Wells Fargo & Company · NYSE:WFC
Wells Fargo & — Q1 2015 Earnings Presentation
30 slides from Wells Fargo &'s earnings presentation, Apr 14, 2015
Slide 1: 1Q15 Quarterly Supplement
1Q15 Quarterly Supplement April 14, 2015 © 2015 Wells Fargo & Company. All rights reserved.
Slide 2: Table of contents
Wells Fargo 1Q15 Supplement 1 Appendix Pages 20-29 - Non-strategic/liquidating loan portfolio 21 - Real estate 1-4 family first mortgage portfolio 22 - Real estate 1-4 family junior lien mortgage portfolio 23 - Consumer credit card portfolio 24 - Auto portfolios 25 - Student lending portfolio 26
Slide 3: 1Q15 Highlights
Wells Fargo 1Q15 Supplement 2 5,893 5,726 5,729 5,709 5,804 1Q14 2Q14 3Q14 4Q14 1Q15 1Q15 Highlights Earnings of $5.8 billion, down $89 million, or 2% year-over-year (YoY), and up $95 million, or 2% linked quarter (LQ) Diluted earnings per common share of $1.04, down 1% YoY and up 2% LQ Revenu
Slide 4: Year-over-year results
Wells Fargo 1Q15 Supplement 3 $5.9 $5.8 1Q14 1Q15 Year-over-year results (1) Pre-tax pre-provision profit (PTPP) is total revenue less noninterest expense. Management believes PTPP is a useful financial measure because it enables investors and others to assess the Company’s ability to generate capit
Slide 5: 1Q15 Revenue diversification
Wells Fargo 1Q15 Supplement 4 Balanced Spread and Fee Income Diversified Fee Generation Deposit Service Charges 12% Card Fees 9% Total Mortgage Banking 15% Insurance 4% Net Gains from Trading 4% (1) Other noninterest income includes lease income, life insurance investment income and all other nonint
Slide 6: Balance Sheet and credit overview (linked quarter)
Wells Fargo 1Q15 Supplement 5 Balance Sheet and credit overview (linked quarter) Loans Core loans (1) increased $914 million on commercial loan growth Non-strategic/liquidating portfolio (1) decreased $2.2 billion Short-term investments/ Fed funds sold Up $32.9 billion on growth in deposits In
Slide 7: Income Statement overview (linked quarter)
Wells Fargo 1Q15 Supplement 6 Income Statement overview (linked quarter) Total revenue Revenue of $21.3 billion, down $165 million Net interest income NII down $194 million reflecting two fewer days in the quarter, and lower income from variable sources NIM down 9 bps to 2.95% driven by deposi
Slide 8: Loans
Wells Fargo 1Q15 Supplement 7 Loans Period-end Core loans grew $54.2 billion, or 7%, YoY and were up $914 million LQ - Commercial loans up $899 million LQ driven by growth in real estate construction and lease financing • Oil and gas loans of $18.5 billion were up $65 million LQ - Consumer loans u
Slide 9: Broad-based, year-over-year loan growth
Wells Fargo 1Q15 Supplement 8 210 220 230 240 250 260 270 280 1Q14 1Q15 Commercial and Industrial 10 14 18 22 26 30 1Q14 1Q15 Credit Card 24 29 34 39 44 49 54 59 1Q14 1Q15 Automobile 150 160 170 180 190 200 210 220 1Q14 1Q15 Core 1-4 Family First Mortgage (1) Broad-based, year-over-year loan growth
Slide 10: Deposits
Wells Fargo 1Q15 Supplement 9 Deposits Average Deposits up $97.5 billion, or 9%, YoY and $25.0 billion, or 2%, LQ Average deposit cost of 9 bps, flat LQ and down 2 bps YoY Core deposits (1) of $1.1 trillion up $89.4 billion, or 9%, YoY and up $27.2 billion, or 3%, LQ - Average retail core depo
Slide 11: Net interest income
Wells Fargo 1Q15 Supplement 10 10,832 11,016 11,163 11,418 11,228 1Q14 2Q14 3Q14 4Q14 1Q15 Net interest income (TE) (1) up $396 million YoY on earning asset growth Net interest income (TE) (1) down $190 million LQ on two fewer days in the quarter and lower variable income Average earning asset
Slide 12: Noninterest income
Wells Fargo 1Q15 Supplement 11 Noninterest income Deposit service charges down $26 million LQ on seasonality Trust and investment fees down $28 million, or 1%, LQ as lower investment banking was partially offset by higher asset-based fees and retail brokerage transaction revenue Card fees down
Slide 13: Noninterest expense and efficiency ratio
Wells Fargo 1Q15 Supplement 12 Noninterest expense and efficiency ratio (1) Noninterest expense down $140 million LQ - Personnel expense up $369 million • Salaries down $87 million due to two fewer days • Commission and incentive compensation up $103 million as $236 million in annual equity awards
Slide 14: Community Banking
Wells Fargo 1Q15 Supplement 13 Community Banking Net income of $3.7 billion, down 5% YoY and up 7% LQ Regional Banking (1) Primary consumer checking customers (2) up 5.7% YoY Primary small business and business banking checking customers (2) up 5.5% YoY Retail bank cross-sell of 6.13 (3) pro
Slide 15: Wholesale Banking
Wells Fargo 1Q15 Supplement 14 Wholesale Banking Net income of $1.8 billion, up 3% YoY and down 9% LQ Net interest income down 6% LQ reflecting lower loan resolution income as well as two fewer days in the quarter Noninterest income up 1% LQ on higher trading gains and seasonally higher insura
