Wells Fargo 2Q Led By Tdg, IB, Eq Gains; NIM, NII Tepid, Slower Loan Growth; NIM Further Down In 3Q

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Wells Fargo 2Q Led By Tdg, IB, Eq Gains; NIM, NII Tepid, Slower Loan Growth; NIM Further Down In 3Q

J P M O R G A N North America Equity Research

15 July 2026

Wells Fargo Neutral

WFC, WFC US

2Q Led By Tdg, IB, Eq Gains; NIM, NII Tepid, Slower Price (14 Jul 26):$85.29

Loan Growth; NIM Further Down In 3Q Price Target (Dec-26):$93.50

Wells Fargo posted core 2Q EPS of $1.96 which included about $0.17 benefit from Banks — Large-Cap

ACvery high equity investment gains by our estimates versus last 8 quarter average. Vivek Juneja

Similarly, reported RoTCE of 17.7% was also boosted by about 150bp from these (1-212) 622-6465

gains. Excluding investment gains, 2Q results were led by very strong growth in vivek.juneja@jpmorgan.com

trading and investment banking revenues, plus continued well-controlled expense Andrew J Dietrich

growth and sharp drop in credit costs. However, net interest income is lagging, up (1-212) 622-4244

about 5% yoy while assets are up about 15% yoy (about $300 bil) due to sharp aj.dietrich@jpmorgan.com

decline in net interest margin. Majority of its asset growth has been driven by Sai M Nettem

growth in trading assets and Wells continues to build out the Corporate and (1-212) 622-2666

sai.nettem@jpmorgan.com

Investment Bank. In addition, Wells has reversed course and gone back into non- J.P. Morgan Securities LLC

prime auto which is driving higher auto loan yields and continues to grow credit

card loans very rapidly along with securities-based margin loans and investment

securities. It has grown prime financing business very rapidly in equities trading, Key Changes (FYE Dec)

following likely rapid growth in private credit trading later in 2025. Core efficiency Prev Cur Δ

ratio was 62.0% excluding equity investment gains above 8 quarter average.