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    WFC
    Earnings call· Dec 2025(Q4 FY25)

    WELLS FARGO & COMPANY/MN WFC

    Jan 14, 2026 Source

    Executive summary

    Wells Fargo Q4 FY25 — Strong Financial Results and Strategic Momentum

    Wells Fargo delivered strong Q4 FY25 results, reflecting significant momentum from strategic investments and expense discipline, including 22 consecutive quarters of headcount reductions. The removal of the asset cap has enabled balance sheet growth and increased capital returns, positioning the company for continued higher growth and improved returns, with a new medium-term ROTCE target of 17-18%. The company remains focused on efficiency and strategic investments to drive future growth.

    Highlights

    6

    • Net income increased to $21.3 billion for FY25.

    • Diluted EPS grew 17% for FY25.

    • Fee-based revenue was up 5% for FY25, driven by broad-based growth.

    • Achieved positive operating leverage in 2025, with 22 consecutive quarters of headcount reductions.

    • Returned $23 billion of excess capital to shareholders in 2025, including an 13% dividend increase and $18 billion in share repurchases.

    • ROTCE increased to 15% in 2025, up from 8% in Q4 2020.

    Concerns

    4

    • Share repurchases are expected to be lower in 2026 compared to 2025.

    • Commercial net loan charge-offs increased 4 basis points QoQ, driven by higher commercial real estate losses, predominantly in the office portfolio.

    • The Corporate Investment Banking commercial real estate office portfolio coverage ratio declined to 10.1% in Q4 FY25.

    • Net interest income, excluding markets, is expected to decline in Q1 2026 due to the impact of two fewer days.

    Guidance & targets

    10
    CategoryTargetConfidence
    Full-year 2026 Total Net Interest Income
    $50 billion, plus or minus
    high materiality
    High
    Full-year 2026 Markets Net Interest Income
    approximately $2 billion
    medium materiality
    Medium
    Full-year 2026 Net Interest Income excluding Markets
    approximately $48 billion
    high materiality
    High
    Full-year 2026 Average Loans Growth
    mid-single digits
    medium materiality
    Medium
    Full-year 2026 Average Deposits Growth
    mid-single digits
    medium materiality
    Medium
    Full-year 2026 Noninterest Expense
    approximately $55.7 billion
    high materiality
    High
    Full-year 2026 Gross Expense Reductions (efficiency initiatives)
    approximately $2.4 billion
    medium materiality
    High
    Q1 2026 Net Interest Income excluding Markets
    decline
    low materiality
    High
    Q1 2026 Personnel Expenses
    approximately $700 million
    low materiality
    High
    Medium-term ROTCE Target
    17% to 18%
    high materiality
    Medium

    Segment performance

    10
    SegmentRevenueYoYQoQMargin
    Consumer, Small and Business Banking
    Revenue increased driven by lower deposit pricing and higher deposit and loan balances.
    		—9%——
    Home Lending
    Revenue declined due to lower net interest income from lower loan balances. Servicing portfolio reduced by $90 billion in 2025 as part of strategy to focus on bank and wealth management customers.
    Servicing portfolio reduction 2025: $90 billion
    		—-6%——
    Credit Card
    Revenue grew from higher loan balances and an increase in card fees. Strong new account growth and significant portion of balances from new products.
    New accounts opened 2025: nearly 3 millionNew accounts growth 2025: 21%Loan balances growth YoY: 6%Loan balances from new products since 2021: approximately 50%
    		—7%——
    Auto
    Revenue increased due to higher loan balances. Originations more than doubled, benefiting from becoming preferred financing provider for Volkswagen and Audi brands.
    Loan balances growth YoY: 19%Origination growth YoY: more than doubled
    		—7%——
    Personal Lending
    Revenue declined due to lower loan balances and loan spread compression.
    		—declined——
    Commercial Banking
    Revenue was down as lower net interest income was partially offset by growth in noninterest income from tax credit and equity investments. Average loan balances grew from higher client activity.
    Average loan balances growth QoQ: $4.6 billion (2%)
    		—-3%——
    Banking (CIB)
    Banking revenue declined YoY in Q4, but investment banking revenue was up 11% for the full year, indicating momentum despite quarterly fluctuations.
    Investment banking revenue growth FY25: 11%
    		—-4%——
    Commercial Real Estate (CIB)
    Revenue was down due to lower interest rates, reduced mortgage banking servicing income (from sale of non-agency third-party servicing business), and lower loan balances.
    		—-3%——
    Markets (CIB)
    Revenue grew driven by higher equities, commodities-related revenue (due to increased market volatility), and structured products. Average loans grew from new originations.
    Average loans growth YoY: 14%Average loans growth QoQ: 6%
    		—7%——
    Wealth and Investment Management
    Revenue increased driven by growth in asset-based fees from increased market valuations and higher net interest income due to lower deposit pricing and growth in deposit and loan balances. Underlying business drivers show momentum with growth in loans, deposits, and client assets.
    Premier deposit and investment balances growth 2025: 14%Branch-based financial advisers growth YoY: 12%Total client assets: grew (benefited from market valuations and net asset flows)
    		—10%——

