Wells Fargo & Company · NYSE:WFC
Wells Fargo & — Q3 2015 Earnings Presentation
30 slides from Wells Fargo &'s earnings presentation, Oct 14, 2015
Slide 1: 3Q15 Quarterly Supplement
3Q15 Quarterly Supplement October 14, 2015 © 2015 Wells Fargo & Company. All rights reserved. Exhibit 99.2
Slide 2: Table of contents
Wells Fargo 3Q15 Supplement 1 Appendix Pages 22-29 - Real estate 1-4 family first mortgage portfolio 23 - Real estate 1-4 family junior lien mortgage portfolio 24 - Consumer credit card portfolio 25 - Auto portfolios 26 - Student lending portfolio 27 Common Equity Tier 1 under Basel III (Fully P
Slide 3: 3Q15 Highlights
Wells Fargo 3Q15 Supplement 2 5,729 5,709 5,804 5,719 5,796 3Q14 4Q14 1Q15 2Q15 3Q15 3Q15 Highlights Earnings of $5.8 billion Diluted earnings per common share of $1.05 Revenue up 3% both year-over-year (YoY) and linked quarter (LQ) - Net interest income up 5% YoY and 2% LQ - Noninterest incom
Slide 4: Year-over-year results
Wells Fargo 3Q15 Supplement 3 Year-over-year results Pre-tax Pre-provision Profit (1) ($ in billions) Net Income ($ in billions, except EPS) Diluted earnings per common share Period-end Loans ($ in billions) Period-end Deposits ($ in billions) Revenue ($ in billions) 21.2 21.9 3Q14 3Q15 775.8 849.2
Slide 5: Balance Sheet and credit overview (linked quarter)
Wells Fargo 3Q15 Supplement 4 Balance Sheet and credit overview (linked quarter) Loans Core loans (1) increased $17.1 billion on broad-based organic growth Non-strategic/liquidating portfolio (1) decreased $2.4 billion Short-term investments/ Fed funds sold Up $22.6 billion primarily reflectin
Slide 6: Income Statement overview (linked quarter)
Wells Fargo 3Q15 Supplement 5 Income Statement overview (linked quarter) Total revenue Revenue of $21.9 billion, up $557 million Net interest income NII up $187 million reflecting growth in securities and loans, as well as one additional day in the quarter NIM down 1 bp to 2.96% Noninterest in
Slide 7: Loans
Wells Fargo 3Q15 Supplement 6 Loans Period-end Core loans grew $73.4 billion, or 9%, YoY and were up $17.1 billion, or 2%, LQ - Commercial loans up $9.4 billion LQ on broad- based growth • C&I loans up $7.4 billion • CRE loans up $2.1 billion and included $354 million from the 2Q15 purchase of loa
Slide 8: Broad-based, year-over-year loan growth
Wells Fargo 3Q15 Supplement 7 24 29 34 39 44 49 54 59 3Q14 3Q15 Automobile 10 14 18 22 26 30 3Q14 3Q15 Credit Card 150 160 170 180 190 200 210 220 230 3Q14 3Q15 Core 1-4 Family First Mortgage (1) 100 105 110 115 120 125 130 135 140 145 150 3Q14 3Q15 Commercial Real Estate 200 220 240 260 280 300 3Q1
Slide 9: Deposits
Wells Fargo 3Q15 Supplement 8 Deposits Average Deposits up $71.8 billion, or 6%, YoY and $13.6 billion, or 1%, LQ - Noninterest-bearing deposits up $33.9 billion, or 11%, YoY and $4.0 billion, or 1%, LQ - Interest-bearing deposits up $37.9 billion, or 5%, YoY and $9.6 billion, or 1%, LQ Average
Slide 10: 3Q15 Revenue diversification
Wells Fargo 3Q15 Supplement 9 Balanced Spread and Fee Income Diversified Fee Generation (% of noninterest income) 3Q15 Revenue diversification 48% 52% Net Interest Income Noninterest Income 4% 9% 1% 0% 4% 9% 6% 2% 1% 1% 1% 2% 3% 9% 3% 8% 24% 13% Lease Income and All Other Noninterest Income Net Gain
Slide 11: Net interest income
Wells Fargo 3Q15 Supplement 10 Net interest income up $516 million YoY and $187 million LQ primarily reflecting growth in loans and securities Average earning assets up $19.8 billion, or 1%, LQ - Loans up $24.6 billion - Investment securities up $11.7 billion - Mortgages and loans held for sale
Slide 12: Noninterest income
Wells Fargo 3Q15 Supplement 11 Noninterest income Deposit service charges up $46 million LQ on seasonality Trust and investment fees down $140 million driven by lower investment banking and asset- based fees Mortgage banking down $116 million on 11% lower residential origination volumes and lo
Slide 13: Noninterest expense and efficiency ratio
Wells Fargo 3Q15 Supplement 12 12,248 12,647 12,507 12,469 12,399 3Q14 4Q14 1Q15 2Q15 3Q15 57.7% 59.0% 58.8% 58.5% 56.7% Noninterest expense and efficiency ratio (1) Noninterest expense down $70 million LQ - Personnel expense down $188 million • Salaries up $99 million reflecting one additional da
Slide 14: Community Banking
Wells Fargo 3Q15 Supplement 13 Community Banking (1) Net income of $3.7 billion, up 7% YoY and 10% LQ Regional Banking (2) Primary consumer checking customers (3) up 5.8% YoY Primary small business and business banking checking customers (3) up 5.0% YoY Retail bank cross-sell of 6.13 (4) pro
