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Wells Fargo & Company (NYSE: WFC) stock fell in Tuesday's premarket trading after the bank reported mixed third-quarter results, beating earnings estimates but missing revenue expectations.
The bank reported higher profits, strong loan growth and improved returns. However, weaker trading activity weighed on revenue.
Wells Fargo reported earnings of $1.87 per share, beating the Wall Street consensus estimate of $1.85.
Earnings increased 13% from $1.66 per share a year earlier.
Revenue rose 2% year over year to $21.870 billion, missing analysts' expectations of $22.317 billion.
Net income increased 6% to $5.951 billion from $5.589 billion a year earlier.
Return on equity improved to 13.8% from 12.8%, while return on tangible common equity climbed to 16.3% from 15.2%.
Net interest income increased 5% to $12.517 billion, driven by higher loan balances, investment securities growth and fixed-rate asset repricing.
However, lower interest rates on floating-rate assets and higher deposit costs partially offset those gains.
Noninterest income declined 1% to $9.353 billion, as lower trading gains and venture capital investment returns offset stronger advisory and banking fees.
Net gains from trading activities fell 21% year over year.
During a media call, Wells Fargo's chief financial officer said client trading activity slowed significantly in the final weeks of September, hurting quarterly results.
However, the executive said the bank maintained a healthy merger and acquisition and investment banking pipeline, with activity across several industries.
Consumer Banking and Lending revenue increased 5% to $10.656 billion. The bank opened approximately 660,000 new credit card accounts during the quarter.
Auto originations rose 15%, while average auto loan balances increased 31%. Premier client assets grew 10%.
Commercial Banking revenue climbed 6% to $3.236 billion, supported by higher lending and deposit balances.
Corporate and Investment Banking revenue increased 3% to $5.008 billion. Investment banking revenue rose 10% to $611 million.
Meanwhile, markets revenue declined 1% to $1.835 billion. Fixed-income, currencies and commodities revenue fell 7%, while equities revenue jumped 21%.
Wealth and Investment Management revenue increased 12% to $4.104 billion. Client assets grew 11%, while average loans rose 16%, largely driven by securities-based lending. Average deposits increased 9%.
Average loans increased 11% year over year to $1.033 trillion, while average deposits climbed 11% to $1.483 trillion.
Noninterest expenses declined 1% to $13.743 billion, supported by efficiency initiatives, including an 8% reduction in headcount.
However, provisions for credit losses increased to $1.029 billion from $681 million a year earlier.
Wells Fargo also repurchased $2.5 billion of common stock during the quarter.
CEO Charlie Scharf said consumer spending remained healthy, loan delinquencies were low and businesses continued to maintain strong balance sheets.
He acknowledged risks from higher interest rates, elevated oil prices and persistent inflation. However, he said investments in artificial intelligence infrastructure, strong employment and wage growth continued to support the economy.
Wells Fargo reaffirmed its 2026 guidance, projecting net interest income of approximately $50 billion.
The bank expects fourth-quarter net interest income of about $13 billion.
It also maintained its full-year noninterest expense forecast of approximately $55.7 billion.
Wells Fargo shares were down 2.51% at $81.22 during Tuesday's premarket trading, according to market data.
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