Wells Fargo & Company · NYSE:WFC
Wells Fargo & — Q2 2024 Earnings Presentation
22 slides from Wells Fargo &'s earnings presentation, Jul 12, 2024
Slide 1: 2Q24 Financial Results
2Q24 Financial Results July 12, 2024 © 2024 Wells Fargo Bank, N.A. All rights reserved.
Slide 2: 2Q24 results
2Q24 results • Net income of $4.9 billion, or $1.33 per diluted common share • Revenue of $20.7 billion, up 1% – Net interest income of $11.9 billion, down 9% Financial Results – Noninterest income of $8.8 billion, up 19% ROE: 11.5% • Noninterest expense of $13.3 billion, up 2% 1 ROTCE: 13.7% • 3 Pr
Slide 3: 2Q24 earnings
2Q24 earnings Quarter ended $ Change from $ in millions, except per share data 2Q24 1Q24 2Q23 1Q24 2Q23 Net interest income $11,923 12,227 13,163 ($304) (1,240) Noninterest income 8,766 8,636 7,370 130 1,396 Total revenue 20,689 20,863 20,533 (174) 156 Net charge-offs 1,303 1,157 764 146 539 Change
Slide 4: Net interest income
Net interest income Net Interest Income ($ in millions) 13,163 13,105 • Net interest income down $1.2 billion, or 9%, from 2Q23 due to the impact 12,771 12,227 of higher interest rates on funding costs, including the impact of lower 11,923 deposit balances and customer migration to higher yielding d
Slide 5: Loans and deposits
Loans and deposits Average Loans Outstanding ($ in billions) Average Deposits ($ in billions) 945.9 943.2 938.0 928.1 1,347.4 1,340.3 1,340.9 1,341.6 1,346.5 917.0 84.7 113.9 122.9 119.6 111.1 112.4 Corporate 107.5 102.1 101.5 102.8 392.9 391.7 389.7 386.0 160.3 Wealth and 382.2 157.2 173.1 183.3 18
Slide 6: Noninterest income
Noninterest income Noninterest Income ($ in millions) • Noninterest income increased $1.4 billion, or 19%, from 2Q23 1 – Investment advisory fees and brokerage commissions up $296 million, or 11%, predominantly driven by higher asset-based fees reflecting higher 8,636 8,766 market valuations – Depos
Slide 7: Noninterest expense
Noninterest expense Noninterest Expense ($ in millions) • Noninterest expense up $306 million, or 2%, from 2Q23 15,786 – Operating losses up $261 million including higher customer remediation 355 14,338 accruals for historical matters 13,113 1,931 633 13,293 – Personnel expense down $31 million and
Slide 8: Credit quality: net loan charge-offs
Credit quality: net loan charge-offs 1 Provision for Credit Losses and Net Loan Charge-offs ($ in millions) • Commercial net loan charge-offs up $127 million to 35 bps of average loans 1,713 (annualized) reflecting an $84 million increase in commercial real estate (CRE) net loan charge-offs and $40
Slide 9: Credit quality: allowance for credit losses for loans
Credit quality: allowance for credit losses for loans Allowance for Credit Losses for Loans ($ in millions) • Allowance for credit losses for loans (ACL) down $73 million on modest ACL declines across most asset classes, partially offset by a higher ACL for credit card loans 14,786 15,064 15,088 14,
Slide 10: Capital and liquidity
Capital and liquidity 1 Common Equity Tier 1 Ratio under the Standardized Approach 11.4% Capital Position 11.0% 11.2% 11.0% 1 10.7% • Common Equity Tier 1 (CET1) ratio of 11.0% at June 30, 2024 remained 2 8.9% above our regulatory minimum and buffers of 8.9% Regulatory • The Company's stress capital
Slide 11: Consumer Banking and Lending
Consumer Banking and Lending Summary Financials • Total revenue down 5% YoY and down 1% from 1Q24 $ in millions (mm) 2Q24 vs. 1Q24 vs. 2Q23 – CSBB down 5% YoY driven by lower deposit balances and the impact of customer Revenue by line of business: migration to higher yielding deposit products includ
