Wells Fargo posted higher Q1 profit as interest income and trading revenue climbed

Wells Fargo $WFC reported first-quarter 2026 net income of $5.25 billion, or $1.60 per share, up from $4.89 billion, or $1.39 per share, in the same period a year earlier, the company said.

At $12.1 billion, the bank's net interest income — which measures the spread between loan earnings and deposit costs — came in roughly $200 million below the $12.3 billion Wall Street had anticipated, even as the figure edged higher than a year ago. Federal Reserve rate cuts have weighed on loan yields, pressuring that figure in the near term.

Trading gains provided a partial offset. First-quarter trading generated $1.35 billion, a 38% jump from the prior-year period, according to Bloomberg. Fee-based revenue across the bank's various business lines totaled $9.35 billion, short of the roughly $9.5 billion analysts had projected. Wealth-related revenue, including advisory fees and brokerage commissions, climbed to $3.49 billion, a 10% rise driven by stronger market valuations and a pickup in client transactions.

Total loans outstanding topped $1 trillion for the first time, growing 11% in the quarter, according to Reuters. Removal of the Fed's $1.95 trillion asset cap last year freed Wells Fargo to pursue growth in consumer lending categories such as credit cards and auto loans.

"While markets have been volatile, we still see continued resiliency in the underlying economy and the financial health of the consumers and businesses we serve remains strong, though the impact of higher oil prices will likely take some time to materialize," CEO Charlie Scharf said in a statement.

On a call with reporters, Santomassimo estimated that gasoline purchases on Wells Fargo credit cards had risen somewhere in the 25%-to-30% range since the outbreak of the Middle East conflict, while broader consumer spending patterns had held up without meaningful deterioration.

Credit quality was stable in the quarter. The bank wrote off $1.1 billion in bad loans during the period, and set aside $1.14 billion in reserves for potential future losses — a 22% increase from a year earlier, according to Bloomberg.

The bank's lending to firms outside the traditional banking sector stood at $210.2 billion at quarter-end, a figure that included $36.2 billion directed specifically toward private-credit managers. Santomassimo said the bank was comfortable with its exposure to that portfolio.

Headcount stood at 200,999 at March 31, down from 205,198 three months earlier, according to Reuters, extending a streak of quarterly workforce reductions that stretches back to late 2020.

Wells Fargo reported fourth-quarter 2025 net income of $5.4 billion, or $1.62 per share, up 13% from a year earlier. That period marked the first full quarter after regulators lifted the asset cap, with CEO Scharf describing it as the start of competing "on a level playing field." The bank returned $23 billion to shareholders in 2025 through dividends and buybacks, and set more ambitious medium-term profitability targets.

Wells Fargo shares were under pressure on the morning of April 14, having already shed roughly 7% of their value since the start of the year through the prior day's close, according to Reuters.