Wells Fargo & Company (WFC) 12 Oct 182018 Q3 Earnings call transcript

Good morning. My name is Regina and I will be your conference operator today. At this time, I would like to welcome everyone to the Wells Fargo Third Quarter Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to John Campbell, Director of Investor Relations. Sir, you may begin the conference.

Regina. you, Thank everybody. Good morning, for and joining Shrewsberry where you your call discuss our Tim Sloan CEO questions. answer President, and John quarter our and third Thank results today our will CFO, recorded. being is call This

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

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consumer of retention our example, For customers reached third X-year a checking high primary quarter. the in

March. tool control provide mortgage and customers all September, applications done mortgage our innovations, using more including continued our we to have retail through to were in introduced XX% online also leading We In introduce transparency. industry technology of which

the since U.S. We’ve Philanthropy, million earlier Chronicle number their U.S., believe information across $XXX quickly Michael that milestone. we large recently increase also giver announced that turn announced their provides from latest of has to enhanced card Chronicle of been Philanthropy donor, recently mobile a reach According the and credit ago on to communities. are off credit two Most I’ll of a our such Hurricane device. also separate was one allows that building recent support Wells by a card Relief Wells on Foundation million year stronger this or Control or with role debit is the should six corporate Fargo payments. Leadership data. survey in giving their on XXXX our based cash citizenship corporate including the was customers target to Fargo play their and account year communities Fargo Florence always the goals not It Wells our with donations to footprint, launched connected or which Wells where response debit corporate Efforts. Fargo the card contributions single exceeded customers digital ranking highlight a it Foundation XX% from Hurricane Tower, credit This track because is Propel on also of $X newly our in financial a expectations. view increase ranking from the a and as Fargo and the We to two would was of part in we Wells but to recurring

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engagement industry low be work to to reflected and want attrition. are in member member Wells our place voluntary also We better a in efforts make team an Fargo leader to continued team

quarter, was second with stable quarter at the the over years. in compared level which Third voluntary lowest was five attrition

is progress towards team which our an vendor engagement. survey, company-wide team by will is being outside a make to receive launch our being in experience from way member goal and another of feedback members the we’ll leader we conducted week Next new

As to high record part are ago. generating returns shareholder long-term to returned double more returned the returning than shareholders a a billion repurchases capital of third $X.X delivering goal through common We and then net value, we of dividends quarter, in committed our the amount more shareholders. share to year stock and

financial evolving to needs meet model committed our and a also We’re manner. in customers’ efficient business streamlined more our to

operating savings litigation and and billion which of billion, penalties. to track and remediation expense We of are $XX initiatives, expense includes on losses target excludes including accruals recently $XX $XXX with million typical XXXX our established a approximately

to While is are Wells our our goals the making do, demonstrates work more there to substantial hard is we working how team Fargo. transform progress on

changes We the I’m we team results business, Wells Shrewsberry loans card business growth will focus primary improving these year-over-year customers, trends now are we our had small financial usage, confident our in debit that and enhancing and our member and including equity in risk strengthening Fargo third building all in customers, quarter, simplifying auto, personal and our a lines. past issues, the on management better experience. credit originations the and are home for John positive detail. in loan discuss addressing more checking encouraged organization and by our are controls, stakeholders of consumer

on XX.XX% good Tim, everyone. an third quarter We and operating of included ROTCE positive which ROE Page generated both of results highlight our and linked quarter XX.XX%. leverage a X, morning, basis. and on year-over-year Thanks, We a

increase our of doubled and return capital continued to the high capital our in with dividend. and and we last a levels stock We XX% have liquidity quality third common quarter strong including credit compared year,

business auto up year debit debit credit card we up As Tim ago, we home a and noteworthy up from quarter. purchase consumer up usage with loans including up small X, X% highlighted, up X% in year momentum from checking and XX%, Page a XX%, originations XX%, volume ago. items general and the equity consumer had On loan lines highlight business credit up primary third higher and X.X% a ago, personal card year from with purchase positive volume purpose card increased and X%, customers

