Wells Fargo CRE Nonaccrual Loans Fall to $2.7 Billion in Q3

Wells Fargo's nonaccrual commercial real estate loans fell $686 million in the third quarter to $2.72 billion, the bank said Tuesday, Oct. 13, as problem office loans declined. Charge-offs on CRE loans rose at the same time, to $107 million from $16 million in the second quarter, according to the financial supplement Wells Fargo filed with the Securities and Exchange Commission.

What did Wells Fargo report on commercial real estate credit?

Nonperforming assets fell $585 million in the quarter, "driven by lower commercial real estate nonaccrual loans," the bank said in its earnings release. Commercial net charge-offs rose to 0.18% of average loans, annualized, from 0.10%, which the bank said was driven by higher commercial real estate and commercial and industrial charge-offs.

Wells Fargo CRE measure	Sept. 30, 2026	June 30, 2026	Sept. 30, 2025
CRE loans outstanding	$132.0 billion	$133.0 billion	$130.3 billion
Nonaccrual CRE loans	$2.72 billion	$3.40 billion	$3.33 billion
Office nonaccrual loans	$1.88 billion	$2.23 billion	$2.45 billion
Office loans outstanding	$18.6 billion	$20.0 billion	$23.7 billion
Apartment nonaccrual loans	$385 million	$337 million	$287 million
CRE allowance, % of CRE loans	1.61%	1.77%	2.28%

Source: Wells Fargo third-quarter 2026 financial supplement. Charge-off figures are for the quarter.

CRE net charge-offs of $107 million equaled 0.32% of average CRE loans, annualized, the same as a year earlier. The bank said its overall allowance rose on higher commercial and industrial and auto loan balances, partly offset by "a lower allowance for commercial real estate loans."

Office loans outstanding fell 21% from a year earlier. Apartment nonaccruals moved the other way, rising to $385 million from $337 million on June 30 and $287 million a year earlier. That is consistent with the pressure on multifamily loans in other data, such as the CMBS delinquency rate Trepp reported for September.

Are banks lending more to real estate lenders?

At Wells Fargo, they have grown over the past year. Loans to "real estate finance" companies, a category the bank says includes originators or servicers of financial assets backed by commercial or residential real estate loans, were $40.2 billion on Sept. 30, with $44.0 billion of total commitments. That was down slightly from $41.0 billion on June 30 but up 29% from $31.1 billion a year earlier. The filing does not say how much of that goes to private or business-purpose lenders. Facilities of this kind include warehouse lines; terms typically vary by lender and loan type, as our guide to the warehouse line of credit explains.

What did JPMorgan say about credit?

JPMorgan Chase reported a $2.7 billion provision for credit losses for the quarter. Net charge-offs were $2.2 billion, down $389 million from a year earlier, "driven by Wholesale," and the net reserve build of $539 million was "primarily in Wholesale," the bank said. Its earnings release did not single out commercial real estate.

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