Wells Fargo & Company · NYSE:WFC
Wells Fargo & — Q2 2016 Earnings Presentation
30 slides from Wells Fargo &'s earnings presentation, Jul 15, 2016
Slide 1: 2Q16 Quarterly Supplement
2Q16 Quarterly Supplement July 15, 2016 © 2016 Wells Fargo & Company. All rights reserved.
Slide 2: Table of contents
Wells Fargo 2Q16 Supplement 1 Appendix Real estate 1-4 family first mortgage portfolio 22 Real estate 1-4 family junior lien mortgage portfolio 23 Consumer credit card portfolio 24 Auto portfolios 25 Student lending portfolio 26 Common Equity Tier 1 (Fully Phased-In) 27 Return on average tangible co
Slide 3: 2Q16 Highlights
Wells Fargo 2Q16 Supplement 2 5,719 5,796 5,575 5,462 5,558 2Q15 3Q15 4Q15 1Q16 2Q16 2Q16 Highlights Earnings of $5.6 billion Diluted earnings per common share of $1.01 Revenue up 4% year-over-year (YoY) and stable linked quarter (LQ) - Net interest income up 4% YoY and 1% LQ - Noninterest inc
Slide 4: Year-over-year results
Wells Fargo 2Q16 Supplement 3 5,145.2 5,048.5 2Q15 2Q16 5.7 5.6 2Q15 2Q16 1,185.3 1,236.7 2Q15 2Q16 870.4 950.8 2Q15 2Q16 21.3 22.2 2Q15 2Q16 Year-over-year results Diluted earnings per common share Net Income ($ in billions, except EPS) Revenue ($ in billions) Period-end Common Shares Outstanding (
Slide 5: Balance Sheet and credit overview (linked quarter)
Wells Fargo 2Q16 Supplement 4 Balance Sheet and credit overview (linked quarter) Loans & interest rate swaps Loans up $9.9 billion on growth in both commercial and consumer loan portfolios Additionally, we continued to employ the strategy of converting floating rate loans to fixed rate through i
Slide 6: Income Statement overview (linked quarter)
Wells Fargo 2Q16 Supplement 5 Income Statement overview (linked quarter) Total revenue Revenue of $22.2 billion, down $33 million Net interest income NII up $66 million on loan growth and included the full quarter benefit of assets acquired from GE Capital on 3/1/16 NIM down 4 bps to 2.86% pri
Slide 7: Loans
Wells Fargo 2Q16 Supplement 6 888.5 903.2 916.6 947.3 957.2 2Q15 3Q15 4Q15 1Q16 2Q16 Loans Total loans increased $68.7 billion, or 8%, YoY and $9.9 billion, or 1%, LQ - Commercial loans up $6.3 billion LQ on higher commercial real estate and C&I loans - Consumer loans up $3.6 billion LQ as growth
Slide 8: Year-over-year loan growth
Wells Fargo 2Q16 Supplement 7 30 32 34 36 38 40 42 2Q15 2Q16 Other Revolving Credit and Installment 20 24 28 32 36 2Q15 2Q16 Credit Card 24 29 34 39 44 49 54 59 64 2Q15 2Q16 Automobile 100 105 110 115 120 125 130 135 140 145 150 155 2Q15 2Q16 Commercial Real Estate 150 17 190 210 230 250 270 290 2Q1
Slide 9: Deposits
Wells Fargo 2Q16 Supplement 8 847.4 874.0 883.7 337.9 345.4 353.0 1,185.3 1,219.4 1,236.7 2Q15 1Q16 2Q16 Noninterest-bearing deposits Interest-bearing deposits Deposits Deposits up $51.4 billion, or 4%, YoY and $17.3 billion, or 1%, LQ - Noninterest-bearing deposits up $15.1 billion, or 4%, YoY an
Slide 10: 2Q16 Revenue diversification
Wells Fargo 2Q16 Supplement 9 Balanced Spread and Fee Income Diversified Fee Generation (% of noninterest income) 2Q16 Revenue diversification 47% 53% Net Interest Income Noninterest Income 5% 5% 2% 4% 3% 3% 10% 3% 3% <1% <1% 1% 3% 10% 4% 8% 22% 13% All Other Noninterest Income Lease Income Net Gain
Slide 11: Net interest income
Wells Fargo 2Q16 Supplement 10 11,270 11,457 11,588 11,667 11,733 2Q15 3Q15 4Q15 1Q16 2Q16 Net interest income up $463 million, or 4%, YoY and $66 million, or 1%, LQ reflecting loan growth including the addition of assets acquired from GE Capital on 3/1/16 Average earning assets up $35.2 billion
Slide 12: Noninterest income
Wells Fargo 2Q16 Supplement 11 Noninterest income Service charges up $27 million LQ on seasonality Trust and investment fees up $162 million on higher investment banking, asset-based fees and retail brokerage transaction revenue – Investment banking up $90 million on higher deal fees across all
Slide 13: Noninterest expense and efficiency ratio
Wells Fargo 2Q16 Supplement 12 Noninterest expense and efficiency ratio (1) Noninterest expense down $162 million LQ - Personnel expense down $260 million • Salaries up $63 million reflecting annual merit increases and the full quarter impact of GE Capital personnel added on 3/1/16 • Commissions a
Slide 14: Continued to reinvest in the franchise and innovate for growth
Wells Fargo 2Q16 Supplement 13 Continued to reinvest in the franchise and innovate for growth Innovation - 2Q16 launches included: - Community Banking: FastFlexSM Small Business Loan, offering an online, fast decision and funding as soon as the next business day - Home Lending: yourFirstMortgageSM
Slide 15: Community Banking