    Operational metrics

    43
    Diluted EPS growth
    17%YoY
    FY25

    Growth in diluted earnings per share from a year ago.

    Headcount reductions
    22 consecutive quartersdown over 25%
    Q2 2020 - Q4 2025

    Headcount reduced over 25% since Q2 2020, reflecting ongoing efficiency initiatives.

    Asset growth
    11%YoY
    FY25

    Growth in total assets from a year ago, including broad-based loan growth and higher trading assets.

    Net charge-offs decline
    16%YoY
    FY25

    Decline in net charge-offs from a year ago, reflecting strong credit performance.

    Net income
    $5.4 billionup 6% YoY
    Q4 FY25

    Net income for the fourth quarter.

    Diluted EPS
    $1.62up 13% YoY
    Q4 FY25

    Diluted earnings per common share for the fourth quarter.

    Diluted EPS excluding severance expense
    $1.76
    Q4 FY25

    Diluted earnings per share for the fourth quarter, excluding severance expense.

    Severance expense
    $612 millionslightly lower YoY
    Q4 FY25

    Severance expense primarily for actions to be taken throughout 2026.

    Severance expense
    $908 million
    H2 FY25

    Total severance expense in the second half of 2025.

    Net interest income increase
    $381 millionup 3% QoQ
    Q4 FY25

    Increase in total net interest income from the third quarter, driven by higher market NII.

    Net interest income excluding markets increase
    $167 million
    Q4 FY25

    Increase in net interest income excluding markets, from higher loan and deposit balances and fixed asset repricing, partially offset by deposit mix changes.

    Period-end loans growth
    5%QoQ
    Q4 FY25

    Strongest linked quarter growth since Q1 2020.

    Average deposit cost reduction
    29 basis pointsYoY
    Q4 FY25

    Reduction in average deposit cost from a year ago, with lower interest-bearing deposit yields across all businesses.

    Noninterest income increase
    $419 millionup 5% YoY
    Q4 FY25

    Increase in noninterest income from a year ago, which included losses from investment securities repositioning and strong venture capital results.

    Noninterest expense decline
    $174 millionYoY
    Q4 FY25

    Decline in noninterest expense driven by lower FDIC assessment, lower operating losses, and efficiency initiatives, partially offset by higher revenue-related compensation, advertising, and technology expense.

    Net loan charge-off ratio decline
    10 basis pointsYoY
    Q4 FY25

    Decline in the net loan charge-off ratio from a year ago.

    Net loan charge-off ratio increase
    3 basis pointsQoQ
    Q4 FY25

    Increase in the net loan charge-off ratio from the third quarter.

    Commercial net loan charge-offs increase
    4 basis pointsQoQ
    Q4 FY25

    Increase driven by higher commercial real estate losses, predominantly in the office portfolio.

    Nonperforming asset ratio increase
    3 basis pointsQoQ
    Q4 FY25

    Increase driven by higher commercial real estate and commercial and industrial nonaccrual loans, due to borrower-specific factors.

    CET1 impact from earnings
    approximately 45 basis points
    Q4 FY25

    Contribution to CET1 ratio from earnings.

    CET1 impact from common stock repurchases
    approximately 40 basis points reduction
    Q4 FY25

    Reduction in CET1 ratio from common stock repurchases.

    CET1 impact from RWA growth
    approximately 45 basis points decline
    Q4 FY25

    Decline in CET1 ratio from risk-weighted asset growth.

    Common stock repurchased
    $5 billion
    Q4 FY25

    Amount of common stock repurchased in the fourth quarter.

    Average common shares outstanding decline
    6%YoY
    Q4 FY25

    Decline in average common shares outstanding from a year ago.

    Average common shares outstanding decline over 6 years
    26%
    Last 6 years

    Total decline in average common shares outstanding over the past six years.

