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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.

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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.

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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.

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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.

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F500-2021-37-Wells Fargo

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G500-2020-069-Wells-Fargo

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

F500-2020-030-Wells-Fargo

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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, and thank you for joining the Wells Fargo third quarter 2026 earnings conference call. All lines have been 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 to ask a question during this time, simply press star one. If you would like to withdraw your question, press star two. Please note that today's call is being recorded. I would now like to turn the call over to Mr. John Campbell, Director of Investor Relations. Sir, you may begin the conference.

Good morning. Thank you for joining our call today, where our CEO, Charlie Scharf, and our CFO, Mike Santomassimo, will discuss third quarter results and answer your questions. This call is being recorded. Before we get started, I would like to remind you that our third quarter earnings materials, including the release, financial supplement, and presentation deck, are available on our website at wellsfargo.com. I would 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 am going to provide some comments about our results and the momentum we see across all our businesses. I will then turn the call over to Mike to review third quarter results in more detail before we take your questions. Let me start with slide two of the presentation deck. Our third quarter results reflected broad-based growth, higher earnings, and stronger returns. Earnings per share grew to $1.87 in the third quarter, up 13% from a year ago. Our ROTCE increased from 14.7% during the first nine months of 2025 to 16.2% during the same period this year, and 16.3% this quarter. Revenue grew 2% versus the prior year, with growth across all our operating segments, partially offset by lower revenue from our venture capital investments as expected, and lower lease income following the sale of our railcar leasing business in the first quarter.

Wealth and Investment Management revenues grew 12%. Commercial Banking grew 6%. Consumer Banking and Lending grew 5%, and Corporate and Investment Banking grew 3%, with 8% growth in banking, partially offset by modest declines in commercial real estate and markets. Markets was trending towards achieving higher revenue growth, but was impacted by a slowdown in the last several weeks of the quarter. However, we still had strong results in equities, with revenue increasing 21% from a year ago. Within banking, key areas of investments for us continued to see strong results. M&A revenues grew 30%, and both equity capital markets and investment-grade underwriting fees grew 33% from a year ago. Expenses declined modestly from a year ago. As we have seen in other quarters, higher revenue-related expenses, up 15%, were more than offset by a 4% decline in non-revenue-related expenses, as we continued to invest while increasing efficiency.

Headcount continued to decline, down 2% in the quarter, 8% year-over-year, and down 30% from its second quarter 2020 peak, and has decreased every quarter for the past six years. We generated strong growth in loans and deposits throughout 2026, with third quarter average loans and average deposits both up 11% from a year ago. This growth was broad-based, with higher loan and deposit balances in both our commercial and consumer businesses. Turning to slide three, we're seeing good performance across each of our businesses. Let me start with Consumer Banking and Lending. Growing consumer primary checking accounts is a key indicator of our progress, and this quarter, we continued to see momentum. We achieved our 14th consecutive quarter of year-over-year growth as stronger branch and digital activity, improved product offerings, and continued investments in marketing have helped drive increased account openings.

Our segmented approach to serving affluent customers is also producing strong results. Premier client assets were up 10% from a year ago. We continued to invest in talent with double-digit growth in Premier bankers and financial advisors year-over-year. We've been investing in business banking, including adding over 130 business bankers over the past year. We are seeing the initial benefits in our results, including checking account openings up 9% and credit cards openings 61% from a year ago. Importantly, we remain disciplined on credit, with growth focused primarily on customers with deep existing relationships. Credit card revenue increased from both a year ago and the second quarter, with growth in balances and purchase volume. We opened more than 660,000 new accounts in the third quarter. We again saw strong account openings in our branch channel, which has allowed us to reduce our reliance on third-party channels.

Auto originations grew 15% from a year ago, and average balances were up 31%. While we're growing our lending businesses and our customer base is still strong, our underwriting criteria recognize that at some point, consumer credit conditions will weaken. To be clear, we do not see signs of this yet, but we know that cycles are inevitable. Turning to Wealth and Investment Management. Wealth and Investment Management client assets grew 11% from a year ago to $2.5 trillion. Average loan balances increased 16% from a year ago. We identified this as a significant opportunity several years ago, and have since enhanced our products and processes to better serve clients and scale the portfolio. We have made significant investments in our technology platforms and expanded investment capabilities to provide advisors with a stronger platform to serve clients.

These investments include a new portfolio analysis and client proposal tools for advisors leveraging Aladdin Wealth technology from BlackRock. We have also increased the number of alternative product offerings in our platform by over 30% this year. In addition, we just launched an AI-powered tool for our financial advisors that streamlines routine work and helps them access the information they need to better serve clients. This is the first of several capabilities planned as part of our broader AI strategy in Wealth and Investment Management. Turning to Corporate and Investment Banking. In our banking business, revenue grew 8% from a year ago, and year to date increased 13%. The hiring we've done in investment banking has strengthened our client coverage model and improved our ability to compete, which you can see from our improved market share.