Slide 12: Consumer Banking and Lending
Consumer Banking and Lending 1 Retail Mortgage Loan Originations ($ in billions) Debit Card Purchase Volume and Transactions 7.7 124.9 124.5 126.1 128.2 6.4 121.5 5.3 4.5 2.6 2.5 2.6 2.5 3.5 2.4 24% 17% 16% 18% 13% 2Q23 3Q23 4Q23 1Q24 2Q24 2Q23 3Q23 4Q23 1Q24 2Q24 Refinances as a % of Retail Origina
Slide 13: Commercial Banking
Commercial Banking Summary Financials • Total revenue down 7% YoY and down 1% from 1Q24 $ in millions 2Q24 vs. 1Q24 vs. 2Q23 – Middle Market Banking revenue down 2% YoY driven by lower net interest income reflecting the impact of higher interest rates on deposit costs, partially Revenue by line of b
Slide 14: Corporate and Investment Banking
Corporate and Investment Banking Summary Financials • Total revenue up 4% YoY and down 3% from 1Q24 $ in millions 2Q24 vs. 1Q24 vs. 2Q23 Revenue by line of business: – Banking revenue up 3% YoY driven by higher investment banking revenue on increased activity across all products, partially offset by
Slide 15: Wealth and Investment Management
Wealth and Investment Management Summary Financials • Total revenue up 6% YoY and up 3% from 1Q24 $ in millions 2Q24 vs. 1Q24 vs. 2Q23 – Net interest income down 10% YoY driven by lower deposit balances and Net interest income $906 $37 (103) higher deposit costs as customers reallocated cash into hi
Slide 16: Corporate
Corporate Summary Financials • Revenue increased YoY on higher net equity gains reflecting improved results $ in millions 2Q24 vs. 1Q24 vs. 2Q23 from our venture capital investments; down from 1Q24 on higher crediting Net interest income ($144) ($176) (53) rates paid to the operating segments Nonint
Slide 17: 2024 Outlook
2024 Outlook Still expect 2024 net interest income to be in the range of down ~7-9% from 2023 level of Net Interest $52.4 billion Income • Currently expect to be in the upper half of the range, or down ~8-9%, but we are only halfway through the year and many of the factors driving net interest incom
Slide 18: Endnotes
Endnotes Page 2 – 2Q24 results 1. Tangible common equity and return on average tangible common equity (ROTCE) are non-GAAP financial measures. For additional information, including a corresponding reconciliation to GAAP financial measures, see the “Tangible Common Equity” table on page 20. 2. The ef
Slide 19: Endnotes (continued)
Endnotes (continued) Page 8 – Credit quality: net loan charge-offs 1. Includes provision for credit losses for loans, debt securities, and other financial assets. Page 10 – Capital and liquidity 1. The Common Equity Tier 1 (CET1) ratio calculated under the Standardized Approach is our binding CET1 r
Slide 20: Tangible Common Equity
Tangible Common Equity Wells Fargo & Company and Subsidiaries TANGIBLE COMMON EQUITY We also evaluate our business based on certain ratios that utilize tangible common equity. Tangible common equity is a non-GAAP financial measure and represents total equity less preferred equity, noncontrolling int
Slide 21: Common Equity Tier 1 under Basel III
Common Equity Tier 1 under Basel III Wells Fargo & Company and Subsidiaries 1 RISK-BASED CAPITAL RATIOS UNDER BASEL III Estimated Jun 30, Mar 31, Dec 31, Sep 30, Jun 30, ($ in billions) 2024 2024 2023 2023 2023 Total equity $ 178.1 182.7 187.4 182.4 182.0 Adjustments: Preferred stock (16.6) (18.6) (
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 Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, and may differ materially from the results and disclosures i
Wells Fargo & Company — Q2 2024 Earnings Presentation on 6ix