Slide 15: Wealth and Investment Management
Wells Fargo 3Q15 Supplement 14 Wealth and Investment Management (1) Net income of $606 million, up 10% YoY and up 3% LQ Net interest income up 7% LQ; average loans up 3% and average core deposits up 2% Noninterest income down 5% LQ primarily driven by lower gains on deferred compensation plan
Slide 16: Wholesale Banking
Wells Fargo 3Q15 Supplement 15 Wholesale Banking (1) Net income of $1.8 billion, down 8% YoY and 13% LQ Net interest income flat LQ as growth in earning assets was offset by lower loan resolution income - Average loans were up 15% YoY and 6% LQ on broad-based growth, as well as the benefit of 2Q
Slide 17: Credit quality
Wells Fargo 3Q15 Supplement 16 Credit quality Provision expense of $703 million, up $403 million from 2Q15 reflecting the absence of a reserve release (1) in the quarter No reserve release (1) in the quarter, compared with a $350 million release in 2Q15, as continued improvement in residential r
Slide 18: Capital
Wells Fargo 3Q15 Supplement 17 Capital Position Capital remained strong Common Equity Tier 1 ratio under Basel III (fully phased-in) of 10.7% at 9/30/15 (1) Capital Return Period-end common shares outstanding down 36.8 million LQ - Purchased 51.7 million common shares - Issued 14.9 million com
Slide 19: 3Q15 Summary
Wells Fargo 3Q15 Supplement 18 3Q15 Summary Solid earnings of $5.8 billion, up 1% from 3Q14 - Diluted EPS of $1.05, up 3% Solid returns - ROA = 1.32% - ROE = 12.62% Strong loan and deposit growth - Period-end loans up $64.3 billion, or 8%, YoY with core loans up $73.4 billion, or 9%, on broad-
Slide 20: Recent Announcements
Recent Announcements
Slide 21: Recent transaction announcements
Wells Fargo 3Q15 Supplement 20 Recent transaction announcements (1) As of June 30, 2015. Railcar purchase 9/30/15 announced agreement to purchase GE Railcar Services from GE Capital, expected to close in 1Q16 - 77,000 railcars and just over 1,000 locomotives, as well as associated operating and lo
Slide 22: CDF and Vendor Finance announcement (continued)
Wells Fargo 3Q15 Supplement 21 CDF and Vendor Finance announcement (continued) ~$32 billion in Assets, ~90% of loans and leases U.S. and Canada-based Commercial Distribution Finance (market leader in customized shorter-term inventory financing to fund flow of finished durable goods from manufacturer
Slide 23: Appendix
Appendix
Slide 24: Real estate 1-4 family first mortgage portfolio
Wells Fargo 3Q15 Supplement 23 Real estate 1-4 family first mortgage portfolio Core first lien up $5.5 billion, or 3%, LQ reflecting nonconforming mortgage originations - Nonconforming mortgage loans increased $9.0 billion to $132.0 billion (2) - First lien home equity lines of $16.4 billion, down
Slide 25: Real estate 1-4 family junior lien mortgage portfolio
Wells Fargo 3Q15 Supplement 24 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 $88 million, or 6%, LQ Core junior net charge-offs of $79 million, or 59 bps, flat LQ (1
Slide 26: Consumer credit card portfolio
Wells Fargo 3Q15 Supplement 25 Consumer credit card portfolio Credit card outstandings up 4% LQ and 14% YoY reflecting account growth and growth in private label and co-brand outstandings driven by the Dillard’s card portfolio acquisition in 4Q14 - Credit card household penetration (2) of 42.9%, u
Slide 27: Auto portfolios
Wells Fargo 3Q15 Supplement 26 Auto portfolios (1) Consumer Portfolio Auto outstandings of $59.2 billion up 2% LQ and 7% YoY - 3Q15 originations of $8.3 billion up 2% LQ and 10% YoY Nonaccrual loans declined $3 million LQ and $20 million YoY Net charge-offs were up $44 million LQ driven by sea
Slide 28: Student lending portfolio
Wells Fargo 3Q15 Supplement 27 Student lending portfolio Private Portfolio $12.3 billion private loan outstandings up 2% LQ due to seasonality and up 3% YoY - Average FICO of 765 and 80% of the total outstandings have been co-signed - Originations up 11% YoY Net charge-offs decreased $4 million
Slide 29: Common Equity Tier 1 under Basel III (Fully Phased-In)
Wells Fargo 3Q15 Supplement 28 Common Equity Tier 1 under Basel III (Fully Phased-In) Wells Fargo & Company and Subsidiaries COMMON EQUITY TIER 1 UNDER BASEL III (FULLY PHASED-IN) (1) Estimated (in billions) Sep 30, 2015 Jun 30, 2015 Mar 31, 2015 Dec 31, 2014 Total equity $ 194.0 190.7 190.0 185.3 N
Slide 30: Forward-looking statements and additional information
Wells Fargo 3Q15 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
Wells Fargo & Company — Q3 2015 Earnings Presentation on 6ix