Bank of America, Wells Fargo, and Citi shares fall as earnings reports contribute to a challenging beginning for 2026

Major US Banks Report Strong Year-End Results

On Wednesday morning, Bank of America (BAC) and Wells Fargo (WFC) announced that both their fourth-quarter and annual profits increased compared to the previous year.

Bank of America posted a net income of $7.6 billion for the quarter, marking a 12% year-over-year increase and surpassing expectations of $7.4 billion. Wells Fargo’s net income reached $5.4 billion, up 6% and matching analyst projections.

Both institutions achieved their highest annual net income in the past four years.

Bank of America reported earnings per share of $0.98, exceeding forecasts. Wells Fargo’s earnings per share came in at $1.62, slightly below the anticipated $1.67, with results impacted by a $0.14 charge related to severance expenses during the quarter.

Citigroup (C), which released its results later in the morning, saw its profits fall 13% from the previous year. The bank reported $2.5 billion in net income and $1.19 earnings per share, both missing analyst estimates. Citigroup also recorded a $1.2 billion loss in the quarter to account for the upcoming sale of its Russian operations.

Following the announcements, Wells Fargo’s stock dropped nearly 5%, Bank of America’s shares declined by 4%, and Citigroup’s stock slipped 2%.

Revenue and Business Segment Performance

Both Bank of America and Wells Fargo saw revenue growth fueled by increased lending margins and higher fees compared to the same quarter last year. Bank of America’s total revenue climbed 7% to $28 billion, while Wells Fargo’s revenue rose 4% to $21.3 billion.

Bank of America’s revenue from dealmaking edged up 1% to $1.67 billion, and trading fees surged 10% to $4.5 billion, mainly due to strong performance in equities.

Citigroup’s investment banking revenue jumped 35% to $1.29 billion, driven by robust M&A advisory activity. However, its trading division saw a 1% decrease in trading fees compared to the prior year’s fourth quarter.

Wells Fargo’s investment banking revenue dipped 1% to $716 million, while its trading fees increased by 8% to $1.6 billion during the quarter.

Leadership Outlook and Strategic Initiatives

The CEOs of Bank of America, Wells Fargo, and Citigroup—the nation’s second, third, and fourth largest banks—expressed optimism about the future of the US economy and their respective organizations. Last autumn, Bank of America and Wells Fargo introduced new targets for growth and returns. Citigroup, which set its own return on tangible common equity (ROTCE) target in 2022, revised its range downward at the start of last year.

Bank of America CEO Brian Moynihan stated, “While there are still various risks ahead, we remain optimistic about the US economy in 2026.”

Wells Fargo’s Growth and Workforce Changes

After restrictions on growth were eased last summer, Wells Fargo CEO Charles Scharf commented, “We’re thrilled to now compete on equal footing and can allocate more resources toward expansion as we grow our balance sheet.”

Both banks are focusing on improving efficiency in generating revenue from their resources.

Wells Fargo recorded a $612 million severance charge for the quarter. The bank has been gradually reducing its workforce over several quarters, ending December with 205,000 employees—a 6% decrease from the close of 2024.

David Hollerith reports on the financial industry, covering everything from major banks and regional lenders to private equity and the cryptocurrency sector.