. Securities-based lending has been a key driver of loan growth, with average balances up 31% from a year ago, reflecting our success in increasing the number of financial advisors offering this product to their clients. Importantly, the opportunity in this business to grow investments and banking remains significant. We estimate that our existing customers hold trillions in assets at other financial institutions, and their lending, deposit, and payment needs are large and growing. 

Turning to our commercial businesses, starting with the Corporate Investment Bank. Revenue grew 16% from a year ago. In our markets business, revenue grew 24% from a year ago. We've been growing our balance sheet to support our clients, with average trading-related assets increasing 41% from a year ago, driven primarily by financing-related activity. While this financing activity impacts our net interest margin because it is lower spread, it has good returns and profitability and positions us to attract more flow business. We track this by client, and we're seeing higher trading revenue and wallet share gains from customers where we are providing financing. While the most immediate revenue benefits are expected within markets, including trading, hedging, and risk management products, these deeper client relationships also enhance opportunities across the broader Corporate Investment Banking platform over time.

In our banking business, revenue grew 20% as our focus on providing a broader set of capital and advisory solutions is working. This was a record quarter for investment banking fees across the firm. Our willingness to invest more in senior talent and in technology and dedicate more balance sheet to these activities is paying off. What's important here is having a growth plan that is properly paced and leverages the broader strengths of Wells Fargo. The team has executed with discipline, has hired and promoted the right people, and is taking risks that are in line with our risk tolerance. The favorable environment for M&A financing is helping drive higher revenues across the industry, but our investments are also delivering strong results, and we are increasing market share in key areas.

In leveraged finance, our year-to-date market share is 7.2%, and we rank number three. In equity capital markets, our share has increased 74 basis points from a year ago to 3.8%. In M&A, we have climbed from number nine to number four among U.S. advisors by announced deal volume, reflecting our active role in advising our clients on franchise-defining transactions. We also have strong share in CRE capital markets, including being the number one non-agency CMBS book runner, number one in real estate loan syndications, and number one in CRE CLOs. This was a strong quarter across Corporate Investment Banking, and we still have significant opportunity to grow each of the businesses. Finally, let me highlight Commercial Banking, which generated 6% revenue growth from a year ago.

The investments we've been making in the business over the past couple of years are driving strong results. Absent the transfers of loans and deposits to consumer banking and lending last year, average loans grew 9%, and average deposits grew 10% from a year ago. Our investments include targeted hiring in 20 high-density markets where we are under-penetrated relative to the rest of the country. The plan is working as we are seeing incremental client growth and higher loan and deposit balances. We expect this momentum to continue as we execute on our plan. We've also focused on delivering investment banking and market products to our commercial banking clients. We've had success, which has helped drive revenue growth. We still see significant opportunities to grow revenue here.

While commercial banking is one of our more mature businesses, we still have significant opportunities to grow. Our treasury management and payments revenues are embedded in our commercial bank and corporate investment bank results. Across both segments, revenue was up 5% from a year ago. We've been investing in coverage teams and payment platforms and are beginning to innovate using blockchain technology to create better payment solutions for our commercial customers. These solutions will use blockchain-based payment rails to make cross-border payments faster, more transparent, and more predictable. Over time, they will extend operating hours to 24 hours, seven days a week. As we look ahead, consumers and businesses remain strong. Consumer spending is higher, charge-offs are lower, and savings and investments are growing across customer segments.

Businesses are cautious. Balance sheets and cash flows remain strong, resulting in strong credit performance. Equity indices are at or near all-time highs, and credit spreads are narrow. Concerns around affordability and inflation exist. The labor market and wage growth remain strong. The markets and U.S. economy have absorbed macroeconomic and geopolitical uncertainty well. Strong environments like this don't last forever. We see large amounts of capital being deployed by both banks and non-banks across a broad range of risk assets. Often, when times like this continue, leverage and risks develop that are sometimes hard to see. We are proud of the progress we have made and remain excited about our competitive position and ability to execute and drive towards our goal of industry leadership in the U.S.

We will watch carefully for signs of outsized risks and stress and continue to deploy our resources carefully and deliberately to serve our clients and build sustainable high returns and higher growth that can endure the inevitable market shocks and economic cycles. In closing, we and most financial institutions are benefiting from today's environment. However, we're also seeing the benefits in our results from the actions we've taken, which should endure through cycles, as I said. Our metrics clearly show our momentum across all business segments. We will continue to remain focused on driving towards higher sustainable returns. I will now turn the call over to Mike.

