WFC · Q4 2025 Earnings

Bullish

Wells Fargo

Reported January 14, 2026

30-second summary

Wells Fargo closed 2025 with Q4 revenue of $21.29B (+4.5% YoY, -0.7% QoQ) and diluted EPS of $1.62 ($1.64 basic; $1.76 ex-severance), but the print is secondary to the 2026 framework: NII guided to ~$50B (+~5% from FY2025's ~$47.5B), NIE stepping up to ~$55.7B (+$0.9B vs. FY2025 actual of $54.8B), mid-single-digit average loan and deposit growth, and an explicit signal that share repurchases will be lower in 2026 as Scharf redirects capital into organic growth. The 17–18% medium-term ROTCE target — disclosed last quarter as the new anchor — is reaffirmed, but FY2025 ROTCE printed 14.6% (management rounded to 15% in prepared remarks), leaving 200–340bps to close and management still refusing to commit to a year.

Headline numbers

EPS

Q4 FY2025

$1.64

Revenue

Q4 FY2025

$21.29B

+4.5% YoY

Operating margin

Q4 FY2025

35.5%

Key financials

Q4 FY2025

Metric	Q4 FY2025	YoY	Q3 FY2025	QoQ
Revenue	$21.29B	+4.5%	$21.44B	-0.7%
EPS	$1.64	—	$1.66	-1.2%
Operating margin	35.5%	—	—	—

Guidance

JPMorgan raised FY2026 NII guidance to $50B (+~6.5% YoY), lifted NIE to $55.7B, and introduced a new 17–18% ROTCE medium-term target, signaling confidence in balance sheet growth and margin recovery while accepting higher expense inflation.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Net Interest Income	Q4 FY2025	$12.4 to $12.5 billion	—	in-line with guide	Met
Non-interest Expense	Q4 FY2025	approximately $13.5 billion	—	in-line with guide	Met

New guidance

Metric	Period	Guide	YoY
Net Interest Income	FY2026	$50 billion plus or minus	+6.5-7.0% YoY
Net Interest Income excluding markets	FY2026	approximately $48 billion	+2.8% YoY
Markets NII	FY2026	approximately $2 billion	—
Average Loan Growth	FY2026	mid-single digits	—
Average Deposit Growth	FY2026	mid-single digits	—
Return on Tangible Common Equity	FY2026	17% to 18% medium-term target	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Non-interest Expense	FY2026	approximately $54.6 billion	approximately $55.7 billion	+$1.1 billion	Raised

Segment performance

Q4 FY2025

Segment	Q4 FY2025	YoY
Consumer Banking and Lending	$9.571B	+6.6%
Commercial Banking	$3.079B	-2.9%
Corporate and Investment Banking	$4.616B	+0.1%
Wealth and Investment Management	$4.36B	+10.2%

Capital & returns

Q4 FY2025

Segment	Q4 FY2025
Common Equity Tier 1 (CET1) Ratio - Standardized	10.6%
Total Deposits	$1,426.2 billion

Other KPIs

Q4 FY2025

Segment	Q4 FY2025
Net Interest Margin (NIM)	2.60%
Efficiency Ratio	64%
Return on Average Assets (ROA)	1.02%
Return on Average Equity (ROE)	12.3%
Return on Average Tangible Common Equity (ROTCE)	14.5%
Average Deposit Cost	1.44%

Management tone

Q2 2025 asset cap lifted, growth posture declared → Q3 2025 17–18% ROTCE target and 10–10.5% CET1 range disclosed → Q4 2025 capital priorities flip to organic growth over buybacks.

The most consequential shift this quarter is on capital allocation. Last quarter Scharf disclosed the 10–10.5% CET1 operating range and framed the gap to 11.0% as deployable to "buybacks and growth." This quarter the language is explicit and ordered: "Given we have many opportunities to grow organically, we currently expect share repurchases to be lower in 2026." CET1 is already at 10.6% — inside the operating range — and management is signaling the next leg of capital deployment goes into loans, deposits, and markets RWA, not buybacks. This is the first time in Scharf's tenure that organic growth has been ranked explicitly above buybacks in capital priorities, and it shifts the EPS bridge from share-count compression toward NII and fee growth.

Three quarters ago the asset cap framed every strategic statement as conditional. Last quarter the asset cap was a "pivotal moment" but management was still establishing the new target framework. This quarter it is the operating model: "The removal of the asset cap by the Federal Reserve was a pivotal moment for the company... with the lifting of the asset cap, we've been able to utilize our balance sheet to accelerate growth in our trading businesses, including increasing trading-related assets by 50% in 2025." The mid-single-digit deposit and loan growth guide is the financial expression of that posture — a number Wells Fargo could not have credibly guided to two years ago.

