Major U.S. Bank Earnings Preview: Bank of America, Wells Fargo, and Citigroup Set to Report Q4 2025 Results

This analysis is based on the Wall Street Journal live coverage report published on January 14, 2026, which identified Bank of America, Wells Fargo, and Citigroup as the next major financial institutions set to release their quarterly earnings results [1]. The timing of these reports is particularly significant as they cap off what has been a remarkable year for major U.S. banks, with the three institutions collectively delivering approximately 40% average stock appreciation in 2025 compared to broader market gains.

The pre-earnings period has been characterized by mixed market sentiment. While the Financial Services sector demonstrated modest strength, posting a +0.21% gain on January 13, individual bank stocks experienced notable pre-market selling pressure [0]. This divergence suggests investor caution is specifically focused on individual bank performance rather than sector-wide concerns. The Dow Jones Industrial Average’s 0.86% decline on January 13 further contributed to the cautious backdrop, as investors appeared to be reducing exposure ahead of the earnings reports.

The three major banks exhibited similar pre-market trading patterns, with all experiencing declines ahead of their earnings releases:

was trading at $54.54 in pre-market sessions, representing a 1.18% decline from the previous close. The stock remains within its 52-week range of $33.07 to $57.55, suggesting it is trading near the upper end of its annual price band [0].

showed the largest pre-market decline among the three banks at 1.56%, with shares trading at $93.48. The stock is similarly positioned near the top of its 52-week range of $58.42 to $97.76 [0].

was down 1.18% in pre-market trading at $116.31, also trading near the upper boundary of its 52-week range spanning $55.51 to $124.17 [0].

The consistent pattern of pre-market selling across all three banks indicates systematic risk aversion among investors, potentially driven by concerns about valuation sustainability and upcoming forward guidance. Wolfe Research analyst Steven Chubak has noted that approximately two-thirds of the banks’ 40% average stock gain in 2025 derived from multiple expansion rather than earnings growth, raising questions about whether current valuations can be sustained [2].

Analyst consensus estimates for Q4 2025 earnings reflect continued momentum across all three institutions:

is expected to report EPS of $0.95, representing a 15.85% year-over-year increase. The bank has demonstrated consistent earnings beat performance throughout 2025, with its strongest quarterly beat of 12.77% occurring in Q3 2025 [2][3]. However, Bank of America’s accounting classification has been flagged as “aggressive” in internal financial analysis, characterized by low depreciation and capex ratios, which may suggest limited upside potential in reported earnings [0].

carries an EPS estimate of $1.66, reflecting a 16.90% year-over-year increase, with revenue expectations of $21.66 billion representing 6% growth. The bank has maintained an average earnings beat of 7.5% over the past four quarters. TD Cowen has maintained a Hold rating on the stock while raising its price target from $93 to $102, indicating confidence in near-term performance alongside recognition of current valuation levels [3][4].

is projected to deliver EPS of $1.65, the highest year-over-year growth expectation at 23.13%. The bank has declared a quarterly dividend of $0.60 per share with a record date of February 2, 2026, demonstrating continued commitment to shareholder returns [3][5]. Citigroup’s Q4 2025 share performance of +19.5% significantly outperformed the S&P 500’s +4.2% gain during the same period, though the bank continues its restructuring efforts targeting approximately $2.5 billion in savings by 2026 through workforce reductions of approximately 1,000 positions [4].

The Financial Services sector’s modest +0.21% gain on January 13 positioned it favorably relative to several other market segments, including Technology (-0.29%), Healthcare (-0.72%), and Consumer Cyclical (-1.07%) [0]. This relative outperformance suggests the banking sector retains investor confidence despite valuation concerns. If Q4 earnings demonstrate continued momentum in lending activity, trading revenue, and investment banking fees, the sector could maintain this relative strength into 2026.