Thank you, Charlie. Good morning, everyone. Since Charlie covered the drivers of our improved financial results and the momentum we are seeing across our businesses that we highlighted in the first two slides, I will start my comments on slide four. Our second quarter results were strong with broad-based revenue growth, disciplined expense management, and improved credit performance. Our earnings increased 17% from a year ago to $6.4 billion, and our diluted earnings per share grew to $2, up 25% from a year ago. Our second quarter results included $132 million, or $0.04 per share, of discrete tax benefits related to the resolution of prior period matters. Turning to slide six. Net interest income increased $609 million or 5% from a year ago and increased 2% from the first quarter.

The growth from the first quarter was driven by higher loan and investment securities balances, as well as one additional day in the quarter. As expected, the net interest margin declined four basis points from the first quarter, down from the 13 basis points decline we had last quarter. The biggest driver of the decline in NIM in the second quarter and over the past year has been growth in interest-bearing deposits, as well as continued growth in our markets business. The success we are having growing interest-bearing deposits deepens our relationships with clients in the commercial bank and the corporate investment bank and gives us the opportunity to attract non-interest-bearing deposits in the future.

As Charlie mentioned, while financing balances in the markets business are lower spread, they have good returns and profitability and position us to grow other activities with those clients. We see it in our results, including total revenue in the markets business growing 24% from a year ago, as well as returns starting to increase along with our market share. I would also note that even with the NIM compression, we grew net interest income versus last year and last quarter. While we'll talk more about our expectations for net interest income later on the call, we expect modest net interest margin compression in the third quarter, broadly in line with second quarter's decline from the first quarter, before stabilizing in the fourth quarter. Moving to slide seven.

Average loans increased $110 billion, or 12%, from a year ago, driven by growth in commercial and industrial loans, as well as growth across our consumer portfolios, except for residential mortgage loans. Turning to deposits. Average deposits increased $134 billion, or 10%, from a year ago, with growth across our consumer and commercial businesses, as well as higher corporate deposits. Average deposits declined one basis point from a year ago and were up eight basis points from the first quarter, driven by growth in interest-bearing deposits. Turning to slide eight. We had broad-based growth in non-interest income, up $1.2 billion or 13% from a year ago. We generated over $10 billion in non-interest income in the quarter with growth across most key categories.

We had strong performance from our venture capital investments, with $847 million in both unrealized and realized net equity gains, or $604 million after non-controlling interest. It's important to look at these results after the impact of non-controlling interest. We also had double-digit growth in investment advisory fees, brokerage commissions, and investment banking fees from a year ago. We had over $900 million in investment banking fees in the second quarter, a new record. Turning to expenses on slide nine. Non-interest expense increased $282 million or 2% from a year ago, and our efficiency ratio improved to 60%, down four percentage points from a year ago. The increase in expenses from a year ago was driven by higher revenue-related and incentive compensation expense.

Which I like to remind you is a good thing, as these higher expenses are more than offset by higher revenue. We also had higher technology and advertising costs driven by the investments we are making in our businesses to generate growth. These higher expenses were partially offset by the impact of efficiency initiatives, including a 7% reduction in head count from a year ago. We are pleased to see the continued execution of our efficiency initiatives quarter after quarter. This is the 24th consecutive quarter of head count reductions, and along with other meaningful efficiency initiatives, we have been able to continue to invest in our businesses while managing overall expense levels. In fact, as Charlie highlighted, non-revenue-related expenses were actually down from a year ago.

Turning to credit quality on slide 10. Our credit performance in the second quarter remained strong, with our net loan charge-off ratio down 10 basis points from a year ago to 34 basis points of average loans. Commercial credit continued to be strong, with net loan charge-offs declining to 10 basis points. Consumer performance was also strong, with loan charge-offs declining 74 basis points, with improvements across the portfolio from the first quarter and continued net recoveries in the residential mortgage portfolio. Non-performing assets as a percentage of total loans declined from the first quarter and from a year ago, with improvements in both the commercial and consumer portfolios. Our allowance coverage ratio for loans was relatively stable from the first quarter.

