Wells Fargo & Company · NYSE:WFC

Wells Fargo & — Debt Investor Presentation (September 2017)

29 slides from Wells Fargo &'s debt investor presentation, September 2017

  1. Slide 1: Fixed Income Investor Update

    Fixed Income Investor Update September 2017 © 2017 Wells Fargo & Company. All rights reserved.

  2. Slide 2: Wells Fargo Vision

    “We want to satisfy our customers’ Wells Fargo financial needs and Vision help them succeed financially.” 1

  3. Slide 3: Strong U.S. distribution

    Strong U.S. distribution 70+ MM customers 8,461 locations Distribution Retail banking 5,977 Wells Fargo Advisors 1,377 Wholesale 687 Mortgage 420 Consumer Customer-facing Team Members Platform bankers (1) 30,357 Financial advisors (2) 14,527 Home Mortgage 7,394 consultants Wells Fargo Retail Banking

  4. Slide 4: Leading U.S. lending and deposit franchise

    Leading U.S. lending and deposit franchise Largest U.S. Lender (1) with $957B in loans #1 Commercial Real Estate Originator (2) #1 Lead in Middle-market Banking Relationships in U.S. (3) #3 in Total Deposits (7) with $1.3T #1 Residential Mortgage Originator (4) #1 in Retail Deposits (7) #1 Small Bus

  5. Slide 5: 2Q17 Highlights

    2Q17 Highlights Wells Fargo Net Income  Earnings of $5.8 billion ($ in millions, except EPS)  Diluted earnings per common share of 5,644 5,810 $1.07 5,558 5,457 5,274  Revenue up 1% linked quarter (LQ) - Net interest income up 1% - Noninterest income stable  Strong credit quality $1.03 $1.07  S

  6. Slide 6: Year-over-year results

    Year-over-year results Revenue Average Loans Net Income ($ in billions) ($ in billions) ($ in billions, except EPS) 22.2 22.2 5.8 950.8 956.9 5.6 $1.07 $1.01 2Q16 2Q17 2Q16 2Q17 2Q16 2Q17 Diluted earnings per common share Net Interest Income Average Deposits Period-end Common Shares ($ in billions)

  7. Slide 7: Revenue

    Revenue Revenue  Total revenue stable year-over-year (YoY) ($ in millions) and up 1% LQ 22,162 22,328 21,582 22,002 22,169  Net interest income (NII) up $750 million, or 6%, YoY on earning asset growth and as the benefit of earning assets repricing 10,429 10,376 9,180 9,702 9,686 in response to hi

  8. Slide 8: Noninterest expense and efficiency ratio

    Noninterest expense and efficiency ratio (1) Noninterest expense  Noninterest expense up $675 million YoY ($ in millions) - Higher compensation and benefit costs from higher salaries and higher FTE count 13,792 13,268 13,215 13,541 - Higher third party service expense 12,866 • 2Q17 included $110 mi

  9. Slide 9: Targeting $2 billion expense reduction by year-end 2018 (Slide 1 of 2)

    Targeting $2 billion expense reduction by year-end 2018 (Slide 1 of 2) We expect efficiency initiatives will reduce expenses by $2 billion annually by year-end 2018 and that those savings will support our investment in the business Initiative and Examples of Initiatives Include: Targeted Savings Cen

  10. Slide 10: Targeting $2 billion expense reduction by year-end 2018 (Slide 2 of 2)

    Targeting $2 billion expense reduction by year-end 2018 (Slide 2 of 2) We expect efficiency initiatives will reduce expenses by $2 billion annually by year-end 2018 and that those savings will support our investment in the business Initiative and Examples of Initiatives Include: Targeted Savings Pro

  11. Slide 11: Credit quality

    Credit quality Provision Expense and Net Charge-offs  Net charge-offs of $655 million, down $150 ($ in millions) million, or 19%, LQ 1,074  $100 million reserve release (1) reflected credit 924 905 improvement across auto, residential mortgage 805 805 805 805 and commercial portfolios, partially o

  12. Slide 12: Balance Sheet Composition, Funding and Capital Position

    Balance Sheet Composition, Funding and Capital Position

  13. Slide 13: Balance Sheet composition continues to evolve

    Balance Sheet composition continues to evolve Assets Liabilities & Equity ($ in billions) ($ in billions) 1,931 1,788 15% Cash & Short- 1,931 16% 4% term 1,788 1,423 Investments Deposits 4% 11% Trading Assets 11% 10% 1,423 4% & Loans Held Short-term 21% For Sale Borrowings 13% 19% 68% 68% Other 70%

