Update: Wells Fargo&Co.

Separately, the bank's investment securities portfolio totaled roughly $407 billion at the end of second-quarter 2023. (Unrealized losses were $44 billion at the end of the first quarter.) About two-thirds of its securities portfolio has been classified as held-to-maturity (HTM). Given Wells' adequate liquidity--its consolidated liquidity coverage ratio was a high 123% as of June 30, 2023--we don't expect the bank to realize any losses on these securities. Nonetheless, we expect capital will likely continue to gravitate upwards, particularly given an expected update to regulatory capital requirements. Accordingly, we expect Wells' S&P Global Ratings' risk-adjusted capital (RAC) ratio could rise towards the high end of the 7%-10% range we consider adequate (9.0% as of Dec. 31, 2022). Wells' ratio of

...Wells Fargo & Co. (Wells) has performed relatively well despite the heightened market volatility that followed recent bank failures and downside risks in the economic outlook. Wells' financial performance was strong in the first half of 2023, with total revenue up 19% and net income up 43% year over year aided by strong growth in net interest income (NII) even as credit provisions rose. Its funding profile also remained solid. Average deposits fell by 7% year over year and 1% from the previous quarter as of June 30, 2023, reflecting the Federal Reserve's quantitative tightening and some customer movement toward higher-yielding alternatives. Still, the deposit outflow isn't outsized relative to those of peers given that Wells benefits from a large national core customer deposit base, with substantial market penetration across the U.S. Separately, the bank's investment securities portfolio totaled roughly $407 billion at the end of second-quarter 2023. (Unrealized losses were $44 billion...

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