Wells Fargo mpany : Q4 2020 presentation (PDF)

4Q20 Financial Results

January 15, 2021

© 2021 Wells Fargo Bank, N.A. All rights reserved.

Supporting customers, communities and employees in 2020

Supporting Our Customers		Helping Our Communities and Small Businesses

• Helped 3.6 million consumer and small business customers by deferring payments and waiving fees
• Funded approximately 194,000 loans totaling $10.5 billion under the Paycheck Protection Program and provided an additional $51 million in liquidity for Community Development Financial Institutions (CDFIs) and African American owned Minority Depository Institutions (MDIs)
• Helped over 635,000 homeowners with new low-rate loans to either purchase a home or refinance an existing mortgage: over 265,000 purchases and nearly 370,000 refis
• Closed $2.1 billion in new commitments for affordable housing under the GSE and FHA programs (77 properties nationwide with 12,560 total units including 10,650 rent restricted affordable units)
• The Renewable Energy & Environmental Finance group provided approximately $2.4 billion in financing to the renewable energy industry in 2020, a nearly $1 billion increase over 2019
• During the height of the market volatility caused by the COVID-19 pandemic, Wells Fargo Investment Institute (WFII) hosted daily market volatility calls for clients; overall WFII hosted 44 market volatility calls in the first half of 2020 with more than 150,000 participants

• Charitable Contributions: Deployed $475 million in philanthropic contributions, including:
• • $225 million in philanthropic contributions for COVID-19 relief
  • More than $84 million through the Open for Business Fund helping entrepreneurs keep roughly 50,000 small business jobs
• Investing in Minority Depository Institutions: (MDIs): Announced the planned investment of up to $50 million in African American MDIs
• Fighting Hunger: Provided 82 million meals to families in need, resulting from a combination of food bank events and a $10 million donation to Feeding America
• Addressing Housing Insecurity: Kept 200,000 individuals housed through our support of rent relief, eviction prevention and other housing initiatives

Assisting Employees

• Aided more than 23,000 employees via a $25 million grant to the WE Care employee relief fund
• More than 22,000 employees utilized enhanced childcare benefits amid the pandemic
• Raised minimum hourly pay levels in a majority of U.S. markets with more than 25,000 employees receiving a pay adjustment

4Q20 Financial Results

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4Q20 results

Financial Results

ROE: 6.4%

ROTCE: 7.7%1

Efficiency ratio: 83%2

Credit Quality

Capital and Liquidity

CET1: 11.6%3

LCR: 133%4

 Net Income of $3.0 billion, or $0.64 per diluted common share

- Revenue of $17.9 billion, down 10%

- Noninterest expense of $14.8 billion, down 5%

 Results included:

($ in millions, except EPS)	Pre-tax Income		EPS
Restructuring charges impact	$	(781)	$	(0.14)
Reserve release due to the announced		757		0.14
sale of our student loan portfolio
Customer remediation accruals impact		(321)		(0.06)

 Effective income tax rate of 3.5%

 Average loans of $899.7 billion, down 6%  Average deposits of $1.4 trillion, up 4%

 Provision for credit losses of $(179) million, down $823 million

- Total net charge-offs of $584 million, down $185 million

• Net loan charge-offs of 0.26% of average loans (annualized), down from 0.32%

- Allowance for credit losses for loans of $19.7 billion, down $758 million from 3Q20 predominantly due to the announced sale of our student loan portfolio

 Common Equity Tier 1 (CET1) capital of $138.3 billion3

 CET1 ratio of 11.6% under the Standardized Approach and 11.9% under the Advanced Approach3  Common stock dividend of $0.10 per share, or $414 million

 The Company's Board of Directors approved an increase in the Company's authority to repurchase common stock by an additional 500 million shares, bringing the total authorized amount to 667 million common shares

Comparisons in the bullet points are for 4Q20 versus 4Q19, unless otherwise noted.

1. Tangible common equity and return on average tangible common equity (ROTCE) are non-GAAP financial measures. For additional information, including a corresponding reconciliation to GAAP financial measures, see the "Tangible Common Equity" table on page 22.
2. The efficiency ratio is noninterest expense divided by total revenue.
3. See page 23 for additional information regarding Common Equity Tier 1 (CET1) capital and ratios. CET1 is a preliminary estimate.
4. Liquidity coverage ratio (LCR) is calculated as high-quality liquid assets divided by projected net cash outflows, as each is defined under the LCR rule. LCR is a preliminary estimate.

4Q20 Financial Results

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4Q20 earnings

$ in millions (mm), except per share data		4Q20		3Q20	4Q19		vs. 3Q20	vs. 4Q19
Net interest income	$	9,275		9,368	11,200	$	(93)	(1,925)
Noninterest income		8,650		9,494	8,660		(844)	(10)
Total revenue		17,925		18,862	19,860		(937)	(1,935)
Net charge-offs		584		731	769		(147)	(185)
Change in the allowance for credit losses		(763)		38	(125)		(801)	(638)
Provision for credit losses		(179)		769	644		(948)	(823)
Noninterest expense		14,802		15,229	15,614		(427)	(812)
Pre-tax income		3,302		2,864	3,602		438	(300)
Income tax expense		108		645	678		(537)	(570)
Effective income tax rate (%)		3.5	%	24.1	19.1		n.m.	n.m.
Net income	$	2,992		2,035	2,873	$	957	119
Diluted earnings per common share	$	0.64		0.42	0.60	$	0.22	0.04
Diluted average common shares (mm)	#	4,151.3		4,132.2	4,234.6		19	(83)
Return on equity (ROE)		6.4	%	4.2	5.9		220 bps	50 bps
Return on average tangible common equity (ROTCE)1		7.7		5.1	7.1		260	60
Efficiency ratio		83		81	79		200	400

NM- Not meaningful

1. Tangible common equity and return on average tangible common equity are non-GAAP financial measures. For additional information, including a corresponding reconciliation to GAAP financial measures, see the "Tangible Common Equity" table on page 22.

4Q20 Financial Results

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