  14. Slide 14: Highly liquid Balance Sheet

    Highly liquid Balance Sheet ($ in billions, period-end balances) 700 35% 31% 29% 29% 30% 28% Liquid assets to total assets 600 28% 30% 27% 609 571 572 25% 522 503 500 484 25% 22% 442 19% 400 379 20% 16% 15% 326 300 272 15% 222 198 200 10% 100 5% 0 0% 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15 3Q15 1Q16 3Q16

  15. Slide 15: Deposits remain a competitive advantage

    Deposits remain a competitive advantage Total Deposits as a % of Total Assets 75% 70% 68% 56% 56% Rank 51% #6 USB PNC WFC JPM BAC C Total Deposits ($ in billions)  Deposits fund 68% of our assets JPM 1,439 WFC 1,306  Grew deposits $284 billion in four years (2Q13 to 2Q17) BAC 1,263 C 959  Average

  16. Slide 16: Less reliance on market based funding sources than peers

    Less reliance on market based funding sources than peers Short-Term Borrowings as a % of Total Assets 23% 21%21% 20% 15% 14% 14% 13% 12%12% 12% 11% 7%7% 5%5%5% 4% 3% 3%3% 1%1%1% WFC PNC USB JPM BAC C 2014 2015 2016 2Q17 As of 6/30/17 ($ in millions) WFC PNC USB JPM BAC C Short-term borrowings 95 5 1

  17. Slide 17: Future non-bank debt maturities are well distributed

    Future non-bank debt maturities are well distributed Non-Bank Debt Maturities Notional as of June 30, 2017 ($ in billions) $19 $15 $15 $14 $13 $10 $9 $8 $7 $5 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 16

  18. Slide 18: Updated TLAC requirement

    Updated TLAC requirement  Final Total Loss Absorbing Capacity (TLAC) rule issued on 12/15/16 and effective on January 1, 2019 External TLAC LTD Requirement 6/30/17 6/30/17 ($ in billions) Actual % of RWA Actual % of RWA Total Risk Weighted Assets $ 1,310.5 $ 1,310.5 Common Equity Tier 1 151.9 11.6

  19. Slide 19: Strong capital position

    Strong capital position Deployment of accumulated Basel III Capital, Fully Phased-In (1) excess capital above our Target Structure (2) As of 6/30/17 internal target will occur over 16.4% 16.5% time and consider the following (Standardized (Advanced Approach) Approach) key factors: 2.5% 3.1%  Curren

  20. Slide 20: Update on Actions Taken to Assist Customers and Strengthen Operations and Governance

    Update on Actions Taken to Assist Customers and Strengthen Operations and Governance Over the Last Year

  21. Slide 21: Expanded third party review of retail bank accounts

    Expanded third party review of retail bank accounts  We recently announced the completion of a previously announced expanded third party review of retail banking accounts dating back to 2009 - Original account analysis reviewed 93.5 million accounts and covered the time period of May 2011 through m

  22. Slide 22: Changes in our retail bank

    Changes in our retail bank  Changed leadership of the Community Bank  Eliminated product sales goals for retail bank team members who serve customers in our retail branches and in our retail banking contact centers effective October 1, 2016.  Introduced new compensation and performance management

  23. Slide 23: Enterprise-wide actions

    Enterprise-wide actions  Strengthened our risk framework and organization by centralizing core functions like Risk, Compliance and Human Resources to provide greater role clarity, increased coordination and stronger oversight  Formed a new Conduct Management Office that reports to the Chief Risk O

  24. Slide 24: Board has taken a broad range of decisive actions

    Board has taken a broad range of decisive actions  Separated the roles of Chairman and CEO  Amended By-Laws to require that the Chairman be independent  Promoted executive accountability through executive compensation decisions with a total impact of more than $180 million  Independent directors

  25. Slide 25: 24

    24

  26. Slide 26: Appendix

    Appendix

  27. Slide 27: Common Equity Tier 1 (Fully Phased-In)

    Common Equity Tier 1 (Fully Phased-In) Wells Fargo & Company and Subsidiaries COMMON EQUITY TIER 1 UNDER BASEL III (FULLY PHASED-IN) (1) Jun 30, Mar 31, Dec 31, Sep 30, Jun 30, (in billions, except ratio) 2017 2017 2016 2016 2016 Total equity $ 206.1 202.5 200.5 204.0 202.7 Adjustments: Preferred st

  28. Slide 28: Basel III capital components and ratios (Fully phased-in)

    Basel III capital components and ratios (Fully phased-in) Wells Fargo & Company and Subsidiaries Risk-Based Capital Calculation, Components and Ratios (Fully Phased-In) (1) June 30, 2017 Advanced Standardized (in billions, except ratios) Approach Approach Total equity $ 206.1 206.1 Adjustments: Pref

  29. Slide 29: Forward-looking statements and additional information

    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 other documents filed or furnis

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