the matters Our included a related to $XXX for $XXX operating Pick-a-Pay losses of mortgage well as on as of and earnings issues $X.X million balances. billion of recognized million $XXX any the sale of in fourth quarter be a approximately expect Act disclosed previously to future were the re-measurement included & insurance, income remediation automobile additional rate credit expense related loan effective We strong an including protection collateral Tax estimates accruals of for to excluding gain for of the And currently primarily quarter. performance of of the our an $X XX.X% reflecting billion to lower rate this of $XXX impact PCI expense million year million XXXX variety the reserve loans, release items. effective of discrete income initial the tax XX% fourth Jobs net related tax impacts Cuts which tax discrete the

processing Our common $X.X we quarter. auto lean and off of strong including Page in our elimination legacy driven income trends and time operating X capital other shares jump Pages buyback driven conservative loans. and loans and Period the our results were travel highlighted second as statement we in year drivers on these included balances net reduced junior be higher in loan throughout share services, outstanding was by stock from The the the performance a accounting of reduced we provision down also the our and entertainment. resulted underwriting, ago. lower results business at – of starting will lower $X.XX our preferred decline X. increased the to losses, EPS in acquisition. credit Wachovia call interest with J also which lower have by Page highlighting purchase outside NIM our reflecting declines we balance assets, billion earning billion the will however professional loans important reductions Average increase estate remained recorded which a X, to outside as X%. from Revenue of as shares as on balances loan loans in transformed diluted sheet mortgage data Page so expenses end X, by and declined included diluted loan X. the share discount continued strategic Series real year-over-year lower I on sales, lower commercial average per declined while run of categories expenses on some in due redemption in offset Strong $X.X We had by levels the income and expense well number growth that

$X.X corporate in XX and billion $X.X commercial declined reliable from to real senior in investment growth real institutions. competitive held increasing with $X.X billion This loans was Over housing. loans non-depository commercial have reflecting declining in offset we and was despite PCI markets. of discipline loans than ongoing the in continued REITs Pick-a-Pay million estate second Commercial financial pay-downs financial community the lower commercial highly months financing of mortgage $X.X or estate credit more facilities acquired C&I construction on decline billion loans loans as CRE sale and loans. credit growth for with growth CRE last and billion. The sold due liquid increased banking, existing lending, loans well capital moved and by through and services and originations quarter to as loans $XXX hospitality

loans declined the mortgage $X.X and which by auto consumer the As loans X million quarter of to was $XXX of on billion Page held-for-sale. sales loans second show $XXX million Pick-a-Pay of from driven PCI transferred we

by starting loan mortgage second which Let grew increased the loan $X.X PCI loan $X.X billion consumer was portfolio Pick-a-Pay billion me highlight detail Nonconforming sales. in with the portfolios the which more quarter. offset loans our from partially largest first

billion continued as grew more RMBS the XX% would In anticipation loans a this downs quarter. been than mortgage year loan million originations lean pay increased and originations loans of in offset second portfolio which nonconforming X% mortgage second to from securities. were ago. as new addition $X.X held-for-sale issuance $XXX of from future the quarter card from decline Credit of included designated that have Junior otherwise in

accounts. from expected do from expectations higher our were XX% quarter which the run Auto off due which the card $X.X XX% loans quarter transfer the grew the and the all new accounts exceeded Propel new of generated down second through digital New launch continued card benefiting automated quarter of billion second high credit channels to related million of originations with loans from to and a which originations auto remaining financial $XXX quality growth and X% changes business the services makes Auto increased year to the of underwriting. origination second including us to held-for-sale. increased easier customers from business with the reliable it driven XX% from for by ago

billion to first deposits manage Average investment driven wholesale business liquidity the from management originations wealth we to expect year in to higher begin rate which deposits $X.X in balances year was of actions We growing are mid-XXXX. wealth management ago, small banking and half well average deposits, positioned by continue customers as a billion rate and taken more declined lower and alternatives. consumer includes gap increase banking including as allocated consumers to asset reflecting $XX portfolio by alternatives. lower to decline for to quarter the continue as the move second deposits as lower deposits and deposits, investment to The higher excess the to from cash well the

not the on deposits, period-end increased coming in our competitive up to was have meaningfully with change to adjustments deposit from Wholesale XX which billion we points environment. average quarter. the Fed yet $X.X basis a declined Funds the X On quarter ago XXX second the compared after basis from and from point cost Our increased in the billion basis movements. year points targeted pricing second to in rates, other wholesale rate. rate and outperform and by expectations. a The third deposits deposit rate with our betas driven while on banking increase was provide wealth Page in in quarter increases business small costs management continue growth we XX, rates most Deposit consumer in the details paid the quarter $X.X and average banking deposits investment deposit banking of made our later responded

