Wells Fargo & Company (NYSE:WFC) on Tuesday reported stronger-than-expected second-quarter results as higher fee income, investment banking activity and net interest income lifted revenue.
The bank reported adjusted earnings of $1.96 per share, beating the Wall Street consensus estimate of $1.72. Revenue rose 8.6% year over year to $22.62 billion, topping analysts’ expectations of $21.82 billion.
On a GAAP basis, net income increased 17% to $6.41 billion, while diluted earnings per share rose to $2.00 from $1.60 a year earlier. Return on equity improved to 15% from 12.8%, and return on tangible common equity increased to 17.7% from 15.2%.
“We saw broad-based revenue growth, with all of our operating segments generating strong revenue growth,” Chairman and CEO Charlie Scharf said.
Net Interest Income, Fee Revenue Rise
Net interest income increased 5% to $12.32 billion, supported by lower deposit costs, higher loan and investment securities balances, balance sheet growth in the Markets business and higher interest-bearing commercial deposits. Those gains were partly offset by lower income on floating-rate assets and a modest decline in noninterest-bearing deposits.
Noninterest income climbed 13% to $10.31 billion, driven by strong venture capital investment performance, higher investment advisory fees, increased investment banking fees and growth across most fee categories.
Provision for credit losses declined 9% to $914 million, while noninterest expense increased 2% to $13.66 billion, reflecting higher incentive compensation, technology spending and advertising costs.
Business Segments Deliver Broad Growth
Corporate and Investment Banking revenue rose 16%, led by a 20% increase in banking revenue and a 24% jump in markets revenue. Wealth and Investment Management revenue increased 13%, while Consumer Banking and Lending and Commercial Banking each posted 6% revenue growth from a year earlier.
During the quarter, Wells Fargo repurchased $3 billion of common stock and said it expects to increase its third-quarter dividend by 11% to 50 cents per share, subject to board approval.
CEO Cites Strong Economy, Reaffirms Outlook
Scharf said the bank continues to benefit from broad-based economic strength in the U.S. while investments and improved operating discipline are driving momentum across its businesses.
“We are clearly benefitting from the broad-based economic strength we see in the U.S., but the investments we are making and our improved operating discipline also drove strong momentum in our key business metrics across all operating segments again this quarter,” Scharf said.
Looking ahead, Scharf said both consumers and businesses remain financially healthy. Consumer spending continues to increase, while delinquencies and charge-offs remain low and savings and investment balances are growing. Businesses remain cautious, but strong balance sheets and cash flows continue to support credit quality.
Although affordability and inflation remain concerns, he said a strong labor market and wage growth continue to support the economy. Scharf added that Wells Fargo is taking a measured approach to growth, aiming to generate sustainable returns that can withstand future economic cycles and market volatility.
Wells Fargo reaffirmed its 2026 outlook, expecting net interest income excluding Markets of about $48 billion, with Markets net interest income of around $2 billion. The bank also maintained its noninterest expense forecast of approximately $55.7 billion.
WFC Price Action: Wells Fargo shares were down 2.29% at $85.66 at the time of publication on Tuesday, according to Benzinga Pro data.
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