NYSE$WFC

Wells Fargo & Co · Q3 2022 earnings

Q3 2022 earnings · · Investor relations

Briefing

Wells Fargo's third quarter net income decreased due to accruals for litigation, customer remediation, and regulatory matters, while revenue increased.

Wells Fargo reported a decrease in net income for Q3 2022, impacted by operating losses related to litigation, customer remediation, and regulatory matters. However, the company saw revenue growth driven by rising interest rates and improved operating efficiencies.

  • Net income for the third quarter of 2022 was $3.5 billion, or $0.85 per diluted share, which included a negative impact of $0.45 per share due to accruals for litigation, customer remediation, and regulatory matters.
  • Total revenue increased to $19.505 billion, up from $18.834 billion in the third quarter of 2021.
  • The company's CET1 ratio was 10.3%, which is 110 basis points above the current regulatory minimum, and the common stock dividend was increased by 20%.
  • Average loans increased to $945.5 billion, while average deposits decreased slightly to $1,407.9 billion.

Headline financials

Total Revenue

$19.5B

Previous: $18.8B+3.6%
EPS (adj)

$0.85

Previous: $1.17-27.4%
Net Interest Margin

2.8%

No prior period
Efficiency Ratio

73.0%

No prior period
Free Cash Flow

$3.53B

Previous: $5.12B-31.1%
Net Income

$3.53B

Previous: $5.12B-31.1%
Operating Income

$14.2B

Previous: $14.8B-4.2%
Gross Profit

$18.5B

Previous: $17.7B+4.2%
Cash & Equivalents

$165B

Previous: $267B-38.0%
Total Assets

$1.88T

Previous: $1.95T-3.9%

Revenue & EPS history

Wells Fargo · Revenue · Quarterly

$19.5B

Q3 2022+3.6%vs Q3 2021
Beat estimate in 8 of 15 quarters(53%)
ActualEstimate

Revenue by segment

Wells Fargo · $20B total across 5 segments · Q3 2022

  • Consumer Banking and Lending
    $9.28B+5.4%
  • Corporate and Investment Banking
    $4.06B+19.9%
  • Wealth and Investment Management
    $3.67B+1.3%
  • Commercial Banking
    $2.95B+42.2%
  • Corporate
    $36M-97.3%

Forward guidance

Wells Fargo expects to benefit from higher rates and disciplined expense management, with consumer and business customers remaining in strong financial condition. They are closely monitoring risks related to inflation, increasing interest rates, and geopolitical risks, anticipating continued increases in delinquencies and credit losses.

Tailwinds

  • Wells Fargo will continue to benefit from higher rates.
  • Ongoing disciplined expense management will contribute to financial performance.
  • Both consumer and business customers remain in a strong financial condition.
  • The company continues to see historically low delinquencies.
  • The company has high payment rates across portfolios.

Headwinds

  • The company is closely monitoring risks related to the continued impact of high inflation.
  • Increasing interest rates pose a risk.
  • Broader geopolitical risks are being closely monitored.
  • The company does expect to see continued increases in delinquencies.
  • The timing of credit losses remains unclear.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q3 2022

Historical avgQ3 2022

+0.3%

Avg return

Earnings day

+0.7%

Avg return

5 days after

+1.8%

Avg return

30 days after

56%

40 / 72 earnings

Positive

+7.6%

Q3 2024

Best reaction

-10.9%

Q2 2011

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q4 2025-4.3%-6.0%-15.2%
Q1 2026+0.2%-6.0%-15.2%
Q3 2025+7.0%+5.5%+7.3%
Q2 2025+2.0%-0.5%+4.6%
Q1 2025-1.0%+1.4%+14.8%
Q4 2024+6.7%+8.3%+12.3%
Q3 2024+7.6%+10.6%+21.3%
Q2 2024-4.0%+1.2%-12.3%
Q1 2024+0.5%+0.9%+9.2%
Q4 2023-4.5%-4.8%-2.0%
Q3 2023+4.8%+4.5%+2.9%
Q2 2023+2.4%+5.8%+0.0%
Q1 2023+4.1%+6.5%-5.5%
Q4 2022+3.0%+1.3%+10.9%
Q3 2022+3.7%+2.9%+12.2%
Q2 2022+6.3%+10.3%+18.6%
Q1 2022-2.8%-1.5%-12.2%
Q4 2021+1.2%-0.8%+4.1%
Q3 2021+5.1%+9.3%+10.7%
Q2 2021+4.1%-0.4%+16.5%
Q1 2021+6.2%+10.3%+18.0%
Q4 2020-6.1%-6.6%-3.5%
Q3 2020-7.2%-8.9%-2.7%
Q2 2020-0.2%-1.8%-1.5%
Q1 2020-9.5%-9.7%-23.4%
Q4 2019-7.3%-5.6%-7.7%
Q3 2019+0.6%+1.4%+8.6%
Q2 2019-3.2%-1.5%-7.1%
Q1 2019-2.0%-0.4%-1.2%
Q4 2018+1.1%+3.3%+0.2%
Q3 2018+3.5%+5.9%+3.1%
Q2 2018+1.7%+1.0%+3.6%
Q1 2018-3.6%-4.4%+3.3%
Q4 2017-0.8%+1.4%-10.9%
Q3 2017-2.6%-3.3%-2.5%
Q2 2017-1.6%-1.2%-6.6%
Q1 2017-0.8%-1.3%-0.2%
Q4 2016-1.3%-0.4%+4.3%
Q3 2016-0.6%+1.1%+15.6%
Q2 2016-1.3%-0.7%-2.1%
Q4 2015-4.8%
Q3 2015+1.6%
Q2 2015+1.8%
Q1 2015+0.4%
Q4 2014-2.2%
Q3 2014-4.7%
Q2 2014-1.0%
Q1 2014+0.8%
Q4 2013+1.8%
Q3 2013+0.7%
Q2 2013+3.5%
Q1 2013-2.5%
Q4 2012-1.8%
Q3 2012-3.6%
Q2 2012+3.6%
Q1 2012-2.6%
Q4 2011+0.8%
Q3 2011-1.7%
Q2 2011-10.9%
Q1 2011+0.3%
Q4 2007+2.6%
Q4 2010+2.6%
Q3 2010+5.8%
Q2 2010+0.1%
Q1 2010+5.7%
Q1 2009-0.3%
Q4 2009-0.3%
Q3 2008+4.1%
Q3 2009+4.1%
Q2 2009+2.4%
Q4 2008+2.4%
Q2 2008+2.4%

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