Wells Fargo & Company (NYSE:WFC) executives highlighted higher earnings, balance sheet growth, and continued expense discipline during the bank’s fourth-quarter earnings call, while also outlining expectations for 2026 net interest income and expenses following a year marked by the removal of the Federal Reserve’s asset cap.
2025 performance and strategic progress
CEO Charlie Scharf said 2025 results reflected “significant momentum” across the company. Wells Fargo reported net income of $21.3 billion for 2025, with diluted earnings per share up 17% from a year ago. Scharf said fee-based revenue rose 5% year over year, describing the increase as broad-based across consumer and commercial businesses.
Scharf also emphasized the significance of the Fed’s removal of the asset cap, calling it “a pivotal moment,” and said Wells Fargo has closed 13 regulatory orders since 2019.
Business highlights: consumer, commercial, and markets
In consumer banking, Scharf pointed to investments in credit cards, with nearly three million new credit card accounts opened in 2025, up 21% from a year ago, and credit card balances up 6%. He said early vintages from newer products are beginning to contribute to profitability after two to three years of upfront costs. In auto lending, Scharf said the business returned to growth, with loan balances up 19% year over year, supported in part by becoming the preferred financing provider for Volkswagen and Audi brands in the U.S.
In home lending, Scharf said Wells Fargo has simplified operations over the past three years, including cutting headcount by more than 50% and reducing third-party mortgage loans serviced by more than 40%. He said the company is continuing to reduce the size of the business and focus on serving bank and wealth management customers.
In commercial banking, Scharf said Wells Fargo hired 185 coverage bankers over the last two years, with more than 60% hired in 2025, and noted early signs of success in new client acquisition and loan and deposit growth. He also said fees generated from investment banking and markets capabilities provided to commercial banking clients grew more than 25% in 2025. Scharf highlighted Overland Advantage, a strategic partnership with Centerbridge Partners, saying it has helped clients raise approximately $7 billion in financing since inception.
On investment banking, Scharf reiterated the bank’s goal of becoming a top-five U.S. investment bank, noting Wells Fargo’s announced U.S. M&A ranking improved to eighth in 2025 from twelfth in 2024, and said the deal pipeline entering 2026 was “meaningfully greater” than at any point in the last five years, while cautioning market conditions can change.
With the asset cap lifted, Scharf said Wells Fargo increased trading-related assets by 50% in 2025 to support customer trading flows and financing activities, describing many of the additions as lower margin but also lower risk and less capital-intensive.
Fourth-quarter results: earnings up, expenses down year over year
CFO Mike Santomassimo said Wells Fargo earned $5.4 billion in the fourth quarter, up 6% from a year ago. Diluted earnings per share were $1.62, up 13% year over year, or $1.76 excluding severance expense. The quarter included $612 million of severance expense tied primarily to actions the bank expects to take throughout 2026. Santomassimo said total severance expense in the second half of 2025 was $908 million.
Net interest income (NII) rose $381 million, or 3%, from the third quarter, driven by higher Markets NII. Excluding markets, NII increased $167 million on higher loan and deposit balances and fixed-asset repricing, partially offset by deposit mix changes.
Loan growth accelerated in the quarter. Santomassimo said period-end loans rose 5% from the third quarter, the strongest linked-quarter growth since the first quarter of 2020. Average loans increased $49.4 billion, or 5%, from a year ago, driven by commercial and industrial growth in corporate investment banking and commercial banking. He also provided additional detail on the “financials except banks” category, breaking it into lending to asset managers and funds, commercial finance, consumer finance, and real estate finance, and said the loans are generally secured with features designed to manage credit risk.
Average deposits increased $23.9 billion year over year as growth in consumer and commercial deposits more than offset declines in higher-cost corporate treasury deposits. Santomassimo said the bank reduced average deposit costs by 29 basis points from a year ago.
Non-interest income rose $419 million, or 5%, from a year ago, as fee-based revenue grew across most categories. Santomassimo highlighted 8% growth in investment advisory fees and brokerage commissions, driven by higher market valuations in wealth and investment management. Non-interest expense declined $174 million year over year, reflecting lower FDIC assessment expense, lower operating losses, and efficiency initiatives, partially offset by higher revenue-related compensation, advertising, and technology spending.
Credit trends and capital position
Credit performance remained “strong,” according to management. Santomassimo said the net loan charge-off ratio declined 10 basis points from a year ago, though it rose 3 basis points from the third quarter. Commercial losses increased, driven by commercial real estate—predominantly office—while consumer net loan charge-offs rose modestly to 75 basis points of average loans, with higher losses in credit card and auto. He noted both credit card and auto losses were lower than a year ago due to seasonality patterns.
Non-performing assets rose modestly from the third quarter, driven by commercial real estate and commercial and industrial non-accrual loans. Santomassimo said the increase was borrower-specific and not indicative of systemic weakness.
Wells Fargo ended the quarter with a CET1 ratio of 10.6%, down from the third quarter but above its regulatory minimum plus buffers of 8.5%. The bank repurchased $5 billion of common stock in the fourth quarter.
2026 outlook: net interest income, expenses, and key assumptions
For 2026, Wells Fargo expects total net interest income of approximately $50 billion, plus or minus, compared with $47.5 billion in 2025. For the first time, the company provided an outlook for Markets NII, expecting it to rise to approximately $2 billion in 2026, driven by lower short-term funding costs and balance sheet growth tied to increased client financing activity. Management cautioned that higher Markets NII is expected to be partially offset by lower non-interest income in the markets business, though the company expects total markets revenue to increase.
Excluding markets, Wells Fargo expects NII of approximately $48 billion in 2026, up from $46.7 billion in 2025. The guidance assumes two to three Fed rate cuts in 2026 and relatively stable 10-year Treasury rates, which management said would be a modest headwind to NII, more than offset by loan and deposit growth and continued fixed-asset repricing. The bank expects average loans and average deposits to grow mid-single digits from fourth-quarter 2025 to fourth-quarter 2026, with stronger growth in interest-bearing deposits. Santomassimo said NII excluding markets is expected to decline in the first quarter due to two fewer days.
On expenses, Wells Fargo forecast 2026 non-interest expense of approximately $55.7 billion, up from $54.8 billion in 2025. The outlook assumes no significant additional severance in 2026, resulting in an approximate $700 million decline in severance expense. Offsetting factors include about $800 million of higher revenue-related expenses in wealth and investment management, about $400 million higher FDIC assessment expense, and additional investments—particularly in technology—along with merit and benefit increases. Santomassimo said the company expects approximately $2.4 billion of gross expense reductions in 2026 from efficiency initiatives and cited approximately $15 billion of gross expense saved over the past five years.
During the Q&A, management also addressed investor questions on topics including balance sheet growth versus buybacks, potential credit card rate cap discussions (calling it “too early to know” what actions may be taken by policymakers), and commercial real estate conditions. Santomassimo said demand remains solid in several commercial real estate subsectors, while office valuations have stabilized, with outcomes differentiated between newer, higher-quality properties and older inventory.
About Wells Fargo & Company (NYSE:WFC)
Wells Fargo & Company is a diversified, U.S.-based financial services company headquartered in San Francisco, California. Founded in 1852 by Henry Wells and William G. Fargo, the firm has evolved from its origins in express delivery and pioneer-era banking into one of the largest full-service banks in the United States. The company provides a broad range of financial products and services to individual, small business, commercial, and institutional clients. Charles W. Scharf serves as chief executive officer.
Wells Fargo operates across several core business segments, including consumer banking and lending, commercial banking, corporate and investment banking, and wealth and investment management.
