Wells Fargo & Company · NYSE:WFC
Wells Fargo & — Goldman Sachs U.S. Financial Services Conference 2008
28 slides from Wells Fargo &'s conference presentation, Dec 10, 2008
Slide 1: Goldman Sachs U.S. Financial Services Conference
= “ Ds Say’ me WR Goldman Sachs U.S. Financial Services Conference December 10, 2008 John Stumpf President and CEO
Slide 2: Forward-Looking Statements and Additional Information
Forward-Looking Statements and i Additional Information This presentation includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about the amount and timing of cost savings, added ear
Slide 3: Our Vision Has Not Changed For The Last 20+ Years
Our Vision Has Not Changed For The Last 20+ Years “We want to satisfy all of our customers’ financial needs, help them succeed financially, be the premier provider of financial services in every one of our markets, and be known as one of America’s great companies.”
Slide 4: Wells Fargo: A Diversified Financial Services Company
Wells Fargo: A Diversified Financial Services Company Wholesale Banking/Commercial Real Estate Consumer 9% Community Finance Banking 6% 34% Specialized Lending 17% Home Mortgage” & Home Equity 17% Investments & Insurance 17% Focus on consumer, small business and middle-market relationships Broad div
Slide 5: Wells Fargo: A Decade of Consistent, Profitable Growth
Wells Fargo: A Decade of Consistent, 2 Profitable Growth | Pre-Tax Pre-Provision Earnings ($ billions) " 1 Yr CAGR = 25% $20.8 5 Yr CAGR = 13% 10 Yr CAGR = 15% $16.6 14.9 $13.9 > $7.4 z $7.2 $5.2 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Note: Revenue less noninterest expense *2008 annu
Slide 6: Wells Fargo: Strong, Consistent Track Record for Shareholders
Wells Fargo: Strong, Consistent Track Record for Shareholders ROE Averages Total Shareholder Return’ yp | 1¥r | 3¥r | 5yYr wre SSP'500, Wells Fargo 15% | 14% | 18% | 18% 1Yr 10% (22%) Bank of America 5% | 4% | 12% | 14% 5 Yr 12% 5% JPMorgan Chase 5% 6% | 11% | 10% 10 Yr 11% 3% Citigroup (11%) | (16%
Slide 7: The New Wells Fargo
The New Wells Fargo Market Rank Total Deposits $774 Billion #2 Total Loans, net $830 Billion #3 Mortgage Servicing $1.7 Trillion #2 Mutual Funds $251 Billion AUM | 4” largest bank mutual fund complex 3" largest U.S. full Retail Brokerage 21,720 Brokers! service brokerage based on financial advisors
Slide 8: Significant Customer Base
Significant Customer Base (millions) Ea WACHOVIA Combined’ Total retail households 11.4 11.6 oo) ‘Small business customers 1.67 ao 0.6 —- 22 Active online customers 10.8 53 464) Powerful Distribution rs WACHOVIA, Combined Banking stores 3,339 3,314 6,653 _ Commercial lending offices 93 nm. 93° Total
Slide 9: Combined retail banking store map
~* i ot ft oN ‘Souree: SNL Financial Note: Data as of September 30, 2008 e@ ¢ ro © 08 KE Wels Fargo retail banking stores — 3,339 ® Wachovia retail banking stores — 3,314 otal combined retail banking stores — 6,653,
Slide 10: Leading Market Share Across U.S.
