NEW YORK, Jan 14, 2026, 14:02 EST — Regular session
- Wells Fargo shares dropped roughly 5% following a quarterly profit miss and a warning of weaker net interest income in 2026.
- A $612 million severance charge dragged on results as CEO Charlie Scharf presses ahead with cost cuts and a bank overhaul.
- Washington’s chatter about a one-year cap on credit-card rates caught traders’ attention, alongside more big-bank earnings due Thursday.
Wells Fargo (WFC) shares dropped 5.1% to $88.81 in Wednesday afternoon trading. The bank missed profit estimates for the quarter and projected 2026 net interest income below Wall Street forecasts. 1
The decline signals a warning for U.S. financials just as earnings season kicks off, with investors gauging how much of last year’s bank rally hinged on cleaner earnings versus simpler year-over-year comparisons.
Wells Fargo is the first major report since regulators removed its long-standing asset cap, opening the door for growth. That raises the stakes, not lowers them, as investors now expect clear evidence the bank can scale up without triggering another regulatory headache.
Wells Fargo reported fourth-quarter net income of $5.36 billion, or $1.62 per share, on revenue totaling $21.29 billion. The bank took a $612 million charge for severance expenses and bought back $5.0 billion in stock during the quarter. CEO Scharf said the “strong financial performance … make me proud of our 2025 results.” 2
Net interest income increased 4% to $12.33 billion, falling short of analysts’ expectations. Wells Fargo projected its 2026 net interest income around $50 billion, anticipating average loan growth in the mid-single digits, driven by commercial lending, auto loans, and credit cards.
“Costs are under control and loan quality remains high, so there is still a lot of good news,” said Brian Mulberry, a portfolio manager at Zacks Investment Management.
Scharf told analysts the economy and customers remain resilient. Management also said it plans to lean into new credit-card products and keep spending on technology, including AI, to modernize services.
The bank wrapped up 2025 with 205,198 employees, a drop from 210,821 at September’s close, as layoffs pushed on into year-end.
Policy risk has crept into the daily tape. Trump has thrown support behind a proposed one-year cap of 10% on credit-card interest rates. Barclays analysts cautioned that such a cap would create “material headwinds to card profitability” and might force lenders to tighten credit. 3
The slump spread through the sector, dragging down Bank of America and Citigroup despite both beating profit forecasts. “It’s not unusual to see a little bit of a pullback,” noted Jake Johnston, deputy chief investment officer at Advisors Asset Management. 4
The downside is straightforward. If rates drop quicker than anticipated or deposit costs remain stubbornly high, banks could see interest income stall just as credit losses usually begin climbing later in the cycle—not sooner.
Thursday morning brings earnings from Goldman Sachs and Morgan Stanley, while traders gear up for the Federal Reserve’s rate decision on Jan. 28. 5
