Bank of America vs. Wells Fargo — Q3 2026 Compared

Two very different quarters, one apparent winner

Bank of America and Wells Fargo both reported Q3 2026 results in mid-October. On the surface they look like opposite stories: BofA's net income fell 16.8% and Wells Fargo's rose 6.5%. But most of that gap is a single item — a $1.2 billion, non-deductible anti-money-laundering penalty Bank of America booked this quarter. Strip that out and the two banks are closer, though Wells Fargo still comes out ahead on the metrics that matter most for judging how well a bank is actually run.

Takeaway: On return on tangible common equity — the cleanest single gauge of how much profit a bank is squeezing from its capital — Wells Fargo's 16.3% beat Bank of America's 12.6% by nearly 4 points, and the gap isn't just the penalty: BofA's efficiency ratio (costs as a share of revenue) also worsened to 66% from 60%, while Wells Fargo's improved to 63% from 65%. Wells Fargo had the better-run quarter, not just the better-looking one.

Where Bank of America's headline number came from

BofA's $6.93 billion profit is down $1.4 billion from a year ago, and $1.2 billion of that is the AML penalty, booked entirely in its "All Other" segment (which swung to a $1,353 million loss from a $103 million loss). Back the penalty out and adjusted diluted EPS was $1.08, up 3.8% — but that's still a smaller gain than Wells Fargo's 12.7% reported EPS growth, and BofA's own efficiency ratio shows costs rose faster than revenue even before the penalty: noninterest expense excluding the penalty was up 7% against 3.2% revenue growth. Net interest income was the one unambiguous bright spot, up 8% to $16.4 billion as loans grew 7.3% to $1.25 trillion, the bank's best-performing line.

Where Wells Fargo's gain actually came from

About half of Wells Fargo's 12.7% EPS growth came from a smaller share count — diluted shares outstanding fell 5.3% as the bank bought back $2.5 billion of stock this quarter — and roughly $0.06 of the $1.87 came from a $170 million discrete tax benefit tied to resolving prior-period tax matters. Net income available to common shareholders, a cleaner profit measure, rose a more modest 6.8%. The core banking business did grow, though: net interest income excluding markets activity rose 2.4%, accelerating from 1.8% in Q2, and pre-tax pre-provision profit — earnings before setting money aside for loan losses — rose 7.1%. The one number moving the wrong way at Wells Fargo is its credit-loss provision, up 51% to $1.03 billion even though its net charge-off ratio actually improved slightly (0.38% vs 0.40%); that increase looks like the bank setting aside more in reserves to support 11.1% loan growth, not a sign borrowers are struggling more than before.

What the headline numbers hide

Neither bank had a fully clean quarter. Bank of America's net income decline is almost entirely a one-off, but its underlying expense growth (7% ex-penalty) outpacing revenue growth (3.2%) is a real trend, not a one-time item, and its CET1 capital ratio — the core buffer against future losses — fell seven-tenths of a point to 10.9%. Wells Fargo's EPS growth is real but inflated: buybacks and a tax benefit account for the large majority of the 12.7% gain, and its own CET1 ratio fell a full point to 10.0%, the steeper of the two declines. Both banks are spending capital on buybacks and balance-sheet growth faster than they're rebuilding it.

Both banks also still face the same question heading into Q4: whether their capital ratios stabilize or keep drifting down as loan books grow and buybacks continue. Wells Fargo enters that question with the stronger core profitability (16.3% ROTCE, falling costs as a share of revenue); Bank of America enters it with the stronger loan-growth momentum but a bigger expense problem to fix once the penalty rolls off.

Figures are from each bank's Q3 2026 earnings release (Exhibit 99.1), as published in our Bank of America and Wells Fargo Q3 2026 report analyses.