    Investment advisory fees and brokerage commissions growth
    8%YoY
    Q4 FY25

    Growth in the largest fee-based revenue category, driven by higher market valuations in Wealth and Investment Management.

    Trading-related assets growth
    50%YoY
    FY25

    Growth in trading-related assets to accommodate customer trading flows and financing activities, following the lifting of the asset cap.

    Revenue-related expenses increase (WIM)
    approximately $800 million
    FY26

    Expected increase in revenue-related expenses in the Wealth and Investment Management business, primarily driven by market levels and higher noninterest income.

    FDIC assessment expense increase
    approximately $400 million
    FY26

    Expected increase in FDIC assessment expense, driven by expected deposit growth and the absence of a $200 million special assessment credit from Q4 FY25.

    Other expenses increase
    approximately $300 million
    FY26

    Expected increase in other expenses, with efficiency initiatives offsetting higher investments and other expenses.

    Incremental technology expense
    approximately $1.1 billion
    FY26

    Expected incremental technology expense, including investments in infrastructure and business capabilities.

    Incremental other investments
    approximately $800 million
    FY26

    Expected incremental other investments in key focus areas.

    Other expenses increase (merit/benefits/comp)
    approximately $800 million
    FY26

    Expected increase in other expenses, including merit and benefit increases, as well as performance-based discretionary compensation.

    Railcar leasing business sale impact on expense
    approximately $400 million of lower expense
    FY26

    Benefit from the sale of the railcar leasing business in Q1 2026, offset by a reduction in noninterest income.

    Coverage bankers hired
    185
    Last 2 years

    Coverage bankers hired to support growth in the Commercial Bank.

    Financing raised by Overland Advantage
    approximately $7 billion
    Since inception

    Amount of financing helped clients raise through the strategic partnership with Centerbridge Partners.

    Announced U.S. M&A ranking
    8thup from 12th in 2024
    2025

    Improved ranking in announced U.S. M&A, reflecting increasing success in bigger and more complex assignments.

    Mobile active customers growth
    1.4 millionup 4% YoY
    2025

    Growth in mobile active customers.

    Consumer checking accounts opened digitally
    50%
    2025

    Percentage of consumer checking accounts opened digitally, driven by digital account openings and marketing.

    Branches refurbished
    700
    2025

    Number of branches refurbished, with over half of the network now refurbished and remaining branches on track for completion over the next few years.

    Home Lending headcount reduction
    over 50%
    Last 3 years

    Headcount reduction in the Home Lending business as part of transformation and simplification efforts.

    Home Lending servicing portfolio reduction
    over 40%
    Last 3 years

    Reduction in the amount of third-party mortgage loans serviced, including $90 billion in 2025 alone.

    Premier deposit and investment balances growth
    14%
    2025

    Growth in balances for the Wells Premier offering to affluent clients.

    Industry KPIs

    11
    MetricValueDetails
    Loans$49.4 billionUSD
    Deposits$23.9 billionUSD
    Rotce ROE15%%
    Cet1 ratio10.6%%
    Capital returns$23 billionUSD
    Fee income lines5%%
    Allowance reserves10.1%%
    Net interest income$47.5 billionUSD
    Net charge offs npls75 basis pointsbps
    Total operating expenses$54.8 billionUSD
    Efficiency ratio operating leveragepositive

    Deals & partnerships

    2
    Centerbridge PartnersStrategic partnership 'Overland Advantage' to provide direct lending product to Commercial Banking customers.

    Overland Advantage, our strategic partnership with Centerbridge Partners has enabled us to better serve our Commercial Banking customers with a direct lending product and since inception we have helped our clients raise approximately $7 billion in financing.

    Volkswagen and Audi brandsBecame the preferred financing provider for Volkswagen and Audi brands in the United States.

    benefiting from becoming the preferred financing provider for Volkswagen and Audi brands in the United States in the spring of last year.

    Risks & headwinds

    4
    Credit card rate caps / affordability concernsNear-term (potential actions by administration/Congress)

    Not quantified, but acknowledged as a 'real issue' for those with less savings.

    Mitigation: Engage in discussions to find solutions that help consumers without creating adverse impacts, carefully considering the right response.

    Commercial real estate (office portfolio) lossesOngoing

    Q4 commercial net loan charge-offs increased 4 basis points QoQ driven by higher CRE losses predominantly in the office portfolio. Corporate Investment Banking CRE office portfolio coverage ratio declined to 10.1% in Q4 FY25. Expect 'additional losses which could be lumpy'.

