Deposits Held Through the CapWide moat

Wells Fargo (WFC) — moat facet

Wells Fargo was forbidden to grow for seven years and its depositors did not leave, a test few bank franchises ever face.

The asset cap was an experiment nobody would design on purpose, and it tested exactly what a moat is supposed to do. From 2 February 2018 the Federal Reserve barred Wells Fargo from growing "any larger than its total asset size as of the end of 2017"1, and that size was $1,951,757 million2.

Period-end deposits ($bn)1,336Dec 20171,358Dec 20231,372Dec 20241,426Dec 20251,501Jun 2026Wells Fargo Exhibit 13 FY2017, Forms 10-K FY2025, 10-Q Q2 2026
Flat under the cap, rising after it.

If the franchise had been weak, customers would have drifted to banks that could grow with them. Period-end deposits were $1,335,991 million at the end of 20173 and $1,371,804 million at the end of 20244, about 2.7% higher over seven years5. Noninterest-bearing deposits, the money customers leave for convenience, were $373,722 million at the end of 2017 and $383,616 million at the end of 20246.

Those seven years included the fake-accounts scandal, the resignation of two chief executives7, a pandemic and the sharpest rise in interest rates in a generation. Through all of it the depositors stayed.

This is the strongest argument for rating the deposit franchise wide. It was not protected by growth, marketing or a better rate; the bank could offer none of them at scale.

The customers who were wronged stayed too. The bank was ordered in 2022 to pay redress over practices affecting more than 16 million consumer accounts8, and average deposits in 2025 were still $1,347,245 million9.

Lending told a different story. Loans were $936,682 million at the end of 2023 and $912,745 million at the end of 202410, so the bank was shrinking its loan book in the last years of the cap while its deposits held.

The pandemic arrived in the middle of the test and pushed money in, not out. Average deposits were $1,376,011 million in 2020 and $1,437,812 million in 202111, the peak, as savings flowed into a bank that was not allowed to use them to grow its assets.

Period-end deposits after the cap are the continuation of the test: $1,501,405 million in June 202612. If they fell back below the 2024 level, the loyalty shown under the cap would have been inertia that needed only a reason to break.

Moat trajectory: Widening

Deposits $1,335,991M (2017) to $1,371,804M (2024), then $1,501,405M (June 2026).

The number that tests this moat
Reported
Period-end deposits, latest quarter
$1,501.4bn (June 2026), +12% year on year

The deposit base now that the cap is gone; a fall back below the 2024 level would mean the loyalty under the cap was only inertia.

