WFC Wells Fargo & Co.

Charles Scharf Chief Executive Officer
John Campbell Director of Investor Relations
Michael Santomassimo Chief Financial Officer
Scott Siefers Piper Sandler
Ken Usdin Jefferies
Steven Chubak Wolfe Research
John McDonald Autonomous Research
Ebrahim Poonawala Bank of America
John Pancari Evercore ISI
Matt O'Connor Deutsche Bank
Gerard Cassidy RBC
Betsy Graseck Morgan Stanley
Vivek Juneja JPMorgan
Call transcript
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Welcome and thank you for joining the Wells Fargo Third Quarter 2021 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. [Operator Instructions] Please note that today's call is being recorded. I would now like to turn the call over to John Campbell, Director of Investor Relations. the begin may you conference. Sir,

John Campbell

(ph). Thank for everyone. you morning, our you call [Indiscernible] joining today. Thank Good

Our CEO, This Charles discuss Scharf, and our CFO, results recorded. answer being Third Michael and your is questions. call Quarter Santomassimo, will

during Before make we to that deck materially call from financial and website. third-quarter to over today's SEC including our filings I'd of be are release, available those our you the containing would earnings forward-looking our available materials including we the expectations materials. website measures materials and on caution found to our remind measures Information also may in now subject to at to the a including Charlie. filings, reconciliation GAAP differ you will are earnings non-GAAP supplement, to started, Factors are can get referenced, uncertainties. in I statements cause SEC about like presentation also may in on results X-K that actual that our measures like today call our risks Form earnings turn filed any I the detailed financial that

Charles Scharf

good will brief about environment to detail we Mike make third-quarter third-quarter in everyone. John. the comments results I'll operating morning, take on more and before results, the some the our you call over Thanks, our update your priorities. And turn I then to questions. review

in from with as in which on a earned period billion credit highlights. the we still first September to losses securities, improve. deposits billion strong. third since common the the third-quarter elevated time, the Let loans $XXX $X.XX allowance We These second our in $X.X OCC first were lower declined quarter. on to the associated continued million Expenses for and progress decrease XXXX, grew quarter continue the initiatives both me $X.X some action. with third enforcement for gains and Revenue included quarter. quarter, And start the equity included efficiency share and quality reflecting or decline, in credit though results of per

have consumer customers And X spending in XX to We Areas who XX% week continue quarter those up and stimulus, to our deposit every XXXX. to received entertainment XXXX. compared compared compared week card pandemic compared credit continued October the to and and XX% Consumer XX% XX% lower are see hardest have and recovered, including customers was balances March, consumers XXXX XXXX, XX% than the a XX% our to to by was restaurant ending and above for Xst during travel compared activity XX% to stimulus, October third quarter for while peak I'm spending XX%, -- X%, XXXX. who for median up spending federal up the that who the pre-pandemic third XXXX. up in federal-Aid. compared hit receive sorry, XX% up did federal levels, the to ending customers and to by continued week increase up not debit continuing during with spend, in card remain higher significant up the Weekly receive liquidity customers

overall strong. I lows. difficulties continue rebounded to was pandemic, X% October performance at the quarter, was Supply And said up credit at base. line during still compared that the travel-related Commercial hit which while to ended our client has continues significant XXXX. the shortages XXXX hardest historic levels, Xst, labor category to were third but stable to week spending, slightly not down only represent XXXX banking be the loans During and significantly was the the remains up chain fully from challenges of as end earlier, yet utilization for

on progress you update our me made Now, priorities. we've on let strategic the

First, of with Fargo's milestone the Wells termination a top building priority. significant CFPB We of risk reflects conduct sales at infrastructure hard appropriate recur. reached by work remains ensure retail Its XXXX to that and in years of not the Fargo control September the and CFPB employees improper intended regarding been Wells the consent has across an the order issued will practices. exploration core order

OCC As compliance the we a in years. that remain OCC reminder Having year actions a the be that confident important the significant program our meaningful I regulatory the way. related BSAAML it progress, deficiencies a in is existed said this reminder, ability when this our setbacks have our January. milestone to arrived the believe the terminating second achieved the order consent But and along priority. we with making gaps are recent the close continues that I must likely that, case we're to remain remaining over to top I several next are to

oversight, different a operational are Company transparency, We greater were years bank ago. we the disciplines. today with several We and run than

new home commercial of lending, small our functions business card, banking, management, team, investment new I've personal have leaders. our are Operating XX also Committee services, business roles. This includes credit many and have digital control XX auto-lending, merchant leadership of now We many wealth we of their in banking. new and new leaders members to leaders spoken and but new in consumer strategy, lending, retail a banking, services,

a we We function consumer management and of invest it. continue an and approach different sales infrastructure oversight consumer a in Our created take and practices. We different office the is to practice control today. to

is customers. we increased dramatically Our payments approach the meaningfully remediation consumer amount have and consumers different paid to to to accelerated as have

resources the risks While we're committed our devoting and work. necessary to regulatory to

in strategy improving will with capabilities we easier customers easier-to-use multi-cloud announced to environment. to digital-first critical the be our investments to in new step multi-year products long-term a is services and digital focused infrastructure move This we that for making and services. a us the are journey us. do and offer on and products digital third We're the business it quarter, making offer. We In also

usage, Clear to tailored Zelle our a offerings momentum and our up now accounts. XX% We're are over users increasing buyers and the different out easy fast from making executing consumer overdraft product year. track on are and checking app. our with million enhancements and provide and no-fee XX% Auto payments customers mobile online of ago. X's with We significant been has We've to financing. next also build beginning on Zelle customer customer work network capabilities new sales previously, about year XX% and outstanding spoken transactions pull-through and products on volumes as joined At segments. Access, a I've North our dealers American also compelling simplify And to our to seeing to up car we're that roll X

which fees reevaluates As a in day. which transactions overdraft-related over X.X business direct all and avoid has the have prior accounts, the reminder, overdraft in September third from automatically received helped this customers ACH our launched million incurred overdraft. feature million in XXXX transactions retail of and have that rewind feature, This X.X deposit our quarter.

