Wells Fargo & Company · NYSE:WFC
Wells Fargo & — Q2 2009 Earnings Presentation
16 slides from Wells Fargo &'s earnings presentation, Jul 22, 2009
Slide 1: 2Q09 Credit Supplement
2Q09 Credit Supplement July 22, 2009 Draft 13 7/20/2009 16:12
Slide 2: Forward-looking statements and additional information
Forward-looking statements and additional information Forward-looking statements: This Credit Supplement contains forward-looking statements about our future financial performance. These forward-looking statements include statements using words such as "believe," "expect," "anticipate," "estimate,"
Slide 3: Credit quality highlights
Credit quality highlights Allowance for credit losses of $23.5 billion Allowance for credit losses of 2.86% of total loans Provision expense of $5.1 billion covers: $4.4 billion of charge-offs $700 million reserve build; YTD reserve build = $2.0 billion (1) Reflects incremental reserves for post-clo
Slide 4: Credit loss reserves
Credit loss reserves 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 Column 1 0.0156 0.0188 0.0195 0.0251 0.0271 0.0286 0.0018 0.002 0.306 Allowance for credit losses as a percentage of total loans (1) 2Q08 and 3Q08 results exclude Wachovia, while 4Q08 includes Wachovia's allowance and period-end loan balances on 12/
Slide 5: Nonperforming assets
Nonperforming assets Nonaccrual loans of $15.8 billion, up $5.3 billion Natural repopulation of NPA balances following purchase accounting write-downs NPAs on books longer due to performance period requirement with loan modifications Economics of liquidating assets remains challenging so prefer to h
Slide 6: Loan portfolio risk reduction
Loan portfolio risk reduction Certain loan portfolios are being run off and risk is being reduced Reductions include portfolios where origination activity has ceased or non-relationship balances are being reduced, as well as the effects of SOP 03-3 and net charge-offs Continue to look for additional
Slide 7: Residential real estate loss mitigation programs
Residential real estate loss mitigation programs Enhanced additional loan modification programs (i.e., HAMP), coupled with underwriting changes and increased trained staff by 54% over the first half of the year Result: More solutions for at-risk borrowers and a comprehensive approach to mitigating r
Slide 8: Pick-a-Pay mortgage portfolio
Pick-a-Pay mortgage portfolio Pick-a-Pay non-impaired portfolio Portfolio performance in line with management's expectations Nonaccrual loans up $947 million Largely attributed to new inflows from post-purchase accounting write-downs Net charge-offs up $122 million, or 94 bps, to $167 million reflec
Slide 9: Pick-a-Pay loan modifications
Pick-a-Pay loan modifications Completed 22,200 loan modifications in 2Q09, up from 11,000 in 1Q09 2Q09 modifications principally driven by proactive outbound customer outreach Targeting loans 60 days past due through foreclosure 93% of modifications were loans in impaired portfolio 14% of impaired p
Slide 10: Wells Fargo Financial debt consolidation mortgage portfolio
Wells Fargo Financial debt consolidation mortgage portfolio Debt consolidation loans are real estate-secured loans originated through Wells Fargo Financial's U.S. retail stores designed to help homeowners repay other sources of debt Net charge-off ratio of 3.02%, well below industry averages for non
Slide 11: Home equity portfolio
Home equity portfolio (1) Core Portfolio Outstandings down modestly on higher prepayments and higher losses High quality new originations with weighted average CLTV of 59%, 776 FICO and 31% total debt service ratio 2Q09 losses up $342 million on higher frequency rates while severity increases have s
Slide 12: Auto portfolio
Auto portfolio Core Portfolio (1) Total outstandings up 3% QoQ reflecting market share gains at higher pricing and higher credit quality Decline in net charge-offs reflects lower severity, relatively stable default frequency trends and seasonality benefits Manheim used car index up 8% QTD and 6% fro
Slide 13: Credit card portfolio
Credit card portfolio $23.1 billion credit card outstandings represent less than 3% of total loans Outstandings up 1% on lower payments Net charge-offs of 11.60% up 147 bps reflecting economic environment including higher bankruptcy filings 30+ days past due improvement of 47 bps reflects improvemen
Slide 14: Commercial loan portfolio
Commercial loan portfolio Non-impaired loan portfolios (1) C&I Loans down 5% largely reflecting improvement in public debt markets and continued de-leveraging NPLs up $1.2 billion and net charge-offs up $178 million, or 39 bps, led by industries tied to housing and discretionary consumer spending Co
Slide 15: Commercial real estate loan portfolio
Commercial real estate loan portfolio $137 billion commercial real estate loan outstandings (1) Prudent relationship-based lending to a variety of customers through 2 key origination channels: Wholesale Commercial Real Estate outstandings of $77.8 billion Legacy Wells Fargo portfolio Seasoned and ex
Slide 16: Commercial real estate loan portfolio by type and geography
Commercial real estate loan portfolio (1) Office Industrial RE- Other Retail Apartments Land-Unimproved Shopping 1-Family Land 1-4 family structure Hotel/Motel Other 28.6 15.2 18 12.6 11.9 10 8.5 4.1 4.4 6.2 5.5 CA FL TX NC GA VA AR NJ NY PA Other 26.9 13.6 9.7 7.3 5.7 5.2 4.6 4 4.2 3.2 40.5 Florida