Wells Fargo & Co Q3 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Ken Usdin - Autonomous Research - Analyst : Just one clarification. I just wanted to wonder. Your new 17%, 18% medium term, you have a general range of how far out you're thinking for that?

Question: Ken Usdin - Autonomous Research - Analyst : Yes. Yeah. Thanks for that, Charlie. Appreciate that. And second question, just, Mike, can I ask you if you allude for a little color on the fourth-quarter NII ramp? You mentioned the fixed repricing. Can you talk to us about what you're still getting on what parts of the book on that fixed repricing? And then secondly, do you expect markets NII to be a meaningful helper to that? And I know you're going to give us more disclosure on that next year, but any help to kind of just help us understand the third to fourth ramp a little deeper would be great. Thank you.

Question: Ebrahim Poonawala - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Just two questions. One, I think, Charlie, you mentioned $15 billion of expense saves, which were used to fund investments. I think as we think about the ROE improvement from here, just remind us where the opportunities are, either on head count, rightsizing of technology, automation of processes. Like how big is the opportunity on the cost save side that would allow you to continue to invest the way you have while driving improved efficiency, if you could sort of put some framework around that.

Question: Ebrahim Poonawala - Bofa Merrill Lynch Asset Holdings Inc - Analyst : That's helpful, Mike. Thank you. And I guess just on capital. So you talked about the fourth-quarter buybacks. And could you give us a perspective on just inorganic growth? Like it was interesting like you emphasized being a US bank and such in terms of your focus. It often comes up that could Wells do an M&A on wealth or global investment banking? And I'm not saying one is right versus wrong but would love to get your perspective if you think there are inorganic opportunities that would allow you to kind of accelerate some of these growth strategies in any of the businesses?

Question: John McDonald - Truist Securities - Analyst : I was wondering, Mike, if you could give some more color on loan growth, which seems to have good momentum. Specifically, you mentioned not having as much drag from some areas like CRE and auto and some of it seems like the front book momentum as well. Maybe you could give us a little color there and how much the build-out of the investment bank might be creating balance sheet opportunities, too? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 14, 2025 / 2:00PM, WFC.N - Q3 2025 Wells Fargo & Co Earnings Call

Question: John McDonald - Truist Securities - Analyst : And then maybe a follow-up, specifically on credit card. Are you seeing new customers to the banking card? Or are they mostly growth in existing Wells Fargo customers?

Question: R. Scott Siefers - Piper Jaffray Inc - Analyst : So I wanted to start on credit. So all the indicators are excellent. I was just hoping you could expand a little on your thoughts on the overall health of the consumer. And then just within there, there are just sort of more emerging concerns on auto, in particular. I know you all have been working to become more of a kind of more fulsome lender. How are you feeling about sort of the credit box? So maybe broadly, thoughts on the consumer and then how it trickles down to you all in particular?

Question: R. Scott Siefers - Piper Jaffray Inc - Analyst : Perfect. Okay. Thank you. And then Mike, just on the NII, I definitely appreciate all that color. I think a lot of your focus was sort of on the asset side, whether it's repricing or volume or what have you. Just curious about sort of what you're seeing and expecting on the deposit cost side now that the Fed is in sort of this round two of easing.

Question: Erika Najarian - UBS AG - Analyst : My first question is a bit of a two-parter, Mike, on the efficiency agenda towards the 17% to 18%. The first, you mentioned third-party spend in your prepared remarks, I think that year-to-date, it's about $3.3 billion, annualizing of $4.4 million, unchanged from last year. I guess the first question is, is that an opportunity to fund future sort of more revenue-related comp or initiatives? And second, it's clear the momentum, [and I'd be] in trading and even card, but I'm wondering, as we think about WIM and sort of a sub-20 pretax margin, obviously, your peers are higher than that. I'm wondering if that's an opportunity as well as you march towards 17% to 18%? And should we be thinking about that pretax margin improvement on the revenue side or the expense side?