and segments, changes service, including and the more we're these affluent consistently substantial making serve intentionally emerging products, customers For affluent routines. to and marketing, management

talk rewards us month, cash, launching this payments. about active hear successfully we in CashBack the customers earlier quarters. Card new coming Card launched After this in You'll executing that our Reflect we're making July, Credit for more on-time how

another will Derek this us. in the attractive of just segment of small and for we couple a start growth days, Ellington business., head new is Our believe

our payments Global Management our be more joining be This brings role effectively into Management capabilities Fargo Wells as Treasury Treasury the one Paul leverage of Payment month, Head Camp businesses. worldwide. Next enable efficient and Solutions process and manage new organization. their more Which to and will help Global clients will our to funds Teams together us

While including the CDFIs, jobs. support from we've improving PPP communities. processing the small impacted now been committed by owners donated created products loans business of for business help and XXX,XXX fund the focused continued to maintain expected and small donating $XXX is voluntarily all in which support to to we've support funded to than small recovery, our in fees the open We've turn business our pandemic. services in we on offer businesses more customers, gross to XXXX We XXX,XXX XXX million

launched to $X than the women-owned performance data, Center and program empower Lift third residents assistance. in payment More hub mentoring moderate-income we Additionally, businesses Nasdaq and down to with We and quarter, we to our and disclosures committed includes Neighborhood and report category. invest women-owned low And more home new goals Philadelphia ESG the which on job in XXX Entrepreneurial resource published to race, a help businesses. our Connect gender, by updated program with million partnering to for XXX workforce

we look concerns, of and I economy its a sustainable work wave below point COVID is discussed remain, to as plan call a will remain for in continue to certainly at make want the to turn forward, stalemate, to the to communities. XX% fiscal to As are including that thank the hard leverage at U.S. the inflation year, our subject same assumptions returns. Fargo with also strong achieve years the the remains debt are condition promising. its target average, risks financial policy infections, latest recent and for well. XX the while outlook burden level lowest strong companies We on Consumer's long-term discuss for better some the to increase ROTCE, now Mike. to and customers, past employees next our then over will continuing I in Wells our shareholders, basis run-rate on and we've there

Michael Santomassimo

we're helping our Charlie and everyone. on morning, Good X. Charlie. how customers Thanks, Slide summarized communities

with start our third-quarter income results X. the for $X.XX was share. on common to going Net for X.X financial am I the or billion So Slide quarter

continuing Pretax, in was from decline pre-provision driven a than included allowance lower ago reflective as results revenue a the the lower year economic by credit of by net profit in Our income offset the expenses. losses. X.X interest in and billion credit performance for grew recovery. more This a decrease is improvement

to Non-interest from stable initiatives, our in And which million due equity venture income ago. have Charlie losses $XXX expense Within private declined XXX We a from enforcement that, predominantly rate. was year ago, year as associated equity the our third the capital helped million September gains quarter, OCC quarter second improve continue but a and to the increased affiliated run with businesses. from execute operating relatively the action. included on highlighted, efficiency

We areas, and mortgage asset-based were by investment increase also corporate deposit-related, more from a than increases other lower fees banking had offset These revenue other in as in revenue advisory card, banking an fees. investment and banking. in and investment ago, lower including markets declines in well as year

the rate Our XX.X%. tax was quarter effective income third in

quarter we repurchased Our billion common the declined to CETX in ratio as of stock. XX.X% third X.X

will of be As a minimum lower capital a G SIB the surcharge. reminder, first quarter regulatory X.X% our in reflecting - XXXX,

risks other under able in included -related billion to our flexibility including to depending conditions And if period, buffer framework, capital factors, the will distributions. stress we plan the repurchase capital the possible, on have four-quarter market XX capital than and increase Additionally, we COVID be risks. the more over

Turning net second declined net points credit million to loan The estate portfolio quality charge-off and real improvement ratio was improve liquidity on X, modest and our XX loan improve broad-based Slide recoveries retail has was continued recovery performance properties our quarter XX well. quarter. included from energy and real continued charge-offs valuations. estate. The the Commercial net credit in the and basis reflected X to basis points. in and in commercial commercial hotel perform increased portfolio The in to to

for improve to above homes quarter Consumer from reserves result and take out. While plans continued loan play return any as XX or points. widespread office, sector working office will also to to basis with and closely charge-offs million values declined a autos levels.Net impact cash strong a in not remaining to time and that the seen any second believe to watch the we have we performance stress XX pre-pandemic collateral hybrid this continue consumer credit of

quarter, the lower to have or largest was Non-performing recoveries across auto real the portfolios back We commercial with prices. types. the second credit given significant card on from and in commodity losses declined by our net X% XXX declines non-accruals continue fundamentals of in and driver, all estate asset assets higher in both energy consumer declined. The million driven improvement

estate. the uncertainties continuing the releases. economic continued at Our The we and to level credit in our the growth On reflected from consumer the the for Average commercial commercial grew deposits first of of mortgage quarter we credit loans industrial since targeted a XX.X portfolios. offset highlight to relatively corporate we're time in decline commercial billion by consumer -- Total continued from and billion and declines real our additional asset trends still would investment end economic recovery growth continue, card, the in auto, remain. up other quarter treasury, reflecting largely ago manage quarter or quarter offset strong X% residential loans deposits. and from modest XXXX If of current of first with loans, and have the with XX.X by growth increased stable commercial and partially Average and loans Slide corporate with allowance a our the third most in and banking and in in X, cap. year were consumer banking, expect period-end loans under businesses second performance. reserve actions second

on third a And we long-term our net end the interest balances the purchased loan billion impact next of the billion the these mortgage-backed grew decline At Slide end the second quarter. also under yields on from PPP offset mortgage-backed EPBOs the premium was we XXX driven We The the loans outstanding. quarters and million securities X, million steadily XX quarter, the by of do the a and was interest loan over out had and amortization end substantially earning third securities. and net or of the a loans or had balances we from year. lower EPBO partially to from several quarter, These down XXXX. decline X% to loans from to contribute by by of X to billion expect end X% and decline expect on we in at interest ago. lower next income Turning X.X assets, of income of of income second to be by billion balances quarter down debt lower ago decrease net XXX or year a year the

level be We to continue of the XX.X billion for range bottom XXXX near to of X% initial guidance to down full net interest of the from income expect fourth our the flat annualized year. quarter

lower Turning made a efficiency on driven losses we've XX% declined decrease X, operating and and to progress restructuring year expenses on ago. by charges slide non-interest The initiatives. from the was our expense

