Wells Fargo & Company · NYSE:WFC
Wells Fargo & — Q1 2023 Earnings Presentation
20 slides from Wells Fargo &'s earnings presentation, Apr 14, 2023
Slide 1: 1Q23 Financial Results
1Q23 Financial Results April 14, 2023 In first quarter 2023, we adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2018-12 – Financial Services – Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts. We adopted ASU 2018-12 with
Slide 2: 1Q23 results
1Q23 results • Net income of $5.0 billion, or $1.23 per diluted common share • Revenue of $20.7 billion, up 17% – Net interest income of $13.3 billion, up 45% Financial Results – Noninterest income of $7.4 billion, down 13% ROE: 11.7% • Noninterest expense of $13.7 billion, down 1% 1 ROTCE: 14.0% 3
Slide 3: Capital and liquidity
Capital and liquidity 1 4 Common Equity Tier 1 Ratio under the Standardized Approach Liquidity Coverage Ratio 122% 122% 10.8% 119% 10.5% 10.6% 100% 9.2% Regulatory Regulatory Minimum Minimum 2 and Buffers 1Q22 4Q22 1Q23 Estimated 1Q22 4Q22 1Q23 Estimated Capital Position Liquidity Position 1 • Commo
Slide 4: 1Q23 earnings
1Q23 earnings Quarter ended $ Change from $ in millions, except per share data 1Q23 4Q22 1Q22 4Q22 1Q22 Net interest income $13,336 13,433 9,221 ($97) 4,115 Noninterest income 7,393 6,601 8,507 792 (1,114) Total revenue 20,729 20,034 17,728 695 3,001 Net charge-offs 564 560 305 4 259 Change in the a
Slide 5: Credit quality
Credit quality 1 Provision for Credit Losses and Net Loan Charge-offs ($ in millions) Allowance for Credit Losses for Loans ($ in millions) 560 604 1,207 13,225 13,609 13,705 399 12,681 12,884 305 344 957 784 6,234 6,653 6,481 580 5,533 5,802 0.26% 0.23% 0.17% 1.39% 1.37% 1.40% 1.42% 1.45% 0.14% 0.1
Slide 6: Commercial Real Estate (CRE) loans
Commercial Real Estate (CRE) loans $154.7 billion of CRE Loans Outstanding, or 16% of Total Loans, with $35.7 billion in CRE Office Loans, or 4% of Total Loans, as of March 31, 2023 CRE Office Loans • ~12% of the CRE office loan portfolio is owner-occupied and nearly one-third have 1 11% recourse to
Slide 7: Loans and deposits
Loans and deposits Average Loans Outstanding ($ in billions) Average Deposits and Rates ($ in billions) 1,464.1 1,445.8 926.6 945.5 948.5 948.7 1,407.9 898.0 1,380.5 1,356.7 27.1 20.3 24.4 185.8 42.1 60.7 Corporate 173.7 158.4 142.2 126.6 Wealth and 389.1 394.3 396.3 395.5 381.9 169.2 164.9 156.8 In
Slide 8: Net interest income
Net interest income Net Interest Income ($ in millions) 13,433 13,336 • Net interest income up $4.1 billion, or 45%, from 1Q22 primarily due to the 12,098 impact of higher interest rates, higher loan balances, and lower mortgage- backed securities (MBS) premium amortization, partially offset by lowe
Slide 9: Noninterest expense
Noninterest expense Noninterest Expense ($ in millions) • Noninterest expense down $175 million, or 1%, from 1Q22 16,186 – Operating losses down $406 million 14,306 – Other expenses of $13.4 billion, up $231 million, or 2% 13,851 3,517 13,676 673 12,862 267 2,218 ◦ Personnel expense up $144 million,
Slide 10: Consumer Banking and Lending
Consumer Banking and Lending • Total revenue up 9% YoY and down 1% from 4Q22 Summary Financials – CSBB up 28% YoY as higher net interest income was partially offset by lower $ in millions (mm) 1Q23 vs. 4Q22 vs. 1Q22 deposit-related fees reflecting our efforts to help customers avoid overdraft Revenu
Slide 11: Consumer Banking and Lending
Consumer Banking and Lending 1 Mortgage Loan Originations ($ in billions) Debit Card Point of Sale (POS) Volume and Transactions 37.9 34.1 125.2 13.8 122.4 124.0 115.0 117.3 14.5 21.5 2.5 2.5 2.5 56% 2.4 9.1 2.3 28% 14.6 24.1 16% 6.4 19.6 6.6 13% 1 16% 12.4 8.2 5.6 1Q22 2Q22 3Q22 4Q22 1Q23 1Q22 2Q22
Slide 12: Commercial Banking
Commercial Banking Summary Financials • Total revenue up 42% YoY and up 5% from 4Q22 $ in millions 1Q23 vs. 4Q22 vs. 1Q22 – Middle Market Banking revenue up 73% YoY due to the impact of higher interest Revenue by line of business: rates and higher loan balances, partially offset by lower deposit bal
Slide 13: Corporate and Investment Banking
Corporate and Investment Banking Summary Financials • Total revenue up 41% YoY and up 18% from 4Q22 $ in millions 1Q23 vs. 4Q22 vs. 1Q22 Revenue by line of business: – Banking revenue up 37% YoY and up 7% from 4Q22 driven by stronger Banking: treasury management results reflecting the impact of high
Slide 14: Wealth and Investment Management
Wealth and Investment Management Summary Financials • Total revenue down 2% YoY and down modestly from 4Q22 $ in millions 1Q23 vs. 4Q22 vs. 1Q22 – Net interest income up 31% YoY driven by the impact of higher interest rates, Net interest income $1,044 ($80) 245 partially offset by lower deposit bala
Slide 15: Corporate
Corporate Summary Financials • Net interest income up YoY due to the impact of higher interest rates $ in millions 1Q23 vs. 4Q22 vs. 1Q22 • Noninterest income down YoY due to lower results in our affiliated venture Net interest income $16 ($62) 834 capital and private equity businesses; 1Q23 include
Slide 16: Appendix
Appendix
Slide 17: Accounting Standards Update 2018-12 - Long-Duration Contracts
Accounting Standards Update 2018-12-Financial Services - Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts In first quarter 2023, we adopted FASB ASU 2018-12 – Financial Services – Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Durati
Slide 18: Tangible Common Equity
Tangible Common Equity Wells Fargo & Company and Subsidiaries TANGIBLE COMMON EQUITY We also evaluate our business based on certain ratios that utilize tangible common equity. Tangible common equity is a non-GAAP financial measure and represents total equity less preferred equity, noncontrolling int
Slide 19: Common Equity Tier 1 under Basel III
Common Equity Tier 1 under Basel III Wells Fargo & Company and Subsidiaries 1 RISK-BASED CAPITAL RATIOS UNDER BASEL III Estimated Mar 31, Dec 31, Sep 30, Jun 30, Mar 31, ($ in billions) 2023 2022 2022 2022 2022 2 Total equity $ 183.2 182.2 178.5 179.8 181.6 2 Effect of accounting policy change — (0.
Slide 20: Disclaimer and forward-looking statements
Disclaimer and forward-looking statements Financial results reported in this document are preliminary. Final financial results and other disclosures will be reported in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, and may differ materially from the results and disclosures
Wells Fargo & Company — Q1 2023 Earnings Presentation on 6ix