Wells Fargo & Company · NYSE:WFC
Wells Fargo & — Q4 2021 Earnings Presentation
22 slides from Wells Fargo &'s earnings presentation, Jan 14, 2022
Slide 1: 4Q21 Financial Results
4Q21 Financial Results January 14, 2022 © 2022 Wells Fargo Bank, N.A. All rights reserved.
Slide 2: Actively helping our customers, communities and employees in 2021
Actively helping our customers, communities and employees in 2021 Supporting our Customers Supporting Sustainability • Helped customers avoid overdraft, overdraft protection and non-sufficient fund • Announced a goal of achieving net zero greenhouse gas emissions, including our (NSF) fees: emissions
Slide 3: Actively helping our customers, communities and employees in 2021
Actively helping our customers, communities and employees in 2021 Supporting the Small Business Recovery Through Our Additional Actions to Support Our Communities Open for Business Fund • Wells Fargo voluntarily committed to donate the gross processing fees received • Charitable Donations: $615 mill
Slide 4: 4Q21 results
4Q21 results • Net income of $5.8 billion, or $1.38 per diluted common share – Revenue of $20.9 billion, up 13% ◦ Net gains from equity securities of $2.5 billion ($1.9 billion net of noncontrolling interests), up from $884 million in 4Q20 and $869 million in 3Q21 – Noninterest expense of $13.2 bill
Slide 5: 4Q21 earnings
4Q21 earnings $ in millions (mm), except per share data 4Q21 3Q21 4Q20 vs. 3Q21 vs. 4Q20 Net interest income $9,262 8,909 9,355 $353 (93) Noninterest income 11,594 9,925 9,134 1,669 2,460 Total revenue 20,856 18,834 18,489 2,022 2,367 Net charge-offs 423 257 584 166 (161) Change in the allowance for
Slide 6: Credit quality
Credit quality Provision for Credit Losses and Net Charge-offs ($ in millions) Allowance for Credit Losses for Loans ($ in millions) 19,713 584 523 18,043 8,197 379 423 16,391 7,361 257 14,705 0.26% 6,821 13,788 0.24% 2.22% 0.18% 0.19% 2.09% 6,140 0.12% 5,997 (179) 1.92% (452) 11,516 1.70% 10,682 1.
Slide 7: Loans and deposits
Loans and deposits Average Loans Outstanding ($ in billions) Average Deposits and Rates ($ in billions) 899.7 1,435.8 1,450.9 1,470.0 873.4 854.7 854.0 875.0 1,393.5 34.9 1,380.1 41.7 37.3 56.4 46.5 175.0 176.6 180.9 Corporate 169.8 173.7 423.2 379.5 190.8 189.4 182.1 Wealth and 396.8 377.7 375.9 20
Slide 8: Net interest income
Net interest income Net Interest Income ($ in millions) • Net interest income down $93 million, or 1%, from 4Q20 reflecting the impact of lower yields on earning assets and lower loan balances, largely 9,355 9,262 offset by a decrease in long-term debt, lower mortgage-backed securities 8,808 8,800 8
Slide 9: Noninterest expense
Noninterest expense Noninterest Expense ($ in millions) • Noninterest expense down 11% from 4Q20 14,802 – Personnel expense down 5% on lower salaries expense driven by reduced 13,989 13,341 13,303 13,198 headcount reflecting efficiency initiatives, as well as lower incentive 104 compensation and emp
Slide 10: Consumer Banking and Lending
Consumer Banking and Lending Summary Financials • Total revenue up 1% YoY and down 1% from 3Q21 $ in millions (mm) 4Q21 vs. 3Q21 vs. 4Q20 – CSBB up 4% YoY primarily due to higher deposit-related fees reflecting lower Revenue by line of business: COVID-19-related fee waivers and an increase in consum
Slide 11: Consumer Banking and Lending
Consumer Banking and Lending 1 Mortgage Loan Originations ($ in billions) Debit Card Point of Sale (POS) Volume and Transactions 53.9 51.8 53.2 51.9 122.0 122.4 118.6 48.1 108.5 21.6 18.2 16.3 16.7 105.3 15.3 2.3 2.3 2.5 2.5 2.5 64% 55% 55% 52% 59% 33.6 36.9 35.2 32.8 32.3 4Q20 1Q21 2Q21 3Q21 4Q21 4