XX% X% initiatives expense reduction During professional occupancy the helped reducing have related months locations, increasing of An a expenses on costs Occupancy in offices. and from staffing. decline have by including lower drive organization, and number and management first X outside to the branches salaries by X% control and reducing consultants of year, decline and expansion by declined this costs, a services spending these also and eliminating optimizing our contractors. in the in COVID-XX branch across layers, costs

specific some we're provide on of me the Now some progress let initiatives. examples of the making

to up to on to the continuing mobile costs which consumer reducing The work in quarter continues pandemic run logons a our ago. are business. We underlying the banking accelerated digital, XX% from third customer with migration year

to While and year were have were than they pre-pandemic transactions ago, as from teller flat XX% over levels a migrated ATMs transactions lower mobile.

by headcount our the number X% reduced branches banking $XXX of Over year, lower by and we've or and branch XX%. past

investment a strong expenses, increases Wealth in We continue and efficiencies in reduce to revenue-related processes. and has number management focus simplifying on our have certain compensation. further branches to initiatives generating including cash and handling time designed reducing branch of had

third in from was year a ago. declined non-revenue-related X% nonadvisor headcount a ago, down executing and by expenses on XX% efficiency quarter year the However, initiatives, from

creating and We divisional aligned and eight our coordination our have wealth better business management efficiency. leaders

by efforts products, consulting also layers contractors from efficiency have more to across on various and and operations support our but client fraud revenue-related all The lead charges, channels operations of of losses footprint. in three-quarters activity initiatives. our the implemented with lower continued reduce areas, higher also and and is optimizing than higher Note through include and assumed nine realized We initiatives restructuring make roles. we many rationalizing has operations, functions footage exits current for exits outlook collections. process excluding reducing million eliminating centralized third-party levels This manager reducing including results, business expect XX.X that banking supporting consolidating the have in a had an additional and expenses including earlier consultants. on and efforts restructuring that charges and investment of actual spending efficient over cost improvements working from have and and and regions, result by spending square cost spans have billion. headcount, year. first also expenses, where sectors of XXX the eliminating management driven model expectation expenses vendors. we time. times, should insourcing, also We've operations-related includes card arrangements, business has location group approximately been teams, reduced Corporate the we months and optimization, of opportunity, reduced strategy coming progress low XXXX that on and we enablement outlook savings operating real longer has the optimization, We're reducing With already, on during distribution with year. technology benefits in and will working vendor while Automation costs total estate enhancements service market opportunities These or of savings

Our related our expense management quarter. and during also expect fourth and close services corporate Fargo assumes to to we asset Wells full trust of sales year expenses outlook a business the these

the We impact these will after on update expense of they you initiatives close.

quarter. first As This million a losses outlook operating million assumptions be includes full-year fact of year. outlook we for X the the than the incurred assumes year. operating the approximately of mentioned, our billion to operating of at the in expect the approximately that losses our months dollars fourth $XXX XXX beginning higher accounts during of losses the And

requirements. and especially work satisfy Just regulatory to operating you we unpredictable, to as continue losses remind our be significant that can needed lumpy to the address

of we million is Our as be associated expenses, current billion higher than equity driven revenue-related the year, markets more revenue approximately this beginning compensation will offsets than assumes in year. Strong dollars expenses. assumed any is outlook which at increase a good thing XXX revenue-related the a have also the the which

Now, debit a to increased lower year volumes, activity, to a decline ago, we ago, waivers. by revenue a - and due card balances. Net spending from business in year. transactions Slide from from in origination fees. income banking lower fee customer with primarily by segments, declined to increased servicing Consumer -related X% declined consumer waivers lower on and higher driven was The margins, from from year on income revenue last our of the ago lending by securitization due X. banking loan a year XX% to small consumer loans lower ago, sale lending gain banking card were including driven primarily by turning mortgage revenue starting and COVID in driven partially and increased Auto X% there year business increase mortgage-backed and response higher from declines interest securities XX% loan offset Credit up also a balances. gains These in higher accommodations fee revenue an pandemic. purchased

XX. Turning key drivers slide to business some on

X% retail. had quarter quarter and the pressure declined higher originations seasonal purchase market. prices. originations from Despite we've mortgage inventory driving has volume relatively environment was year with competitive decline growing quarter, strong downward X% consumer rates stable, trends demand originations and sales record in are the a putting our up and second second for decline than by remained offset from XX% consecutive shortages typical of industry ago. on in more The the modestly autos, recent We originations Our given to expect correspondent X%, currently increase our mortgage fourth a the with which in

and up cash by second and was point-of-sale Credit the year in new to credit transactions quarter, of second across up XX% accounts categories. active quarter. a year of our driven XX% all from from new had quarter from the the X% We with second were from card card XX% a increases a the ago card. growth stable ago volume from purchase Turning strong relatively nearly debit launch card,

of While payment rates from grew quarter first balances have balances since XXXX. average the quarter, X% high, remain the grown time the second fourth

partially year lower and balances Turning in primarily declined deposit-related XX, banking loan deposit were in due to ago, higher offset Slide from to balances results commercial rates, a middle-market fees. lower X% revenue which by interest banking

lower a year XX% client lease lease revenue positions. quarters, levels efficiency ago, to Asset-based low, consulting XX% from loan lower income. stabilized primarily for impacted be After expense as by to third average salaries lower leasing declining driven and a ago, lending the lower strong initiatives well declined Non-interest consecutive from driven and balances and line expenses declined by cash in inventory and X due as client remain continued loan by quarter, and expenses. utilization demand loans year low

the However, increased quarter X% there was balances the quarter. X.X and billion some increase in from demand or second in period-end late