Question: Erika Najarian - UBS AG - Analyst : Great. And my second question. Unfortunately, it's not any less complicated. But in the previous two peer calls this morning, NDFI came up as a significant topic. And Wells has clearly been a big player here for a very long time, no issues. This is a little bit of a deja vu from a call, John will probably recall this from five years ago. And I'll ask the question the same way I asked JPMorgan for both you, Charlie and Mike. NDFI is clearly a sort of a broad swath, a broad definition. What questions should investors be asking banks in terms of assessing NDFI exposure and risk as it relates to future credit quality? And second, should investors be concerned about SSFA in terms of its role in allowing NDFI when wrapped in different structures to have an RWA that could be well less than 100%? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 14, 2025 / 2:00PM, WFC.N - Q3 2025 Wells Fargo & Co Earnings Call

Question: Erika Najarian - UBS AG - Analyst : Great. I'm sure I have a lot of follow-up questions, but I'll save it for my follow-up call with IR. Thank you so much.

Question: Betsy Graseck - Morgan Stanley - Analyst : So thanks for the update on the ROTCE trajectory from here. Two-part question. One is on the trading, you indicated, look, NIM came down because trading leaned into trading, makes a ton of sense. I'm wondering, do you feel trading is maxed out relative to your risk profile and what you're interested in doing and what your client demand is? Or is there more that we should expect you're going to be leaning into trading same pace QQ or year on year? Or is it slowing from here?

Question: Betsy Graseck - Morgan Stanley - Analyst : Okay. And then on the $2 billion of compliance expenses that you initially had to spend, has all of that come out? Are you now back to what you would argue as normalized level of expense run rate for that piece of the business? Or is there more to go there?

Question: Betsy Graseck - Morgan Stanley - Analyst : Right. So that should be a material part of the improvement in expense ratio from here?

Question: Matt O'Connor - Deutsche Bank - Analyst : I wanted to follow up on the comment in the prepared remarks about targeting top five within Investment Banking. And I guess in short, just how do you get there, it's a pretty big step up from where you are now. I know you made a bunch of hires a few years ago that probably still have some [seasoning] benefits as the [long] improves here. But maybe just talk to kind of the big leap from [six to five] and how much is already kind of baked in the franchise? And how much do you need to hire or expand from here? Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 14, 2025 / 2:00PM, WFC.N - Q3 2025 Wells Fargo & Co Earnings Call

Question: John Pancari - Evercore Inc - Analyst : Regarding the 17% to 18% ROTCE target, can you maybe help us in how to think about the efficiency ratio that you baked into that assumption? And does it factor in that you could reach the high 50s as you focus on the efficiency opportunity that you discussed earlier on the call?

Question: John Pancari - Evercore Inc - Analyst : Okay. Alright. Thanks. And then on your CET1, the 10% to 10.5%, can you maybe just talk to us a little bit about the cadence of getting down to that 10% to 10.5% level versus the current 11% in terms of how much would be ideally coming from organic opportunity versus buyback? And then separately, I know you also put in the comment there that you may have the opportunity to manage the CET1 below that level over time, depending upon the regulatory backdrop. Where specifically on the regulatory front is the key driver there? Thanks.

Question: Gerard Cassidy - RBC Capital Markets Inc - Analyst : Mike, you touched on credit quality. Obviously, you guys are seeing some stabilization in the office market and you're seeing lower non-accrual loans. Can you share with us just any color outside of the office market in terms of multifamily or other commercial real estate properties? Any trends that you guys are noticing that may be different than earlier in the year?

Question: Gerard Cassidy - RBC Capital Markets Inc - Analyst : Okay. And it was a curse a year or two ago to grow commercial real estate mortgages. Do you think that we could see commercial real estate mortgage growth in '26 for you guys if we see continued evidence of a bottoming out of the commercial real estate markets?

Question: Gerard Cassidy - RBC Capital Markets Inc - Analyst : In both areas, generally speaking.

Question: Gerard Cassidy - RBC Capital Markets Inc - Analyst : Very good. Thank you, Charlie. And then just as a follow-up, some of your peers are using security risk transfers to manage risk. Is that something that you guys have thought about or something that you might consider if you think you need to do it to manage risk?

Question: Christopher McGratty - Keefe Bruyette & Woods Inc - Analyst : Within your deposit growth expectations within retail specifically, could you speak to geographies or products you're pushing the hardest and maybe where there's the biggest opportunity for growth over the coming years? Thanks.