Wells Fargo & Co at BancAnalysts Association of Boston Conference Transcript

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

Question: Gerard Cassidy - BancAnalysts Association of Boston, Inc. - Analyst : The timing of the conference couldn't be better with the election, of course, and maybe to start off, can you give us your macro view and obviously in view of what we saw with the election. But also can you talk about the health of the consumer and business sentiment once we get beyond the election stuff?

Question: Gerard Cassidy - BancAnalysts Association of Boston, Inc. - Analyst : Do you find Mike that geographically because you've got an incredible franchise, of course, but have you guys noticed any areas of the country that seems to be healthier than others or is it pretty evenly spread across?

Question: Gerard Cassidy - BancAnalysts Association of Boston, Inc. - Analyst : Yes. Maybe moving on to the CSBB group at Wells Fargo. After many years of no growth, it's now grown -- you've grown checking accounts for three consecutive quarters. The debit card market share is starting to increase as well. Can you talk about the consumer banking strategy and one of the, some of the changes you've made more recently to drive this growth.

Question: Gerard Cassidy - BancAnalysts Association of Boston, Inc. - Analyst : We hear a lot about the access to consumers through the digital channel. Obviously, you guys are doing that as well, but it sounds like the branch channel is still very important to the process. And so do you think you have the optimal mix now between digital and branches or is there still some refining that you might have to do?

Question: Gerard Cassidy - BancAnalysts Association of Boston, Inc. - Analyst : In one of the lines, obviously on the consumer lending side, you've built up the credit card business and you've kind of deemphasized the mortgage business. Maybe to start off with credit cards. Can you explain to us, how that journey has gone and what should we think about in terms of profitability of the business as the portfolio matures?

Question: Gerard Cassidy - BancAnalysts Association of Boston, Inc. - Analyst : Very good. And when you look at your other consumer business, the home lending business, obviously head counts down quite a bit about 50%. You reduced the size of the servicing portfolio. Are we near an end state of the size? You got it to a level where you're comfortable with?

Question: Gerard Cassidy - BancAnalysts Association of Boston, Inc. - Analyst : Yeah. If we shift over to the CIB area, one of the areas that you've seen real good growth in trading and investment banking for the past seven quarters. What -- what's driving the strong results and what are your goals for this business as you look out over the next couple of years?

Question: Gerard Cassidy - BancAnalysts Association of Boston, Inc. - Analyst : When we look at, as you said, you've been hiring a bunch of people. Is it more competitive today in hiring investment bankers than maybe two years ago when you started to hire more?

Question: Gerard Cassidy - BancAnalysts Association of Boston, Inc. - Analyst : Yeah. Moving over to the other line of business, your wealth management business. It seems like you've stemmed the advisor attrition, of course, and you're attracting new names into the platform. What changes have you made to drive that improvement and tell us about the strategy and aspirations you have for that business as we go forward.

Question: Gerard Cassidy - BancAnalysts Association of Boston, Inc. - Analyst : Yeah. In view of the conference theme obviously, you've given us good insights to your different lines of businesses. And, we're talking -- we always hear about scale, the need for scale is a fact or fiction. Can you share with us how important is scale in these business lines? And then is there any way investors can measure whether you have sufficient scale?

Question: Gerard Cassidy - BancAnalysts Association of Boston, Inc. - Analyst : Moving more to the income statement. Now, when you -- in your third quarter call, you gave us guidance on fourth quarter net interest income essentially being fairly flat with the third quarter and maybe it's troughing soon and I appreciate you're not in a position to talk about '25 guidance. But could you give us a sense what the NII drivers are that we should be focused on?

Question: Gerard Cassidy - BancAnalysts Association of Boston, Inc. - Analyst : Yeah. One of the large topics that everybody is talking about today is balance sheet sensitivity to interest rates. Obviously, the fed is moving by reducing rates. If the forward curve doesn't materialize and we have fewer cuts than projected. How does that impact NII? I think in your 10-Q, you had disclosures representing the sensitivity of, a '25 basis point decline in rates in one quarter versus 100 basis point decline. Can you share with us?

Question: Gerard Cassidy - BancAnalysts Association of Boston, Inc. - Analyst : Yeah. You touched on deposits just a moment ago. What are you seeing in deposit trends, particularly the behavior of the consumer and commercial depositors as you (technical difficulty) lower the rates on those deposits?

Question: Gerard Cassidy - BancAnalysts Association of Boston, Inc. - Analyst : (multiple speakers)

Question: Gerard Cassidy - BancAnalysts Association of Boston, Inc. - Analyst : Yeah. Moving to the other side of the balance sheet loans? How are loans trending relative to expectations? And what do you think could be the driver for commercial loan growth are rate cuts alone enough to get the catalyst or do we need to see more economic activity or easing of lending standards?

Question: Gerard Cassidy - BancAnalysts Association of Boston, Inc. - Analyst : Moving on to fee revenue growth. Mike, you've had several quarters of year-over-year growth in fee income. We talked about the investments that obviously you've made and the favorable market conditions that have helped the fee income growth. Can you walk us through, any of the opportunities ahead and including any seasonal trends that you may want to highlight going into the fourth quarter here?

Question: Gerard Cassidy - BancAnalysts Association of Boston, Inc. - Analyst : And talking about expenses. Obviously, you guys have done a good job in reducing head count. I think it's about 17 consecutive quarters that you've reduced it. But it is 17. There you go. Thank you. Efficiency looks still high relative to peers, particularly in the consumer business. What else can you guys do to improve the efficiency?

Question: Gerard Cassidy - BancAnalysts Association of Boston, Inc. - Analyst : Yeah. I have to ask Mike, when you were here yesterday, did you have the special sound effects that were? (laughter)

Question: Gerard Cassidy - BancAnalysts Association of Boston, Inc. - Analyst : That's new today. Okay. I know it's in budget process season for you folks. Is there any color you want to share with us or can share with us as you look out into 2025 about expenses? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 07, 2024 / 1:10PM, WFC.N - Wells Fargo & Co at BancAnalysts Association of Boston Conference

Question: Gerard Cassidy - BancAnalysts Association of Boston, Inc. - Analyst : Charlie mentioned in his letter to shareholders about spending $2.5 billion since 2000 -- above the 2018 (multiple speakers) on risk and control areas. Can you share with us how much of that is permanent versus being reinvested maybe into other areas?

Question: Gerard Cassidy - BancAnalysts Association of Boston, Inc. - Analyst : Got it. Obviously you're very well capitalized. You purchased $15 billion of your shares year-to-date in 2024. When you look at your CET1 ratio and looking forward, what should we expect on how you're going to manage that? And second any thoughts on the changes that Basel III endgame reproposal should have come between now and your end?

Question: Gerard Cassidy - BancAnalysts Association of Boston, Inc. - Analyst : Yeah. Moving over to the regulatory front, obviously Charlie's tone and you guys seem a little more upbeat of late with your progress you're making obviously with the regulators. I know you can't go into details, but are there any updates that you can share with us? And then second, eventually, when the asset cap is lifted, what business lines do you think will have like the most impact on being able to grow even better? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 07, 2024 / 1:10PM, WFC.N - Wells Fargo & Co at BancAnalysts Association of Boston Conference

Question: Gerard Cassidy - BancAnalysts Association of Boston, Inc. - Analyst : Business is (multiple speakers) --

Question: Gerard Cassidy - BancAnalysts Association of Boston, Inc. - Analyst : Got it. We're running out of time. But one last question for you. The 15% return on tangible common equity, that goal, do you consider that to be the endpoint? And then one of the biggest opportunities and constraints in achieving that 15% on a sustainable basis?