Credit card and auto loan growth drove a modest increase in our allowance, which was largely offset by a lower allowance for commercial real estate office loans. Turning to capital and liquidity on slide 11. Our capital levels remain strong, with our CET1 ratio at 10.3%, within our stated 10%-10.5% target range, and well above our CET1 regulatory minimum plus buffers at 8.5%. While the Federal Reserve stress test results do not impact capital requirements this year, our results continued to be below the stress capital buffer floor of 2.5%. We repurchased $3 billion of common stock in the second quarter, and common shares outstanding declined 6% from a year ago. We continue to have the capacity to repurchase shares while also supporting our clients.

Moving to our operating segments, starting with consumer banking and lending on slide 12. Consumer, small, and business banking revenue increased 8% from a year ago, driven by higher deposit and loan balances, wider deposit spreads, and growth in non-interest income. Credit card revenue grew 2% from a year ago due to higher loan balances. Home lending revenue declined 7% from a year ago, reflecting lower loan balances. However, the rate of reduction has continued to slow, with balances relatively stable from the first quarter. Lower revenue also reflected the continued reduction in the size of our servicing business, with third-party mortgage loans serviced for others down 21% from a year ago. Auto revenue increased 33% from a year-ago due to higher loan balances. Auto originations increased 41% year-over-year, but were stable from the first quarter.

Turning to Commercial Banking results on slide 13. Revenue increased 6% from a year-ago, driven by non-interest income growth from equity investments, revenue from the financing we do for renewable energy projects that come in the form of tax credits, and investment banking, as well as growth in net interest income from higher loan and interest-bearing deposit balances. Loan growth was broad-based, with increased demand from both new and existing customers. Turning to Corporate Investment Banking on slide 14. Banking revenue increased 20% from a year-ago with growth in investment banking fees and equity in debt capital markets, as well as higher loan and interest-bearing deposit balances. Commercial real estate revenue declined 1% from a year-ago as higher capital markets activity and loan balances were more than offset by the impact of lower interest rates.

Markets revenue grew 24% from a year-ago, driven by stronger performance in equities and higher revenue across most fixed income products, including the impact of balance sheet growth. As you know, we've been growing our balance sheet in the markets business that has increased $198 billion since the end of 2024, with approximately 60% in financing balances, 20% on the trading side, and 20% for the lending we do in this business. We extend these balances to clients who can also bring us additional business. Our early tracking shows that is what's occurring. We track this on a granular basis. We'll continue to optimize with clients to drive growth and returns. Average loans in Corporate Investment Banking grew 26% from a year-ago, with growth across all businesses while utilization rates were relatively stable.

On slide 15, Wealth and Investment Management revenue increased 13% from a year-ago, driven by growth in investment advisory fees from increased market valuations, as well as higher net interest income due to lower deposit pricing and higher deposit and loan balances. As a reminder, the majority of WIM advisory assets are priced at the beginning of the quarter, so third-quarter results will reflect market valuations as of July 1st, which were up from April 1st and from a year-ago. Turning to our 2026 outlook on slide 17. We are maintaining our guidance of $50 billion ± of net interest income for the full year. Similar to last year, we expect stronger growth in the second half of the year compared to the first half.

We still expect net interest income, excluding markets, to be approximately $48 billion for the full year. Looking at the key drivers, starting with loans. As I highlighted, average loans in the second quarter grew 12% from a year-ago. Year-over-year average loan growth in the fourth quarter will likely be higher than the mid-single-digit increase we assumed in our outlook back in January. This is a positive versus our original expectation. We have also successfully grown interest-bearing deposits, which is a good thing since these higher balances help us deepen relationships with our customers, and as I mentioned earlier, gives us the opportunity to attract non-interest-bearing deposits in the future. We had originally assumed some growth in non-interest-bearing deposits, but we now expect them to be relatively stable, which is a negative versus our original expectation.

Interest rates are currently not a significant factor in our outlook for this year. While interest rates have been higher than we expected in our original outlook, which benefits NII excluding markets, the rate cuts we had originally assumed were expected later in the year, so the change is only a modest impact on this year's net interest income expectations. In terms of markets NII, as we all know, it's always hard to forecast. Higher short-term rates typically result in lower markets NII, but as of now, we still expect markets NII to be approximately $2 billion in 2026. Putting this all together, while the drivers have moved around since our original outlook, which is always the case, our current outlook is still $50 billion ± of NII for 2026.

