Wells Fargo (NYSE:WFC) is doing a good job of moving on from its issues of the past few years, but there are still lingering effects that are preventing it from delivering numbers as strong as its big-bank peers. In this Fool Live video clip, recorded on Oct. 18, Fool.com contributor Matt Frankel and Industry Focus host Jason Moser discuss the numbers and what they mean to investors. 

Jason Moser: Speaking of Wells Fargo, it feels like things are slowly but surely coming back on line for them. Stock continues to have a good year and it feels like this was a pretty good, maybe nothing terribly noteworthy, but it felt like it was pretty good quarter, it kept them going in the right direction.

Matt Frankel: Yeah, it was a strong quarter. Like I said, I would've given JPMorgan (NYSE:JPM) a B, I would've given Bank of America (NYSE:BAC) probably a B+ or A-, Wells Fargo will get like a B- to a C. Not a bad quarter, but like you said, nothing terribly great. They beat earnings expectations, most of that was because of a reserve release. They released $1.65 billion.

Remember, Wells Fargo is the most consumer-facing out of the five, meaning they're not really focused on the investment bank. They loan money, that's how they make their money. Net interest income was down 5% year over year. Remember I mentioned Bank of America's was up 10%, so their interest income is trending in the opposite direction, which is concerning. That's probably the biggest thing on the quarter. One thing that's really impressive, they spend $5.3 billion on buybacks in the third quarter alone.

Moser: Wow.

Frankel: That's an aggressive buyback pace.

Moser: That is.

Frankel: I don't have the figure in front of me, but I want to say Wells Fargo's total market cap is in the $200 billion range.

Moser: Yeah, that sounds about right.

Frankel: That means say they bought back more than 2.5% of their share count in the third quarter alone.

Moser: Yeah, $193 billion. I'm seeing right now on Capital IQ.

Frankel: That's a big buyback pace.

Moser: It is.

Frankel: Consumer loans still down, year over year, down 2% from the second quarter. Not terribly concerning, about in line with peers. Deposits continue to rise and Wells Fargo's nicely profitable, that return on equity of 11.1%, which is above that magical 10% threshold. Strong quarter but nothing to jump up and down in the street about.

Moser: Do you feel like the headwinds that they're facing in on the net interest income side, you feel like that's partly due to the fact that regulators are still keeping the growth lid on, so to speak. They're still not able really to grow. You're not going to bring those deposits. We see with JPMorgan and Bank of America for example, there's robust deposit growth numbers. Wells is going to be limited in what they can do there. You feel like that's something that plays into that net interest income. If so, then it feels like maybe that's a bit more of a short-term concern as opposed to a long-term one.

Frankel: Absolutely. When their peers are growing their deposit base at 20% year over year, like in some of these cases. JPMorgan's was up 19% year over year. Wells Fargo's was up less than 4% year over year.

Moser: Yeah.

Frankel: When you have that big difference in deposit growth, of course, it gives the other banks an advantage to generate more interest because it gives them more money to lend. Even if their loan portfolio is not necessarily growing as fast as they'd like it to, it still gives them that big capital base to lend out and make money, so Wells Fargo, that's definitely a handicap for them right now.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.