Wells Fargo(US:WFC) ZACKS·2026-01-14 16:55Core Viewpoint - Wells Fargo & Company (WFC) reported fourth-quarter 2025 adjusted earnings per share of $1.76, exceeding the Zacks Consensus Estimate of $1.66, and up from $1.42 in the prior-year quarter [1][10]. Financial Performance - The results were bolstered by an increase in net interest income (NII), higher non-interest income, and lower provisions, although a rise in non-performing assets negatively impacted the results [2][10]. - The net income (GAAP basis) for the quarter was $5.36 billion, a 6% increase from the prior-year quarter, while total revenues were $21.29 billion, missing the Zacks Consensus Estimate of $21.6 billion but increasing 4.5% year over year [3][4]. - For the full year 2025, total revenues reached $83.69 billion, which also fell short of the consensus estimate of $84.03 billion, but represented a 2% year-over-year increase [4]. Income and Expenses - NII was reported at $12.33 billion, a 4% year-over-year increase, driven by higher loan and investment securities balances, although the net interest margin contracted by 10 basis points to 2.60% [5][10]. - Non-interest income grew 5% year over year to $8.96 billion, benefiting from the absence of prior-year losses and higher fees in various segments [6]. - Non-interest expenses decreased by 1% year over year to $13.72 billion, attributed to lower assessment expenses and efficiency initiatives, resulting in an improved efficiency ratio of 64% compared to 68% in the previous year [7]. Loan and Deposit Growth - As of December 31, 2025, total average loans increased by 3% sequentially to $955.8 billion, while total average deposits also rose by 3% to $1.37 trillion [8]. Credit Quality - The provision for credit losses was $1.04 billion, down 5% from the prior-year quarter, with net loan charge-offs at 0.43% of average loans, a decrease from 0.53% in the previous year [11]. - Non-performing assets increased by 7.1% year over year to $8.5 billion, indicating mixed credit quality [10][11]. Capital Ratios and Profitability - The Tier 1 common equity ratio as of December 31, 2025, was 10.6%, down from 11.1% in the fourth quarter of 2024 [12]. - Return on assets was 1.02%, slightly down from 1.05% in the prior-year quarter, while return on equity improved to 12.3% from 11.7% a year ago [13]. Share Repurchase and Future Outlook - In the reported quarter, Wells Fargo repurchased 58.2 million shares, amounting to $5 billion of common stock [14]. - The company has achieved a 15% return on tangible common equity (ROTCE) target and set a new medium-term target of 17-18%, positioning itself for continued healthy returns [15][16].