Regarding our expense outlook, we still expect 2026 non-interest expense to be approximately $55.7 billion. Expenses in the first half of the year were in line with our expectations. As we look at the second half of the year, we expect revenue-related expenses to be somewhat higher than we expected at the beginning of the year, but we expect expenses in other areas to be lower through our continued focus on efficiency initiatives. In summary, we had strong second quarter results, and they clearly demonstrate that the strategy we have been implementing to drive growth is working. Revenue growth was broad-based, with every one of our operating segments generating higher net interest income and non-interest income from a year ago. Our continued focus on improving efficiency drove positive operating leverage.

The asset cap came off last year, and we had double-digit growth in both average loans and deposits from a year ago. Credit quality was strong, with improved performance in both our commercial and consumer portfolios. We continue to return significant capital to shareholders while maintaining our strong capital position. As Charlie highlighted, we are seeing strong momentum in key business drivers in every one of our businesses, and the steady improvements in our returns continue to give us confidence in achieving our medium-term 17%-18% return on tangible common equity target. We will now take your questions.

At this time, we will now begin the question-and-answer session. If you would like to ask a question, please first unmute your phone and then press star one. Please record your name at the prompt. If you would like to withdraw your question, you may press star two to remove yourself from the question queue. Once again, please press star one and record your name if you would like to ask a question at this time. Please stand by for our first question. The first question comes from Ken Usdin of Autonomous Research. Your line is open.

Hey, thanks. Good morning. Mike, thanks for the color on the second half expected NIM trends. Two questions I have. One is just, to get to $50 billion, I think we need to assume that the average earning assets continue to grow at around this 3% pace, and given your comments about loan growth and the deposit growth, is that kind of what we need to put forward to get there? Any other things we need to think about in terms of mix within? Thanks.

Yeah, sure. Look, when you look at what's going to progress for the second half of the year, it's very similar to what we saw last year, right, in terms of the step-up as we went through each of the quarters. You do benefit from an extra day as you go into the third quarter, so you sort of have to account for that. We expect to see some growth in loans, securities. You get benefit of the fixed asset turnover given where rates are. I think it's all progressing. It's not a bad assumption sort of relative to what to expect. We still feel very good about getting to that $50 billion in total.

Got it. The second question is just on that NIM stabilizing in the fourth quarter, what are the pieces that kind of get there? Meaning, is it that one piece slows relative to the growth rate? Is it just that you kind of lap some comps? What are the helpful things underneath that can give us the confidence that that stabilization happens?

Yeah, sure. We've talked about this a little bit over throughout the quarter. We don't expect to see the markets balance sheet to grow at the same pace. The impact that we've seen over the last few quarters moderates. That's certainly part of the story as you get into the latter part of the year. I think you continue to get the benefit of all of what we just talked about in terms of the growth in earning assets, the repricing. You sort of see the rest of the growth across the balance sheet. At this point, as I said, we expect just a small decline potentially in the third quarter. Hopefully it ends up maybe even being better than that, then we sort of stabilize from there.

The next question will come from John McDonald of Truist Securities. Your line is open.

Hi. Thanks. I was wondering, Mike, on expenses and efficiency, what's the outlook? I mean, you've done a great job with the outlook on head count. From here, are you still looking to keep that flat to down? Just the broader commentary about the opportunity for efficiency improvement from here to keep going. Thanks.

Yeah, sure. I'll take a shot and start, and Charlie can add if he wants. On the head count side, or just more broadly on efficiency, we still come into the environment thinking the same thing we've now done for a number of years. We've got a lot of room to go to continue to make the place more efficient. In part, that drives head count down. Given the size of our business, the activity levels we've got, we expect that we should be able to run this company with less head count than we've got today. Certainly, technology and AI helps us get at aspects of that in a different way or faster than maybe in the past. We expect that we'll continue to see more efficiency from here.

Just more broadly, it applies to just about everything we do. I know we keep talking about this over and over and over, but as you peel back the onion, there's more opportunity to make things more automated, to improve the client experience, to make things more efficient in terms of how we serve clients every day, and I think there's a lot still to go. We just come in every day and every week to sort of make sure that we continue to execute like we've done over the last few years.

Okay. Thanks. Maybe just to follow up on Ken's line of questioning around the net interest income drivers. The change in non-interest bearing from what you were expecting earlier in the year, Mike. Is that related to any developments in your checking account growth, or is it more attributable to rate-seeking behavior on customers and just the rate environment? What do you attribute the change in your NIB outlook to?