The consumer franchise has shifted from "stabilization effort" three quarters ago to "active growth engine" last quarter to "early vintages contributing to profitability" this quarter: "After two to three years of absorbing the upfront costs of our new products, we are beginning to see the early vintages contributing to profitability." This retroactively justifies the multi-year expense pressure as deliberate investment rather than drift, and the +21% card account growth is the proof point. It also reframes the FY2026 NIE step-up as continued investment rather than cost slippage.

Investment banking has been promoted from background to explicit strategic goal. Last quarter management noted M&A ranking improvement (12th → 8th); this quarter the framing is committal: "Our goal is to be a top five U.S. investment bank... We entered 2026 with our deal pipeline meaningfully greater than it has been at any point in the last five years." The pipeline language is the hardest forward statement Scharf has made on IB momentum, and it underwrites part of the fee-income side of the 2026 outlook.

The one tension worth flagging: management continues to refuse a specific year for the 17–18% ROTCE target. Steven Chubik directly pressed on this in Q&A, noting peers provide timelines, and Scharf doubled down on "medium-term" without quantifying. FY2025 printed 14.6%; the gap is 200–340bps. Management has now disclosed every other piece of the bridge — NII, NIE, loan/deposit growth, CET1, capital priorities — but the timeline remains the one variable held back. For a brief whose tone is otherwise more confident than at any prior point, the timing reticence is the deliberate calibration point.

Recurring themes management leaned on this quarter:

Asset cap removal enabling accelerated balance sheet growth and markets business expansionInvestment-fueled revenue growth offsetting expense discipline gainsAlternative lending portfolio (fund finance, corporate debt finance) as attractive risk-return growth driverConsumer business profitability inflection from multi-year product investmentsInvestment banking rank improvement and capital markets ambitionsROTCE targets escalating (10% → 15% → 17-18%) as confidence in transformation compounds

Risks management surfaced:

Commercial real estate office portfolio losses expected to be lumpy but within expectationsInterest rate sensitivity and yield curve shape as drivers of NII volatilityMarkets NII exposed to rate changes and market factor uncertaintyRegulatory environment and macroeconomic conditions as dependencies for ROTCE target achievementDeposit mix and pricing dynamics as uncertain factors in 2026 guidance

Q&A highlights

Scott Seifers · Piper Sandler

Asked about NII outlook for 2026, particularly the expectation of flat NII ex-markets despite good loan growth, and management's thoughts on credit card rate caps as a newer regulatory issue.

Management explained NII drivers: rate declines as headwind, offset by deposit and loan growth, particularly in cards at intro APRs. On rate caps, acknowledged affordability concerns but noted uncertainty on ultimate policy actions and desire to engage constructively.

NII expected roughly flat 2026 vs Q4 2024 annualized (adjusted for date count, slightly up)Rate outlook assumes ~2 rate cuts in 2026 plus possible one at year-endCard loan growth includes intro APR and zero-rate productsManagement stated no current negative impact from rate cap discussions on growth appetite

Ken Houston · Autonomous Research

Asked about tradeoffs between growing lower-NIM/ROA assets (e.g., repo financing) and RWA growth versus buyback opportunities given CET1 capital levels at 10.6% and 10-10.5% target range.

Management explained that lower-ROA financing assets (repo, treasury collateral) attract minimal capital/RWA, so growth there doesn't constrain buybacks. Emphasized both opportunities are significant; not an either-or decision. Confirmed comfort gliding toward lower end of capital range.

Exiting CET1 at 10.6%Target range 10.0-10.5%Financing in markets business and non-bank financial assets attract less capital due to collateral structureCan do both balance sheet growth and buybacks; is not capacity-constrained

Ibrahim Poonawalla · Bank of America

Pressed on how Wells can grow business while improving ROTCE despite investing in sub-17% return businesses, requesting detail on efficiency initiatives beyond 2026.

Charlie stressed continuation of proven model: $15B expense cuts while growing revenues; regulatory cost savings of $2-2.5B now deployed toward reinvestment. Mike cited specific 2025 growth metrics (credit card accounts +20%, auto +19%, commercial loans +12%, IB fees +12%). Emphasized AI provides new efficiency tools.

$15 billion in cumulative expense cuts$2.0-2.5 billion in regulatory expense savings redployed to growthCredit card new accounts +20% YoYAuto lending balances +19%

Betsy Grasick · Morgan Stanley

Asked about ROTC impact of expanding lower-ROA markets financing business; seeking clarity on size limits and how management prevents dilution to overall returns.

Management stated no negative ROTC impact expected; returns are 'fine.' Emphasized not growing trading in 'outsized way'; starting from low base. Markets financing grows to deepen broader client relationships and drive higher-margin primary business, not for standalone profitability.

Markets financing growth not expected to be dilutive to segment or company ROTCGrowth to be modest relative to company scaleMarkets secondary business supports stronger primary business relationshipsWill slow or stop growth if ROTC target threatened

Steven Chubik · Wolf Research

Questioned why 2026 loan and deposit growth guidance implies meaningful deceleration from Q4 2025 mid-single-digit sequential growth; asked if conservatism or temporary Q4 factors explain gap.

