Wells Fargo(WFC) - 2025 Q2 - Quarterly Results

Consolidated Results Summary Financial Data In Q2 2025, Wells Fargo reported strong quarterly performance with total revenue of $20.8 billion and net income of $5.5 billion, representing a 3% and 12% increase quarter-over-quarter, respectively. Diluted earnings per share rose to $1.60. The company maintained stable capital levels with a CET1 ratio of 11.1% and continued to reduce headcount, which decreased by 4% year-over-year Q2 2025 Key Financial Highlights (in millions) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | QoQ Change | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $20,822 | $20,149 | $20,689 | 3% | 1% | | Pre-tax pre-provision profit (PTPP) | $7,443 | $6,258 | $7,396 | 19% | 1% | | Wells Fargo Net Income | $5,494 | $4,894 | $4,910 | 12% | 12% | | Diluted EPS | $1.60 | $1.39 | $1.33 | 15% | 20% | Key Ratios and Period-End Metrics | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Return on Average Equity (ROE) | 12.8% | 11.5% | 11.5% | | Return on Average Tangible Common Equity (ROTCE) | 15.2% | 13.6% | 13.7% | | Efficiency Ratio | 64% | 69% | 64% | | CET1 Ratio (Standardized) | 11.1% | 11.1% | 11.0% | | Headcount | 212,804 | 215,367 | 222,544 | - Period-end loans increased by 1% quarter-over-quarter to $924.4 billion, while period-end deposits decreased by 2% to $1.34 trillion[9] Consolidated Statement of Income For Q2 2025, total revenue reached $20.8 billion, driven by a 2% sequential increase in net interest income to $11.7 billion and a 5% rise in noninterest income to $9.1 billion. The growth in noninterest income was notably supported by a 12% increase in card fees. Noninterest expense decreased by 4% quarter-over-quarter to $13.4 billion, contributing to a 12% increase in net income to $5.5 billion Q2 2025 Income Statement Breakdown (in millions) | Item | Q2 2025 | Q1 2025 | QoQ Change | | :--- | :--- | :--- | :--- | | Net Interest Income | $11,708 | $11,495 | 2% | | Total Noninterest Income | $9,114 | $8,654 | 5% | | Total Revenue | $20,822 | $20,149 | 3% | | Provision for Credit Losses | $1,005 | $932 | 8% | | Total Noninterest Expense | $13,379 | $13,891 | -4% | | Wells Fargo Net Income | $5,494 | $4,894 | 12% | - Card fees increased 12% sequentially to $1.17 billion, partly due to the completed acquisition of the remaining interest in a merchant services joint venture in April 2025[12] - Noninterest expense decreased 4% from the prior quarter, primarily due to an 8% reduction in personnel expenses[12] Consolidated Balance Sheet As of June 30, 2025, total assets grew to $1.98 trillion, a 2% increase from the previous quarter. This was supported by a 1% rise in net loans to $910.5 billion. Total deposits saw a 2% sequential decline to $1.34 trillion. Total equity remained stable at $183.0 billion Period-End Balance Sheet Highlights (in millions) | Item | Jun 30, 2025 | Mar 31, 2025 | QoQ Change | | :--- | :--- | :--- | :--- | | Total Assets | $1,981,269 | $1,950,311 | 2% | | Net Loans | $910,457 | $899,813 | 1% | | Total Deposits | $1,340,703 | $1,361,728 | -2% | | Total Liabilities | $1,798,315 | $1,767,405 | 2% | | Total Equity | $182,954 | $182,906 | 0% | - Short-term borrowings increased significantly by 34% quarter-over-quarter to $188.0 billion[15] - Retained earnings grew by 2% sequentially to $221.3 billion, while treasury stock increased by 3% to $117.2 billion[15] Average Balances and Interest Rates (Taxable-Equivalent Basis) In Q2 2025, the net interest margin on a taxable-equivalent basis was 2.68%, a slight increase from 2.67% in the prior quarter but down from 2.75% a year ago. Average total loans were stable at $916.7 billion, while average total deposits decreased by 1% sequentially to $1.33 trillion. The average cost of interest-bearing deposits decreased to 