No, it's actually not related to the checking account growth. That's actually progressing quite well. As Charlie mentioned, we're up in sort of the checking account growth now for a number of quarters and months in a row. I think that's actually going quite well. I think when you look at just the broader backdrop in terms of the rate environment, we expected a little bit more growth than we're seeing. We did see a little bit of growth from the first quarter and the second quarter, so that's good. We expect it to be pretty stable from here. We are seeing really good success in growing interest-bearing deposits and growing other business with clients in the payment space and the treasury management space. Those things will bring non-interest-bearing deposits with them over time.

It just takes a little bit longer for that stuff to get onboarded and to see the results there. We're not seeing pricing pressure sort of, or client behavior drive any of the results.

The next question will come from Erika Najarian of UBS. Your line is open.

Hi. Good morning. Thanks for all the color so far. As we think about the trajectory of net interest income and net interest margin, I'm wondering if we could maybe just take a step back because obviously there is a lot of focus on this number. I'm wondering if we could sort of separate sort of the structural factors versus the cyclical factors. First, what are you expecting for deposit costs in the second half of the year? Is there a rate hike priced in? I think you removed the cuts, Mike, I just wanted to make sure I understood what you were assuming for the short end. What should we expect from deposit cost standpoint from here? Additionally, you have two strategies that are sort of competing factors on the NIM.

One is this great growth in markets, which is obviously NIM dilutive, also strong momentum in card, which in theory could be NIM accretive, especially once the accounts mature. As we think of all of those factors, how should we think about whether or not we should expect more secular pressure on the NIM beyond the macro factors with rates and deposit costs in the second half of the year?

Okay. Erika, there's a lot in there, I'll try to get it. If I miss a piece, please point me in the right direction. I think when you look at what's happening across NIM, obviously what we've got baked into the second half of the year is the market's pricing in a little over one increase at this point. I think we'll see how that actually plays out. That'll have very little impact on the full year results, just given the timing of it, depending on when that happens. I think that's not a huge driver one way or the other. I think what's happening in our deposit book, though, is that we're seeing the pace of interest-bearing deposits grow at a really good clip.

You can see that in the results quarter after quarter. I think even if you just look at the CIB, the Corporate Investment Bank, and the commercial bank deposits where you've seen really good deposit growth year-on-year, sequentially, the majority of those deposits are going to be interest-bearing deposits. Since they're growing faster and you're seeing slower growth in the consumer side and pretty stable non-interest-bearing deposits, you're going to see the deposit cost inch up a little bit. That's actually fine and expected, frankly, not a bad thing because we're growing sort of these profitable balances across the businesses. I would expect the deposit cost to just move up a little bit as you go in the second half of the year.

Ultimately, I think that's actually a good thing from a profitability point of view and supports sort of the broader set of business that we do with those customers. As I sort of mentioned in the commentary, we expect a little bit more NIM compression in the third quarter. It starts to stabilize, and you get the benefit of all of the other impacts that we sort of talked about in terms of the earning asset growth, the repricing that's happening across a large portion of the securities book. All of that I think contributes quite well.

I think just keep in mind, as we sort of look at NII, what we're most focused on here is really growing NII over a long period of time that will generate really profitable business and relationships that I think will see benefit us for many years to come. You may see a little bit of volatility in the NIM number that you've seen over the last few quarters. That's to be expected just given where we came from last year with the asset cap coming off and the pace of growth that you've seen since then.

Let me just add, Erika, this is Charlie, if I can, just a couple of things. Number one is, I think the way we think about this is kind of separate out our balance sheet and what you're seeing into a couple of different components. One is just kind of the business that we have which generates the majority of NII. That is very stable. Then we have these businesses that we're looking to grow, both in the markets business, but also ultimately expanding relationships and treasury management on the consumer side. There, as we talked about, you're seeing growth in interest-bearing liabilities. It's those additional businesses that have narrower margin, NIM that is, that's bringing down the NIM. We're looking at it in terms of what it means in the shorter term for profit growth and for returns.

We feel good about that at this point. More importantly, over time, that should also help us grow NIM as we attract more non-interest bearing over a period of time. Away from NIM, we generate stronger trading revenues. That is the flywheel effect of that financing that we're providing. As I've said, if we don't see that, then we can certainly pull back on some of that activity and improve the NIM. As we said in our prepared remarks, we are seeing the payoff certainly on the market side at this point, even though it's early. That's a decision point that we have to make, and we'll be very conscious of what the impact is both on NIM, also on this balance between what you see in terms of NIM profit growth, returns.