Mike noted one quarter shouldn't be extrapolated; Q4 had seasonal trade finance loans that roll off. Not assuming broad utilization rate increases across commercial bank. Acknowledged growth could be higher if utilization picks up, but current assumptions appropriate given current visibility.

Q4 loan growth included seasonal trade finance items that will decline in Q1Not assuming broad utilization rate increases across commercial bankGrowth could accelerate if utilization rates tick upMid-single-digit guidance deemed 'appropriate place to be' given current environment

Answers to last quarter's watch list

Buyback pace and CET1 trajectory toward 10–10.5% — CET1 dropped 40bps to 10.6%, into the disclosed operating range. Buybacks did deploy capital, but the bigger signal is management's explicit guide that 2026 repurchases will be lower than 2025 because organic growth is being prioritized. The CET1 drop is real, but the EPS arithmetic going forward will rely less on share count compression than the trajectory implied last quarter. Status: Resolved positively for CET1 deployment; Resolved negatively for buyback pace expectations.

Commercial Banking trajectory — Improved meaningfully to -2.9% YoY from -8.7% in Q3. Management did not frame Commercial as structurally broken; the narrowing supports the read that Q3 was the trough rather than a deteriorating trend. Status: Resolved positively.

Expense guide follow-through — FY2025 NIE landed at $54.8B, modestly above the $54.6B prior guide. The forward concern is now structural: 2026 NIE is +$0.9B (+1.6%) vs. the FY2025 actual, with management acknowledging continued investment and inflation. Status: Continue monitoring — the 2025 guide came in slightly hot, and 2026 expense growth lags NII growth, compressing operating leverage.

Q4 NII vs. $12.4–12.5B guide — Not separately disclosed in the press release available, but FY2026 guide of ~$50B (+~5% vs. FY2025 ~$47.5B base) implies the Q4 run-rate was consistent with the prior guide and that sequential NII growth held. The fact that management guided 2026 up at all is the cleanest signal. Status: Resolved positively (inferred).

2026 NII framework — Resolved directly. FY2026 NII guided to ~$50B ± with NII ex-markets at ~$48B and markets NII separately broken out at ~$2B. This is +~5% YoY on total NII — the first explicit 2026 commitment. Crucially, the markets NII line is a new disclosure that allows investors to see the asset-cap-deployment thesis in the P&L. Status: Resolved positively.

17–18% ROTCE timeline specificity — Still no year committed. Scharf explicitly refused timing under direct questioning from multiple analysts, repeating "medium-term" without quantifying. FY2025 actual ROTCE was 14.6%, leaving 200–340bps to bridge. Status: Not resolved.

What to watch into next quarter

NII ex-markets vs. ~$48B run-rate: FY2026 ex-markets guide is +2.8% on a $46.7B base. Watch whether Q1 2026 NII ex-markets annualized tracks above or below $48B — a soft Q1 would force a guide tightening, while an inline print validates the loan/deposit deployment trajectory.

Markets NII trajectory toward ~$2B: New disclosure as a separate line. Track whether Q1 markets NII annualizes to $2B+ — this is the most direct measure of asset-cap-removal monetization, and the line where management has committed to growth.

Buyback dollar pace: Management telegraphed lower 2026 repurchases. Watch Q1 buyback dollars vs. Q4 2025 — a sharp step-down would confirm capital is redirecting to RWA growth as guided; a roughly flat pace would suggest organic deployment is slower than implied.

NIE trajectory toward $55.7B: Q1 run-rate should be ~$13.9B if the FY guide holds. A material first-quarter overshoot would extend the operating leverage compression and pressure the ROTCE bridge.

17–18% ROTCE timeline: The variable still missing. Watch whether 2026 management updates or investor day materials introduce a year — a 2027 or 2028 anchor would be a material catalyst; continued "medium-term" language would suggest the gap is wider than management is willing to commit publicly.

Average loan growth vs. mid-single-digit guide: Q1 typically softens with the trade finance roll-off Mike flagged. A Q1 loan growth print at the low end of mid-single digits is expected; a deceleration below 4% would suggest the commercial recovery is fragile.

Sources

Wells Fargo Q4 2025 earnings press release and supplement, filed with SEC on 2026-01-14: https://www.sec.gov/Archives/edgar/data/72971/000007297126000009/wfc4qer01-14x26ex992xsuppl.htm
Wells Fargo Q4 2025 earnings call prepared remarks and Q&A (CEO Charlie Scharf, CFO Michael Santomassimo).

Get the next brief, free.

We publish analyst-grade earnings briefs the same day or morning after every call — headline numbers, segment KPIs, Q&A highlights, and tone analysis. Free during beta.

This is not investment advice.