Including equity capital market share increasing 84 basis points to 3.9%, and increasing our rank in announced U.S. M&A volume to number six, up from nine a year ago. It is important to note that while we're building our investment banking business, and it benefits from strong market environments, its size is still relatively small in the context of the rest of the company. We don't expect it to drive outsized returns in any one period, but it has contributed and should continue to contribute to higher returns over time. Markets revenue was down modestly from a year ago. Market conditions were more difficult than prior quarters, but we continued to see the benefits of our strategic investments. Year to date, markets revenues increased 14% versus last year. Finally, let me highlight Commercial Banking, where our client acquisition strategy helped to drive strong balance sheet growth.

Average loans increased 10% from a year ago, reflecting our continued success in attracting new clients and deepening existing relationships, supported by our investment in additional bankers. Average deposits increased 16% from a year ago, reflecting our deposit-gathering initiatives, which have attracted deposits from both new and existing clients, even as we've maintained our pricing discipline. We also continue to capture a larger share of our Commercial Banking clients' investment banking and markets activities, with gross fees 25% higher than a year ago. These results highlight the benefits of the investments we've made in our Commercial Banking franchise, which is driving client growth and increasing the diversity of our revenue base. More broadly, we are accelerating our investments in both traditional digital payments, in traditional and digital payment solutions for consumers and businesses. We believe tokenized deposits can deliver important benefits for the businesses we serve.

Last month, we launched tokenized deposits on our proprietary blockchain platform, providing corporate and commercial clients with a new way to move money more efficiently. As we expand the platform, clients will be able to move funds 24 hours a day, seven days a week, across accounts and borders, without changing how they bank with us. Use cases in the U.S. for stablecoins remain unclear, but we're building solutions to be prepared as opportunities potentially unfold. We, along with 20 other international financial institutions, are establishing a new company to issue stablecoins beginning in the first half of 2027. The product will support wholesale, institutional, and retail use cases, providing clients with a trusted form of digital money that can improve cross-border payments and facilitate digital asset settlements. We're devoting significant management time and resources to building AI capabilities and drive value. The work here is multi-dimensioned.

Internally, we're using it to write code faster. Over the past year, this has gone from being a tool to assist programmers to now being able to use autonomous agents when appropriate, to increase capacity and revenue from our branches, to launch marketing campaigns faster, to help identify as well as write and test code to close previously unknown cyber vulnerabilities, and to improve and simplify risk management processes. Externally, we're using it to improve the customer experience, including helping customers complete common banking tasks such as making payments, replacing cards, and getting insights into spending, and to accelerate response times for underwriting decisions and customer complaints. We will also evaluate how third-party models and agents can provide value-added capabilities to our clients, while at the same time considering the potential risk these tools can introduce for both our clients and Wells Fargo.

Our focus was recently recognized in the Evident AI Index for Banks, which independently tracks AI maturity across the world's leading banks. We increased our ranking to number five globally and ranked number three in the U.S. based upon their evaluation four core pillars, including talent, innovation, leadership, and transparency. We're excited by the opportunities AI presents for our clients and our company, and we're taking a disciplined approach to managing risk. Looking externally, U.S. economic growth continues to be strong. While uncertainty persists due to sticky inflation, the conflict in the Middle East, persistent fiscal deficits, and volatile energy markets, strong labor markets and wage growth, business investment, productivity investments, infrastructure spending, and a historic wave of technology-related CapEx have proven more powerful than many predicted. As a result, real GDP growth continues to track well, with the third quarter shaping up to be strong.

The consumer remains one of the economy's most important sources of resilience, though higher prices continue to weigh on consumer sentiment. Let me highlight our customer trends. Consumer spending remains strong. Debit card spending increased 8% from a year ago, with broad-based growth across categories accelerating from the 5% growth rate we saw in the third quarter last year. Credit card spending was up 12% from a year ago. Our growth has been amongst the highest in the industry, driven by strong new account growth. At the same time, consumer credit remains strong, with our charge-off ratio down from both the second quarter and a year ago, and early-stage delinquencies at historically low levels. High-income households continue to benefit from strong asset prices, substantial home equity, and stable labor income.

While lower-income households remain more sensitive to financing costs, inflation, and higher living and fuel expenses, they appear to be stable. Corporate America also continues to demonstrate strength. Our corporate and commercial customers remain in good shape. Loan demand continues, and credit remains strong, with only 18 basis points of losses in the third quarter, and non-accrual loans down from both the second quarter and a year ago. While our data is strong, we are conscious of the risks. Inflation and higher interest rates continue to be headwinds, and the longer they persist, the more pressure they could place on both consumers and commercial clients. While markets have been strong, an unexpected or significant movement could filter through the broader economy. The AI investment cycle has become a complicated macroeconomic force in its own right.

Demand for semiconductors, networking equipment, power generation, data center infrastructure, cooling systems, storage, cybersecurity, and advanced manufacturing equipment continue to surge. The scale of investment here increasingly resembles prior infrastructure booms, creating both significant opportunities, but also risks, given the significant leverage used to finance the build-out and the upward pressure on prices in selected industries and supply chains. Having said this, the strength of the economy and the positive forces from these investments have thus far outweighed the potential downside. Before I conclude, I want to thank Derek Flowers, our Chief Risk Officer, for his leadership in strengthening our risk and control framework and culture to position Wells Fargo for continued growth. As we announced last month, Derek plans to retire early next year, and he will work closely with Scott Powell, our Chief Operating Officer, to support the smooth transition when Scott assumes the Chief Risk Officer role.

