Wells Fargo’s first quarter drew a negative market reaction, as both revenue and adjusted earnings per share missed Wall Street expectations. Management attributed the quarter’s results to broad-based loan and deposit growth, particularly in commercial and consumer banking, as well as increased noninterest income. CEO Charles Scharf pointed to ongoing investments in technology, AI, and marketing that fueled momentum across business lines, but also acknowledged higher expenses and net interest margin compression. Scharf noted, “Revenue growth was driven by a 5% increase in net interest income and an 8% increase in noninterest income.”
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Wells Fargo (WFC) Q1 CY2026 Highlights:
- Revenue: $21.52 billion vs analyst estimates of $21.77 billion (6.4% year-on-year growth, 1.2% miss)
- Adjusted EPS: $1.56 vs analyst expectations of $1.60 (2.7% miss)
- Adjusted Operating Income: $6.05 billion vs analyst estimates of $7.51 billion (28.1% margin, 19.4% miss)
- Market Capitalization: $251.2 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Wells Fargo’s Q1 Earnings Call
- John McDonald (Truist Securities) pressed for details on the estimated 7% decline in risk-weighted assets under new proposals. CFO Michael Santomassimo explained the decline is driven mainly by credit risk improvements, particularly better treatment of investment-grade credits and some benefit on mortgages and autos.
- Ken Usdin (Autonomous Research) questioned the drivers of net interest margin compression and whether asset mix was a factor. Santomassimo clarified that growth in lower-return, lower-risk markets assets and a shift toward interest-bearing deposits were main contributors, but expected moderation in coming quarters.
- Scott Siefers (Piper Sandler) asked how management balances the risk-reward of lending to non-depository financial institutions (NDFIs) and whether it could become a distraction. CEO Charles Scharf emphasized strong structural protections, diverse collateral, and said they are not reacting to external attention but remain vigilant on portfolio size.
- Ebrahim Poonawala (Bank of America) challenged the achievability of the 17–18% ROTCE target given margin pressures. Santomassimo maintained confidence in reaching the goal via maturing consumer businesses, wealth expansion, and disciplined expense management, while Scharf reiterated underlying business KPIs are improving.
- Erika Najarian (UBS) sought clarity on capital deployment if capital requirements decrease. Management stated they will re-evaluate CET1 targets after final rules are implemented, emphasizing that lower risk-weighted assets would increase capacity for client support or capital return.
Catalysts in Upcoming Quarters
In upcoming quarters, our analysts will be monitoring (1) the pace of loan and deposit growth, particularly in consumer and commercial banking; (2) the impact of net interest margin trends and expense management on profitability; and (3) how regulatory capital rule changes affect risk-weighted assets and capital allocation. Execution in core business lines and the ability to navigate macroeconomic headwinds will also be key to tracking progress.
Wells Fargo currently trades at $82.16, down from $86.64 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free).
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