2.09% from 2.17% in the prior quarter Key Average Balances and Rates (in millions) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Average Total Loans | $916,719 | $908,182 | $916,977 | | Average Total Deposits | $1,331,651 | $1,339,328 | $1,346,478 | | Net Interest Margin | 2.68% | 2.67% | 2.75% | | Total Interest-Earning Assets Rate | 4.87% | 4.85% | 5.25% | | Total Interest-Bearing Liabilities Rate | 2.89% | 2.92% | 3.31% | - Average interest-earning assets remained flat quarter-over-quarter at $1.76 trillion[17] Reportable Operating Segment Results Combined Segment Results In Q2 2025, Consumer Banking and Lending was the largest contributor to total revenue at $9.2 billion, followed by Corporate and Investment Banking at $4.7 billion. In terms of profitability, Consumer Banking and Lending and Corporate and Investment Banking were the top earners, with net incomes of $1.9 billion and $1.7 billion, respectively Q2 2025 Segment Revenue and Net Income (in millions) | Segment | Total Revenue | Net Income | | :--- | :--- | :--- | | Consumer Banking and Lending | $9,228 | $1,863 | | Commercial Banking | $2,933 | $1,086 | | Corporate and Investment Banking | $4,673 | $1,737 | | Wealth and Investment Management | $3,898 | $480 | | Corporate | $559 | $328 | - For the first six months of 2025, total net income reached $10.4 billion, a 9% increase from the $9.5 billion reported for the same period in 2024[22] Consumer Banking and Lending The Consumer Banking and Lending segment reported a 10% sequential increase in net income to $1.9 billion for Q2 2025, driven by a 4% rise in total revenue to $9.2 billion. Growth was led by a 13% increase in card fees, while mortgage banking income declined. The segment saw continued digital engagement, with mobile active customers growing 4% year-over-year to 32.1 million CBL Q2 2025 Performance (in millions) | Metric | Q2 2025 | Q1 2025 | QoQ Change | | :--- | :--- | :--- | :--- | | Total Revenue | $9,228 | $8,913 | 4% | | Provision for Credit Losses | $945 | $739 | 28% | | Net Income | $1,863 | $1,689 | 10% | - Revenue from Credit Card services grew 9% year-over-year, while Auto and Personal Lending revenues declined by 15% and 9% respectively[26] - Mortgage loan originations increased 68% quarter-over-quarter to $7.4 billion, and auto loan originations rose 50% to $6.9 billion[29] Commercial Banking The Commercial Banking segment's net income surged 37% quarter-over-quarter to $1.1 billion in Q2 2025. This was primarily due to a negative provision for credit losses of $43 million, compared to a $187 million provision in the prior quarter. Total revenue remained flat at $2.9 billion, while noninterest expense decreased by 9% Commercial Banking Q2 2025 Performance (in millions) | Metric | Q2 2025 | Q1 2025 | QoQ Change | | :--- | :--- | :--- | :--- | | Total Revenue | $2,933 | $2,925 | 0% | | Provision for Credit Losses | ($43) | $187 | NM | | Net Income | $1,086 | $794 | 37% | - Average total loans increased by 1% sequentially to $226.5 billion, driven by growth in commercial and industrial loans[34] - The efficiency ratio improved to 52% from 57% in the prior quarter[33] Corporate and Investment Banking Corporate and Investment Banking reported a net income of $1.7 billion in Q2 2025, down 11% from the previous quarter. Total revenue decreased by 8% to $4.7 billion, mainly due to a 13% drop in noninterest income. Despite the revenue decline, the segment saw a 3% sequential increase in average loans to $285.9 billion CIB Q2 2025 Performance (in millions) | Metric | Q2 2025 | Q1 2025 | QoQ Change | | :--- | :--- | :--- | :--- | | Total Revenue | $4,673 | $5,064 | -8% | | Provision for Credit Losses | $103 | $0 | NM | | Net Income | $1,737 | $1,941 | -11% | - Investment banking fees decreased 8% sequentially but were up 10% year-over-year. Net