As I close, I'll leave you with a few final thoughts. Our progress towards building a growing, high-returning company continues. Our ROTCE continues to increase and is getting closer to our 17%-18% target. Though timing is influenced by markets and the credit environment, we are confident this trajectory can continue, and ultimately, our targets should be higher. Like all management teams, we are balancing many things, growth, risk, changing interest rate expectations, inflation, and AI opportunities, just to name a few. However, our North Star remains the same. Invest in our people, products, technology, and marketing for the long term, but show consistent progress in growing revenue and returns in the short term without taking outsized risks or growing in ways that is not consistent with our long-term vision for Wells Fargo. I'll now turn the call over to Mike.

Thank you, Charlie, and good morning, everyone. Since Charlie already covered the key drivers behind our financial performance and the business highlights, I'll begin my remarks on slide four. Our third quarter results demonstrated the progress we've made in strengthening the company's financial performance. Strong balance sheet growth, continued revenue growth, disciplined expense management, and solid credit performance drove another quarter of double-digit EPS growth and continued improvement in returns year-over-year. Turning to slide six. Net interest income increased $567 million, or 5%, from a year ago, and increased 2% from the second quarter. The growth from the second quarter was driven by higher loan and investment securities balances, one additional day in the quarter, fixed-rate asset repricing, as well as the impact of higher rates on floating-rate assets.

The net interest margin was stable from the second quarter as the benefits of loan growth and higher yields in almost all categories of interest-earning assets, including the impact of fixed-asset repricing, were offset by continued growth in interest-bearing deposits. This was a better result than we expected at the beginning of the quarter due to slightly higher cash and securities balances, slightly lower funding costs, and additional efficiency in deployment of the markets balance sheet. As we continue to grow the markets balance sheet on a gross basis, we are becoming increasingly more efficient in how we deploy it, and we made more progress this quarter than we originally anticipated. As our equity finance business expands, we are realizing greater netting benefits, and on the fixed income side, we are implementing more efficient funding structures, including sponsored repo and other balance sheet optimization solutions.

I will update you on our expectations for full-year net interest income later on the call. Moving to slide seven. Average loans increased $105 billion, or 11% from a year ago, driven by growth in commercial and industrial loans where demand remains healthy. Commitment levels have continued to increase across both Commercial Banking and the Corporate and Investment Bank, while utilization rates have remained relatively stable. On the consumer side, auto, securities-based lending, and credit card continued to be the primary growth drivers. Turning to deposits. Average deposits increased $143 billion or 11% from a year ago, and were up 1% from the second quarter. We continue to have strong commercial and interest-bearing deposit growth, reflecting continued client demand for higher yielding products, as well as our targeted growth initiatives.

Consumer balances increased from a year ago, and with a modest decline in balances from the second quarter, reflecting seasonal outflows. Turning to slide eight. Non-interest income declined 1% from a year ago. We had growth across several categories, including investment advisory, deposit-related fees, investment banking, and card fees, reflecting continued momentum in businesses where we've been investing. However, this growth was more than offset by lower trading gains, although revenue in our markets business was down only slightly versus a year ago. Lower lease income following the sale of our railcar leasing business in the first quarter, as well as lower gains from the equity securities also contributed to the decline. We had only modest net gains from equity securities in the third quarter, and we currently expect them to remain low in the fourth quarter.

As we have highlighted in the past, results from our venture capital investments can be volatile from quarter to quarter, but we continue to expect strong returns over time. It's important to note that we generated more than $1 billion of equity gains during the first half of the year, which is in line with our historical full-year average. As a result, even with minimal gains in the second half of the year, we would still be on track for a solid full-year result. Turning to expenses on slide nine. Non-interest expense declined $103 million from a year ago, and our efficiency ratio improved to 63%, down two percentage points year-over-year. Personnel expense declined driven by lower severance costs, which were $296 million a year ago. Higher revenue related compensation expense was largely offset by the benefits of our efficiency initiatives.

Non-personnel expense increased from a year ago, driven by higher technology and equipment expense. Turning to credit quality on slide 10. Our credit performance in the third quarter remained strong with a net loan charge-off ratio of 38 basis points of average loans down from a year ago. Commercial net loan charge-offs were stable from a year ago, and increased eight basis points from the second quarter to 18 basis points. We continue to monitor for a range of macroeconomic and industry specific risks, including higher interest rates, inflation, geopolitical uncertainty, and AI related disruption. But as of now, we do not see signs of broad-based credit deterioration. Losses continue to be idiosyncratic and driven by borrower specific situations. Consumer credit performance was strong with good performance across all portfolios, and consumer net loan charge-offs declined to 70 basis points.

Our allowance coverage ratio for total loans was relatively stable compared with the second quarter. Growth in commercial and industrial, and auto loan balances drove a modest increase in the 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 remained strong with our CET1 ratio at 10%, well above our CET1 regulatory minimum, plus buffers of 8.5%. The decline from the second quarter included a decrease in accumulated other comprehensive income driven by the impact of higher interest rates. We plan to continue to manage our CET1 ratio to be within our targeted range of 10%-10.5%. During the third quarter, we increased our common stock dividend to $0.50 per share and repurchased $2.5 billion of common stock.