Leading Market Share Across U.S. Adjusted deposits market share in key states Delaware = 13% District of Columbia = 15% #1 Market Share #2 Market Share #3 Market Share i #4+ Market Share ‘Source: SNL Financial Note: Deposit data as of June 20, 2008 (pro forma for acquisitions; excludes deposits grea
Slide 11: Well Positioned in High Growth Markets
Well Positioned in High Growth Markets Adjusted Deposit-Weighted Population Growth 2008-2013 (%) 6.5% 5.1% 49% ' Peeraverage:4.7% | 3.7% i 2.6% i i ' PNC (4 USB JPM BAC WFC ‘Source: SNL Financial Note: Deposit data as of June 30, 2008 (pro forma for acquisitions; excludes deposits greater than SS00m
Slide 12: Approx. 30% cash EPS accretion
approx. 30% = Conservative assumptions = De-risked balance sheet "Excludes cost and incremental return on TARP capital 2
Slide 13: Illustrative Net Income Potential
Illustrative Net Income Potential Excluding Revenue Synergies ($ billions, after-tax) r 1 7 s108 S $99 WACHOVIA Added earnings from s7s (pre-synergies) S44 cost saves 3.4 s28 sos 2009 2010 2011 2008 2oto 2ott 2009 2010 201 (s09) (20) = GAAP net income based on = WFC model estimates including = Net o
Slide 14: Revenue Synergy Opportunity
WELLS FARGO Revenue Synergy Opportunity 6.3 57 1998* 3Q08 Consumer 3Q08 Wholesale = Opportunity to increase cross-sell to Wachovia’s consumer and wholesale banking customers = Opportunity to increase sales capacity in Wachovia's retail banking stores = Opportunity to leverage Wachovia's service expe
Slide 15: Examples of Cross-Sell Opportunities
WELLS FARGO Examples of Cross-Sell Opportunities WFC WB Retail Households 11.4mm 11.6mm Non-Interest Bearing Deposits (As of 9/30/08) $898 $56B NLD mortgage $1808 $45B originations Active online customers 10.8mm 5.3mm Credit card penetration 38% 12% YTD insurance revenue $1.5B $0.2B Business deposit
Slide 16: Cost synergies of $5.0bn
= Overlapping Businesses & Infrastructure 3.0 Efficiency saves in General Banking, Investment Banking, Capital Markets & Operations and normalization of market disruption expenses (e.g., OREO & Litigation) = Corporate Functions 1.4 Elimination of duplicative corporate overhead inclusive of compensat
Slide 17: $60bn life of loan loss
$60bn life of loan loss 2/3" of credit losses marked at close Remainder assumed in next three years (EPS accretion exceeds 20% after year 3) Run-off of higher-risk, non-relationship, lower return assets; large corporate, structured commercial products, commercial real estate, and Pick-a-Pay Liquidit
Slide 18: Wachovia loan portfolio loss estimates
Corporate/Investment Bank Other Commerical Total Commercial Pick-a-Pay Other Mortgage Home Equity Auto Other Total Consumer Grand Total Note: Totals may not tie due to rounding: Amounts are pre-tax and will be updated at close $1119 $(10.8) $(3.4) $(14.2) (12.7)% 107.0 (1.0) (2.2) (3.2) (3.0)% $218.
Slide 19: Pick-a-Pay: $122bn outstanding
$122bn outstanding: ™ 58% secured by California real estate ™ Weighted average LTV at origination 76% ™ 80%+ stated income with average 675 FICO Recast at 125% loan balance or 10 years minimizes contractual payment shock Remaining losses after purchase accounting to peak in 2010 Loss mitigation prog
Slide 20: Home equity portfolio credit profile
™ Relatively good credit profile in a $63bn portfolio ™ Retail only distribution > 95% ™ 44% in first lien position ™ 50% fixed rate ™ 54% < 80% CLTV/ 10% > 90% CLTV ™ Lack of geographic concentrations ™ 19% Florida ™ 12% New Jersey ™ 10% North Carolina and Pennsylvania ™ Life of loan loss estimated
Slide 21: WB - Other Consumer Portfolios
WELLS FARGO WB - Other Consumer Portfolios Amount LOL ($bn) — ($bn) Indirect Auto Near prime portfolio. Pricing will be adjusted upward over time Other Mortgage Alt-A, WB originations and purchased Student Loans a Government guaranteed As of 9/30/08 a
Slide 22: WB - Commercial Portfolios
WB - Commercial Portfolios ($ billions) WELLS FARGO WB > - Outstandings* LOL / % of Outstandings Middle Market / Commercial $31.7? gt . 3.5% of outstandings Commercial Finance $11.6 $0.9 (ABL, equipment leasing) 7.8% of outstandings Large Corporate/ Structured $32.9 $2.7 Products 8.2% of outstanding
Slide 23: Raised $12.6B in common stock
= Raised $12.6B in common stock = Largest non-IPO capital raise in U.S. history = Strong Internal Capital generation = Year 3 Tier | Leverage and Tier | Capital will exceed targeted minimums of 6% and 8% = Continue to be opportunistic about deploying and raising capital 2
Slide 24: Integration philosophy unchanged from prior WFC integrations
™ Philosophy is unchanged from prior WFC integrations ™ Order of priority is control, profitability and growth ™ Business/Function will be run by the executive that performed due diligence ™ We will choose best practices regardless of company origin ™ Doing integration right is more important than d
Slide 25: Wells Fargo has successfully completed over acquisitions in 20 years
Wells Fargo has successfully completed over 280 acquisitions in the past 20 years Norwest / Wells Fargo merger is the template for a measured and controlled integration Wells Fargo has proven experience in integrating acquisitions while retaining and growing customer base Wachovia has significant in
Slide 26: Management Team
Slide 27: The New Wells Fargo
The New Wells Fargo Premier Coast-to-Coast Financial Services Franchise Strategic Fit v v ~ v Dominant position with all buyers of financial services in U.S. — consumer, small business, commercial/wholesale Unparalleled distribution network — stores, ATMs, phone and online banking Commanding presenc
Slide 28: The next stage.
The next stage.
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