Wells Fargo Q4 2025 Results: Profit Up, Revenue Miss
Wells Fargo Q4 2025 results show adjusted profit rose on higher net interest income while revenue missed, making buybacks and ROTCE focus for investors.
KEY TAKEAWAYS
- Adjusted net income was $5.8 billion excluding a $612 million severance charge.
- Total revenue was $21.3 billion, missing the $21.65 billion Street consensus.
- Federal Reserve removed the asset cap, clearing the way for buybacks and a 17-18% ROTCE target.
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Wells Fargo reported adjusted net income of $5.8 billion in Q4 2025, excluding a $612 million severance charge, with diluted earnings per share of $1.76. The results, released on Jan. 14, 2026, showed profit growth driven by rising net interest income and expense control, while total revenue of $21.3 billion fell short of Street forecasts as the bank set a higher medium-term return on tangible common equity (ROTCE) target.
Earnings and Capital Returns
Total revenue rose 4% year over year but missed the consensus estimate of $21.65 billion. Net interest income increased 4% to $12.3 billion, supported by higher loan and investment securities balances, improved Markets business results, and fixed-rate asset repricing, partially offset by deposit mix changes. Noninterest income reached $9 billion. Noninterest expense declined 1% to $13.7 billion, with severance costs recorded in both periods. These factors combined to lift profits despite the revenue shortfall.
GAAP net income was $5.4 billion, up 6% from the prior year. Management highlighted the adjusted figure to isolate the one-time severance charge and better reflect operating performance.
The bank repurchased $5 billion of common stock in the quarter. For the full year, it returned $23 billion to shareholders, including $18 billion in buybacks and a dividend increase of 13%. Buybacks accounted for roughly three-quarters of the capital returned.
Balance Sheet and Outlook
Average loans grew 5% year over year to $956 billion, while average deposits rose 2% to $1.38 trillion, supporting higher interest income. The provision for credit losses declined 5% to $1.04 billion, and net charge-offs fell 13% to $1.03 billion, reflecting easing credit costs.
Capital ratios showed a common-equity tier-1 (CET1) ratio of 10.6%, down from 11.1% a year earlier. Return on equity was 12.3%, and ROTCE stood at 14.5%. Chairman and CEO Charlie Scharf said, "We achieved our prior ROTCE target of 15% and have set a new medium-term target of 17-18%."
The Federal Reserve removed its asset cap on the bank, and multiple consent orders were terminated. Wells Fargo filed a Form 8-K with the SEC on Jan. 14 documenting these developments, which management cited to justify increased capital returns and a firmer ROTCE goal.