which increased moving declined by higher $XX This including We deposits and million to also in offset source partially CDs billion variable from the alternative the from which wealth deposits $XX brokerage million had from X million liquidity management $XX.X balance funding. small as an balance offset sheet quarter in corporate a we sheet were These and Consumer banking treasury million by $XX in income. business and partially other growth quarter. benefits business quarter rate banking growth deposits. and by was investment from from benefit Net effectiveness and the used second customers modest decline a of of approximately community interest included small alternatives driven second day all mix, in excess income additional and benefit accounting. $XXX growth hedge re-pricing banking

ago year, market the income be deposit betas. quarter in of first $XXX X.XX%, income the hedge charges fees. million card expected income, better point to relatively driven Our currently a with reduction in for from yielding modest NIM with benefit months increased other compared X basis lower second by modestly and on assets service and growth was ineffectiveness a quarter net year proportion up mortgage the expect this of increased the full to the from income X than interest reflecting year from sensitive banking, accounting. and for revenue, deposits interest the we second Non-interest Net stable

Deposit the our and credit by a declined higher investment by charges from $XX me on commercial residential drivers million partially primarily banking the million brokerage driven and $XX banking the from commercial and results originations. lower second up for net quarter, Mortgage quarter second of detail. fees were Let rate loan the in investment on from and transaction second offset business more quarter from million service customers. higher a few earnings activity. gains lower revenue highlight $XX Trust seasonality increased retail mortgage

quarter to are production primarily in be loan improvement points quarter, mortgage conditions. improvement. margins in mortgage we excess secondary Fourth purchase down, expected to $X remain due Pricing market their in to pricing capacity from originations market. billion not basis the seen the declined originations the margin to increased we And residential XX While second reflecting due quarters, industry. tight historically meaningful although stabilization seasonality seen have in have in an margins recent any

of this quarterly year’s production We the to XX fourth quarter basis be XX margin within points. to range expect in the

on year and ago. from declined both Turning expenses the to expenses second XX, quarter a Page

$XX expense We penalties. in billion expense litigation and are exclude in $XXX of these annual $XX billion targets $XX.X $XX and of achieve on typical accruals operating losses billion to and this approximately XXXX, million XXXX. $XX to track to billion targets our Each remediation to billion year, billion $XX.X include of and

Given next our making displacement expect decline to the attrition. priority our commitment changes XX% we our X% be are we are to we supporting normal for across to digital efficiency, X transformational we forward as member team as to will as approximately An well be decline improving preferences, by expected those businesses as projected that including well recently expense through move targets. our part adoption years changing announced capabilities, us customer team the as impacted. who of within headcount our achieved is This as of important achieving members self-service

in and basis, and most due the Expenses expense detail more equipment discretionary company’s Let both PC expense the to Page business revenue expense and in me higher a including explain purchases benefits, third-party non-discretionary trends of related, driven X% our our in to XX. The We related declines from Windows expenses quarter. were second had increase million $XXX the down on was migration services. to in primarily by categories the or running third quarter starting compensation infrastructure quarter on linked XX.

ago or operating As we lower show were expenses losses. down by X% on from XX, Page $XXX year a driven million

eligible first expenses to XXX(k) as higher higher lower initiative. Fargo benefits These expenses services well lower higher impact the members team X% increase due was and expense of by increase our lower of sale and and the was reestablished efficiency the expenses the higher business expense primarily were Wells as from We also by FTEs T&E offset in discretionary were The higher a Total to to the stock campaign from as had broad-based third-party quarter. The due partially expense expense, higher award running expense. insurance services matching severance revenue related compensation expense of granted in FTEs year ago. restricted offset down part expense. in the by and advertising driven salary partially

to and more as we professional already we that to improve While outside will efficiency T&E, being in our processing, have services, areas currently expect our postage work we XXXX reflected expense and such efforts target. do, supplies are data meet outside