gains from trading activities were down 9% sequentially[35] - Period-end total assets for the segment grew 4% quarter-over-quarter to $658.0 billion[37] Wealth and Investment Management The Wealth and Investment Management segment delivered a strong quarter, with net income rising 22% sequentially to $480 million in Q2 2025. Total revenue was up 1% to $3.9 billion, while noninterest expense fell 3%. Total client assets grew 5% from the prior quarter to $2.35 trillion, driven by higher market valuations WIM Q2 2025 Performance (in millions) | Metric | Q2 2025 | Q1 2025 | QoQ Change | | :--- | :--- | :--- | :--- | | Total Revenue | $3,898 | $3,874 | 1% | | Noninterest Expense | $3,245 | $3,360 | -3% | | Net Income | $480 | $392 | 22% | Client Assets (in billions, period-end) | Asset Type | Jun 30, 2025 | Mar 31, 2025 | QoQ Change | | :--- | :--- | :--- | :--- | | Advisory assets | $1,042 | $980 | 6% | | Other brokerage assets and deposits | $1,304 | $1,253 | 4% | | Total client assets | $2,346 | $2,233 | 5% | Corporate The Corporate segment reported a net income of $328 million in Q2 2025, a significant improvement from the $78 million income in the prior quarter and a loss of $318 million a year ago. The result was driven by a swing to positive total revenue of $559 million, compared to a loss of $177 million in Q1 2025, primarily from higher noninterest income Corporate Segment Q2 2025 Performance (in millions) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Total Revenue | $559 | ($177) | $248 | | Noninterest Expense | $565 | $457 | $723 | | Net Income (Loss) | $328 | $78 | ($318) | - Average deposits in the Corporate segment continued to decline, falling 9% sequentially and 58% year-over-year, reflecting strategic balance sheet repositioning[39] Credit-Related Information Consolidated Loans Outstanding – Period-End Balances, Average Balances, and Average Interest Rates As of June 30, 2025, total loans outstanding increased by 1% quarter-over-quarter to $924.4 billion. Commercial loans grew to $549.8 billion, while consumer loans were relatively stable at $374.6 billion. The average interest rate on the total loan portfolio was 5.95%, nearly unchanged from the prior quarter Period-End Loans by Category (in millions) | Loan Category | Jun 30, 2025 | Mar 31, 2025 | QoQ Change | | :--- | :--- | :--- | :--- | | Total Commercial | $549,770 | $540,699 | 2% | | Total Consumer | $374,648 | $373,143 | 0% | | Total Loans | $924,418 | $913,842 | 1% | - Commercial real estate loans continued to decline, down $1.5 billion sequentially, while commercial and industrial loans grew by $11.6 billion[41] Net Loan Charge-offs Total net loan charge-offs for Q2 2025 were $997 million, or 0.44% of average loans, a slight decrease from $1,009 million in the prior quarter and a significant improvement from $1,301 million a year ago. Consumer loans, particularly credit cards ($622 million), continued to be the primary driver of charge-offs, while commercial real estate charge-offs decreased notably to $61 million Net Loan Charge-offs by Product (in millions) | Product | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Total Commercial | $247 | $211 | $468 | | Total Consumer | $750 | $798 | $833 | | Total Net Loan Charge-offs | $997 | $1,009 | $1,301 | - Credit card charge-offs accounted for 62% of total net charge-offs in the quarter[42] Changes in Allowance for Credit Losses for Loans The allowance for credit losses (ACL) for loans ended Q2 2025 at $14.57 billion, remaining stable compared to the prior quarter. The company recorded a provision for credit losses of $1.01 billion, which was offset by net charge-offs of $997 million. The ratio of allowance for loan losses to total loans stood at 1.51% ACL Movement (in millions) | Item | Q2 2025 | | :--- | :--- | | Balance, beginning