A critical insight from the analysis concerns the quality of 2025 earnings growth. While all three banks have consistently beaten analyst estimates throughout the year, Wolfe Research has raised concerns about the sustainability of this performance. The observation that approximately two-thirds of the 40% average stock gain came from multiple expansion rather than fundamental earnings growth suggests investors have already priced in substantial optimism [2]. This creates a challenging backdrop where beats may be viewed as expected and misses could trigger disproportionate negative reactions.

Analysts expect loan growth to accelerate beyond 5% in Q4, driven by several converging factors including diminished macroeconomic uncertainty, enhanced risk appetites among borrowers, and the Federal Reserve’s easing cycle. The trajectory of Net Interest Income (NII) will be a key focus area, with potential upside to 2026 estimates if deposit and loan growth accelerate as projected [3]. This represents a meaningful shift from the interest rate headwinds that pressured bank earnings in previous periods.

Major banks are expected to report record annual trading fee revenue, with the notable exception of Wells Fargo. For Wells Fargo, the relatively smaller but growing investment banking team continues targeting its own record in dealmaking fees [2]. This divergence in trading revenue expectations may create differentiation in stock performance post-earnings, with banks showing strong trading desks potentially receiving more favorable investor response.

Wolfe Research’s downgrade of both JPMorgan and Bank of America shares on expectations of “average” 2026 earnings represents a significant risk signal. Analyst Steven Chubak’s observation that “It’s all just a little too perfect in Bank-land” encapsulates investor skepticism about current valuation levels [2]. The strong 2025 performance has compressed valuation multiples, leaving limited room for disappointment. Any guidance suggesting slower-than-expected growth in 2026 could trigger meaningful multiple contraction.

A significant policy headwind identified in the analysis is the potential implementation of a 10% credit card interest rate cap under the incoming administration. This proposed regulation could materially impact consumer banking revenue streams, particularly for banks with substantial credit card lending operations [2]. Investors will likely closely scrutinize management commentary on this potential regulatory development and its projected impact on future earnings.

Internal financial analysis has identified high debt risk for all three banks, with Bank of America specifically flagged for aggressive accounting practices [0]. While these indicators do not necessarily predict default or distress, they warrant careful consideration in any investment thesis. The aggressive accounting classification for Bank of America, characterized by low depreciation and capex ratios, may limit the upside potential in reported earnings and warrant additional scrutiny of quality-of-earnings metrics.

The credit quality backdrop appears relatively benign, with card delinquencies showing declining trends, bankruptcy filings stabilizing, and household and business balance sheets remaining healthy [3]. This supportive credit environment reduces provisioning needs and supports earnings growth. However, early indicators of consumer credit stress in the forward guidance or provisioning decisions will signal potential future challenges.

Despite identified risks, several opportunity factors merit consideration. The consistent earnings beat pattern throughout 2025 demonstrates strong operational execution across all three institutions. The acceleration in loan growth projected for Q4, combined with the Federal Reserve’s easing cycle, could provide sustained support for Net Interest Income into 2026. Additionally, record trading revenue expectations and strengthening investment banking activity suggest diversified revenue growth drivers beyond traditional lending.

The January 14, 2026 earnings releases from Bank of America, Wells Fargo, and Citigroup represent significant market events that will provide crucial insights into the state of the U.S. banking sector and its trajectory into 2026. All three banks have demonstrated consistent operational execution throughout 2025, reflected in their consistent earnings beats and substantial stock appreciation. However, elevated valuations, regulatory concerns, and questions about earnings quality sustainability create a complex backdrop for interpreting the results.

Key metrics to monitor include Net Interest Income trends, trading revenue performance, credit quality indicators, and forward guidance on 2026 expectations. The pre-market selling pressure across all three banks suggests investors are positioning cautiously, potentially creating opportunities for positive surprises if results and guidance exceed already-optimistic expectations.

The Financial Services sector’s relative outperformance on January 13 indicates retained investor confidence in the banking sector despite valuation concerns. The outcome of these earnings reports, combined with management commentary on regulatory risks and 2026 outlook, will likely serve as a pivotal moment for sector positioning in the coming quarters.