Looking ahead, we will continue to consider the interest rate environment and the impact on accumulated other comprehensive income when determining how much stock we repurchase. As a reminder, we expect the Federal Reserve to finalize Basel III capital rules, and based on the proposal, we have estimated that our risk-weighted assets could decrease by approximately 7%, which all else being equal, would increase our CET1 ratio. We provide an update on our operating segments on slides 12 through 15. Charlie has already covered the key drivers of revenue growth across the businesses, so I'll keep my comments brief and just highlight a few additional points. Let me start with Consumer Banking and Lending. We generated solid revenue growth while reducing expenses, and return on allocated capital increased to over 32% in the third quarter.

Commercial Banking had good revenue growth and combined with disciplined expense management, their efficiency ratio improved to 43% in the third quarter from 48% a year ago. Turning to Corporate and Investment Banking. Banking revenue was up 8% from a year ago, including a 10% increase in investment banking. I'd like to focus for a moment on our markets business, where results can vary with market conditions. While equities revenue was up 21% from a year ago, total markets revenue was relatively stable from a year ago, and revenue in the third quarter was not as strong as during the first two quarters of the year. At an industry conference last month, I indicated that we expected third quarter markets revenue to be up mid-single digits year-over-year. Our actual results reflected a more challenging market environment late in the quarter than we had anticipated.

During the final weeks of September, interest rates moved sharply, and these moves pressured fixed income valuations and significantly reduced client activity, particularly in strategic transactions, hedging activity in the primary issuance market. At the same time, equity market volatility stayed low, creating a less favorable environment for our equities derivative franchise. Finally, turning to Wealth and Investment Management, which generated strong results. I'd like to remind you that the majority of WIM advisory assets are priced at the beginning of the quarter, so fourth quarter results will reflect October 1st market valuations, which were above both July 1st and year-ago levels. Turning to our 2026 outlook on slide 17. Starting with net interest income, we still expect net interest income for full year 2026 to be ±$50 billion.

Fourth quarter net interest income is expected to be approximately $13 billion, and the net interest margin is expected to be stable from the third quarter. We expect the pace of net interest income growth to increase in the fourth quarter versus the prior two quarters due to a few factors. We expect continued benefits from loan growth as well as deposit growth. We also expect continued benefits from fixed-rate asset repricing and higher investment securities balances. Given we are modestly asset sensitive, we expect fourth quarter net interest income, excluding markets, to benefit from the higher interest rate environment. However, in markets which is liability sensitive, some of these benefits would be offset since markets net interest income is negatively impacted by higher rates. However, this would largely be offset by markets non-interest income. Turning to expenses, we continue to expect 2026 non-interest expense to be approximately $55.7 billion.

While full-year revenue-related expenses are expected to be approximately $400 million above our original expectations, driven by strong business growth in equity markets, our ongoing focus on improving efficiency is generating more savings across the company, allowing us to offset the higher revenue-related expense. Our third quarter results demonstrate the strength of the franchise and the ongoing successful execution of our strategy. We continued to grow earnings, increase returns, and invest in the business while maintaining strong credit performance and a disciplined approach to expenses. Our stronger performance during the first three quarters of the year highlights the continued incremental progress we are making towards our goal of higher growth and returns. 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. Our first question will come from John McDonald of Truist Securities. Your line is open, sir.

Thank you. Good morning. Mike, I was hoping you could start off, maybe just repeat a little bit of the comments about the drivers of the net interest income growth you expect in the fourth quarter. Then maybe just clarify what you were saying about markets NII versus non-markets, maybe in the context of, I think for the full year, you originally were hoping for $48 billion and $2 billion to get to the $50 billion. Is that still the same? Maybe just clarify what you were saying about the fourth quarter split, maybe between markets and total NII.

Yeah. Hey, John. Thanks. Thanks for the question. Let me just start a little bit on Q3, and then I'll quickly bridge into Q4. What we saw in Q3 is the NIM stabilized. The aggregate NIM stabilized. When you look beneath that a little bit, what was happening is the NIM ex markets increased slightly. We saw a little bit of expansion there, and that's part of what you're going to see as you go into Q4 as well. Then we also got the benefit of a lot of the efficiency work we've been doing, and how we deploy the balance sheet in the markets business. That sort of helps bring good stability, I think, overall to the NIM. We still expect that to be flat in Q4 relative to Q3. Just to double-click on that one second.

When you look at what we did in markets is, and I think fixed income financing is a good illustration of it. The gross financing balances, they grew about 18% from the second quarter. But the net balances were down. That was a lot of the optimization that we have been doing, moving more clients to sponsored repo, and other things. We've got really good confidence that we've got more ability to continue to do that, and that'll be pretty stable. That sort of underpins sort of the NIM being pretty stable as we go into Q4. What's happening in Q4 then is you start to get the benefits of a lot of what you started seeing in Q3. You look at loan balances. The step-up into Q4 is bigger than obviously the average balances you saw in the quarter.

