Wells Fargo fell short of analysts' profit estimates as net interest income fell short of expectations and severance costs drove up expenses in the fourth quarter.

Wells Fargo's latest quarterly results showed net interest income of $12.3 billion, below the estimated $12.4 billion, leading to a drop in share price. Investment banking fees also missed expectations, coming in at $716 million versus an estimate of just under $800 million, while expenses were higher than projected at $13.7 billion.

Despite higher-than-expected average total loans and deposits, the bank's outlook for 2026 net interest income was set at $50 billion, below the $50.2 billion estimate. This marks only the second quarter since the removal of the Federal Reserve's asset cap, and while Wells Fargo's management expressed optimism about future growth, current financial results did not meet analyst expectations.

Wells Fargo misses profit estimates as NII falls short

It is a mess. The big number coming in on net interest income, this is the one sending shares lower. Coming in for the quarter at $12.3 billion. The estimate was for $12.4 billion. At the same time, their fees, those did miss too on investment banking. $716 million is where it comes in. The estimate was just for under $800 million. Expenses, those are also higher. $13.7 billion, the estimate was for $13.6 billion. Average total loans, that is higher too, as is deposits that were estimated. So just to recap, it is higher expenses, worse than expected net interest income, worse than expected investment banking fees. Those are gonna be some of the more important numbers, John, because this is a Wells Fargo that is trying to grow more aggressively. This is only the second quarter where Wells Fargo doesn't have its asset cap provision, something that the Federal Reserve put on it in 2018 after a string of scandals tied around improper customer practices. So they had targeted really aggressive growth for both its investment banking, for loans, for its deposits too. Of course, loans coming in a little bit better than expected, as did deposits. But it's gonna be an issue for them. They're also seeing their total expenses for 2026 at $55.7 billion. That's about a little bit higher than it was for 2025. So that's not great news either. Just wanna lay out what they see for their view of net interest income for 2026. They're seeing $50 billion. That's a miss. The estimate was for $50.2 billion. Again, Wells Fargo putting in the commentary here that they are targeting increased growth. The CFO is saying that they are now excited to compete on a level playing field. But for now, John, the numbers aren't matching up to what the expectations were.

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