of period | $14,552 | | Provision for credit losses for loans | $1,007 | | Net loan charge-offs | ($997) | | Balance, end of period | $14,568 | - The allowance for unfunded credit commitments increased by $84 million sequentially to $607 million[44] Allocation of the Allowance for Credit Losses for Loans As of June 30, 2025, the total allowance for credit losses (ACL) was $14.57 billion, representing 1.58% of total loans. The consumer portfolio had a higher coverage ratio of 1.80%, driven by a substantial 8.88% ACL for credit card loans. The commercial portfolio had an ACL of 1.43%, with commercial real estate covered at 2.50% ACL as % of Loan Class | Loan Class | Jun 30, 2025 | | :--- | :--- | | Commercial and industrial | 1.07% | | Commercial real estate | 2.50% | | Credit card | 8.88% | | Auto | 1.53% | | Total Loans | 1.58% | Nonperforming Assets (Nonaccrual Loans and Foreclosed Assets) Total nonperforming assets (NPAs) decreased by 3% sequentially to $8.0 billion in Q2 2025, representing 0.86% of total loans. The decline was driven by a $320 million reduction in commercial nonaccrual loans, primarily from the commercial real estate portfolio, which saw nonaccruals fall by $280 million to $3.6 billion Nonaccrual Loans by Product (in millions) | Product | Jun 30, 2025 | Mar 31, 2025 | QoQ Change | | :--- | :--- | :--- | :--- | | Commercial and industrial | $925 | $969 | ($44) | | Commercial real estate | $3,556 | $3,836 | ($280) | | Total Consumer | $3,194 | $3,095 | $99 | | Total Nonaccrual Loans | $7,757 | $7,978 | ($221) | - Nonperforming assets in the Corporate and Investment Banking segment saw the largest decrease, falling by $310 million from the prior quarter[47] Commercial Loan Portfolio As of Q2 2025, the commercial loan portfolio totaled $549.8 billion. The office sector within commercial real estate continues to be a key area of focus, with $2.5 billion in nonaccrual loans against a $25.2 billion outstanding balance. The largest C&I exposure is to 'Financials except banks' at $170.0 billion, with minimal nonaccruals Commercial Real Estate Loans by Property Type (in millions) | Property Type | Loans Outstanding | Nonaccrual Loans | | :--- | :--- | :--- | | Office | $25,219 | $2,532 | | Apartments | $38,910 | $378 | | Hotel/motel | $12,005 | $253 | | Total CRE Loans | $132,560 | $3,556 | - Office loans account for 71% of total commercial real estate nonaccrual loans[49] Equity Tangible Common Equity The company's tangible common equity, a non-GAAP measure, increased to $139.1 billion at the end of Q2 2025. This resulted in a tangible book value per common share of $43.18, up 2% sequentially and 9% year-over-year. The annualized return on average tangible common equity (ROTCE) improved to 15.2% from 13.6% in the prior quarter Tangible Common Equity Metrics (in millions) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Tangible Common Equity (period-end) | $139,057 | $137,776 | $134,660 | | Tangible Book Value per Common Share | $43.18 | $42.24 | $39.57 | | Return on Average Tangible Common Equity (ROTCE) | 15.2% | 13.6% | 13.7% | Risk-Based Capital Ratios Under Basel III As of June 30, 2025, Wells Fargo's estimated risk-based capital ratios remained strong and stable. The Common Equity Tier 1 (CET1) ratio under the Standardized Approach was 11.1%, unchanged from the prior quarter. The Total Capital ratio was 15.0%. Ratios under the Advanced Approach were higher, with a CET1 of 12.7% and Total Capital of 16.2% Estimated Capital Ratios (Standardized Approach) | Ratio | Jun 30, 2025 | Mar 31, 2025 | | :--- | :--- | :--- | | Common Equity Tier 1 (CET1) | 11.1% | 11.1% | | Tier 1 Capital | 12.4% | 12.6% | | Total Capital | 15.0% | 15.2% | - Common Equity Tier 1 capital under both Standardized and Advanced Approaches was estimated at $136.4 billion[57]