I think we were up, the end of period's up $15 billion or so going into the fourth quarter. You have to look through a little bit of that because there's a little bit of seasonality at the end of the quarter in the commercial bank. But nonetheless, the step-up is bigger. You're getting the benefit of that in the fourth quarter. We continue to grow deposits. You'll see more of that contribute into the quarter as well. You get the benefit of rates, and sort of yield and repricing sort of coming through in the balance sheet. Almost every category outside of the markets business of earning assets saw a little bit of benefit in Q3 from higher yields, and you're going to see more of that in Q4.

That's going to lead to a little bit more of an expansion of the NIM ex markets as well as you go into the quarter. Then there are a few other factors that sort of drive it, but those are sort of the big ones that lead to the step-up that we're going to see going into Q4. What I was saying on markets NII is as you go into this rising rate environment, we're asset sensitive on the banking book. You're going to see that NIM expand. You're going to see sort of the impact of rates come through. Since markets is liability sensitive, you're going to see some impact on markets NII going into the fourth quarter. But that'll be offset in fees.

When you look at the mix of the $50 billion, our best guess is on the markets NII, that it will be slightly below $2 billion, call it $1.8-ish billion. Then you will make up for some of it to get in the non-markets NII to sort of get back to the full year of $50 billion.

Okay, thanks. That is very helpful. I know it is too early for guidance on 2027 NII, but any early thoughts in terms of just the drivers your next year's NII relative to where you think you will jump off on the fourth quarter? Things we should keep in mind, good guys, bad guys, as you go through your planning.

Yeah, I mean, look, certainly, when you look at the step-off point coming out of Q4, that is a net positive sort of where we are. Rates appear to be either increasing or certainly staying higher for longer than we contemplated not that long ago. So that is a net positive. We are still seeing good growth across the loan portfolios. We expect to continue to see good growth in the card business, auto business, as well as on the commercial side. So those will all be positive. Then we have been pretty successful at growing deposits, particularly the interest-bearing deposits. So I think all those things should sort of continue as we go into next year with all the right caveats around sort of the macro environment sort of being pretty constructive despite some of the noise you have there.

But we enter the year, and I think if the $13 billion is what close to $700 million over last year, so you sort of enter the year in a better place.

The next question will come from Scott Siefers of TD Cowen. Your line is open.

Morning, guys. Thanks for taking the question. Mike or Charlie, was hoping you could maybe just sort of touch on just sort of your thoughts for how a period of sustained higher rates kind of changes your sense for both customer health and resilience. And then maybe also touch on sort of your sense for how commercial demand might change portions of the consumer book where you've had good growth, how that might change, et cetera. So basically impact on sort of resilience and growth dynamics.

Hey, Scott. It's Mike. I'll take a shot and welcome back to the call in your new seat. Look, I think we've been living in this environment now for a while where inflation's been higher, rates have been pretty high although have moved a little bit higher more recently. You've seen and the cumulative impact of that has been flowing through the economy. But what we're seeing sort of offset some of what would be kind of the negatives is wages and employment continues to be really strong. And wages are largely keeping up with inflation. Even at all of the different cohorts of clients we have, when you look at them income levels, wealth levels, the data would say on a cumulative basis over the last number of years, wages have sort of kept up, which is sort of supporting the activity levels that we're seeing.

We're not seeing any deterioration in the credit profile of the consumer. I think as long as the employment picture stays pretty strong, we should be able to keep seeing sort of the strong activity levels and strong performance across the consumer base. Even when you start looking at energy and gas prices, it is meaningful for sure, but it ends up being 3%-6% of spend depending on your wealth level or income level. So it's still manageable, and people were able to offset that with savings in other categories of spend. Overall, we're seeing a pretty strong picture there. As long as the economy continues to grow and employment stays strong, that should continue.

We're just not seeing signs of that changing at this point, either from the sentiment across our commercial client base or just in the actual metrics that we're seeing on the consumer side. On the commercial side, higher rates definitely matter. But in many of our Commercial Banking type clients, people have been pretty prudent now for a while, for years, in terms of how much leverage they're putting on. So they're still being thoughtful about inventory levels or levels of investment despite sort of the AI and CapEx cycle that Charlie sort of talked about a little bit. So they come into this environment in pretty good shape. Now, the higher rates are definitely going to impact valuations in places like commercial real estate. But that'll take some time to really kind of play through those asset classes.

As we sit here today, things look pretty good, despite sort of what you're seeing in terms of rates or just sort of overall sentiment that you hear about.

Okay. Perfect. Thank you very much. Then maybe switch gears a second. A whole host of AI-related questions sort of floating around investor psyches these days. But maybe it was something you could touch on, just this idea that AI agents eventually make it just a lot easier to kind of identify and move around idle cash toward higher yielding alternatives. Just maybe at a top level, how you're thinking about the possibility that technology as it improves, just sort of reduces deposit inertia over time, and what it means for value behavior for large low-cost deposit bases like yours and others in the industry.

