Wells Fargo & Company · NYSE:WFC
Wells Fargo & — Q3 2020 Earnings Presentation
32 slides from Wells Fargo &'s earnings presentation, Oct 14, 2020
Slide 1: 3Q20 Quarterly Supplement
Exhibit 99.2 3Q20 Quarterly Supplement October 14, 2020 © 2020 Wells Fargo Bank, N.A. All rights reserved.
Slide 2: Table of contents
Table of contents 3Q20 Results Appendix 3Q20 Earnings Pages 2 Real estate 1-4 family mortgage portfolio 23 Strong capital and liquidity positions 3 Consumer credit card portfolio 24 Loans 4 Auto portfolios 25 Commercial loan trends 5 Student lending portfolio 26 Consumer loan trends 6 Trading-relate
Slide 3: 3Q20 Earnings
3Q20 Earnings . 3Q20 net income of $2.0 billion, up $4.4 billion ($ in millions, except EPS) 3Q20 2Q20 3Q19 linked quarter (LQ) on lower provision expense and Net interest income $ 9,368 9,880 11,625 higher noninterest income on broad-based growth Noninterest income 9,494 7,956 10,385 including high
Slide 4: Strong capital and liquidity positions
Strong capital and liquidity positions 3Q20 Common Equity Tier 1 (CET 1) Ratio (1) 3Q20 Liquidity Coverage Ratio (LCR) (2) 134% 11.4% 129% 11.0% 34% above 2.4%, or 10% the $28.3 regulatory billion, 100% 9% minimum above the regulatory minimum Regulatory Current Internal 2Q20 Actual 3Q20 Estimate Reg
Slide 5: Loans
Loans Average Loans Outstanding Period-end Loans Outstanding ($ in billions) ($ in billions) 971.3 956.5 965.0 949.8 931.7 954.9 962.3 1,009.8 935.2 920.1 4.61% 4.37% 4.20% 3.50% 3.41% 3Q19 4Q19 1Q20 2Q20 3Q20 3Q19 4Q19 1Q20 2Q20 3Q20 Commercial Consumer Total average loan yield . Total average loan
Slide 6: Commercial loan trends
Commercial loan trends Commercial loans down $30.0 billion YoY and down $30.9 billion LQ reflecting lower loan demand, as well as loan paydowns on continued liquidity and strength in the capital markets ($ in billions, Period-end balances) B= billion, MM = million 370 Commercial and Industrial Comme
Slide 7: Consumer loan trends
Consumer loan trends Consumer loans down $4.8 billion YoY; up $15.8 billion LQ driven by increases in consumer real estate loans due to the purchase of $21.9 billion of EPBOs and the reclassification of $9.0 billion of first mortgage loans from HFS to HFI ($ in billions, Period-end balances) B= bill
Slide 8: Deposits
Deposits Average Deposits and Rates Period-end Deposits ($ in billions) ($ in billions) 1,386.7 1,399.0 1,291.4 1,410.7 1,308.5 1,383.2 408.5 439.7 344.5 434.0 404.3 436.7 0.71% 48.2 37.8 84.2 34.4 37.1 29.2 959.3 946.9 978.2 894.1 904.0 0.17% 758.4 0.09% 3Q19 2Q20 3Q20 3Q19 2Q20 3Q20 Wholesale Bank
Slide 9: Net interest income
Net interest income Net Interest Income . Net interest income decreased $2.3 billion, or 19%, YoY ($ in millions) reflecting the lower interest rate environment . Net interest income decreased $512 million, or 5%, LQ 11,625 11,200 11,312 reflecting balance sheet repricing resulting from the lower in
Slide 10: Noninterest income
Noninterest income vs vs . Noninterest income up $1.5 billion, or 19%, LQ ($ in millions) 3Q20 2Q20 3Q19 . Deposit-related fees up $157 million, or 14%, LQ on higher (1) Noninterest income transaction volumes, one additional day in the quarter, and higher Deposit-related fees $ 1,299 $ 157 (181) tre
Slide 11: Noninterest expense and efficiency ratio
Noninterest expense and efficiency ratio (1) vs vs . ($ in millions) 3Q20 2Q20 3Q19 Noninterest expense up $678 million, or 5%, LQ Noninterest expense (2) - Personnel expense down $292 million and included: Personnel $ 8,624 $ (292) 20 • $344 million lower deferred compensation expense Technology, t