Source: Wells Fargo Form 10-Q, Q2 2026 ↗
⚠ Threats to the moat
⚠ THREAT 01
Seven Years Nobody Gives Back
The asset cap left Wells Fargo with about half of JPMorgan's deposits and less than a third of its market value.
References
  1. ReportedFrom 2 February 2018 the Federal Reserve barred Wells Fargo from growing "any larger than its total asset size as of the end of 2017", and that size was $1,951,757 million.
    Federal Reserve press release, 2 February 2018 - enforcement action restricting Wells Fargo's growth and requiring board changes. — February 2018 · publ. 2 February 2018 · source ↗
  2. ReportedFrom 2 February 2018 the Federal Reserve barred Wells Fargo from growing "any larger than its total asset size as of the end of 2017", and that size was $1,951,757 million.
    Wells Fargo 2017 Annual Report, Form 10-K Exhibit 13 - total assets of $1,951,757 million at 31 December 2017, the asset cap and how it is measured, net income and ROTCE for 2015-2017. — FY2017 · publ. February 2018 · source ↗
  3. ReportedPeriod-end deposits were $1,335,991 million at the end of 2017 and $1,371,804 million at the end of 2024, about 2.7% higher over seven years.
    Wells Fargo 2017 Annual Report, Form 10-K Exhibit 13 - total assets of $1,951,757 million at 31 December 2017, the asset cap and how it is measured, net income and ROTCE for 2015-2017. — FY2017 · publ. February 2018 · source ↗
  4. ReportedPeriod-end deposits were $1,335,991 million at the end of 2017 and $1,371,804 million at the end of 2024, about 2.7% higher over seven years.
    Wells Fargo 2025 Annual Report to Shareholders (financial statements, MD&A and segment note), part of the Form 10-K for fiscal 2025 - average balance sheet, deposits, net interest income and securities. — FY2025 · publ. 24 February 2026 · source ↗
  5. Moat Explorer calcPeriod-end deposits were $1,335,991 million at the end of 2017 and $1,371,804 million at the end of 2024, about 2.7% higher over seven years.
    Moat Explorer calculation from Wells Fargo's reported figures ($ millions unless stated). Deposits: cost of total deposits = interest on interest-bearing deposits / (average interest-bearing + average noninterest-bearing deposits): 2020 2,804 / 1,376,011 = 0.20%; 2021 388 / 1,437,812 = 0.03%; 2022 2,349 / 1,424,269 = 0.16%; 2023 16,503 / 1,346,282 = 1.23%; 2024 24,282 / 1,345,915 = 1.80%; 2025 20,449 / (987,198 + 360,047 = 1,347,245) = 1.52%. Bank of America 2025: 34,513 / (1,469,705 + 514,477 = 1,984,182) = 1.74%. Gap to JPMorgan 1.80% - 1.52% = 0.28 points x 1,347,245 = about 3,772 (about $3.8 billion); gap to Bank of America 1.74% - 1.52% = 0.22 points. Noninterest-bearing share of average deposits: 2020 412,669 / 1,376,011 = 30.0%; 2021 499,644 / 1,437,812 = 34.8%; 2022 505,770 / 1,424,269 = 35.5%; 2023 399,737 / 1,346,282 = 29.7%; 2024 352,379 / 1,345,915 = 26.2%; 2025 360,047 / 1,347,245 = 26.7%. Average deposits 2023-2025 range 1,345,915 to 1,347,245 = 1,330 (about $1.3 billion). Period-end deposits 1,371,804 / 1,335,991 - 1 = 2.7% (Dec 2017 to Dec 2024); Dec 2025 to Jun 2026 1,501,405 - 1,426,207 = 75,198 (about $75 billion). Consumer Banking and Lending share of average deposits Q2 2026 828.4 / 1,465.6 = 57%. Held-to-maturity: Dec 2024 carrying 234,948 - fair value 193,779 = 41,169 unrealised loss; June 2026 loss 32,408 / common equity 165,000 = 19.6%. Balance sheet: total assets 2,282,201 / 1,951,757 - 1 = 16.9% above the 2017 cap level; 2,282,201 - 1,929,845 = 352,356 (about $352 billion); 2,282,201 / 1,929,845 - 1 = 18.3% (about 18%). CIB total assets 862,472 / 597,278 - 1 = 44%. Average loans Q2 2026 1,026.5 - 916.7 = 109.8; CIB 359.4 - 285.9 = 73.5; 73.5 / 109.8 = 67% (about two-thirds). CIB share of average loans 359.4 / 1,026.5 = 35.0% (Q2 2026); 285.9 / 916.7 = 31.2% (Q2 2025). Trading-related assets 401.5 / 283.7 - 1 = 41.5%; Markets loans 111.2 / 79.0 - 1 = 40.8%; CIB average loans 359.4 / 285.9 - 1 = 25.7%. Tangible common equity / total assets: Dec 2024 135.6 / 1,929.8 = 7.0%; June 2026 139.7 / 2,282.2 = 6.1%. Branches 4,079 - 5,032 = -953; 4,079 / 5,032 - 1 = -19%. Mobile active customers 33.7 / 29.9 - 1 = 13%. Headcount 197,466 / 212,804 - 1 = -7%. Personnel expense 36,281 / noninterest expense 54,842 = 66% (about two-thirds). Efficiency gap to JPMorgan (66% - 52%) x 83,699 = about 11,718 (about $11.7 billion). JPMorgan deposits 2,559,320 / 1,426,207 - 1 = 79%; market value 911.91 / 250.90 = 3.6 times. Capital: CET1 headroom 10.3% - 8.5% = 1.8 points. Returned 2025 (17.7 billion buybacks + 6.5 billion dividends - 1.053 billion preferred dividends) / 20.285 billion net income to common = 114%. Average diluted shares 3,242.3 / 5,108.3 - 1 = -36.5% (2016 to 2025). EPS 6.26 / 4.12 - 1 = 52%. Revenue 83,699 / 86,057 - 1 = -2.7% (2015 to 2025). Trailing twelve months to June 2026: revenue 21,436 + 21,292 + 21,446 + 22,622 = 86,796; net income 5,589 + 5,361 + 5,253 + 6,407 = 22,610; EPS 1.66 + 1.62 + 1.60 + 2.00 = 6.88. First half 2026: net income 5,253 + 6,407 = 11,660; net interest income 12,096 + 12,317 = 24,413; noninterest expense 14,330 + 13,661 = 27,991, about 50.3% of the ~55,700 guidance. Market value 250.90 / 298.75 - 1 = -16% (end 2017 to Sept 2026). Segments (2025): revenue 37,362 + 11,978 + 19,232 + 16,328 = 84,900; plus Corporate 747, less Reconciling Items 1,948 = 83,699. Shares of segment revenue: Consumer Banking and Lending 37,362 / 84,900 = 44%; Commercial Banking 11,978 / 84,900 = 14%; CIB 19,232 / 84,900 = 23%; Wealth and Investment Management 16,328 / 84,900 = 19%. Shares of company net income 21,338: Consumer Banking and Lending 7,865 = 37%; CIB 7,283 = 34%; Commercial Banking 4,184 = 20%; Wealth and Investment Management 2,119 = 10%. CIB share of segment net income 7,283 / (7,865 + 4,184 + 7,283 + 2,119 = 21,451) = 34%; of total revenue 19,232 / 83,699 = 23%. Wealth net income / revenue 2,119 / 16,328 = 13%. Commercial Banking net income 4,184 / 5,104 - 1 = -18%. CIB Banking 2,522 + 2,507 + 2,008 = 7,037. Investment banking 2,008 / 1,404 - 1 = 43%. Credit card revenue 6,375 / 5,809 - 1 = 10%; Auto 1,016 / 1,464 - 1 = -31%. Advisory assets 1,127 / 891 - 1 = 26%. Consumer Banking and Lending share of Q2 2026 revenue 10,288 / 22,622 = 45%. Consumer Banking and Lending provision 3,362 / total provision 3,658 = 92%. Markets loans 111.2 - 79.0 = 32.2; 32.2 / 73.5 = 44% of the CIB loan increase. Investment banking share of CIB revenue 1,404 / 19,191 = 7% (2023); 2,008 / 19,232 = 10% (2025). Debit plus credit card purchase volume 530.5 + 186.0 = 716.5 billion. More deposits: noninterest-bearing deposits 505,770 - 360,047 = 145,723 (about $146 billion, 2022 to 2025); average deposits 1,424,269 - 1,347,245 = 77,024 (about $77 billion). Interest on interest-bearing deposits 24,282 - 20,449 = 3,833 (about $3.8 billion). Bank of America 2024 all-in deposit cost 38,442 / 1,924,106 = 2.00%. JPMorgan average deposits 2,506,565 / 1,347,245 = 1.9 times. Average loans to average deposits Q2 2026 1,026.5 / 1,465.6 = 70%. Bank of America deposits 2,018,729 / 1,426,207 - 1 = 42%. Held-to-maturity share of total assets 198,573 / 2,282,201 = 8.7% (June 2026); 208,023 / 2,148,631 = 9.7% (Dec 2025). More balance sheet and valuation: branches closed 5,032 - 4,777 = 255 (2021); 4,598 - 4,311 = 287 (2023); 4,177 - 4,090 = 87 (2025); 4,090 - 4,079 = 11 (H1 2026); 4,311 - 4,079 = 232 (end 2023 to June 2026). Second half 2025 assets 2,148,631 - 1,981,269 = 167,362 (about $167 billion). Market value 233.86 / 298.75 - 1 = -22% (end 2017 to end 2024); Bank of America 394.32 / 250.90 - 1 = 57%; market value over trailing net income 250.90 / 22.61 = 11.1 times. Risk-weighted assets 137.7 / 0.103 = about 1,337 billion (about $1.34 trillion). Total equity 182,323 / 2,282,201 = 8.0%. 2016 penalties 100 + 35 + 50 = 185 million. Commercial Banking net interest income 7,902 / 11,978 = 66%. Consumer Banking and Lending deposit surplus 779,994 - 322,052 = 457,942 (about $458 billion) - deposits, deposit cost and the securities book. — Length additions: held-to-maturity Dec 2025 208,023 - 175,797 = 32,226; carrying value 208,023 - 198,573 = 9,450 (about $9.5 billion in six months). Interest on interest-bearing deposits 16,503 / 2,349 = 7.0 (about seven times). Consumer Banking and Lending net interest income 29,183 / 37,362 = 78%. Average deposits per branch 1,437,812 / 4,777 = 301 (2021); 1,347,245 / 4,090 = 329 (2025). Deposits Dec 2024 to Jun 2026 1,501,405 - 1,371,804 = 129,601 (about $130 billion). TLAC cushion 23.22 - 21.50 = 1.72 points; 22.81 - 21.50 = 1.31 points. CIB assets 862,472 / 2,282,201 = 38%; CIB period-end assets 787,751 / 597,278 - 1 = 32%. CIB investment banking 1,814 / 1,404 - 1 = 29%; 2,008 / 1,814 - 1 = 11%; Q2 2026 628 / 5,425 = 12%. CIB revenue per dollar of expense 19,232 / 9,436 = 2.04; Consumer Banking and Lending 37,362 / 23,515 = 1.59. CRE 5,083 / 19,232 = 26%. Q2 2026 expense 13,661 / 13,379 - 1 = 2.1%; revenue 22,622 / 20,822 - 1 = 8.6%. Headcount 205 - 197 = 8 thousand. Average assets per employee 1,933.4 / 212,804 = $9.1 million (Q2 2025); 2,227.9 / 197,466 = $11.3 million (Q2 2026), +24%. Personnel expense per employee 36,281 / 205,000 = 0.177 ($177,000). Efficiency gap to Bank of America (66% - 61.65%) x 83,699 = 3,641 (about $3.6 billion). Risk-weighted assets about 1,340 billion x 1% = about $13 billion per point; 9.80% - 8.50% = 1.30 points x 1,340 = about $17 billion. Stockholders equity 180,190 / 206,936 - 1 = -12.9%. Charge-offs 876 x 4 = 3,504 (about $3.5 billion); 14,129 / 139,700 = 10.1%. JPMorgan cost of total deposits 2024 2.08% against Wells Fargo 1.80%. ROTCE H1 2026 16.1% - 14.4% = 1.7 points. Target 17.5% x 139.7 = 24.4 billion; 24.4 / 20.285 = 1.20. Net income 6,407 x 4 = 25,628 (about $25.6 billion). H1 2026 expense 27,991 / 55,700 = 50.3%; net interest income 24,413 / 50,000 = 48.8%. Credit card revenue 6,375 / 5,908 - 1 = 7.9%; Auto 1,016 / 1,464 - 1 = -30.6%. Home Lending 3,364 / 37,362 = 9.0%; originations 26.3 / 986.2 = 2.7%. Buybacks 22.7 billion / 79.80 = 284 million shares; 284 / 3,085.6 = 9.2%. Tangible book 1 / 1.79 = 0.56. Dividend 0.50 x 4 x 3.02 billion = 6.04 (about $6.0 billion). Accounts 16 million / 32.8 million = 49%. Remediation 236 / 160,700 = 0.15%. Advisory assets 1,127 / 2,509 = 45%. Investment banking fees 3,027 / 83,699 = 3.6%. Advisory fees 10,498 / 36,215 = 29%. Branches 4,090 - 4,079 = 11. Buyback runway 22.7 / 17.7 = 1.3 years (about fifteen months); 22.7 / (7 x 2) = 1.6 years. Deposits 1,347,245 / 1,376,011 - 1 = -2.1%. Q2 2026 consumer bank share 10,288 / 22,622 = 45%. Card fees 4,589 / mortgage banking 1,152 = 4.0. 