Yeah. Hi, it's Charlie. I'll take that, and Mike, you can chime in. Listen, I think we'd say what like many other people have said, which is high-rate alternatives exist today. They've existed for a long time. If you want to move to a high rate, you can just go online and do it yourself in no time. That's not something new. The idea that consumers are going to give the power to an agent to act on their behalf unilaterally, and move money around to institutions that they don't know, they don't understand, where they don't understand the terms of the accounts they're moving it to and all those types of things. I think that's a long ways away. There's no question that agents will become a part of the way people interact. We have them. We're building them ourselves.

But the idea that that's going to contribute to mass movement to higher-rate alternatives, I think is completely overdone, especially for the time period we can see. Just a reminder, people keep money with us for a lot of reasons beyond just maximizing that last value they get in terms of savings. They keep money because with a primary payments account, they've got money coming in and going out all the time. We have wholesale customers that understand every last basis point, and they want to pay us for certain services. Clearly these agents will become tools. But the idea that they're going to contribute to some mass movement anytime in the near future, I just think is completely overdone.

The opportunity for us is to use agents to better serve our customers and let them get access to the things that we can do for them.

Perfect. No, that all sounds great. I definitely appreciate all the color. Thanks again.

The next question will come from Ken Usdin of Autonomous Research. Please go ahead, sir.

Thanks. Good morning, guys. I wanted to ask a question just about capital and balance sheet utility. Noted that obviously AOCI was up, CET1 was down a little bit, as was TCE. You didn't grow RWAs as much as you had in the prior couple quarters. I just wanted to know, are you thinking any differently about what you're thinking about growing, what you're putting on the balance sheet, and how does that build into your expectations for where you want to keep capital and capital return within that? Thanks.

Yeah. Hey, Ken, it's Mike. Really no different in terms of how we're thinking about growth. But again, we can continue to optimize as we deploy the balance sheet. Even in some of the optimization work that we're doing in markets, it's the same client activity with a lower footprint. You end up having less RWA associated with some of it as well. When you think about where we've been growing now for a while, it's all the same places that we expect to see some growth going forward. On the consumer side, we continue to expect the card and the auto portfolios to grow. I think you won't see much growth in home lending. On the commercial side, we're seeing really good loan growth.

Again, you can see that in the commercial bank as well as in pockets in the corporate investment bank. That'll ebb and flow in any given quarter based on just sort of what's happening and the opportunity set that's there. In the markets business, we're as excited as ever in terms of being able to continue to scale that business, and seeing really good receptivity across a lot of clients that we're either deepening relationships with or adding onto the platform. I think we continue to see really good opportunity there. All in the context of continuing to increase the return profile of the whole company as we go as well.

I would just add on that, I think we feel like we've got a lot of flexibility when it comes to our ability to manage our overall capital. As Mike said, we are growing, but we're very conscious of, and have the ability to manage the RWA in that. We earn at $6 billion a quarter in terms of earnings power, less dividends. That adds just where we show up 30 basis points or so to our CET1 ratio for the quarter. Then we've got just variability of rates. Our rates are back down from where they were. So we've got flexibility to both grow and manage capital, and over a period of time, continue to return capital to shareholders as we've been doing.

Got it. Just a quick one on deposit betas. Given that you've been changing what's been growing since the asset cap came off, and obviously we've seen the commercial deposits growing, do you have a view at all on how in this up cycle for rates, how deposit betas might be different than the prior rising rate cycle? Thanks.

Yeah. At this point, we don't think they're going to be that different versus what we saw last go around. I think what we saw so far from the hike in September, I think is a good example of that. In the corporate investment bank, those are going to be the highest betas by far. But it's right on top of what our playbook is for the rate increase. The beta was slightly lower than, at least so far, in terms of what we expected to see. In the commercial bank, the betas are much lower than the corporate investment bank. Again, right on top of what we would have expected to see. Then in the consumer space, it really is about how you manage CD rates and high yield savings promos that we've launched through the branches.

The rest of the book is actually quite stable and not moving from a rate perspective. So overall, so far exactly what we would have expected to see, and don't think at this point it's going to be that different than what we've seen or saw last time.

The next question will come from Ebrahim Poonawala of Bank of America. Please go ahead.

I guess first question, just around, I think, Charlie, you laid out all the areas that Wells has been investing in business banking, wealth, except payments. That's been going on for a few years. As we think about where that monetization is showing up already versus where it's on the come looking out over the next 12-24 months, just break it down for us how we should think about where we could see building momentum as we think about next year, assuming the macro holds up, and where you've already been able to monetize some of those investments more noticeably over the last few quarters.

Sure, Ebrahim. It's interesting. When we look at our results, we talk about the statistics, whether it's growth in checking accounts, growth in credit card accounts, growth in loans in the commercial bank, growth in our lending products, growth in assets under our total client assets and wealth. We tried to lay out, and across the entire franchise, we see all the businesses, with the exception of mortgage, growing those statistics. When we look at our revenue growth, I went through this in my prepared remarks, our WIM revenues are up 12%, our Commercial Banking revenues are up 6%, Consumer Banking and Lending revenue is up 5%, Corporate and Investment Banking revenue is up 3%, with areas of focus like M&A up 30%, ECM up 33%, investment grade up 33%.