Slide 12: Commercial Banking
Commercial Banking Summary Financials • Total revenue up 1% YoY and up 10% from 3Q21 $ in millions 4Q21 vs. 3Q21 vs. 4Q20 – Middle Market Banking revenue up 2% YoY and included higher deposit balances Revenue by line of business: and modestly higher investment banking fees, partially offset by the i
Slide 13: Corporate and Investment Banking
Corporate and Investment Banking Summary Financials • Total revenue up 11% YoY and up 4% from 3Q21 $ in millions 4Q21 vs. 3Q21 vs. 4Q20 Revenue by line of business: – Banking revenue up 17% YoY and up 9% from 3Q21 primarily driven by higher advisory and debt origination fees, and higher loan balance
Slide 14: Wealth and Investment Management
Wealth and Investment Management Summary Financials • Total revenue up 6% YoY $ in millions 4Q21 vs. 3Q21 vs. 4Q20 – Net interest income down 7% YoY driven by the impact of lower interest rates, Net interest income $666 $29 (48) partially offset by higher deposit and loan balances Noninterest income
Slide 15: Corporate
Corporate Summary Financials • Net interest income down YoY primarily due to the sale of our student loan $ in millions 4Q21 vs. 3Q21 vs. 4Q20 portfolio Net interest income ($420) $7 (190) • Noninterest income up YoY and from 3Q21 on strong results in our affiliated Noninterest income 3,540 1,788 1,
Slide 16: 2022 net interest income considerations
2022 net interest income considerations 2022 Net Interest Income Considerations • 2022 net interest income could potentially be up to ~ 8% higher than ($ in billions) the full year 2021 level of $35.8 billion Potential for up to an ~ 8% increase – Expectations assume the asset cap will remain in pla
Slide 17: Update on efficiency initiatives
Update on efficiency initiatives Making progress on our goal to build a more efficient company with a streamlined organizational structure and less complexity in processes and products to better serve our customers Summary Selected efficiency initiatives • Building the right risk and control infrast
Slide 18: 2022 expense expectations
2022 expense expectations 2022 Expense Expectations ($ in billions) • 2021 noninterest expense – Results included $509 million of expenses from: $53.8 (0.5) ◦ $183 million goodwill write-down associated with the sale of (1.0) 0.5 (1.6) $52.3 0.3 our student loan portfolio Business exit ~$51.5 Expens
Slide 19: Appendix
Appendix
Slide 20: Tangible Common Equity
Tangible Common Equity Wells Fargo & Company and Subsidiaries TANGIBLE COMMON EQUITY We also evaluate our business based on certain ratios that utilize tangible common equity. Tangible common equity is a non-GAAP financial measure and represents total equity less preferred equity, noncontrolling int
Slide 21: Common Equity Tier 1 under Basel III
Common Equity Tier 1 under Basel III Wells Fargo & Company and Subsidiaries RISK-BASED CAPITAL RATIOS UNDER BASEL III (1) Estimated Dec 31, Sep 30, Jun 30, Mar 31, Dec 31, (in billions, except ratio) 2021 2021 2021 2021 2020 Total equity (2) $ 190.1 191.1 193.1 188.0 185.7 Effect of accounting polic
Slide 22: Disclaimer and forward-looking statements
Disclaimer and forward-looking statements Financial results reported in this document are preliminary. Final financial results and other disclosures will be reported in our Annual Report on Form 10-K for the year ended December 31, 2021, and may differ materially from the results and disclosures in
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