estate XX, by deposit increase balances, ago. higher a by to expenses. to year This our year XX% from loans grew revenue a by banking, Slide results. commercial and salaries year declined expense assets average expenses, corporate made a occupancy XX% year from by from commercial to Client valuations. The on were the securities-based driven year markets investment lower Wealth by revenue lower due lower continued ago, was a a the primarily non-revenue-related from investment reduce market ago, from our due and partially primarily due student ago The and in asset-based activity increased non-interest asset due trading from from by driven under driven taken in conditions. net to portfolio in and valuations. XX% Turning decline total classes underwriting portfolio. income, balances to declined sale results XX higher year higher growth the sale year on XX% Commercial gains by lower predominantly a in of earlier higher an of and in ago. on expense across to fees in due ago, than loan interest highlighted deposits highlights non-interest due lower momentum primarily market market from revenue XX% lending. affiliated our gains private by grew $XXX initiatives. Slide Average revenue the up advisory to and actions included OCC lower income Non-interest driven primarily increased by were gain And capital a XX% the management higher fees, corporate Revenue to take will more on September. that, from a the due banking we manage equity and ago, in equity businesses. loan loan a offset Revenue-related lower, was interest million in we've origination cap. Slide driven venture by asset a from driven servicing revenue to associated our to efficiency in compensation equity initiatives and decline driven drove questions. driven higher sale efficiency balances increased real progress interest the expenses reduced with X% rates quarter stronger and capital income, margins your net the action year securities I ago, investment from and ago loss enforcement income declined expense primarily XX offset X% lower market's With increase a operating second now operations year year primarily most in including fees. from ago, volumes


this time. At

We time question. from stand to will the If your Please at been record Instructions]. by queue withdraw [Operator answered. question the question-and-answer [Operator name Please prompt. begin now [Operator your first question our Instructions] session. at your has for question the Instructions] any

Piper of come will from Sandler. Siefers first Scott Our question

Your open. line is

Scott Siefers

the regarding my in particular. I could you certainly address the Good morning. commentary fourth for I the Thanks quarter was cost taking hoping appreciate outlook. question.

expectation for come as had of the you year-over-year costs I guys we down have next the could think years. that forward, look couple

guys inflation in many Of a very - course, peers, people your many things vis position right now. puts unique vis-a about so are but like you talking wage of

your importantly, what there couple and you of even cost such to still wage years? could for next that, year-over-year outlook higher is curious, flexibility see despite seeing in Just you are that more degree enough the pressures down existing

Charles Scharf

is question. -- This Charlie. for with start I the me Sure. the wage let guess Thanks inflation.

we are seeing very the inflation. wage categories we different have. different it's parts across and shot I across different very I that Company think would certainly say different of

job. where Company wage we're these you of acting and we of and middle to the as very, when question, we look see the approach in it first thank they're do look We we're we roughly making in very paying through this time I'm as are everywhere pressure, as from calls longer-term. of it, broader year. our about it's so $X.XX every for we're be do of whatnot. actually entire accordingly, at but be our the exists And the are of trying what in ensuring to see with well that them fair say address across regularly which doing, And be from would people prepared think, everyone we an we're for things Company that thoughtful like the branches, to attrition at competitively. as sure continuing we're end very October not I they all, makes as it hear we people that can and competitiveness as to awards equate something at what I but But certainly To single the places of that year. To the for beginning doing the the evaluating out hour budgets also as now sense there and we

we've still that overall base. said in the the which would net like expense goal still Our past, same to is is the reductions we see in

We two unique position would I a ways. that, are in say in in

significant excess have day amount assuming in near that out one not be us us, the just required, for the that's for radar an have screen still across But the we're and of First the we on spending we Company. of we expenses on that we're future. that's that when do not built but right orders all, opportunity will that all we get efficiencies even tremendous now. regulatory But

You can see it in headcount.

which I places, ratios here inefficiency seen it back. the see I across it's same is other that lot Mike an onion thing a can of think the that is found And peeling I've and like what You businesses.

that And way. think see the those Once see of culture. engage becomes incredibly You actually the level to inefficiencies, you entire you get next it start the Company moving we clear. and then part what's is rid of you

quite also said still we we efficiencies have which, whether reductions, us in extremely as will think can for allow it's we're well. focused both net which extremely products So hopefully to but we've meaningful time or pursue that technology that appropriately, here some there on as invest

Scott Siefers

quarter. Perfect. for might access bit Thank that in made Mike, have seems where expand larger please. on color to between be demand hoping, little in later better instance, more was just seeing able loan you markets. I that improving growth, seeing you're loan And to say companies, a divergence about could versus might much. you we're little with to and very demand, emerging middle-market then, you a smaller or be the provide the excuse if on comment a the corporates of Curious me, it you improved demand we're capital what There seeing

Michael Santomassimo

I the for we're contrary are the will still demand their you you need But some divergence and in of right And see assume which the think in have a client-base, asked clients because I middle and little for But on and to the far bit end the chain end, we're what supply lower excess of base with the seeing Commercial Yeah. emerging what pipeline liquidity in now. of demand you the so question. way build know impacting crunches lower I in a less is credit. part you end of the and other at client seeing an as that's still their peers look I sort the actually upper that's if the some -- at of across the different with need liquidity we dealing think -- issues example, lot look our Bank that as this. of And they're

see we'll -- think out, over so as the more demand things that'll commercial play that's seeing what to consistently the I time across more And start client think base bank. I we're in

too. I we you, think loans give more growth on and when When in we at as them consumer whether we bit And That's the sectors there, things non-conforming seeing the across declines growth -- really finance, we growth. core, balances that well. data in we've lending driving seen that our on are by through corporate of book see you corporate investment and seen some broadly really that of some then, a seeing the are Investment other mortgage we little that's some you side, grow But auto, year. in the look you bank. of Bank, estate, growth last securities in have offset home that a real look And it's look lot card. of the the happening bought from kind you commercial subscription, are out

period get manifest out balances to just in terms in and going stretching of to the no any a it so in modest the a of balances as that gets so try switches, be at customer And see always it's to start the more of well you one that continuing will way. it's and heart just because time it's -- in think end then And least far. it some greater bit And But like we've meaningful so I not or to certainly what final more look really sure at pricing take a we've make things relatively a still encouraging result. to of the on I'll terms way it little question for or we're are encourage as again, play rising to gets same seen, it to We're thing had. of you say because the that credit I these question. would to averages far disciplines And to activity.