As we think about what we've been investing in versus what we're getting for it, we see that very clear payoff. In terms of our revenue growth for this quarter, we had a very big quarter in our equity gains last quarter from our private equity investments. Didn't have that this quarter. We said you need to look at them over a long period of time. What we see is that these investments that we've been making are paying off, and we would expect that to continue. When we think about where we are on the investment versus the payoff cycle, we're probably much earlier in the consumer bank because of the things that we had to fix over a period of time, and we compete with people who've been investing for a decade to two decades, and we've been investing now for two years in that.

Even though we see growth in that part of the business, we would hope to see more acceleration in our core consumer and small business franchise. We would expect to see more of the same in our card business, more of the same in our auto business, more of the same in the commercial bank. I would say, in the corporate investment bank, more of the same in some areas, but potentially broader growth with even markets. Overall, when we think about what we've been able to produce, EPS growth of 13%, ROTCE marching upwards north of 16% now, kind of continuous progression upwards with this kind of broad-based growth. We see it continuing. We feel really good about being able to deliver that as time goes on.

That's helpful. I guess just out of curiosity, I realize it's not needle-moving, but you chose to talk about tokenization and tokenized deposits in your prepared remarks. Just put it in context, do you see significant adoption happening either in the markets or the commercial payments business, and does that create a meaningful opportunity for Wells as you think about investing, growing client wallet share? Just if you can size that for us to whichever way you can. Thank you.

What we're doing in tokenized deposit payments really starts with how do you do a better job servicing cross-border payment needs of our customers. I think there's lots of discussion around some of the negatives of the existing payment rails when it comes to cross-border payments. Takes too long, transparency, et cetera. I think what this allows us to do is completely change that experience. It goes from what could be a day or two to get your payment to where it's going to, this is in production by the way, and it's small volume so far, but the payments that we're doing are getting from initiation to beneficiary account in two minutes or less. I think it completely starts to change the experience that you can provide to the customers.

For us, more broadly, we don't have the same international branch network that other big global players have. This technology allows us to go after an addressable market in the cross-border space in a completely different way and provide a solution that is as good or better than a lot of the peers can provide. It does, over time, increase our addressable market that we can go after without having to make significant investments of putting people locally in a bunch of different places around the world. Just more broadly, it gives us the blockchain technology to do a whole bunch of other stuff if the use cases start to materialize around other tokenization of real-world assets, tokenization of securities, whether it's crypto trading in our wealth business or a whole bunch of other different places.

It does give us some real-world benefits today. It increases the addressable market in payments, and then just gives us a lot of optionality over a whole bunch of different use cases, if and when they develop and become more meaningful.

The next question will come from Manan Gosalia with Morgan Stanley. Please go ahead.

Hey, good morning. I wanted to ask on the deposit mix. I know you've previously spoken about interest-bearing commercial deposits leading the growth initially, and then lower cost operating balances coming through over time. Can you help us think through when we should see that mix start to improve consistently? And are we getting close to an inflection in those non-interest-bearing deposit balances as well?

Yeah, I think you probably need to focus a little bit less on mix and a little bit more on dollars of deposits growing, because we still think there's a lot of opportunity to grow on the interest-bearing side. As I've said on the call and just in other forums, these are great returning long-term balances that come with other fees associated with them on the payment side. I think they're very valuable over a long period of time. The non-interest-bearing or low-interest-bearing deposits come as we grow more on the consumer side. You see momentum building, as Charlie sort of talked about in his remarks on the consumer side. Those will bring either non-interest-bearing or sort of low-interest-bearing deposits with them.

As we continue to grow our treasury management and payments business on the commercial side, those also bring non-interest-bearing deposits with them for clients to support all of the payment needs that they have with us. Those things just take a little bit longer to sort of materialize and grow in a more meaningful way. I think you'll see interest-bearing still grow at a faster clip for a while as we continue to deepen with many of our clients.

Got it. Then maybe pivoting to expenses. The full-year guide implies about $14 billion or so of expenses in the fourth quarter. So it's a little bit of a step-up from this quarter. How much of that is just a timing of investments and other spend that you're making, and is that a good jumping-off point as we think about next year?

Yeah. Well, in the third to fourth quarter, if you go back and look over time, there's always a little bit of an increase from the third to fourth. So there's nothing special embedded within that. I think we're trending well to sort of hit the full-year guide, and potentially could be a little bit better, but we are trending well there. I think as you sort of think about next year, without giving specific numbers, the fourth quarter is not a good jumping-off point because it doesn't take into account all the work we continue to do on the efficiency side. Which again, as we've said over and over, we still think there's a lot of meaningful opportunity to drive that.

So as we enter sort of our budget conversations going into next year, we come at it in the same way we've been doing it for years now, which is we expect every part of the company to drive meaningful efficiency. We've got to continue to make the investments that we want to make. You got to deal with inflation on salaries and other things. That'll net down to a number. I think we still expect to see sort of meaningful efficiencies as we go into next year to help offset some of that.

