New York, Jan 14, 2026, 12:24 EST — Regular session
- Shares of Wells Fargo dropped roughly 5.7% in midday trading following the bank’s fourth-quarter report
- The lender recorded $612 million in severance expenses and reported net interest income totaling $12.33 billion
- Management indicated net interest income around $50 billion in 2026, factoring in rate cuts in their projections
Wells Fargo & Company shares slid 5.7% to $88.27 in New York on Wednesday, deepening the sell-off following its quarterly earnings release and new 2026 goals.
Investors are zeroing in on two key issues for big banks: how rising rates will impact loan earnings, and if cost-cutting is finally within reach after years of heavy compliance spending. Wells Fargo, in particular, is eager to show it can expand more aggressively now that regulators have removed its longstanding balance sheet cap.
Wells Fargo reported fourth-quarter net income of $5.36 billion, or $1.62 per diluted share, factoring in a $612 million severance charge related to job cuts. Net interest income—the difference between earnings on loans and costs on deposits—came in at $12.33 billion. CEO Charlie Scharf remarked, “We have built a strong foundation and have made great progress in improving growth and returns though we have operated with significant constraints.” 1
Wells Fargo’s presentation materials for the earnings call projected net interest income of roughly $50 billion in 2026, based on two to three Fed funds rate cuts and a stable 10-year U.S. Treasury yield. The bank also predicted noninterest expenses near $55.7 billion for 2026, noting lower severance costs but an uptick in FDIC assessment expenses. 2
Capital return remained in focus. Wells Fargo repurchased 58.2 million shares, totaling $5.0 billion, in the fourth quarter. The bank also highlighted plans to return $23 billion to shareholders in 2025 through buybacks and an increased dividend.
The stock’s moves highlighted just how tight expectations are. Analysts described the results as mixed. Brian Mulberry, portfolio manager at Zacks Investment Management, noted: “Beyond this issue, there is still a lot of good (news) as costs are under control and loan quality remains high.” Wells Fargo closed 2025 with 205,198 employees, continuing to cut headcount while addressing lingering regulatory demands tied to past sales-practices missteps. 3
Credit cards threw a new curveball at bank investors Wednesday. Wells Fargo CFO Mike Santomassimo said it’s “just too early” to gauge the fallout from President Donald Trump’s proposed 10% ceiling on credit card interest rates. He also cautioned that if passed, the move might tighten credit availability. 4
In the sector, Bank of America and Citigroup both reported quarterly profits that beat expectations. Investors focused closely on loan growth and net interest income trends as earnings season continued to unfold. 5
Still, the downside risks are clear. Wells Fargo’s interest income for 2026 assumes rate cuts and shifts in mix; if cuts come later than anticipated or deposit costs remain stubborn, that revenue could fall short. Credit quality slipping, especially in riskier areas like cards or commercial real estate, would put pressure on the cost-cutting narrative.
Investors will be tuning in for any shifts in management’s tone during the conference call, along with potential adjustments to those 2026 targets. Wells Fargo is set to report its next earnings on April 14, 2026. 6