$XXX XX, On from Page a reflecting XX, expense. a tax increased consolidate migration and transactions on channels. are starting provide quarter, Digital year million metrics. lower and the ago. year. we by approximately continued the Teller segments ago, customer our Page virtual ATM discrete sessions to second driven community income community to on net third banking earnings Turning quarter branches we to declined from X% In year XX% increased XXX branches the consolidated XX secure from track this we banking

we in was and in volume. benefit we reflected the announced card the ongoing XX% we strength started in of consumer of in marketing growth Growth XXXX. Page customer quarter, in X.X% initiatives the customers fourth complete divestiture checking digital the customers the XX, of at was driven also this strong third expect acquiring purchase debit quarters highlight growth branches. previously Additionally, tracking the year grown to customers quarter compared a with acquired In new new the which to highest digital improvements credit channel. year for in college-age from to continue primary four year-over-year customers. in retention, third checking year-over-year quarter, XX since have On ago. of we level in and checking consecutive grew by new X.X% checking customers metric Primary the and have Growth

quarter most improvement both overall throughout the quarter ended loyalty scores visit the the with second from with we rebounding steady had also third and and customer survey scores recent both We quarter. in satisfaction

Page XX, reflecting reflected sale reflecting related $XXX increased management quarter, lower to and wholesale second operating was the due quarter our quarter operating losses. of Turning higher Rock the Results the increased also second million OTTI, Wealth from earnings in announced the revenue. to second third lower Creek. in earnings lower ownership impairment related losses banking $XXX million quarter to the from and which the stake from investment

XX, strong to basis points Turning third continued results our Page in with quarter. the credit XX net of charge-offs

consecutive quarter, real of the assets commercial portfolios all quarter, second our For a estate the in fourth consumer declined recovery were quarter and of Non-performing from $XXX the net decline. consecutive position. million loan XXth

reduction by to commercial estimated in ratio third common in Turning decrease included basis one-time assets. the high regulatory our phased-in XX, in capital which covering X issued return by offset benefited equity XX the our fully impact CETX real the our estate, risk-weighted newly reflected ratio quarter decline in guidance linked The from a a implementation volatility Page RWA our Tier our increased of quarter partially approximately points.

changes and work our throughout we So, in to to the are track expense initiatives making are expense including summary, we continue on targets. in hard our we our transformational meet businesses,

the year in quarter a personal primary generated quarter Our and with from up and both equity growth all positive business, take originations and year-over-year in third included questions. are a business and now usage I debit will and which in operating and that, home higher loan trends positive on increased leverage And Tim ago consumer loans and linked card auto, credit your lines basis. we customers, checking small

O’Neill Partners. line Scott first of from Sandler will the Instructions] & question Please Siefers with [Operator come Our ahead. go

morning, Good Scott.

quick just a Good had question. morning. I

the on guide So, appreciate I expense years. next couple reiteration of the the for

up when think back of XXXX. from to it conference to about one through I they for aspects hold the presume wanted question made I think when of the went a people at guide flat XXXX ask other I revenues from as lot must guide, simulation specifically the that well the in simulation expense XXXX you through like to mid-September started

and forward? X see years, main to as or next is case of I you over not, So, do revenue reaccelerating you of I the opportunities what out guess look look as course that drivers you X as the the if mean, the growth

Sure.

flat would trying a even our with revenue just all you deposit and capital served for our that, in rates them we guided let’s with loan we reasons that are demonstrate the place and simulation go, So, at XX% the industry what have revenue with have to a as don’t in with credit we that happen. we growth growth, up it say of of and May in other Day, described for as have expenses single XX% in where is be and Investor imagine we XXXX, a number in ROE XXXX ROTCE. solid where in delivering can that a things We variety terms plan

range outcomes that So, for a the big about XXXX we have of a of XX% XXXX. for ROE My current portion we us best a XX% that has think delivering and guess, range ROTCE.