    Mitigation: Office valuations continue to stabilize; expected losses are 'well within our expectations'. No signs of systemic weakness across the portfolio.

    NII headwind from rate cuts2026

    Modest headwind to NII excluding markets.

    Mitigation: Expected to be more than offset by loan and deposit growth as well as continued fixed asset repricing.

    Lower share repurchases in 20262026

    Expected to be lower than $18 billion repurchased in 2025.

    Mitigation: Focus on optimizing capital levels to a CET1 ratio of approximately 10% to 10.5% while growing organically, given many opportunities.

    What to watch in Q1 FY26

    5

    NII excluding Markets

    Q1 FY26
    CurrentQ4 FY25 NII ex-markets increased $167 million QoQ
    Targetdecline in the first quarter due to the impact of 2 fewer days

    Why it matters

    Net interest income is a primary revenue driver for banks; Q1 decline due to day count is a known factor, but actual performance will indicate underlying trends.

    We currently expect net interest income, excluding markets to decline in the first quarter due to the impact of 2 fewer days.

    Q&A highlights

    6

    Clarification on the drivers of the expected flat NII ex-markets despite projected loan growth, considering the rate outlook.

    Mike Santomassimo explained that NII ex-markets is slightly up when adjusted for day count. The outlook is influenced by three main factors: rate cuts (a headwind), continued loan and deposit growth (an offset that builds throughout the year), and fixed asset repricing. Deposit pricing is performing as expected, with high betas on commercial deposits and already adjusted consumer rates.

    “You got rates coming down which will be a headwind for NII ex-markets. And then you've got the continuation of deposit and loan growth coming throughout the year, and so that will build as you go.”

    asked by Robert Siefers · answered by Michael Santomassimo

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Progress & Asset Cap Removal

    The removal of the asset cap by the Federal Reserve and the successful closure of 13 regulatory orders since 2019 mark a pivotal moment for Wells Fargo. This milestone has enabled the company to grow its balance sheet, with assets increasing 11% from a year ago, including broad-based loan growth and higher trading assets. These actions position the company for stronger growth and improved returns, reflecting significant progress in transforming the organization.

    02

    Consumer Business Momentum

    Investments in the credit card business have driven strong outcomes, with nearly 3 million new accounts opened in 2025, up 21% year-over-year, and credit card balances growing 6%. The auto business returned to growth in 2025, with loan balances up 19% year-over-year, benefiting from becoming the preferred financing provider for Volkswagen and Audi brands. The Home Lending business is being simplified, reducing headcount by over 50% and the servicing portfolio by $90 billion in 2025, focusing on profitability by serving bank and wealth management customers.

    03

    Digital & Branch Enhancements

    Wells Fargo saw stronger net checking account growth in 2025, driven by digital account openings and increased marketing efforts. The company refurbished approximately 700 branches in 2025, with over half of its network now updated. Digital adoption is strong, with 50% of consumer checking accounts opened digitally and mobile active customers growing by 1.4 million, up 4% from a year ago, reflecting ongoing enhancements to the mobile app.

    04

    Commercial & Investment Banking Growth

    The Commercial Bank has hired 185 coverage bankers over the last two years, with over 60% hired in 2025, leading to early signs of success in new client acquisition and loan/deposit growth. Investment banking fees from commercial banking clients grew over 25% in 2025. In M&A, the company's announced U.S. ranking improved to 8th in 2025 from 12th in 2024, entering 2026 with a significantly greater deal pipeline than in the last five years.

    05

    Capital Optimization & Returns

    Wells Fargo returned $23 billion of excess capital to shareholders in 2025, including a 13% increase in common stock dividend per share and $18 billion in common stock repurchases. The CET1 ratio stands at a strong 10.6%, well above the regulatory minimum plus buffers of 8.5%. The company aims to manage its CET1 ratio to approximately 10% to 10.5%, balancing organic growth opportunities with capital returns.

    06

    Expense Discipline & Efficiency

    The company maintained its disciplined approach to managing expenses, achieving positive operating leverage in 2025 and marking 22 consecutive quarters of headcount reductions, with headcount down over 25% since Q2 2020. Wells Fargo expects approximately $2.4 billion of gross expense reductions in 2026 from efficiency initiatives, continuing its focus on streamlining operations and reinvesting savings into business growth.

    AI-generated summary of the company’s earnings call. Not investment advice.