2015-2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Wells Fargo's annual reports, Forms 10-Q, earnings releases and presentations, JPMorgan's and Bank of America's Forms 10-K and market data; operands shown in the source line.
  6. ReportedNoninterest-bearing deposits, the money customers leave for convenience, were $373,722 million at the end of 2017 and $383,616 million at the end of 2024.
    SEC EDGAR XBRL company facts for Wells Fargo - revenue, net income, diluted EPS, average diluted shares, total assets and noninterest-bearing deposits by year. — 2015-2026 · publ. 2026 · source ↗
  7. Third-party estimateThose seven years included the fake-accounts scandal, the resignation of two chief executives, a pandemic and the sharpest rise in interest rates in a generation.
    Wikipedia, Wells Fargo cross-selling scandal - chief executive departures and Charlie Scharf's background. — History · publ. 2026 · source ↗
  8. ReportedThe bank was ordered in 2022 to pay redress over practices affecting more than 16 million consumer accounts, and average deposits in 2025 were still $1,347,245 million.
    Consumer Financial Protection Bureau press release, 20 December 2022 - more than $2 billion of redress and a $1.7 billion civil penalty. — December 2022 · publ. 20 December 2022 · source ↗
  9. ReportedThe bank was ordered in 2022 to pay redress over practices affecting more than 16 million consumer accounts, and average deposits in 2025 were still $1,347,245 million.
    Wells Fargo 2025 Annual Report to Shareholders (financial statements, MD&A and segment note), part of the Form 10-K for fiscal 2025 - average balance sheet, deposits, net interest income and securities. — FY2025 · publ. 24 February 2026 · source ↗
  10. ReportedLoans were $936,682 million at the end of 2023 and $912,745 million at the end of 2024, so the bank was shrinking its loan book in the last years of the cap while its deposits held.
    Wells Fargo 2025 Annual Report to Shareholders (financial statements, MD&A and segment note), part of the Form 10-K for fiscal 2025 - average balance sheet, deposits, net interest income and securities. — FY2025 · publ. 24 February 2026 · source ↗
  11. ReportedAverage deposits were $1,376,011 million in 2020 and $1,437,812 million in 2021, the peak, as savings flowed into a bank that was not allowed to use them to grow its assets.
    Wells Fargo 2022 Annual Report, part of the Form 10-K for fiscal 2022 - segment results for 2020-2021, average balance tables for 2020-2022, branch counts and the 2020 provision. — FY2022 · publ. February 2023 · source ↗
  12. ReportedPeriod-end deposits after the cap are the continuation of the test: $1,501,405 million in June 2026.
    Wells Fargo Form 10-Q for the quarter ended 30 June 2026 - balance sheet, capital requirements, interest rate sensitivity, segment assets, headcount and legal actions. — Q2 2026 · publ. 28 July 2026 · source ↗
Sources
Generated September 28, 2026