Scott Siefers

guys That's very much. terrific. Thank you,


Ken The Jefferies. of comes question next from Usdin

is Your line open.

Kenneth Usdin

Hey, guys. Thanks. Good morning.

just there. just bit a you bit how in could underneath meaning talk your of need of to just what works you incremental ongoing we and us little to the from if like sheet securities about have to movements, some closer that or replacements getting improvement Thanks. do the what's are terms -- balance rates remind a on at how point premium, book you where are Mike, And outside closer in to the increase on mechanism off? outs ins saw and you wondering, can little purchases the rolling point NII Just of

Michael Santomassimo

Thanks, Yes. Ken.

backward, in I from amortization said continue you down come but couple And I saw you but about the like we've to quarter. you bucks we're million when a benefit we to our little is that as getting think of premium bit, that think it we expect down. and a maybe think results expect premium saying, in less, so $XX been a amortization, roughly coming

somewhat look quarters. couple I think will the it be of as we at gradual next

to going not You're see step-downs. big

the maybe down I quarter, again we come than it'll fourth saw from in think quarter. third a little less to the second the

over of happen. exactly the be it lag and over trajectory mortgage amortization. of a data. period place. matter as It's the as it have what a are to the rates down rates three little the function expect months, there's time But bit through It's to you've rates, been fast where that'll a of still coming a little just As we over last all comes seen a on premium general how and

I of the again, the question, think -- the part second second on part was the what Ken,

Kenneth Usdin

rates the the and reinvestment underlying versus about book. portfolio securities Just

Michael Santomassimo

-- third second most on even were much, And today as rates No. I Yeah. quarter, I than you for the reminding people they of the quarter. keep that, look are lower again, at much

really, in them to of for the have And obviously, of is rate since reinvestment overall and match portfolio, a stabilize tail still and off come gap to week rolling portfolio. to so, for but That the go closer of getting -- rates to the we've what's way average out rolling at slightly over closing, to the end little we down so. the or quarter terms in the what's seen then rally last

Kenneth Usdin

Got Okay. quick just one. And last it.

continue is reduce that improving Thanks, to footprint reducing meaningfully and it? Just the balance on an is. debt been of long-term helped that mix, debt to the much the Mike. and lower the long-term footprint you've of sheet opportunity cost by more How

Michael Santomassimo

going and I be think good we you I much hold. Yeah. No. how have think a TLAC, And question bit. out a little probably our know, It's TLAC that to constraints to you model can

a debt it's change. some at mix point more go next continue bit at likely to point the to room some -- to bring optimize here it's have little to But down. likely we long-term the and So year, that'll start


The Chubak question Research. from of next Steven comes Wolfe

open. line is Your

Steven Chubak

pieces I'd is blender. ask it of a I good last the that Hi, all you And if line around Ken's component mentioned, the outlook. in stored different questioning take on afternoon. the NII follow-up

NII to excess commentary, peers. balance given and loan many grow still elevated the relative is growth So reinvestment reserves still expect modest of Fed, but headwinds. a of overall the some steady premium, but more that versus your just Is guidance of at appetite you some end and percentage can constructive lower to range separately, what's the it your deploy reasonable benefit, for the liquidity quite at sheet, your parked least excess as 'XX to

Michael Santomassimo

Yes. Maybe second I'll and back first part, the Steven. start come I'll one with to the

last happening mortgages patient. redeployment, look think the we're pretty I bit more being and bit been at question, we about little just same mentioned the And lower, the rallied months. they made much time, Rates were you a still As Ken's compressed a them to over actually as between what's so recently. basis treasuries is relatively few At expensive.

that we with I And on this there's coming rates and you tapering we're at downside and more there think happening upside at so point. think what's -- and than still is to look if risk -- inflation in so

And that the did the little sort redeployment making as when the at there. them the so themselves, spike a end third we take right saw we of opportunities being our of look were of some rally given And we we where there. quarter and we that advantage accelerated in at that we'll present patient we're bit still purchases

see be months. we to that, we'll over things the continue we're develop coming so but to patient as And how going do

we a to If that'll rates faster see move pieces If growth portfolio there's months And I bit that'll to giving you be and for of positive. expect, a lot the see there's think a out. lot a curve securities just range obviously in play higher the We still full the about loan for up still been we year, of we forward a to range the because be quarter. the what to, little a a where keep moving have a make reason purchases to than has, than try we few we've if positive. with have fourth think

end and And so like be there's client things determined base. up factors see then rates forgiveness that drive will that be PPP where margin, on we that that important. based in our sort other on will of client the trends the throughout And and

where where out. those we could scenarios there projected than bit little be play we I and a So depending we all factors think bit better are could scenarios there, a what be there's how some little worse on

Steven Chubak

color. And Thanks my that's taking great for question.


of from will McDonald The come you. next Autonomous question John Thank Research.

open. is line Your

John McDonald

wouldn't next about Hi, business goal for a expenses. Mike to relative the I to year that now, budgeting the you've down think is follow the wanted up from and goal that your on When to expenses we understanding be that we it of -- that's think aspiration through XX.X and the can Is gone help include and right exits.

