What to Watch As Big Banks Start Reporting Q1 Earnings This Week

Several of the largest banks—including Wells Fargo WFC, JPMorgan JPM, and Citigroup C—are set to report their first-quarter earnings results on Tuesday, April 14. Bank of America BAC will report on Wednesday, April 15.

The biggest driver of dispersion across the money centers has been idiosyncratic business arcs, followed closely by fourth-quarter 2025 results and 2026 guidance, then by business mix. Most major bank stocks have been posting losses this year, but dispersion remains meaningful, with Citi stock moving solidly into positive territory in the past week.

Wells Fargo is the clear laggard, falling 8% in the year to date, weighed down by net interest income guidance that fell short of expectations. The bank is in the “Prove it” part of its turnaround and has been trading like a healed bank, between 1.5 times and 2.0 times tangible book value at the start of the year. The underperformance ties to investors wanting to see more tangible evidence of progress—and accelerating growth—now that the bank has shed its asset cap.

Bank of America is the second-worst performer in the group, down around 4% year to date. The slow grind of rolling over its low-yield held-to-maturity security book continues to weigh on the bank’s narrative, as does the reality that it is a strong second- or third-place player in most of its businesses but best in none of them.

JPMorgan is down around 3%, with higher-than-expected 2026 expense guidance outweighing strong momentum in its underlying businesses.

Citi has been the relative outperformer, posting a strong gain in the past week. The bank has more cushion by its concrete efficiency ratio guidance for 2026 (60% target), momentum in its core Treasury and trade solutions business, and a very low starting valuation.

Regarding the discrepancies, Wells Fargo had been trading at multiples commensurate with a fully healthy bank, but with NII guidance disappointing relative to peers and no commitment to a timeline for its target of 17%-18% return on tangible common equities, that narrative shifted after its first-quarter results and guidance.

Bank of America’s underperformance is harder to fully pin down. The bank’s investor day guidance was constructive (55%-59% long-term efficiency ratio, 16%-18% ROTCE), but progress remains painfully slow as the HTM book rolls over and net interest margins grind higher from just shy of 2.00% in 2025 toward 2.25% by 2030, by our forecasts.

JP Morgan’s selloff traces more to its $105 billion noninterest expense guidance for fiscal 2026, which was higher than the market expected. Still, we’d frame that as management appropriately leaning into its cost advantage moat, which smaller regional banks simply can’t keep pace with.

Citi’s relative outperformance traces to narrative improvement under CEO Jane Fraser and its business mix. Treasury and trade solutions—which operates at a through-the-cycle mid-20s ROTCE—is a gem and constitutes a meaningful share of operating profit, providing a more stable earnings base than peers with heavier capital markets exposure.

What We’ll Be Watching in First-Quarter Earnings

NII guidance will be the biggest thing to keep an eye on. A few dynamics are worth flagging ahead of the releases.

Loan demand through February was really strong, up 10%-11% annually, with particularly robust results in commercial and industrial loans (up 22%), though March will be telling. Demand held up better than the macro backdrop would have implied, and it’s worth watching whether that’s balance sheet prepositioning ahead of regulatory reform, businesses stockpiling cash, or something more durable.

With the Chicago Mercantile Exchange consensus now contemplating no rate cuts in 2026, the NIM environment should remain fairly constructive. Assets are repricing faster than liabilities, and loan growth has been surprisingly strong.

Some capital relief from proposed regulatory reform could work its way into the system even before changes are formalized, which the big banks could lean into. The question is whether this is enough to push NII guidance from the current 5%-7% range toward the higher end or beyond.

On fees, expect more pressure in asset-based businesses (wealth management, asset management) with year-to-date market performance, and a bit better from transactional lines—cards, cash management and payments, trading, banking. Investment banking and trading could see headwinds in the back half if volatility increases or geopolitical risk stretches on, though year-to-date results are still really strong, with a few big initial public offerings in the queue and global investment banking revenue still tracking to rise 9.9% in the year to date (a big deceleration from 20% through February, but still positive). Sponsor-driven mergers and acquisitions and midmarket activity look slower than we see from large corporations.

Adding some degree of volatility, one would have to think that provisions for loan losses tick up if the base case has shifted toward higher inflation, higher borrowing costs, and slower real growth.

Our top pick within the group remains Bank of America, with a $58 per share fair value estimate. Trading at roughly a 15% discount to its fair value, the stock is essentially a junior varsity JPMorgan at a compelling price when valuations diverge this much. Wells Fargo and JPMorgan look fairly priced, while Citi has the most upside in the group to the extent that the turnaround is real, still trading around 1 times TBV.

Jillian Moore contributed to this article.