Wells Fargo & Company · NYSE:WFC

Wells Fargo & — Q2 2015 Earnings Presentation

28 slides from Wells Fargo &'s earnings presentation, Jul 14, 2015

  1. Slide 1: 2Q15 Quarterly Supplement

    2Q15 Quarterly Supplement July 14, 2015 © 2015 Wells Fargo & Company. All rights reserved.

  2. Slide 2: Table of contents

    Wells Fargo 2Q15 Supplement 1  Appendix Pages 19-27 - Non-strategic/liquidating loan portfolio 20 - Real estate 1-4 family first mortgage portfolio 21 - Real estate 1-4 family junior lien mortgage portfolio 22 - Consumer credit card portfolio 23 - Auto portfolios 24 - Student lending portfolio 25 

  3. Slide 3: 2Q15 Highlights

    Wells Fargo 2Q15 Supplement 2 5,726 5,729 5,709 5,804 5,719 2Q14 3Q14 4Q14 1Q15 2Q15 2Q15 Highlights  Earnings of $5.7 billion  Diluted earnings per common share of $1.03  Revenue up 1% year-over-year (YoY) and stable linked quarter (LQ) - Net interest income up 4% YoY and 3% LQ - Noninterest inc

  4. Slide 4: Year-over-year results

    Wells Fargo 2Q15 Supplement 3 $5.7 $5.7 2Q14 2Q15 Year-over-year results Net Charge-offs ($ in millions) Net Income ($ in billions, except EPS) Diluted earnings per common share Period-end Loans ($ in billions) Period-end Deposits ($ in billions) Period-end Common Shares Outstanding (shares in milli

  5. Slide 5: Balance Sheet and credit overview (linked quarter)

    Wells Fargo 2Q15 Supplement 4 Balance Sheet and credit overview (linked quarter) Loans  Core loans (1) increased $29.5 billion on broad-based growth including $11.5 billion from GE Capital loan purchase and financing transaction  Non-strategic/liquidating portfolio (1) decreased $2.2 billion Short

  6. Slide 6: Income Statement overview (linked quarter)

    Wells Fargo 2Q15 Supplement 5 Income Statement overview (linked quarter) Total revenue  Revenue of $21.3 billion, up $40 million Net interest income  NII up $284 million reflecting growth in earning assets as well as one additional day in the quarter  NIM up 2 bps to 2.97% Noninterest income  No

  7. Slide 7: Loans

    Wells Fargo 2Q15 Supplement 6 763.6 775.8 801.8 802.6 832.1 65.3 63.1 60.8 58.6 56.4828.9 838.9 862.6 861.2 888.5 2Q14 3Q14 4Q14 1Q15 2Q15 Core loans Non-strategic/liquidating loans Loans Period-end  Core loans grew $68.5 billion, or 9%, YoY and were up $29.5 billion, or 4%, LQ - Commercial loans u

  8. Slide 8: Broad-based, year-over-year loan growth

    Wells Fargo 2Q15 Supplement 7 100 105 110 115 120 125 130 135 140 145 2Q14 2Q15 Commercial Real Estate 24 29 34 39 44 49 54 59 2Q14 2Q15 Automobile 150 160 170 180 190 200 210 220 2Q14 2Q15 Core 1-4 Family First Mortgage (1) 210 220 230 240 250 260 270 280 290 2Q14 2Q15 Commercial and Industrial 10

  9. Slide 9: Deposits

    Wells Fargo 2Q15 Supplement 8 805.6 849.2 847.4 295.9 325.6 337.9 1,101.5 1,174.8 1,185.3 2Q14 1Q15 2Q15 Noninterest-bearing deposits Interest-bearing deposits Deposits Average  Deposits up $83.8 billion, or 8%, YoY and $10.5 billion, or 1%, LQ  Average deposit cost of 8 bps, down 1 bp LQ and 2 bp

  10. Slide 10: 2Q15 Revenue diversification

    Wells Fargo 2Q15 Supplement 9 Balanced Spread and Fee Income Diversified Fee Generation Deposit Service Charges 13% Card Fees 9% Total Mortgage Banking 17% Insurance 5% Net Gains from Trading 1% (1) Other noninterest income includes lease income and all other noninterest income. 2Q15 Revenue diversi

  11. Slide 11: Net interest income

    Wells Fargo 2Q15 Supplement 10  Net interest income (TE) (1) up $524 million YoY and $312 million LQ primarily reflecting growth in earning assets  Average earning assets up $22.1 billion, or 1%, LQ - Investment securities up $15.0 billion - Loans up $7.1 billion - Trading assets up $4.6 billion -

  12. Slide 12: Noninterest income

    Wells Fargo 2Q15 Supplement 11 Noninterest income  Deposit service charges up $74 million LQ on seasonality and day count  Trust and investment fees up $33 million  Card fees up $59 million on seasonality as well as account growth  Other fees up $29 million on higher merchant processing fees  M

  13. Slide 13: Noninterest expense and efficiency ratio

    Wells Fargo 2Q15 Supplement 12 Noninterest expense and efficiency ratio (1)  Noninterest expense down $38 million LQ - Personnel expense down $365 million • Salaries up $85 million reflecting annual merit increases and one extra day in the quarter • Commission and incentive compensation down $79 mi