So, respect, that differently made or than we I it. in did today feel we say that would first reupped when we don’t that commitment any

have within as described entirely more expenses, we be control been specific our we because We them deemed have about to them.

think And that’s how about I it. so

opportunity Okay, don’t couple years? just X the get over just see the main into the specifically would side or revenue perfect. And you next then numbers on anything or want even points specific if X you to

we are drivers is but as we side net them on are the are increase then in. share handful I growth depending many a that Sure. to in have of businesses lot do of of operating market improved we And ongoing would to loan driving conditions non-interest income a again there work income within. with the There what variety, through on interest say a

if sale in what the industry profitability like is mortgage, like them it on reflect will that example, overall. looks if about shrinking our than for position of the size future we the is as and is gain then on market Some the today, as market, have where the cycles the are outcomes others in of and different market talked

example meaningfully of levered investment like businesses some that the got our trusted to drivers fees. have S&P We the for are

of how in we All as competing on business. much reflect do working we to what’s are as going how win are are hard well those going to and they things the world

it. goes All of that into

for our once business I are at great the next have we fact and John’s we some just reinforce the quarter year, talking in results would example, have we in growth the see would that see this comments auto we of have thought Mary Scott, of Schubach expected you in business. have and by we to I we by significant will those overall the Laura in, growth. about that specific that and been and examples doing a can And been making some looking see changes and the the mean, And that consecutive that see quarters for now, two portfolio. changes you loan Mack think we job seen we middle reiterated made

growth. quarter. encourage year-over-year you give the through go businesses automated show and thing but I quarter growth I detail opposed quarter, are additional only an will being decisioning loans our it the seeing to as on about originated just that auto sequential would in and are is we business of you think originating of not the on exciting know see year-over-year we the of could to efficiently, you that this we loans, XX% the I a about all some manual in on examples But doing basis many are I more terms are go examples sequential basis. because And and and as credit and

growth would I to originations. say that and modify

Thanks, exactly. yes, Originations, John.

question, When repurchase into earnings. out Okay, perfect. know periods final blackout And been I just you due around quarter. repurchase have I to one numbers more then probably you are you able back get shares? have obviously recently, ticky-tack know for to full huge the been

Monday.

okay. very Thank Monday, guys for questions. much the perfect. you taking Alright,

Scott. Thanks,

Please of ahead. of line from America. Bank Your Erika Najarian the with comes next go question

Erika. Hi,

morning. follow-up good questioning. line wanted of just to I on Hi, Scott’s

that have trajectory dollar another is the And As $XX I opportunity if the about in is a going billion incremental end to number the that expense the way, we market just question really improvement billion you revenues terms XXXX range, think expected at better of firm the result of than something it happen this announced, $XX years that few to an the to about had top ago? am banks outside started is you a unearthed XXXX $XX billion of continuation that of for a or the be to to $XX headcount billion of process target wrong ask a expect? or and is you

Sure.

So, incremental way business that opportunities I improvement. business that without staffed have that’s of for doubt, looking we to ways drive to continued and a function now goes to and function to say would program from continuous we a have uncover a business fully where

of high and had revenue But have them. a a what incremental to our and itself. of We were miss big on the thing was revenue when there missed on the things are would other be being beginning and was all mortgage right to remember different attached And there the we extraordinary about $XX where the if net us high expense what because of estate, spent. cycle guys gross opportunity not target the coming third-party dollars and expense, when investing the is that we where of were out there member There happened target from do. some will at presented then that so are the same constantly refinancing activities, if say this biggest probably we we of expense it to this team we take because areas contribute dollars opportunity us expense, of is an depends talked we because side, the did And dollars environment, hard producing also for to have kinds side, billions to dollar billion is real load is to $XX opportunity new revenue I the expense billion. of ever revenue revenue it gets ongoing. you

high in We talking transparent or environment the be situation that’s think we will on find structuring to the etcetera that ourselves is revenue and side. If about about the either do frankly we the low that. that if our business very and side needs on be take then us and need would stopping different capacity, about something that we to open-minded in lower, we certainly

rougher regardless cycle, depending and what trying delivers measures then well. to If then us. where upside, are revenue rougher on it’s it. environment, try return it’s equity drive a market if a economy we We the to the this the a will take full etcetera, necessary we on big outcome is, as of If business the just of advantage it’s take will

middle-market the sense wondering another we We we growth I thought had about the And and question as competition. hope, hasn’t us expectations. the GDP CapEx what your I specifically, had industry interested structures I available if to on can am little all from that commercial give is noticed the loan that bit quite am the duration all matched right. this one hoped non-bank in portfolio, are And a wondering different am you could in better nature exposure across am clients, competition lending? I do jumble all any of I more your And have manager managers. in warehousing private C&I CLO sort term bucket? asset and that exposure question, short or sorry like Wells’ to you to asset that of XX% direct is other thing And I in