Slide 12: Building a stronger Wells Fargo
Building a stronger Wells Fargo Embarking on a multi-year journey to build a stronger Wells Fargo . Our goal is to build a better-run company with a streamlined organizational structure, and less complexity in processes and products to better serve our customers . This is more than a program – this
Slide 13: Community Banking
Community Banking vs vs . Net income of $336 million, compared with a net loss of ($ in millions) 3Q20 2Q20 3Q19 $331 million in 2Q20 and net income of $999 million in Net interest income $ 5,587 $ (112) (1,182) 3Q19 Noninterest income 5,135 2,068 665 . Provision for credit losses of $556 million, d
Slide 14: Community Banking metrics
Community Banking metrics Customers and Active Accounts (in millions) 3Q20 2Q20 1Q20 4Q19 3Q19 vs 2Q20 vs 3Q19 Digital (online and mobile) Active Customers (1) 32.0 31.1 31.1 30.3 30.2 3% 6% Mobile Active Customers (1) 25.9 25.2 24.9 24.4 24.3 3% 7% Primary Consumer Checking Customers (2)(3) 24.4 24
Slide 15: Wholesale Banking
Wholesale Banking vs vs . Net income of $1.5 billion ($ in millions) 3Q20 2Q20 3Q19 . Net interest income down 11% LQ reflecting lower loan Net interest income $ 3,481 $ (410) (901) and deposit balances, as well as lower trading-related NII Noninterest income 2,113 (559) (447) . Noninterest income d
Slide 16: Wealth and Investment Management
Wealth and Investment Management vs vs . Net income of $463 million, down 64% YoY and up 157% LQ ($ in millions) 3Q20 2Q20 3Q19 . Net interest income up 5% LQ primarily due to higher deposit Net interest income $ 771 35 (218) balances and lower deposit costs Noninterest income 3,023 99 (1,129) . Non
Slide 17: Credit quality of the loan portfolio
Credit quality of the loan portfolio Provision Expense and Net Charge-offs on Loans . Customer forbearance and payment deferral activities ($ in millions) instituted in response to the COVID-19 pandemic could 9,565 delay the recognition of net charge-offs, delinquencies, and nonaccrual status for th
Slide 18: Commercial & Industrial loans and lease financing by industry
Commercial & Industrial loans and lease financing by industry . C&I and lease financing nonaccrual loans of $3.0 billion, down $13 million LQ, as declines in oil and gas and retail nonaccruals were largely offset by higher nonaccruals in the healthcare and pharmaceuticals, transportation services, c
Slide 19: Commercial real estate loans by property type
Commercial real estate loans by property type . Nonaccrual loans of $1.4 billion, up $126 million LQ driven by a $119 million increase in office buildings nonaccruals . Criticized assets of $12.7 billion, up $2.3 billion, or 22%, LQ - 92% of the increase in criticized assets was from the hotel/motel
Slide 20: Consumer loan deferrals due to COVID-19
Consumer loan deferrals due to COVID-19 . $23.5 billion unpaid principal balance (UPB) of modified consumer loans were still in deferral as of 9/30/20, down from $37.2 billion as of 6/30/20 (1) As of September 30, 2020 As of June 30, 2020 Unpaid principal Unpaid principal balance of modified balance
Slide 21: Allowance for credit losses for loans
Allowance for credit losses for loans . Allowance for credit losses (ACL) for loans of $20.5 billion, relatively stable LQ and reflected an improving economic environment and solid credit performance in the quarter, but continued uncertainty due to COVID-19 - Allowance coverage for total loans of 2.