  14. Slide 14: Community Banking

    Wells Fargo 2Q15 Supplement 13 Community Banking  Net income of $3.4 billion, down 2% YoY and 8% LQ reflecting higher income taxes Regional Banking (1)  Primary consumer checking customers (2) up 5.6% YoY  Primary small business and business banking checking customers (2) up 5.3% YoY  Retail ban

  15. Slide 15: Wholesale Banking

    Wells Fargo 2Q15 Supplement 14 Wholesale Banking  Net income of $2.0 billion, up 3% YoY and 12% LQ  Net interest income up 5% LQ reflecting loan growth and higher loan resolution income  Noninterest income up 1% LQ driven by higher equity gains, treasury management and mortgage banking fees  Non

  16. Slide 16: Wealth, Brokerage and Retirement

    Wells Fargo 2Q15 Supplement 15 Wealth, Brokerage and Retirement  Record net income of $602 million, up 11% YoY and up 7% LQ  Net interest income stable LQ; average loans up 4% and average core deposits down 1%  Noninterest income stable LQ as higher asset- based fees were offset by lower deferred

  17. Slide 17: Credit quality

    Wells Fargo 2Q15 Supplement 16 Credit quality  Provision expense of $300 million, down $308 million from 1Q15 primarily driven by a higher reserve release (1)  Net charge-offs of $650 million, down $58 million, or 8%, LQ  0.30% net charge-off rate - Commercial losses of 6 bps, up 2 bp LQ on lower

  18. Slide 18: Capital Position

    Wells Fargo 2Q15 Supplement 17 Capital Position  Capital remained strong  Common Equity Tier 1 ratio under Basel III (fully phased-in) of 10.5% at 6/30/15 (1)  Started using Advanced Approaches for capital requirements following approval from the OCC and FRB  Capital ratios under the Advanced an

  19. Slide 19: 2Q15 Summary

    Wells Fargo 2Q15 Supplement 18 2Q15 Summary  Solid earnings of $5.7 billion, in line with 2Q14 - Diluted EPS of $1.03, up 2%  Solid returns - ROA = 1.33% - ROE = 12.71%  Strong loan and deposit growth - Period-end loans up $59.6 billion, or 7%, YoY with core loans up $68.5 billion, or 9%, on broa

  20. Slide 20: Appendix

    Appendix

  21. Slide 21: Non-strategic/liquidating loan portfolio

    Wells Fargo 2Q15 Supplement 20 (1) Net of purchase accounting adjustments. -$125.5 Non-strategic/liquidating loan portfolio -$2.2 -$134.4 -$2.3 -$2.2 -$2.2 ($ in billions) 2Q15 1Q15 4Q14 3Q14 2Q14 4Q08 Pick-a-Pay mortgage (1) $ 42.2 43.7 45.0 46.4 48.0 95.3 Liquidating home equity 2.6 2.7 2.9 3.1 3.

  22. Slide 22: Real estate 1-4 family first mortgage portfolio

    Wells Fargo 2Q15 Supplement 21 Real estate 1-4 family first mortgage portfolio  Core first lien up $4.5 billion, or 2%, LQ reflecting nonconforming mortgage originations - Nonconforming mortgage loans increased $7.8 billion to $123.0 billion (2) - First lien home equity lines of $16.6 billion, down

  23. Slide 23: Real estate 1-4 family junior lien mortgage portfolio

    Wells Fargo 2Q15 Supplement 22 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 $79 million, or 5%, LQ  Core junior net charge-offs of $79 million, or 58 bp

  24. Slide 24: Consumer credit card portfolio

    Wells Fargo 2Q15 Supplement 23 Consumer credit card portfolio  Credit card outstandings up 4% LQ and up 14% YoY reflecting account growth and growth in private label and co-brand outstandings driven by the Dillard’s card portfolio acquisition in 4Q14 - Credit card household penetration (2) of 42.6%

  25. Slide 25: Auto portfolios

    Wells Fargo 2Q15 Supplement 24 Auto portfolios (1) Consumer Portfolio  Auto outstandings of $57.8 billion up 3% LQ and 7% YoY - 2Q15 originations of $8.1 billion up 5% YoY and 15% LQ on seasonality  Nonaccrual loans declined $7 million LQ and $24 million YoY  Net charge-offs were down $33 million

  26. Slide 26: Student lending portfolio

    Wells Fargo 2Q15 Supplement 25 Student lending portfolio Private Portfolio  $12.0 billion private loan outstandings down 1% LQ due to seasonality and up 3% YoY - Average FICO of 759 and 80% of the total outstandings have been co-signed - Originations up 10% YoY  Net charge-offs increased $4 millio

  27. Slide 27: Common Equity Tier 1 under Basel III (Fully Phased-In)

    Wells Fargo 2Q15 Supplement 26 Common Equity Tier 1 under Basel III (Fully Phased-In) - 1 - Wells Fargo & Company and Subsidiaries COMMON EQUITY TIER 1 UNDER BASEL III (FULLY PHASED-IN) (1) Estimated (in billions) Jun 30, 2015 Mar 31, 2015 Dec 31, 2014 Total equity $ 190.7 190.0 185.3 Noncontrolling

  28. Slide 28: Forward-looking statements and additional information

    Wells Fargo 2Q15 Supplement 27 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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