Wells Fargoβs First-Quarter Momentum Builds as Growth Broadens
Loan and deposit growth accelerated, fee income strengthened and management kept its 2026 outlook intact, even as margin pressure remained a near-term headwind.
π Key Takeaways
Wells Fargo opened 2026 with a solid quarter that showed its post-asset-cap strategy is beginning to translate into broader operating momentum. Diluted EPS rose 15%, revenue increased 6%, loans grew 11%, and deposits were up 7% from a year earlier. Net interest income rose 5%, non-interest income increased 8%, and pre-tax, pre-provision profit climbed 14%. Credit stayed steady, with the net charge-off ratio unchanged at 45 bps, while the bank returned $5.4B to shareholders, including $4.0B of buybacks.
Against the prior quarter, the read-through is constructive but not cleanly one-way positive. The growth backdrop clearly improved versus late 2025, with stronger loan and deposit momentum, broader segment revenue growth and a key strategic milestone reached with the closure of Wells Fargoβs final outstanding consent order. But first-quarter net interest income still fell 2% from 4Q25 and margin compressed as the bank leaned further into lower-margin markets assets and higher-cost interest-bearing deposits. That leaves the latest quarter looking stronger on franchise momentum, but still carrying some near-term earnings mix pressure.
π What Drove the Quarter
The most important feature of the quarter was breadth. Every operating segment posted revenue growth year over year. Consumer Banking and Lending revenue rose 7%, Commercial Banking was up 7%, banking revenue within Corporate & Investment Banking increased 11%, markets revenue jumped 19%, and Wealth & Investment Management grew 14%. Client assets in wealth reached $2.2T, and companywide net asset flows hit their highest level in more than a decade.
The underlying business drivers also looked healthier than they did three months ago. Credit card account growth accelerated, with new account openings up at least 60% from a year ago, while auto originations more than doubled again. Consumer checking account openings rose more than 15%, mobile active users moved above 33M, and Zelle transactions increased 14%. On the commercial side, management pointed to rising new client acquisition and roughly $5B increases in both average commercial loans and deposits in the quarter. That matters because many of these initiatives were already visible in 4Q25 as investments, hires and product refreshes; in 1Q26, they looked more like measurable output.
βοΈ Margin, Credit and Capital
The biggest near-term friction point remains mix. Wells Fargo said the 13 bp sequential decline in net interest margin was primarily driven by growth in the markets balance sheet, a larger share of interest-bearing deposits and the lagged effect of lower rates. That is consistent with the strategic trade-off management has been describing since 4Q25: use the balance sheet more aggressively now, especially in markets and commercial relationships, and expect the broader revenue payoff to arrive over time.
Credit, by contrast, remains well behaved. Commercial credit performance was described as strong, consumer net charge-offs improved from a year ago, and management said it has not seen recent deterioration or meaningful shifts in trends. A fraud-related loss in the financials-ex-banks portfolio was framed as isolated after further review. Capital also remains a clear source of flexibility: CET1 ended the quarter at 10.3%, within the bankβs 10.0%-10.5% target range, and Wells said proposed capital rules could reduce risk-weighted assets by roughly 7% if implemented as currently drafted.
π What Matters Next
Management maintained its 2026 outlook, including net interest income of roughly $50B Β± and non-interest expense of about $55.7B. It also reiterated that net interest income should build through the year, helped by loan growth, deposit growth and continued franchise normalization. At the same time, the tone on the macro backdrop was more guarded than in 4Q25. Wells described the U.S. consumer as resilient but increasingly bifurcated, flagged higher energy prices and geopolitical uncertainty as sources of volatility, and suggested the second half of the year may show more pressure on lower-income households.
That leaves Wells Fargo in a better strategic position than it was entering 2026. Regulatory cleanup is largely behind it, growth engines in cards, auto, wealth and commercial banking are gaining traction, and the bank still has room to optimize capital. The next test is execution: whether management can turn that expanding balance sheet and stronger client activity into sustained revenue acceleration that more than offsets margin compression and a softer macro backdrop.
