Wells Fargo & Company · NYSE:WFC
Wells Fargo & — Q3 2023 Earnings Presentation
19 slides from Wells Fargo &'s earnings presentation, Oct 13, 2023
Slide 1: 3Q23 Financial Results
3Q23 Financial Results October 13, 2023 © 2023 Wells Fargo Bank, N.A. All rights reserved.
Slide 2: 3Q23 results
3Q23 results • Net income of $5.8 billion, or $1.48 per diluted common share, included: – $349 million, or $0.09 per share, of discrete tax benefits related to the resolution of prior period tax matters – The sale of ~$2 billion of private equity investments, which had a minimal impact to net income
Slide 3: Capital and liquidity
Capital and liquidity 1 Common Equity Tier 1 Ratio under the Standardized Approach Capital Position 1 10.8% 11.0% 8.9% • Common Equity Tier 1 (CET1) ratio of 11.0% at September 30, 2023 remained 10.6% 10.7% 2 10.3% Regulatory above our regulatory minimum and buffers of 9.2% Minimum • CET1 ratio up ~
Slide 4: 3Q23 earnings
3Q23 earnings Quarter ended $ Change from $ in millions, except per share data 3Q23 2Q23 3Q22 2Q23 3Q22 Net interest income $13,105 13,163 12,098 ($58) 1,007 Noninterest income 7,752 7,370 7,468 382 284 Total revenue 20,857 20,533 19,566 324 1,291 Net charge-offs 864 764 399 100 465 Change in the al
Slide 5: Credit quality: net loan charge-offs
Credit quality: net loan charge-offs 1 Provision for Credit Losses and Net Loan Charge-offs ($ in millions) • Commercial net loan charge-offs down $12 million to 13 bps of average loans (annualized) as a $26 million decrease in commercial and industrial net loan charge- offs was partially offset by
Slide 6: Credit quality: allowance for credit losses for loans
Credit quality: allowance for credit losses for loans Allowance for Credit Losses for Loans ($ in millions) • Allowance for credit losses for loans (ACL) up from both 3Q22 and 2Q23 primarily for commercial real estate (CRE) office loans, as well as higher credit card loan balances, partially offset
Slide 7: Loans and deposits
Loans and deposits Average Loans Outstanding ($ in billions) Average Deposits and Rates ($ in billions) 945.5 948.5 948.7 945.9 943.2 1,407.9 1,380.5 1,356.7 24.4 1,347.4 1,340.3 42.1 60.7 Corporate 158.4 84.7 113.9 142.2 126.6 394.3 396.3 395.5 392.9 391.7 112.4 Wealth and 156.8 107.5 156.2 157.6 I
Slide 8: Net interest income
Net interest income Net Interest Income ($ in millions) 13,433 • Net interest income up $1.0 billion, or 8%, from 3Q22 primarily due to the 13,336 13,163 13,105 impact of higher interest rates, partially offset by lower deposit balances 12,098 – 3Q23 MBS premium amortization was $163 million vs. $23
Slide 9: Noninterest expense
Noninterest expense Noninterest Expense ($ in millions) • Noninterest expense down $1.2 billion, or 8%, from 3Q22 16,186 – Operating losses down $1.9 billion 14,306 – Other expenses of $12.8 billion, up $696 million, or 6% 3,517 13,676 267 12,987 13,113 ◦ Personnel expense up $415 million, or 5%, dr
Slide 10: Consumer Banking and Lending
Consumer Banking and Lending Summary Financials • Total revenue up 3% YoY and up 1% from 2Q23 $ in millions (mm) 3Q23 vs. 2Q23 vs. 3Q22 – CSBB up 7% YoY as the impact of higher interest rates was partially offset by Revenue by line of business: lower deposit balances, as well as lower deposit-relate
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 21.5 122.4 124.0 124.9 124.5 9.1 117.3 14.6 2.5 2.5 2.6 6.4 2.5 2.4 7.8 6.6 6.4 16% 13% 17% 16% 16% 12.4 8.2 5.6 7.7 6.4 3Q22 4Q22 1Q23 2Q23 3Q23 3Q22 4Q22 1Q23 2Q23 3Q23
Slide 12: Commercial Banking
Commercial Banking Summary Financials • Total revenue up 15% YoY and up 1% from 2Q23 $ in millions 3Q23 vs. 2Q23 vs. 3Q22 – Middle Market Banking revenue up 23% YoY driven by the impact of higher Revenue by line of business: interest rates and higher loan balances, partially offset by lower deposit
Slide 13: Corporate and Investment Banking
Corporate and Investment Banking Summary Financials $ in millions 3Q23 vs. 2Q23 vs. 3Q22 • Total revenue up 21% YoY and up 6% from 2Q23 Revenue by line of business: – Banking revenue up 20% YoY driven by higher lending revenue, stronger Banking: treasury management results reflecting the impact of h
Slide 14: Wealth and Investment Management
Wealth and Investment Management Summary Financials • Total revenue up 1% YoY and up 1% from 2Q23 $ in millions 3Q23 vs. 2Q23 vs. 3Q22 – Net interest income down 7% YoY driven by lower deposit balances as Net interest income $1,007 ($2) (81) customers reallocated cash into higher yielding alternativ
Slide 15: Corporate
Corporate Summary Financials • Revenue decreased $345 million YoY reflecting assumption changes related $ in millions 3Q23 vs. 2Q23 vs. 3Q22 to the valuation of our Visa B common stock exposure, as well as lower Net interest income ($269) ($178) (21) venture capital revenue Noninterest income 21 (10
Slide 16: Appendix
Appendix
Slide 17: Tangible Common Equity
Tangible Common Equity Wells Fargo & Company and Subsidiaries TANGIBLE COMMON EQUITY We also evaluate our business based on certain ratios that utilize tangible common equity. Tangible common equity is a non-GAAP financial measure and represents total equity less preferred equity, noncontrolling int
Slide 18: Common Equity Tier 1 under Basel III
Common Equity Tier 1 under Basel III Wells Fargo & Company and Subsidiaries 1 RISK-BASED CAPITAL RATIOS UNDER BASEL III Estimated Sep 30, Jun 30, Mar 31, Dec 31, Sep 30, ($ in billions) 2023 2023 2023 2022 2022 2 Total equity $ 182.4 182.0 183.2 182.2 178.5 2 Effect of accounting policy change — — —
Slide 19: 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 September 30, 2023, and may differ materially from the results and disclosu
Wells Fargo & Company — Q3 2023 Earnings Presentation on 6ix