Michael Santomassimo

When savings X of we're if business Yeah, of that the describe to starting some separate close you about these off, XX.X% be John. new place. how April, we've better We driving. we and roll the businesses new a when be the for our efficiency lack these we'll starting take about good about got clarity And and to that'll going be your core detail and a exits to point. -- in gave very a the the baseline level, the think that transparent subtract we in goal way there's from it, it, high reset X on and just and think as dollars

John McDonald

terms of in thinking? is lines, currently And you're what quarter sales, -- the Sure. those fourth I gains you the come assume should on in same you those and expecting are thinking probably

Michael Santomassimo

were be in gains how good what happens. on XXX% the of all not will They be obviously, fourth fourth deals was in structured, be the it in a And clear may fourth it the quarter we'll quarter, but of will chunk when not quarter. be given the the that

John McDonald

that? staying other on the the we you under give grow just last around coming back that liquidity is how we want the where Does come while growth much you asset stuff does about loan thoughts us for some the to cash come And from it for and balance do me how capacity from? think have Can thing Okay. sheet. industry, about if loans cap and to moving mix dream

Michael Santomassimo

all growth. faster loan dream We of

I think we're like. aligned there

if grow. securities of could nice it that -- much point, sitting first that's we cash as plenty place. we plenty FED initially to be faster that loan than got well to the we what we've room would or and grew a side be needed we on think have at the expected, of But this portfolio whether the it to, capacity have. reduce would I to problem if grow comes the But at from

John McDonald

Okay. Thanks.


America. you. Ebrahim Thank The from next Poonawala of question Bank comes of

Your open. is line

Ebrahim Poonawala

Hey, taken Or think wondering you mentioning same that I should you there of the in and setbacks to you investors, time, we of? big is picture whole regulatory At your morning. do risk process. through you address Charlie. just within both one a that? when the think when we how stay go Appreciate shareholders talk as of you was the it that's guess talent the I asset could be [Indiscernible] from good client well about question, about think a terms gap. franchise, what the if just standpoint, care longer I

Charles Scharf

do of? it's cap. to I'll taken We care it's I we about think it every think you well I it. start Well, think the take -- day think well we stay say I but that about there, think below would actions

is to we about, the balance have asset spoke be need where clients really the just Mike as we for think which you. side room significant they there of sheet, I on want

hustling for matter it And their so we're it's doesn't a you're out business, whether on when or fulfill to whether able certainly consumer corporate. needs it's

experience off the not on sheet these sheet other When by but where had think been franchise have to my have -- a work we about about long-term up sheet, we different very, having impacts, as the position deposits very think And and to if has I we we decisions would with And possible in off-balance side that think impact. very been think is. balance choice, to we're for and more about optimize to communicating continue client a that certainly smart we very customers. sure come solutions experience all. deposits have to little understanding way, we when that the customers we Our are what balance has find been with as move at little impact liked the customers of growth way consumer the them. as Again the of I with we're limited in that we has a trying we make make to ways be have

open people of I I Wells at said, an think done have the side. balance. I the here for amazing as right And as job think we're asset anyone that striking businesses on

I think customers appreciate that well. as

Ebrahim Poonawala

on what full-year shedding one we implied impact for third the quarter, should perspective. was your number? And you on one, Mike, does the that quarter guidance, third-quarter the levels? And from quick NII at just fourth for of NII. can NII that that PPP look all grow of Thanks When the -- you net at the disclose least fourth-quarter should

Michael Santomassimo


the I've feel can be on of you on you you pick fourth we bottom where the you and assumptions said, near range on as your I how will the And be can about model will think are. based quarter, think based it. what

a give think how on impact. forgiveness sequential pace than But the forecast. be to a that than clients quarter little you bit to that's I about was all XXX was from the a a small what quarter based that a little that request saw third clients. we second lower PPP million. for quarter, And always fourth And just bit of context, little impact the be pretty expect will would our the lower and we in get that -- overall, we potentially, but be --

Ebrahim Poonawala

you. Thank Understood.


next Pancari Evercore Thank ISI. The question John you. from of comes

open. Your line is

John Pancari

Good morning.

think realization magnitude you're developments those the X.X the expense we saves? the remaining the Thanks. of or magnitude And and the should in how of thinking side, how regulatory that about the would you cost timing say On billion the of the timing latest any about saves? impacted of

Michael Santomassimo

the you the as Mike. X about Yeah, to to impact year we of were build as the the in of billion get this John, year. annualized going starts beginning billion and said we X.X year, it's go through

that in run XXXX. the you coming of So of out rate some get

to get multi-year in we'll first to to of new of get to expect XXXX. stretch. introduce capabilities, of time we're more in mentioned, a the as we some take what in the will any that all of I a other to just have this of takes that And is by it. better give or so as get to months not going you And beginning where at view said longer XX get technology year, we plan, we January, the new some as it And at. And

John Pancari

later And on And maybe as business, on your in loan payment you're it. buy more thinking spending the seeing product us the product the thoughts you're Thanks. pay about separately now, give on Got on set. card including impact just separately, trends rates. well front, volume can then any the then as you how of Okay. detail

Michael Santomassimo

bit Yeah, I little they're payment still really at bounce a think the when high. look rates, last month-to-month you They in around quarter.

So -- but high. they're still really

happening And a from point-of-sale which that time look the year on depending getting can XXXX. XX% quite ago or look the you the in see expect, overall, through move is And at quarter, and bunch year so, we second that based growth or new at, around the products are but sequentially. on X% I'd as under -- a from different week that book, in a launched. really purchase bit period. patterns, volumes point-of-sale see, what in saw can account when quarter we've on given pretty based I as seeing, increase from the on periods the where And last pretty highlighted you'd dropped say, or spend the stable in strong, in coming you versus still that from up getting you what are you're spend volumes comparable growth the think is any then up bit a you year month, we're categories pretty what's quarter seeing the you -- Charlie ago, When And XX% you're the based through. new stats of a balance an quite quarter, second XX%

there out variant noise really despite the and still levels as it activity related other Delta the see characterize things. I'd to you strong So

Charles Scharf

would would And -- merchant. out I and now, pay later say, buying the On I providing on Charlie. later, pay is describe serving of the as another this buy option credit

others a but still it'll it's supplant have overall it's I for exist I think as the relatively of think to other of types there. be a the But place portion small it, credit that out market. not all going said,

the own own our is merchant And addition we place business. ourselves. my over got services time, it relationships have It's a will we've retail have guess personal continue. point far have a lending We our significant these It time, can the be will number that differentiated reasons seeing really for products to industries will that that of at consolidated And we that business; experience a other we now, more the at proliferation have. some provide consolidated, people some merchant. in including for will, of all been become involved those a

So hopefully that helps.

