Wells Fargo & Company · NYSE:WFC

Wells Fargo & — Q1 2016 Earnings Presentation

33 slides from Wells Fargo &'s earnings presentation, Apr 14, 2016

  1. Slide 1: 1Q16 Quarterly Supplement

    1Q16 Quarterly Supplement April 14, 2016 © 2016 Wells Fargo & Company. All rights reserved. Exhibit 99.2

  2. Slide 2: Table of contents

    Wells Fargo 1Q16 Supplement 1 Appendix Non-strategic/liquidating loan portfolio 25 Real estate 1-4 family first mortgage portfolio 26 Real estate 1-4 family junior lien mortgage portfolio 27 Consumer credit card portfolio 28 Auto portfolios 29 Student lending portfolio 30 Common Equity Tier 1 (Fully

  3. Slide 3: 1Q16 Highlights

    Wells Fargo 1Q16 Supplement 2 5,804 5,719 5,796 5,575 5,462 1Q15 2Q15 3Q15 4Q15 1Q16 1Q16 Highlights  Earnings of $5.5 billion  Diluted earnings per common share of $0.99  Revenue up 4% year-over-year (YoY) and 3% linked quarter (LQ) - Net interest income up 6% YoY and 1% LQ - Noninterest income

  4. Slide 4: Noteworthy items in 1Q16 results

    Wells Fargo 1Q16 Supplement 3 Noteworthy items in 1Q16 results ($ in millions) Pre-tax Income Impact Line Affected Income Statement Sale of crop insurance business, on 3/31/16 $ 381 - Sold ~$4 billion in assets Hedging results (hedge ineffectiveness), driven by long-term debt 379 All other income Oi

  5. Slide 5: Year-over-year results

    Wells Fargo 1Q16 Supplement 4 1,174.8 1,219.4 1Q15 1Q16 863.3 927.2 1Q15 1Q16 5.8 5.5 1Q15 1Q16 Year-over-year results Diluted earnings per common share (1) Pre-tax pre-provision profit (PTPP) is total revenue less noninterest expense. Management believes PTPP is a useful financial measure because i

  6. Slide 6: Balance Sheet and credit overview (linked quarter)

    Wells Fargo 1Q16 Supplement 5 Balance Sheet and credit overview (linked quarter) Loans  Total loans increased $30.7 billion and included $24.9 billion from GE Capital acquisitions, as well as organic growth Short-term investments/ Fed funds sold  Up $30.4 billion primarily reflecting increases in

  7. Slide 7: Income Statement overview (linked quarter)

    Wells Fargo 1Q16 Supplement 6 Income Statement overview (linked quarter) Total revenue  Revenue of $22.2 billion, up $609 million Net interest income  NII up $79 million as growth in earning assets, including the addition of assets from GE Capital acquisitions, and the benefit from the fourth quar

  8. Slide 8: Loans

    Wells Fargo 1Q16 Supplement 7 Loans  Total loans grew $86.1 billion, or 10%, YoY and were up $30.7 billion, or 3%, LQ - Commercial loans up $31.6 billion LQ on GE Capital acquisitions and organic growth • $24.9 billion in acquired loans (see page 8 for additional information) - Consumer loans down

  9. Slide 9: GE Capital assets acquired in 1Q16

    Wells Fargo 1Q16 Supplement 8 GE Capital assets acquired in 1Q16  Integrations are on track  Continue to expect modest accretion in 2016  Loans and leases – Loans and leases were marked to fair value in purchase accounting with no Allowance recorded with the 3/1/16 closing – $1.4 billion of loans

  10. Slide 10: Year-over-year loan growth

    Wells Fargo 1Q16 Supplement 9 150 160 170 180 190 200 210 220 230 240 1Q15 1Q16 Core 1-4 Family First Mortgage (1) 20 24 28 32 36 1Q15 1Q16 Credit Card 24 29 34 39 44 49 54 59 64 1Q15 1Q16 Automobile 100 105 110 115 120 125 130 135 140 145 150 155 1Q15 1Q16 Commercial Real Estate 30 32 34 36 38 40 1

