Wells Fargo's profit beat analysts' estimates in the fourth quarter, but its shares were weighed down before the bell by interest income that missed expectations.
The bank, which had twice reduced its annual interest income expectations last year, said net interest income - the difference between what it earns on loans and pays out on deposits - rose 4% to $12.33 billion in the quarter from a year earlier, but missed expectations of $12.46 billion.
Wells Fargo had forecast interest income to be about $50 billion in 2026. Analysts on average were expecting $50.33 billion, according to data compiled by LSEG.
The bank's stock, which had surged 32.7% in 2025, was down 1.7% before the bell.
The fourth-largest US lender's net income was $5.36 billion, or $1.62 per share, in the three months ended December 31, it said today. That compares with $5.08 billion, or $1.43 per share, a year earlier.
Excluding one-time items, Wells Fargo earned $1.76 per share in the quarter, compared with Wall Street expectations of $1.67, according to estimates compiled by LSEG.
The bank recorded $612m in severance expenses in the quarter as part of its job cuts.
The results cap a strong year for the US bank as regulators removed a $1.95 trillion asset cap in June, lifting a penalty linked to Wells Fargo's fake-accounts scandal, allowing the bank to grow and pushing total assets past the $2 trillion mark last year for the first time.
"We have funded significant increased investments in infrastructure and business growth by driving greater savings. Evidence of increased growth can be seen across the company," CEO Charlie Scharf said in a statement.
Wells Fargo also closed seven consent orders last year, drawing a line under its regulatory woes tied to a fake-accounts scandal. It still has one remaining consent order from 2018.
Under Scharf, the bank has streamlined its workforce, leaning on cost cuts to fund long-term growth initiatives.
Scharf said last month that Wells Fargo will keep trimming headcount as it focuses on becoming more efficient, adding that artificial intelligence presents a major opportunity to boost productivity.
Wells Fargo ended 2025 with 205,198 employees, compared with 210,821 as of September 30. Its headcount has fallen every quarter since late 2020.