John Pancari

Appreciate Charlie. it. Thanks,


next from comes of Thank O'Connor question The Bank. you. Matt Deutsche

open. Your line is

Matthew O’Connor

key comment bit, know, about potential everyone whether up bomb this little which meaningful follow additional specifically the of never here don't for have on a " broad is you to be point? turning the stuff. cap, something regulatory like just just for prepared And again wanted here to between I Charlie, in like setbacks just or statement a guys. views case, the end likely a to more should asset if "you it's think or of I we speed and landmine mind, risks push the Hey kind and

Charles Scharf

extraordinarily I make asset describe thinking important. that, we with. important complete sure also, still FED But that for with you're cap, have Everyone about consent that sure. important You that all that we want orders embedded order the think asset agencies other know, one us the I if we would in focuses is have XX-Q. for cap broad and But understand which read things this other we still there's is our what's is are And dealing believe I consent order. just very And -- I it to make you way. guess reality we we're of the transparency, on the to to set sure the which the want reasons just

mine. to of that when based years there's are been to on do We in land It's in overall we that pure there. hopefully, make mines, all number [Indiscernible] that that I minimize were have I different work saying. upon we've that the sure place about important as upon it's transparent. nothing in these just are today. of said than described things. progress versus progress, as a But that we're talk what are other as in we're inquiries likelihood things you completely think before, land we We're of complex. the the we place ago, interconnectedness, just initial due practices the judged based judged that the practices dates well And have some are And of

it of we're things people but So and something carefully is to doesn't on opportunity change nothing to that like Again, I and forward. are. just we want things our point sure we choose to the moving like we're of close But that I make are we see. internal understand that we these things. about -- surprised don't want be which that able confident believe happens, being are you so date, that, out we and about there that, the how net view to these if very changes metrics have every the things what perspective interim words my all see now outsiders absolutely can't have our able

Matthew O’Connor

the that. long we a the as of Like any because there's a in take? level But the there is how follow-up, is going banks accepted on submitted the OCC, there's large cap Like, is and the of outside some have lot think, I -- tell communication, you communication -- And point there content of like the is understand cap, do like you conversation FED like the But the is plan, to about you regular with all what at just asset all to conversation I on if you with can even this tell trying offices, there. think asset tell like regulators. least and us? the know conversation us what does you what we can't on so of I the sits can't a communication the fronts, it us,

Charles Scharf

things. couple A of

is this all all, not of First think we I is this think I us, banks. and true have of just

FED, SEC, our the say with interactive CFPB, is with the supervision. their there, We with that you Absolutely, relationships. the and the have examiners to open the clear, extremely in all our other we in the regulators, overseas FINRA, consistent and regular we to all with OCC, FDIC, many have the regular found conversations regulators. have with basis. regulators. the approach an of relate including on as relationship issues That way offices appropriate a to be I treat But FED

have cap. at I do. the a think things And deviate what a talk this I I've asset then as said, It is that haven't say. consent from would order, it seen describes you we that. comment general just doesn't plan. in I there, say when we'll look to submit lifting And about the

really we're of to have have assume engagement just a there. to we you get -- do. we the that clear is that we're what so, And level And constant there doing work on

Matthew O’Connor

Okay. That's helpful color. you. Thank


you. Thank

from question next Gerard Our RBC. of Cassidy comes

is line open. Your

Gerard Cassidy

you. similar strong the very can you Mike, with to quality many us share industry. credit your in Thank is

when points Your your when long and think go reserves of net and how basis to a And widest number guys XX could in one charge-offs. sustain of a was a when we're it want more that we it charge-off sometimes to reach back points out. ratio, January you of you put have you points. course, idea level relative difference, of normalized all of and incredibly looking -- an basis loans, you was level net may XX basis low of [Indiscernible] Do that then about peers. such an may at day, your XXXX, out the [Indiscernible] second, about that I strong XXX

go So the just well? where reserve thoughts could as any on Thank you.

Michael Santomassimo

A couple of things. Gerard. Thanks,

point, normalize. we're more all so people, if rates. to think said have will far, get normal credit sustained back new when think expect we've charge-off normal I higher And the at to that, balances some I might the credit different think, wrong how I or all, Having about throughout industry going we keep that higher time. in liquidity be been

out. play that's still think I something So that

credit highlighted high pay-off have in liquidity rates in at chart, and this as script point, people balances. his think I payout seeing still Charlie -- loans. that we other We're high still cards

And should we XX shouldn't there's the so, normalize. they but no we points, not bases it it that in basis reason at XX think may performance near be to in to credit continue near may strong be the strong, -- quite least to how have starts see And will historically term. still term.

we add me return of Let think think earnings the sustainable Company I number on power one that just when up that. thing it about ability will about we talk really to I we go charge-off our to as the and from numbers, long-term -- there. assume get think

we that here. So for won't make you it about low, And extremely our adjustments stay we we that. agree it's returns, think as when think about

last if And so, will it relates maybe, today, we'll explain then be our sooner we'll as year, be number the see go. there And for rise to hopefully be but what ratio to if to next hopefully do whole assumptions, they not, very we and said and why. if start couple it relative the to releases as in the trends plays to we've get coverage then to continue, out more prove as we coming out quarters, will quarters. scenarios for we continue of conservative different of have we'll continue over reserved And

economic one, I the point, environment - think given get back very your almost whether time. you unemployment an you I XXXX, Utopian if first answer, to a going a function at to now question have from be of the what consider, what pre really think X.X% think day different that to you I think to is, impossible with of variables to a at I it go quarter is are seasonal not, outlook and think levels and all And back a perspective. a risks had COVID we that I or it's very it was [Indiscernible], was

things have so out, will I back hard outlook, think But we'll number to And more get it exactly to think we that releases that play go and say. continue we down. if to will

Gerard Cassidy

as Very us market an then good. customer existing initiatives? successfully base? you a update penetrating you your investment guys the And in follow-up, in middle banking can How give been

Michael Santomassimo

time, I still really way so opportunity in really in relationships we've some that's got I'd very We in or Gerard, It period started late on way long to built happen year, -- it it we've the a that focus say we're out think doesn't those over a two. highlighted, last early. put really of quarter time but want. Yeah, extra disciplined some a a make we to know takes big sure we

seeing pretty think have that, encouraging not but of that before we're a we the opportunity shoots over do been quarters position have where out, the that play a we last I it'll we've won few to some but some in green opportunities big. might is take months or had time we've some couple think to

Gerard Cassidy

Thank you much. Great. very


Graseck The comes you. Thank Betsy from of Morgan next question Stanley.