And maybe I can just add a couple of things to that. First of all, when we think about we as a company and what we're focused on, I think we're very focused on growing the business in a smart, methodical way. We've talked about that a whole bunch in terms of where we're seeing that. In terms of the expenses and what we've done and the way we think about it, we've been very consistent since we've been here about focusing on efficiencies, reinvesting. Even this quarter, the fact that our expenses were somewhat flat to down when our revenue-related expenses, which are mostly commissions, which are formulaic, are up, says a lot about levers that we're able to pull. We're very focused on building a company which has higher embedded returns, which is more efficient.

And when we get questions about AI and people talk about agents and all these other things, I personally think there's this underappreciation for the benefits that those with scale have when it comes to AI. I think there are huge benefits when it comes to how we can serve customers and our ability to build tools for customers and deploy them broadly. But the same thing is true on the expense side. We can go build an agent that can do the work in our call centers or in our off-sites. We can spend the same amount of money as someone else but deploy it over a very large part of the company here. This idea of scale matters in AI world is even more so. That's probably not very good English, but I hope you understand what I'm saying.

Again, I think we feel that way both on how we serve customers and ultimately what it means for revenue over a period of time. But certainly when it comes to our ability to continue to become more efficient, which will allow us to either control expenses and reinvest in other things at the same time. That's just something that's kind of appeared with the advent of these models that we're incredibly bullish about.

That's great color. Thanks, Charlie. Thanks, Mike.

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

Thank you and good morning. Just a few follow-up questions for me. First on capital. When Moody's affirmed your ratings on October 5th, they did say something about estimating that your RWA benefit from Basel III Endgame would be RWAs down 7%, but they would view operating at the low end of your CET1 ratio target of 10%-10.5% as credit negative. I know that they said it in context of Basel III Endgame, but I'm just wondering with the current CET1 at 10% and some of the growth opportunities that you've mentioned so far on this call, how investors should think about the buyback as a priority and absolute buyback levels relative to your CET1 today and that comment from Moody's. If that comment at all is impactful to how you're thinking about capital.

Yeah. Erika, it's Mike. I'll take a shot. I think you're overreading the comment. I think their comment was in the context of if RWAs go down by a bunch and you manage below 10%, in their analysis would imply, I think they said a $13 billion decline in capital. I think you just got to take that in context, like less capital from a rating agency perspective is worse than more capital. There's a lot to play out between sort of now and then. So I wouldn't overthink that too much. I think as you look at our capital priorities and the way we're going to manage capital, I think we said it in our remarks again. We plan to manage capital between 10% and 10.5%.

Depending on what we think the growth opportunity looks like and all the risks that are out there in the quarter, we will use buybacks as that lever after we go through that assessment. That is kind of the way we have approached it now for a number of years. I think as Charlie said earlier, I think we certainly feel like we are going to have capacity over time to buy back plenty of stock, and I think we have done a lot over the last number of years. I think in any given quarter, it is going to be a function of what we think the growth opportunity looks like and what risks are there, and then buybacks end up being that last piece.

Let me just kind of put a fine point on what Mike said is, obviously we care a lot about our ratings. We care a lot about what rating agencies think. We look at where we are today and believe we continue to still have a significant amount of flexibility to deploy capital, and not be in a position to harm anything relative to our ratings. As Mike said, we are comfortable with the range of managing capital that we have said. We do have the change in RWA coming, hopefully from Basel III Endgame, which should be tailwinds for us. We earn a lot of money in a quarter. When we look at all of that gives us the opportunity to use the balance sheet to serve customers as well as return stock.

We do not view that comment as limiting to anything we otherwise would be contemplating doing.

Thank you for that complete answer. As my second question, as a follow-up to John's line of questioning on net interest income. The exit rate for NII in the fourth quarter implies a 4%-5% gross rate, and obviously that is coming off of a 2.60% net interest margin in 4Q 2025. Is that 4%-5% the right sort of ballpark as we think about 2027? Sorry for the compound question, Mike, but just wanted to clarify. We are calculating your beta in the last cycle, 4Q 2021, 2Q 2024 to be about 46% versus 55% at JPMorgan and 52% at BofA.

I just wanted to make sure that you meant that you will continue to sort of outperform your peers in terms of deposit beta when you responded to the question that your beta should be the same this time around as it was in the last hiking cycle.

If I miss a piece of that, Erika, you got to remind me.

I'll try and capture all of that. Maybe on the beta first. You have to look at each of the components of our deposit base separately. The mix is changing a little bit. But when you look at each component of the deposit base, we don't expect the betas to be any different than they were the last cycle. We will have, if you're comparing it to that time frame, we had a bigger percentage of our deposit base was in the consumer side, so you're going to have a lower beta. Now that we're growing on the commercial side, in aggregate, you'll have a slightly higher beta, but that's a good thing, as you sort of see the growth overall come through.

Exactly how that will compare to sort of the peer set, is a function of the mix of deposits and how much of it is consumer versus commercial. I think you do need to normalize through that. But we do not expect each component to be really any different than what we saw in the last go around. I think in terms of the way to think about the jumping off point into 2027, I think we'll give more guidance like we normally do in January. But certainly, having a strong fourth quarter sets us up well as we go into next year.

Wells Fargo (WFC) Q3 2026 Earnings Call Transcript

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