Wells Fargo 2Q16 Supplement 14 Community Banking Net income of $3.2 billion, down 1% YoY and 4% LQ Regional Banking Primary consumer checking customers (1)(2) up 4.7% YoY Retail banking cross-sell of 6.27 (1) (3) products per household Debit card POS transactions (4) of 2.0 billion, up 6% LQ
Slide 16: Wholesale Banking
Wells Fargo 2Q16 Supplement 15 Wholesale Banking Net income of $2.1 billion, down 5% YoY and up 8% LQ Net interest income up 5% LQ - Average loans were up 17% YoY and 5% LQ driven by the acquisition of GE Capital loans and leases, as well as broad-based organic growth Noninterest income up 5%
Slide 17: Wealth and Investment Management
Wells Fargo 2Q16 Supplement 16 Wealth and Investment Management Net income of $584 million, stable YoY and up 14% LQ Net interest income down 1% LQ, but up 12% YoY on strong loan and deposit growth Noninterest income up 3% LQ driven by higher asset-based fees and retail brokerage transaction r
Slide 18: Credit quality
Wells Fargo 2Q16 Supplement 17 Credit quality Nonperforming Assets ($ in billions) Provision Expense and Net Charge-offs ($ in millions) Net charge-offs of $924 million, up $38 million, or 4%, LQ as $59 million higher oil and gas portfolio losses were partially offset by $46 million lower consumer
Slide 19: Oil and gas loan portfolio
Wells Fargo 2Q16 Supplement 18 17.4 17.8 17.1 43.2 40.7 39.1 2Q15 1Q16 2Q16 Outstandings Exposure Oil and gas loan portfolio Loans Outstanding and Exposure (1) ($ in billions) (1) Exposure = Loans outstanding + unfunded commitments. (1) Credit performance overview $263 million of net charge-offs i
Slide 20: Capital
Wells Fargo 2Q16 Supplement 19 10.6% 10.6% 10.8% 10.6% 10.6% 2Q15 3Q15 4Q15 1Q16 2Q16 Estimated Common Equity Tier 1 ratio well above the regulatory minimum and buffers and our internal buffer - Common Equity Tier 1 ratio (fully phased-in) of 10.6% at 6/30/16 (1) Period-end common shares outstan
Slide 21: 2Q16 Summary
Wells Fargo 2Q16 Supplement 20 2Q16 Summary Strong earnings of $5.6 billion - Diluted EPS of $1.01 Efficiency ratio of 58.1%, improved 40 bps from 2Q15 PTPP of $9.3 billion, up 5% YoY Solid returns - ROA = 1.20% - ROE = 11.70% • ROTCE (1) = 14.15% Strong loan and deposit growth - Average l
Slide 22: Appendix
Appendix
Slide 23: Real estate 1-4 family first mortgage portfolio
Wells Fargo 2Q16 Supplement 22 Real estate 1-4 family first mortgage portfolio First lien mortgage loans up $2.4 billion, or 1%, LQ reflecting an increase in nonconforming mortgage originations - Nonconforming mortgage loans increased $8.0 billion to $152.5 billion (1) - First lien home equity lin
Slide 24: Real estate 1-4 family junior lien mortgage portfolio
Wells Fargo 2Q16 Supplement 23 Real estate 1-4 family junior lien mortgage portfolio Junior lien mortgage loans down 3% LQ as new originations were more than offset by paydowns Junior nonaccruals down $91 million, or 6%, LQ Junior net charge-offs of $62 million, or 49 bps, down $12 million LQ
Slide 25: Consumer credit card portfolio
Wells Fargo 2Q16 Supplement 24 Consumer credit card portfolio Credit card outstandings up 3% LQ and up 10% YoY reflecting account growth - Credit card household penetration (3) of 45.6%, up 34 bps LQ reflecting household growth, and up 101 bps YoY reflecting continued new account growth and card p
Slide 26: Auto portfolios
Wells Fargo 2Q16 Supplement 25 Auto portfolios Consumer Portfolio Auto outstandings of $61.9 billion up 2% LQ and 7% YoY - 2Q16 originations of $8.3 billion up 8% LQ on seasonality and up 2% YoY Nonaccrual loans declined $3 million LQ and $15 million YoY Net charge-offs down $37 million LQ dri
Slide 27: Student lending portfolio
Wells Fargo 2Q16 Supplement 26 Student lending portfolio $12.3 billion private loan outstandings down 2% LQ on seasonality and up 2% YoY - Average FICO of 758 and 81% of the total outstandings have been co-signed - Originations up 9% YoY Net charge-offs increased $2 million LQ due to seasonality
Slide 28: Common Equity Tier 1 (Fully Phased-In)
Wells Fargo 2Q16 Supplement 27 Common Equity Tier 1 (Fully Phased-In) Wells Fargo & Company and Subsidiaries COMMON EQUITY TIER 1 UNDER BASEL III (FULLY PHASED-IN) (1) Estimated (in billions) Jun 30, 2016 Mar 31, 2016 Dec 31, 2015 Sep 30, 2015 Jun 30, 2015 Total equity $ 202.7 198.5 193.9 194.0 190.
Slide 29: Return on average tangible common equity (ROTCE)
Wells Fargo 2Q16 Supplement 28 Return on average tangible common equity (ROTCE) Wells Fargo & Company and Subsidiaries TANGIBLE COMMON EQUITY (1) Quarter Ended (in millions, except ratios) Jun 30, 2016 Return on average tangible common equity (1): Net income applicable to common stock (A) $ 5,173 Av
Slide 30: Forward-looking statements and additional information
Wells Fargo 2Q16 Supplement 29 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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