Slide 16: Wealth, Brokerage and Retirement
Wells Fargo 1Q15 Supplement 15 Wealth, Brokerage and Retirement Record net income of $561 million, up 18% YoY and up 9% LQ Net interest income up 2% LQ; average loans up 4% and average core deposits up 3% Noninterest income up 3% LQ primarily driven by higher asset-based fees and brokerage tra
Slide 17: Credit quality
Wells Fargo 1Q15 Supplement 16 Credit quality Provision expense of $608 million, up $123 million from 4Q14 on lower reserve release (1) Net charge-offs of $708 million, down $27 million, or 4%, LQ 0.33% net charge-off rate - Commercial losses of 4 bps, up 1 bp LQ on lower recoveries - Consumer
Slide 18: Capital position
Wells Fargo 1Q15 Supplement 17 Capital remained strong Common Equity Tier 1 ratio under Basel III (Standardized Approach with Transition Requirements) of 10.86% Common Equity Tier 1 ratio under Basel III (Advanced Approach, fully phased-in) of 10.53% at 3/31/15 (1) Approval to use Advanced A
Slide 19: Capital return
Wells Fargo 1Q15 Supplement 18 Our strong capital levels allowed us to continue to return capital to shareholders - Returned $3.3 billion to shareholders in 1Q15 No objection from the Federal Reserve to our 2015 Capital Plan - Included a proposed dividend rate of $0.375 per common share for 2Q15
Slide 20: Summary
Wells Fargo 1Q15 Supplement 19 Summary 1Q15 Solid earnings of $5.8 billion, down $89 million, or 2% from 1Q14 - Diluted EPS of $1.04, down 1% Solid returns - ROA = 1.38% - ROE = 13.17% Strong loan and deposit growth - Period-end loans up $34.8 billion, or 4%, YoY with core loans up $54.2 billi
Slide 21: Appendix
Appendix
Slide 22: Non-strategic/liquidating loan portfolio
Wells Fargo 1Q15 Supplement 21 (1) Net of purchase accounting adjustments. (2) At the end of 2Q14, $9.7 billion in Education Finance-government guaranteed loans were transferred to loans held for sale. -$112.8 Non-strategic/liquidating loan portfolio -$12.7 -$132.2 -$2.2 -$2.3 -$2.2 ($ in billions)
Slide 23: Real estate 1-4 family first mortgage portfolio
Wells Fargo 1Q15 Supplement 22 Real estate 1-4 family first mortgage portfolio Core first lien up $1.4 billion, or 1%, reflecting nonconforming mortgage originations - Nonconforming mortgage loans increased $4.7 billion to $115.2 billion (2) - First lien home equity lines of $16.7 billion, down $2
Slide 24: Real estate 1-4 family junior lien mortgage portfolio
Wells Fargo 1Q15 Supplement 23 Real estate 1-4 family junior lien mortgage portfolio Junior lien mortgage loans down 3% LQ as high quality new originations were more than offset by paydowns Core junior nonaccruals down $46 million, or 3%, LQ Core junior net charge-offs of $106 million, or 77 b
Slide 25: Consumer credit card portfolio
Wells Fargo 1Q15 Supplement 24 Consumer credit card portfolio Credit card outstandings down 3% LQ on seasonality, but up 15% YoY reflecting new account growth and growth in private label and co-brand outstandings driven by the card portfolio acquisition in 4Q14 - Credit card household penetration
Slide 26: Auto portfolios
Wells Fargo 1Q15 Supplement 25 Auto portfolios (1) Consumer Portfolio Auto outstandings of $56.3 billion up 1% LQ and 7% YoY - 1Q15 originations of $7.1 billion up 6% LQ on seasonality and down 10% YoY reflecting continued underwriting discipline Nonaccrual loans declined $4 million LQ and $28 m
Slide 27: Student lending portfolio
Wells Fargo 1Q15 Supplement 26 Student lending portfolio Private Portfolio $12.2 billion private loan outstandings up 2% LQ and 4% YoY - Average FICO of 754 and 80% of the total outstandings have been co-signed Net charge-offs decreased $5 million LQ due to seasonality of repayment 30+ days pa
Slide 28: Common Equity Tier 1 under Basel III (General Approach and Standardized Approach)
Wells Fargo 1Q15 Supplement 27 Common Equity Tier 1 under Basel III (General Approach and Standardized Approach with Transition Requirements) Wells Fargo & Company and Subsidiaries FIVE QUARTER RISK-BASED CAPITAL COMPONENTS UNDER BASEL III Standardized Approach (1) General Approach (1) (in billions)
Slide 29: Common Equity Tier 1 under Basel III (Advanced Approach, fully phased-in)
Wells Fargo 1Q15 Supplement 28 Common Equity Tier 1 under Basel III (Advanced Approach, fully phased-in) Wells Fargo & Company and Subsidiaries COMMON EQUITY TIER 1 UNDER BASEL III (ADVANCED APPROACH, FULLY PHASED-IN) (1)(2) (in billions) Mar 31, 2015 Common Equity Tier 1 (transition amount) under B
Slide 30: Forward-looking statements and additional information
Wells Fargo 1Q15 Supplement 29 Forward-looking statements and additional information Forward-looking statements: This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. In addition, we may make forward-looking statements in our
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