Wells Fargo’s Q4 2025 Earnings Miss Estimates As Mortgage Profits Decline

Wells Fargo on Wednesday reported fourth-quarter 2025 net income of $5.36 billion, or $1.62 per diluted share, as the bank posted stronger loan growth, solid credit performance and continued expense discipline following the removal of a long-standing Federal Reserve asset cap.

But the numbers still fell short of Wall Street analysts’ expectations of $1.66 per share. As a result, Wells Fargo‘s shares were down 4.8% to $89, according to reporting by Reuters.

The bank’s total revenue was $21.29 billion, but that fell short of analysts’ expectations of $21.64 billion, even as it rose 4% from a year earlier.

“Strong financial performance, removal of the asset cap imposed by the Federal Reserve, termination of multiple consent orders, and stronger growth in both our consumer and commercial businesses make me proud of our 2025 results,” chairman and CEO Charlie Scharf said in a statement.

The San Francisco-based bank reported Wednesday that it spent $612 million on severance, reflecting the company’s ongoing workforce reductions, which have occurred every quarter since late 2020. The company ended 2025 with about 205,200 employees. The reported $612 million in severance costs is down compared with $647 million a year earlier.

Loans held on the bank’s balance sheet increased to $955.8 billion in Q4 2025, up from $906.4 billion in the same period a year earlier, while average deposits grew to $1.38 trillion.

Non-interest expenses declined 1% from a year earlier to $13.7 billion, which the bank said was “driven by lower Federal Deposit Insurance Corporation (FDIC) assessment expense,
lower operating losses, and the impact of efficiency initiatives.”

Provision for credit losses totaled $1.04 billion, down slightly from $1.1 billion a year ago.

Wells Fargo’s consumer banking and lending segment, which includes home loans, reported net income of $2.1 billion, up 33% from a year earlier, as revenue rose 7%. Credit card spending and new account growth remained strong, while auto lending balances increased 19% from the prior year.

The home lending segment, specifically, was down 6% annually to $807 million in net income due to lower revenues tied to smaller loan balances, the bank noted.

According to reporting by Bloomberg, Wells Fargo expects about $50 billion in net interest income for 2026, slightly below analysts’ forecast of $50.2 billion. The bank anticipates expenses of roughly $55.7 billion, also just under the $55.9 billion analysts projected.

“We have built a strong foundation and have made great progress in improving growth and returns, though we have operated with significant constraints,” Scharf said. “We are excited to now compete on a level playing field and are able to dedicate even more resources to growth with the ability to grow our balance sheet.”