Yep. Hear you loud and clear, Charlie. I think that is why I wanted to frame it in terms of structural and growth. To that end, the second question is just the opportunity set in your areas of where you are focusing growth. Maybe talk a little bit about the investment banking pipeline, but also in terms of the equities opportunity. We are hearing that a lot of your peers are a little bit more limited in terms of Prime equities financing capacity given the hyperscaler trade in Asia. Of course, you are not quite big globally yet, and you did mention it in your prepared remarks in terms of financing related activity. Maybe describe a little bit more the Prime financing opportunity that lies ahead, especially if the sort of traditional counterparties have more limited capacity because of activities outside of the U.S.

Yeah. It is like, Erika, I will start on both parts of it. On the investment banking pipeline, the pipeline is quite strong. I think we see that now very consistently for a while now. I think the environment is very supportive of deals. The markets are wide open, both on the equity side and sort of the debt side. I think the art of the possible in the M&A space is quite alive, right? I think there is a lot of active dialogue there. I think you can see our investment banking business had a really good quarter.

I think that all the investments that we have made over the last three or four years have positioned us to take advantage of this environment more than we would have been able to three, four, five years ago by a lot. I think we are continuing to make more investments in targeted areas across different coverage sectors and in some of the product areas. We feel good about the trajectory there, and we will see how it progresses.

Just on the broader question, I would just say, listen, I think what we have said in the past still holds true, which is that there is a lot of great competition out there. There are people that are very large in some of these businesses, including Prime. What we have found is that people want more options. They want more counterparties. We have relationships with a broad set of these customers, and they generally like doing business with us, and so they want to do more. For us, it is a question of just pacing that addition in terms of the amount of business that we do properly. We are still very early in terms of growing out our Prime business.

There is nothing really material in this current quarter relative to that. It is an opportunity that we are going to be careful about. That along with other trading flow opportunities that we have and the investment banking opportunities that we've talked about, we still think are incredibly significant for us.

The next question will come from Ebrahim Poonawala of Bank of America. Your line is open.

Hey, good morning. Not to beat a dead horse on the margin, and the stock obviously sold off when you started talking about your margin outlook. Understand you're not running the bank on one day stock reaction. Maybe I think just a bigger picture question, if we take a step back, and appreciate, Mike, your comments around the trajectory of the NII, which I think is more important than what the NIM does any given quarter. As we look forward beyond even this year, do you think the net interest margin, given your balance sheet and the business strategy going forward, is at a point where the margin should begin to stabilize post that 3Q compression you talked about? One of the pushbacks this morning has been the markets revenue growth predominantly NII driven.

I guess the street is struggling to see the cross sell of deploying that market's balance sheet into lower NIM, and then that translating into better fee growth on the market side. Maybe help us understand that from a market standpoint, and then how should we think about just a normalized NIM for your balance sheet or business strategy?

Sure. I think on the NIM side, as I said earlier on the call, we do expect it to stabilize after you get through the third quarter. That's definitely the case. As Charlie mentioned, over a slightly longer time period, there's opportunity to expand the NIM, not just stabilize. I think that's certainly what we expect as we sort of look at the rest of the year. I think when you start looking at the overall trading business there, you certainly see some growth in NII, but it's not all because of the rate move that we saw. You get paid in some of these trading businesses through NII. You think mortgages, mortgage trading, and other areas of that business. You do really need to look at overall sort of revenue in the markets business.

When you look at the financing, and I'll break it down a little bit for you. You look at the financing side of the business. It's not quite a double, but it's pretty close when you sort of look at the year-on-year performance and the overall financing revenue within the business. Then you saw roughly a 20-plus % increase in sort of the trading related revenue off the back of that. I think we've seen quite a bit of growth across these parts of the business within trading. More importantly, when you start looking at the individual clients where we're deploying some of this incremental financing balance sheet to every single one of them, all but a couple have done significantly more business with us than they did just a year ago.

That's just getting started in terms of ramping up some of the volumes. I think you'll continue to see that across the markets business, I think into the coming quarters. We feel really good about what we're seeing and the trend that we're seeing there.