  11. Slide 11: Deposits

    Wells Fargo 1Q16 Supplement 10 849.2 866.1 874.0 325.6 350.7 345.4 1,174.8 1,216.8 1,219.4 1Q15 4Q15 1Q16 Noninterest-bearing deposits Interest-bearing deposits Deposits  Deposits up $44.6 billion, or 4%, YoY and $2.6 billion LQ - Noninterest-bearing deposits up $19.8 billion, or 6%, YoY and down $

  12. Slide 12: 1Q16 Revenue diversification

    Wells Fargo 1Q16 Supplement 11 Balanced Spread and Fee Income Diversified Fee Generation (% of noninterest income) 1Q16 Revenue diversification 47% 53% Net Interest Income Noninterest Income 8% 4% 2% 2% 2% 4% 7% 8% 4% 1% 1% 1% 3% 9% 3% 8% 21% 12% All Other Noninterest Income Lease Income Net Gains f

  13. Slide 13: Net interest income

    Wells Fargo 1Q16 Supplement 12 10,986 11,270 11,457 11,588 11,667 1Q15 2Q15 3Q15 4Q15 1Q16  Net interest income up $681 million YoY, or 6%, and $79 million LQ, or 1%, reflecting growth in earning assets including the addition of GE Capital assets, the benefit from higher short-term rates, and disci

  14. Slide 14: Noninterest income

    Wells Fargo 1Q16 Supplement 13 Noninterest income  Service charges down $20 million LQ on seasonality  Trust and investment fees down $126 million on lower investment banking, retail brokerage transaction revenue and asset-based fees  Other fees down $107 million from strong 4Q15 commercial real

  15. Slide 15: Noninterest expense and efficiency ratio

    Wells Fargo 1Q16 Supplement 14 Noninterest expense and efficiency ratio (1)  Noninterest expense up $429 million LQ - Personnel expense up $647 million • Salaries down $25 million primarily due to one less day in the quarter • Commissions and incentive compensation up $188 million as $269 million i

  16. Slide 16: Community Banking

    Wells Fargo 1Q16 Supplement 15 Community Banking  Net income of $3.3 billion, down 7% YoY and up 4% LQ Regional Banking  Primary consumer checking customers (1)(2) up 5.0% YoY  Retail bank cross-sell of 6.09 (1) products per household  Debit card purchase dollar volume (3) of $72.4 billion, down

  17. Slide 17: Wholesale Banking

    Wells Fargo 1Q16 Supplement 16 Wholesale Banking  Net income of $1.9 billion, down 3% YoY and 9% LQ  Net interest income up 1% LQ - Average loans were up 13% YoY and 3% LQ driven by the GE Capital acquisitions, as well as growth in asset backed finance and corporate banking - Average deposits down

  18. Slide 18: Wealth and Investment Management

    Wells Fargo 1Q16 Supplement 17 Wealth and Investment Management  Net income of $512 million, down 3% YoY and down 14% LQ  Net interest income up 14% YoY; average loans up 13% and average deposits up 8%  Noninterest income down 3% LQ driven by lower brokerage transaction revenue, asset-based fees,

  19. Slide 19: Credit quality

    Wells Fargo 1Q16 Supplement 18 608 300 703 831 1,086 708 650 703 831 886 1Q15 2Q15 3Q15 4Q15 1Q16 Provision Expense All Other Net Charge-offs Oil & Gas Net Charge-offs 0.33% 0.30% 0.31% 0.36% 0.38% Net Charge-off Rate Credit quality (1) Provision expense minus net charge-offs. Nonperforming Assets (

  20. Slide 20: Oil and gas loan portfolio

    Wells Fargo 1Q16 Supplement 19 Oil and gas loan portfolio $17.8 billion of Oil and Gas Loans Outstanding (1) As of March 31, 2016. (1) Industry classifications based on NAICS classifications. (2) Exposure = Loans outstanding + unfunded commitments. (3) Publicly rated investment grade rating from at

