Wells Fargo reported third-quarter net income of $6.0 billion, or $1.87 a share, on October 13. Average deposits for the quarter reached $1.48 trillion, up 11% from a year earlier. Most of that growth came from outside the consumer side of the bank.
Net income of $5,951 million was 6% above the $5,589 million the bank earned a year ago. Earnings per share rose 13%, from $1.66 to $1.87. Against the second quarter, profit slipped 7% from $6,407 million.
Where the $1.48 trillion came from
Wells Fargo counts deposits as an average across the quarter. In its third-quarter earnings release, the figure is $1,482.9 billion, up 11% from a year ago and 1% from the second quarter. Average loans grew just as fast, up 11% to $1,033.4 billion.
The consumer side moved far less. The Consumer Banking and Lending segment, which holds household and small-business accounts alongside the bank’s card, auto and home loans, averaged $825.1 billion in deposits. That was flat from the second quarter and up 2% from a year ago.
The bank also reports a modest decline in noninterest-bearing deposits and higher deposit costs, which it ties to growth in interest-bearing commercial deposits. In plain terms, the big gains sat with business customers who are paid interest on their balances, not with ordinary checking accounts.
Chief executive Charlie Scharf still described a healthy household picture. “Consumers are spending more, loan delinquencies are low, and deposit and investment balances have grown,” he said in the release. The consumer net loan charge-off rate fell to 0.70% annualized, and consumer primary checking accounts kept growing.
For anyone who keeps checking and savings at Wells Fargo, the question that matters is what protects that money if something goes wrong, either at the bank or with a creditor. Two separate rules answer it, and neither depends on how big the bank’s quarter was. People with Social Security deposited there, and people with more than $250,000 on hand, should know which rule covers them.
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A 51% bigger cushion for bad loans
Even with delinquencies low, Wells Fargo set aside $1,029 million for credit losses in the quarter. That compares with $681 million a year ago and $914 million in the second quarter, a 51% jump from last year. The bank says the increase reflects a higher allowance for commercial and industrial loans and auto loans because balances grew, partly offset by a lower allowance for commercial real estate.
Actual losses were steady. Net loan charge-offs came to $983 million, or 0.38% of average loans, compared with 0.40% a year ago. The allowance for loan losses stood at $14,458 million on September 30, or 1.38% of loans, against 1.40% at the end of June.
The household lending lines tell a mixed story. Credit Card segment net income rose 3% to $1,710 million, and Wells Fargo opened more than 660,000 new card accounts in the quarter. Auto segment net income jumped 33% to $341 million as auto originations rose 15% from a year ago.
Home Lending went the other way. Its net income fell 15% to $743 million, which the bank blames on lower mortgage servicing income and lower net interest income on smaller loan balances. Scharf added that the company will “remain vigilant about risk as we build for the long term.”
The bank also bought back $2.5 billion of its own stock, about 28.6 million shares, and cut headcount 8% from a year ago. Its preliminary common equity ratio, a measure of capital strength, was 10.0%, down from 11.0% a year earlier.
What stands behind a balance: the $250,000 rule
A bank’s profit does not insure a deposit. The FDIC does. Its deposit insurance page says coverage is $250,000 per depositor, per insured bank, for each account ownership category, and that no depositor has lost a penny of insured funds since the agency was founded in 1933.
The limit applies per bank, not per account. A saver with $300,000 in one ownership category at a single bank has $50,000 above the line, and Wells Fargo’s strong quarter does not change that arithmetic.
The two-month rule when a creditor gets a court order
The second protection is for federal benefits such as Social Security. Under Treasury’s rule at 31 CFR Part 212, a bank that receives a garnishment order must review the account within two business days and look back over the previous two months for benefit deposits.
The protected amount is the lesser of two figures: the benefit payments posted in that two-month window, or the balance on the day of the review. The bank must give the account holder full and customary access to that amount, and the rule bars a garnishment fee against it.
One exception is written into the rule. If the order arrives with a Notice of Right to Garnish Federal Benefits, the bank follows its usual procedures instead. Money above the protected amount is handled the way the bank normally handles any garnishment order.
That cap is the open question for a household with a mixed account. A Social Security deposit that sits beside a paycheck, a transfer or a large balance protects only the lesser of two months of benefit deposits or the balance, so how the money is kept decides how much of it is covered.
Social Security paid into a Wells Fargo account?
A bank’s record quarter does nothing for an account a creditor has frozen. The protected amount is capped at the lesser of two months of benefit deposits or the balance, so benefit money mixed with other deposits can leave part of an account exposed.
The Bank Account & Debt Protection Kit covers the 2-month bank protection rule and the frozen-account response, laid out as steps for the day a freeze notice arrives. Part 3, Keeping Benefits Provably Exempt, is about keeping benefit deposits traceable, and a debt inventory, call log and deadline tracker comes with it.
Get the frozen-account response kit for benefit deposits →
More Financial Reading
- 21 Ways to Stretch a $2,087 Social Security Check
- 15 Places to Find Your Share of the $4.25 Billion States Give Back
- 15 Steps to Stop the Scams That Took $7.7 Billion From Seniors
This article was produced with the assistance of AI and reviewed by the editorial team.
Warren Cohen is a finance writer based in Phoenix, Arizona, covering personal finance topics including credit, banking, and beginner investing. He earned his degree in business administration from Arizona State University and began his career working in consumer finance, where he gained direct experience with lending and credit systems. He now writes for personal finance websites and fintech platforms, focusing on clear, practical content that helps readers make informed financial decisions.