Let me just add one thing, slightly different words, but kind of reinforcing a point that I made earlier, which is what we're seeing in NIM is not happening to us. What we're seeing in NIM is because things that we're doing, and those are things that we don't have to continue to do, or we can unwind at some point as well. The reason why we're doing it is because we believe that it'll lead to stronger NIM in some of these businesses in the future by attracting more non-interest-bearing deposits or by attracting additional trading. That's either going to drive the kind of profit growth and higher returns that we believe we can deliver, or that's a decision point that we can make.

We understand that it's hard to see that as clearly from the outside, so we've got to do a good job of doing our best to show you how that's actually playing itself out. As Mike said, when it comes to the financing as an example, we look client by client, and we're providing more financing. We're getting more share, higher trading revenues. That's when I said on the last call, we're either going to get paid for it or we're not going to do it. That very much holds true. The fact that that is in our control is something I think that's critically important, and is a tool for us to help grow the returns and the profit of the company. We can either slow things down or reverse course if we had to.

Nothing suggests that we should do that because we believe that we're getting the payoff for it, and we'll have to show that to you.

I think that's a great point, Charlie, that the NIM is due to the deliberate actions you're taking. I think the one point of discussion that's come up repeatedly with investors over the last month or two is no one doubts when they think about can Wells achieve a higher end of your 17 to 18, so let's call it 18% ROTCE over the next few years. I think as the street is trying to digest what the execution around this growth strategy may imply, I think the timing of that has become a bit more uncertain, I would say, over the last six months.

To the extent you can address that, just through your crystal ball, how do you think about when you could achieve that target, maybe towards that 18%, which also if I recall, you've talked about as a way point and we could go even higher than 18%. Maybe if you can provide some color around the timing of how you think about it, I think that would be very helpful to your shareholders. Thank you.

Sure. Listen, I know it's a very busy day and you guys are trying to juggle lots of different companies. I did talk a little bit about this in my prepared remarks, where I talked about the fact that I know that people ask about timing. It's difficult to answer because what we don't want to do as a company is give you a definitive date and then have the interest rate environment change, the markets environment change, credit change, and then you believe that we haven't actually delivered on something. Because the fact is we are subject to those things. Assuming that the markets continue to behave and that conditions continue to be favorable, what I said is that we would expect it to achieve in a reasonable timeframe.

Then one other thing I would say, which is, as time goes on and from last quarter's underlying performance in our business trends and this quarter's, we feel even more confident about being able to deliver it. What I said in my prepared remarks is that our intention is to get there and then raise the bar higher for the future. If we didn't have the kind of confidence that we can get there in a reasonable period of time, we wouldn't be saying that. Again, what gives us that confidence is looking at the underlying business drivers that we tried to lay out in the first two pages of the presentation because it's those things which are going to drive the continued growth of the franchise regardless to some extent of outsized performance in the markets.

I know it's not giving you a definitive timeframe, but what I think what's important to read is our confidence is higher, not lower, as each quarter goes by.

Appreciate you going through it again. Thank you.

The next question will come from Manan Gosalia of Morgan Stanley. Your line is open.

Hi, good morning. I wanted to dig in a little bit on loan growth. Clearly very strong this quarter. You noted the upside to the original loan growth guide for the full year. Can you just walk us through some of the drivers on what you're seeing now? How much of the commercial loan growth reflects high utilization versus new customer activity? I guess your willingness and ability to lead more on the auto side going forward.

Sure. I'll start maybe on the consumer side, then I'll bring it back on the commercial side. On the consumer side, we continue to see really good growth in auto. We see steady growth in card, and the home lending business is kind of pretty stable at this point. I think those trends we would expect to continue as you sort of look at the rest of the year. Steady as you go in terms of what we've been seeing quarter to quarter there. I think on the commercial loan side, it's really not utilization. We see a little bit in pockets of slightly more utilization here or there, but it's really not substantially higher utilization of revolvers. It is new business we've been bringing on that drives a lot of it in the C&I space.

I think we'll see how the rest of the year progresses. As I mentioned in the script, we certainly have seen higher loan growth than what we had assumed in the beginning of the year, and that's a positive. We'll have to see how the rest of the year goes. I think you definitely see tariff refunds coming through impacting some commercial bank clients, in terms of their utilization, and you see a bunch of other factors there. I think it's been good so far, and we'll see how it progresses for the rest of the year. Importantly with that, we're seeing really good performance from a credit perspective across really all the portfolios. I think that supports continued sort of execution across each of the businesses in growing those portfolios.