Your line is open.

Betsy Graseck

Hi, you doing? how are

Charles Scharf

Hey, Betsy.

Betsy Graseck

branch get on network, you just opportunity on questions. footprint an of wanted how more updated optimize? or your today, see to and Two to One to thoughts your expand there is

Charles Scharf

That's question, Betsy. a good

like looks very, actually behind very bunch exactly others. of on we're given what work the on that fact focused because a were some we that doing have think reductions net been we I

and of significant had what the great appropriate work coverage. we of done typically so local where opportunities describe really very has not obvious a And as closures, will consolidation a really we I team identifying, just terms just number which the consolidation have they're they're

reorient but concentration. work less in a think point, we're of number is to have of that share, how have period places at can existing where those we actually out we significant the enough some our I time. What where think have -- looks that figure share, we have we of doing like footprint really this branches over we through, we is to the

focused we on, too certainly is figure that as will well. as going is places with But need because I use goes changing. opportunity We're those to without We're how So to a branch usage as time up to some on in that communities smaller our leaving optimize help wind footprints of of an resources we think we reality not continue will redeploy lot continue solutions. the to will the needless. because out

Betsy Graseck


have strategy know mind. don't to I platform. Barry in same there question your understand you I that on Now, just brought wealth if and a you recently to want the run

Charles Scharf


got our together and [Indiscernible] words network. think came -- buckets. that that four we where think form channel like as broker it [Indiscernible] the old our into to Number one, distinct falls businesses it's I is that, we've [Indiscernible] have independent of

We closely our have with then opportunity branches untapped believe relatively financial advisors for extremely still and that us. work a that's bank

brokers when actually are independent where those people platform have people WellsTrade. business go beginning, are the go I -- are where actually and platform a continue can have wrong and online we then, in have through can a also do our but we the independent say employees, business, And to those phrase, We who us.

piece we so more think we've all it the customers very I of Historically, as we have just think ran is existed just, like a I on value footprint. which we distribution. just amount something I branch those. distinct underinvested focused the that And in of we in we opportunity as given and of equally bank got And those And have independent piece different [Indiscernible] that the branch And online points feel one opportunity. our big in for sure. said, is meaningful the the we're maximizing much think piece

Betsy Graseck


Michael Santomassimo

Betsy. Thanks,


like you. Once if a Thank again, Instructions]. to ask [Operator you would question,

next Vivek of Juneja Our comes from JPMorgan. question

open. is line Your

Vivek Juneja

Charlie. Hi

back from sense the you. go to to Going get orders. consent Want regulatory to a

in of people. and Given a of the brought a already consent years the hired with -- you've two additional over the of lot setback lot we there spent had been lot in-house order, this consultants, a quarter you’ve you've folks you on lot since last obviously a these,

as So you go to those have differently, direction more team, go in especially do the what it would need hoping to a do not you setbacks with management this? it to were and have of

Charles Scharf

say I do as an reaching there's as that would endpoint. Yes. to we far nothing new have

right the have So not. capabilities if in mortgage? it or change right in answer you with said this we to absolutely the case, pre-consent order, controls, do to build is what does out The post-consent order

which going how us. who need of many regulators again, That's some Because that's regulated. to whether have they being this minds relative regulate and they predate fast look done how in at not the they these to which so the been or on, And of it's enough, long context have things end.

embedded is the us, So a that's ourselves. that there, again, is I'm contemplated. in for order end-state end-state, a Building we minimizing I and Consent have big deal. But order. think not would very the work consent same the

things And the work so there's deeply some comes certainly that's more the now, series the that is process And like exercise and the OCC same. like But the in the an formality lot checkpoints, a will out of more of be more that. of end-state part there is in that. involved

Vivek Juneja

plus there? -- is timeframe so several already you Charlie, and right, been think And terms should with of direction so three-year before any say, in as of when you're we you this just so there's X years, sense got all timeframe, in dealing years, that been there, that five-year we've

Charles Scharf

we lay of in and what but just And position world, I I a -- we're our think think encourage I we'd to business. for draw perfect you'll obviously would And it to for what to that the forward is the be look our out we've you to do want means that. see upon everyone, do not that. -- based you'll Hopefully, things to at able all this plans in I look and don't closed. continue progress to as judgments relative

side. have it's of asset I usage fair As not you in grow about sheet other don't people. than for can't want that still and And require a amount order I grow more future. specificity said, businesses as if thinking balance the not on to the we we fee-based flexibility us businesses any mislead we're give to

are, in try see, dedicated to we order. to isn't the number the huge Many we or resources consent you much of here a careful again, person that building of are other. that people weigh every products a serve day every too not so and on very working got customers And got and a as single business. we're we've card one But it. side lot be But on

confidence in same building execute you build We across doing the products of business. retail services as our are the regulators. the Company. We're platforms these items, the across on digital the we And

confidence, but you have wait So their to it's your completely to not in with be not able continue done with well. move as to just confidence everything to forward, if until as is

And making, the progress believe so, of that terms we that's hopefully, we're in we're seeing. what

done to put at see the things business resources moving so, these but forward. that the minimize timeframe, you'll the us them the time same And all towards properly get we're

Vivek Juneja

[Indiscernible] Thanks


no like to questions over have we turn to At back this management. time, and I'd further call the

John Campbell

today. all thank appreciate We you time [Indiscernible], here answer all to you Great. any the for we're to take And questions it. care. follow-up have


on participation your for you Thank today's call. time, disconnect. conference parties this may At all