  21. Slide 21: Oil and gas loan portfolio, 1Q credit performance

    Wells Fargo 1Q16 Supplement 20 Oil and gas loan portfolio, 1Q credit performance Net charge-offs  $204 million of net charge-offs in 1Q16, up $87 million from 4Q15, driven by deterioration in borrower financial performance and collateral values reflecting lower crude and natural gas prices - All of

  22. Slide 22: Monitoring other loan exposures in energy regions

    Wells Fargo 1Q16 Supplement 21  Implemented underwriting changes across our consumer portfolios in these “In Zone” markets to respond to market conditions Commercial Real Estate Monitoring exposures in states highly correlated to the oil and gas industry  Tracking loans outstanding and collateral

  23. Slide 23: Capital

    Wells Fargo 1Q16 Supplement 22  Capital remained strong  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 3/31/16 (1) - LQ decline reflected the deployment of capital for the addition of asse

  24. Slide 24: 1Q16 Summary

    Wells Fargo 1Q16 Supplement 23 1Q16 Summary  Strong earnings of $5.5 billion - Diluted EPS of $0.99  PTPP (1) of $9.2 billion, up 5% from 1Q15  Solid returns - ROA = 1.21% - ROE = 11.75%  Added $30.8 billion of loans and leases from GE Capital  Strong loan and deposit growth - Period-end loans

  25. Slide 25: Appendix

    Appendix

  26. Slide 26: Non-strategic/liquidating loan portfolio

    Wells Fargo 1Q16 Supplement 25 Non-strategic/liquidating loan portfolio (1) Net of purchase accounting adjustments. ($ in billions) 1Q16 4Q15 3Q15 2Q15 1Q15 4Q08 Pick-a-Pay mortgage (1) $ 37.7 39.1 40.6 42.2 43.7 95.3 Liquidating home equity 2.1 2.2 2.4 2.6 2.7 10.3 Legacy WFF indirect auto - - - -

  27. Slide 27: Real estate 1-4 family first mortgage portfolio

    Wells Fargo 1Q16 Supplement 26 Real estate 1-4 family first mortgage portfolio  Core first lien up $2.9 billion, or 1%, LQ reflecting nonconforming mortgage originations - Nonconforming mortgage loans increased $5.5 billion to $144.5 billion (2) - First lien home equity lines of $15.9 billion, down

  28. Slide 28: Real estate 1-4 family junior lien mortgage portfolio

    Wells Fargo 1Q16 Supplement 27 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  Core junior nonaccruals down $69 million, or 5%, LQ  Core junior net charge-offs of $65 million, or 52 bps, up $5 mill

  29. Slide 29: Consumer credit card portfolio

    Wells Fargo 1Q16 Supplement 28 Consumer credit card portfolio  Credit card outstandings down 3% LQ from a seasonally high 4Q15, and up 10% YoY reflecting account growth - Credit card household penetration (3) of 43.3%, down 16 bps LQ reflecting household growth, while up 145 bps YoY reflecting cont

  30. Slide 30: Auto portfolios

    Wells Fargo 1Q16 Supplement 29 Auto portfolios Consumer Portfolio  Auto outstandings of $60.7 billion up 1% LQ and 8% YoY - 1Q16 originations of $7.7 billion up 2% LQ and 9% YoY  Nonaccrual loans declined $7 million LQ and $19 million YoY  Net charge-offs down $8 million LQ driven by seasonality,

  31. Slide 31: Student lending portfolio

    Wells Fargo 1Q16 Supplement 30 Student lending portfolio Private Portfolio  $12.5 billion private loan outstandings up 2% LQ and YoY - Average FICO of 756 and 81% of the total outstandings have been co-signed - Originations up 136% LQ due to seasonality and 11% YoY  Net charge-offs decreased $12 m

  32. Slide 32: Common Equity Tier 1 (Fully Phased-In)

    Wells Fargo 1Q16 Supplement 31 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) Mar 31, 2016 Dec 31, 2015 Sep 30, 2015 Jun 30, 2015 Mar 31, 2015 Total equity $ 198.5 193.9 194.0 190.7 190.

  33. Slide 33: Forward-looking statements and additional information

    Wells Fargo 1Q16 Supplement 32 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

Wells Fargo & Company — Q1 2016 Earnings Presentation on 6ix