Got it. Thank you. Maybe on the capital side, $3 billion of buybacks this quarter, a little bit below the recent pace. How should we think about where you want to manage to in your CET1 target range, and how should we think about repurchases going forward here?

Sure. We're really comfortable in the range that we put out there of 10 to 10.5. Really anywhere in that range, we're comfortable with. We approach buybacks the same way we do every quarter. We look at what we expect to do from a client perspective and what growth we expect to see across the portfolios and the business. We think about all the different risks that are out there, including the rate environment, and the volatility that may be there and how that impacts capital. We'll make decisions on how much we will buy back each quarter. We'll sort of keep that progression as we go this quarter, and we'll see where we get to.

We certainly, as we mentioned, we bought back $7 billion in the first half of the year, and I think we still have capacity to buy back more as we go, and we'll make the decision as we go in the quarter.

Also keep in mind, Mike's talking about this absent the finalization of the capital rules. As we've said in the past, the capital rules might not necessarily change that CET1 minimum plus buffers. It could certainly change what goes into the calculation relative to freeing up capital through the RWA calculation for us.

Yeah. Just as a reminder, we still expect our RWA to go down as a result of at least what was proposed, by about 7%. We'll see how it gets finalized.

Got it. If I can ask a quick clarification on that. You would need to see the rules being finalized before you act on that lower CET1 ratio? Or, sorry, on the higher capital, on the ability for the new capital rules to give you more CET1, you would only act on that in terms of buybacks or capital deployment once the rules are finalized?

Yeah, I think we need to see the rule get finalized. Hopefully that'll get done pretty quickly.

The next question will come from Matt O'Connor of Deutsche Bank. Your line is open.

Good morning. Just a quick comment before my question here. As your markets business has gotten bigger, I know you've given us the pieces that we could probably calculate it, but showing them in ex markets I think might be helpful and cut a handful of these questions related to it. My question is, the new credit card accounts, as you pointed out, are up sharply post lifting of the asset cap. I think it's up 50%-60% now in the four quarters. Any way to estimate how much of a drag there is from those new cards and related promotions as we think about the credit card yield? When does that inflect as that backbone kind of starts overwhelming the new accounts?

Yeah. As Charlie sort of mentioned in his script, we've made some intentional decisions to see the growth, continue to execute on growing those accounts. I think, the good part about what we've seen now for the last almost four quarters, I guess, started really in the third quarter of last year, is a lot of those new accounts are actually coming through either our branch network or people coming directly to wellsfargo.com. The acquisition costs there are lower than if you're doing them through third-party affiliates and others. That's a really good thing. With that comes really high-quality accounts. We know these customers. The majority of it's still existing customers that are coming to us for these cards, I think that's a good thing. I think as those vintages are a little bit bigger than the early vintages.

Overall, we'll continue to make those decisions as we go quarter-to-quarter and decide sort of what we're seeing and how happy we are with the quality of it. Despite that, I think over the next couple years, you will see the profitability of that business just continue to increase, and the returns increase in the business, and that's the way we've been sort of managing it. Then, the yield quarter-to-quarter, in terms of what you see from the credit card yield, that'll move around a little bit depending on sort of what we see from the new acquisitions. Over a longer period of time, you'll see that continue to increase as those vintages mature and you transition from the intro APRs or the balance transfer APRs into sort of real revolving balances. That'll happen over the next couple of years.

The next question will come from John Pancari of Evercore ISI. Your line is open.

Morning. I just want to see if you can comment a bit more just around deposit price competition that you're seeing. How is it trending versus your expectations? Then related to that, I know you did comment on the growth expectation on the mid-single digit side. Do you still have confidence around a mid-single digit pace growth as you look at your deposit strategy? Thanks.

Yeah. The short answer on the second part is yes on the deposits. Again, a little more weighted to interest-bearing than non-interest-bearing, as I mentioned, John. We're seeing week to week, month to month, sort of the growth that we expect there. I think that's good. On the pricing competition question, it really hasn't changed over the last few quarters. On the consumer side, our standard rates haven't moved. We're not seeing shifts in behavior than what we've seen over the last few quarters there in terms of people yield seeking in any way. I think that's good. Then on the commercial side, rates are always competitive, but we've not seen rates get more competitive than what we would have expected normally across those businesses. We're really careful to not overpay to attract balances.

Wells Fargo (WFC) Q2 2026 Earnings Call Transcript

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