Slide 22: Capital
Capital Common Equity Tier 1 Ratio (1) Capital Position . Common Equity Tier 1 (CET1) ratio of 11.4% at 9/30/20 (1) continued to be above both the regulatory 12.4% minimum of 9% and our current internal target of 10% 11.9% 11.6% 11.5% . 11.4% 11.4% Currently expect internal loan portfolio credit rat
Slide 23: Appendix
Appendix
Slide 24: Real estate 1-4 family mortgage portfolio
Real estate 1-4 family mortgage portfolio ($ in millions) 3Q20 2Q20 3Q19 Linked Quarter Change Year-over-Year Change Real estate 1-4 family first mortgage loans: $ 294,990 277,945 290,604 $ 17,045 6 % $ 4,386 2 % Nonaccrual loans 2,641 2,393 2,261 248 10 380 17 as % of loans 0.90 % 0.86 % 0.78 % 4 b
Slide 25: Consumer credit card portfolio
Consumer credit card portfolio ($ in millions, except where noted) 3Q20 2Q20 3Q19 Linked Quarter Change Year-over-Year Change Credit card outstandings $ 36,021 36,018 39,629 $ 3 - % $ (3,608) (9) % Net charge-offs 245 327 319 (82) (25) (74) (23) as % of avg loans 2.71 % 3.60 % 3.22 % (89) bps (51) b
Slide 26: Auto portfolios
Auto portfolios ($ in millions) 3Q20 2Q20 3Q19 Linked Quarter Change Year-over-Year Change Consumer: Auto outstandings $ 48,450 48,808 46,738 $ (358) (1) % $ 1,712 4 % Nonaccrual loans 176 129 110 47 36 66 60 as % of loans 0.36 % 0.26 % 0.24 % 10 bps 12 bps Net charge-offs $ 31 106 76 $ (75) (71) $
Slide 27: Student lending portfolio
Student lending portfolio ($ in millions) 3Q20 2Q20 3Q19 Linked Quarter Change Year-over-Year Change Private outstandings $ 10,000 10,258 10,827 $ (258) (3) % $ (827) (8) % Net charge-offs 14 17 29 (3) (18) (15) (52) as % of avg loans 0.54 % 0.68 % 1.07 % (14) bps (53) bps 30+ days past due $ 205 20
Slide 28: Trading-related revenue
Trading-related revenue ($ in millions) 3Q20 2Q20 3Q19 Linked Quarter Change Year-over-Year Change Trading-related revenue Net interest income $ 527 617 838 $ (90) (15) % $ (311) (37) % Net gains from trading activities 361 807 276 (446) (55) 85 31 Trading-related revenue $ 888 1,424 1,114 $ (536) (
Slide 29: Wholesale Banking adjusted efficiency ratio for income tax credits
Wholesale Banking adjusted efficiency ratio for income tax credits We also evaluate our Wholesale Banking operating segment based on an adjusted efficiency ratio for income tax credits. The adjusted efficiency ratio for income tax credits is a non-GAAP financial measure and represents noninterest ex
Slide 30: Common Equity Tier 1 (Standardized Approach)
Common Equity Tier 1 (Standardized- 1 - Approach) Wells Fargo & Company and Subsidiaries COMMON EQUITY TIER 1 UNDER BASEL III – STANDARDIZED APPROACH (1) Estimated Sep 30, Jun 30, Mar 31, Dec 31, Sep 30, (in billions, except ratio) 2020 2020 2020 2019 2019 Total equity $ 182.0 180.1 183.3 188.0 194.
Slide 31: Common Equity Tier 1 (Advanced Approach)
Common Equity Tier 1 (Advanced- 1 - Approach) Wells Fargo & Company and Subsidiaries COMMON EQUITY TIER 1 UNDER BASEL III - ADVANCED APPROACH (1) Estimated Sep 30, Jun 30, Mar 31, Dec 31, Sep 30, (in billions, except ratio) 2020 2020 2020 2019 2019 Total equity $ 182.0 180.1 183.3 188.0 194.4 Adjust
Slide 32: Forward-looking statements
Forward-looking statements This document contains forward-looking statements. In addition, we may make forward-looking statements in our other documents filed or furnished with the Securities and Exchange Commission, and our management may make forward-looking statements orally to analysts, investor
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