Yes.

you finance with you Erika, three business business charge increase. variety that that seen I questions, extra. in you right. have seen of we a the order, to is reverse good absolutely have growth allude we that really non-bank in which To competition to So for no fine. continue forms That’s in problem asset-backed of think are we we strong a won’t reasons and maybe have mean, some

We gone very the whatever, bit duration. rights of are in basis, short a which competition group company. little throughout in legacy be of business relatively gone tends to now, the the It’s asset-by-asset fundamental of non-bank advance is history attractive. like because have different the that non-bank competitors on gives and some rates the of us an away, the It structured approval and right form underwriting seen but out have

So, we business. like that

of deal and that’s providing part financing Sometimes that of overall that’s make the we I okay, mean, are are but the credit, sure are of we credit competitors business sharing our customers. to all a just sometimes on we one our to

Yes.

to it’s it. to securitization sometimes Sometimes it’s got a some term takeout,

the we underlying although that think last competing we that a is business about interesting a spoke where distribution at the in started consumer of asset way directly. there in sometimes which non-banks wouldn’t are are these question where I this of I your we commercial conference talked deeply as have at, you types, and most

in question like I lending talked take But the example, CMBS, set a estate for more that the as that in real it’s usually, of which the sense loan. real markets on market terms it’s about widened, and can have others it’s lending whole CRE, funds, warning life to competing about ways. different belongs hotter, that a broadly, return we our a doesn’t from a it’s portfolio was bank’s And to in a in it’s for direct and where of it’s being risk-adjusted third while leverage CLOs, estate more companies a perspective, make competitive around back We for so willing what we or it’s pool, bank finance other gotten at and XX% go they cross-collateralized and indicator same estate, get taking that other with more we concern. way of a a I should. about XXXX on a reflected a and the have And the bank whole you haircut think real commercial at XXXX commercial loan and be are to than that in would And and really respect is early them cross-collateralization haircut national on risk banks the tell exposure. might in have are order the but

lot and lending of side C&I in there way. CLOs were action bank meaningful is still hand LBOs of the things, in or it leverage middle-market the being a direct CLOs higher But – in on one eligible seems the we most call it’s On in really by or going of categories. business be around middle-market that categories on non-traditionally a to never financed

a got business have alternative others of with won’t manner and a in the wealth asset on on that doesn’t doing It’s it things pooled who are sovereign loss. whole really basis managers a bank unregulated pursue funds all in fact, and we way a a and that an a aggressive also hurt loan can basis of but haircut do. So, after you terms

debt world think our their are never but Their the ever customers world, I particular, better. the around Their service seeing is interest in is the strong. U.S., balance And have economic than commercial, their lower. overall higher corporate has of because maturities. are sheets They the coverage been, we it’s here in extended is growth Erika, been because that what for the in credit quality

capital So, credit markets have buoyant growth and our I very for we we have loan seeing customers that all think are growth than markets, quality an liquid that would imagined economic is the we means slower we level right have fact got in a high that now. capital very little bit

you. Thank it. Got

Erika. Thanks,

of go Jefferies. next with line Usdin Ken comes from Please Your question ahead. the

Ken. Hey,

guys. morning, good Hey,

intro clarification. or to be, remarks, you sure FTE to still make an in your a that one about talking just had Just basis? said clarify you basis flat you mentioned John, expect just you on talk and it, non-FTE are I that let’s higher say think NII slightly and wanted about I or

equivalent taxable a if question. the basis, On that’s

talking taxable FTE That’s the a a about question on is fully what are it basis equivalent you non-fully basis? or

On a flat be think, flat. we bit I how it’s GAAP plus stronger. mean little expect a to that to close That’s bit, basis, little and enough a minus it I or by

you. thank Understood, basis. GAAP Okay,

we about your I now, see of sheet, you on OCI that have that So, little the this mix the while a with balance just and rising second think talked for John. rates, question a bit going a balance is up is obviously

of the you here tons room keeping portfolio So, of doing you on terms the to cash but of the what sheet are are check. obviously, lot in remix, still, balance in

have that given your to been is where now strategy act? investment how talk us balancing rates evolving Just moving about and the

Sure.

that from and X%. portfolio certain of have high that reinvested to the every enthusiastic a amortization be quarter It’s we we the not about possibilities different. more maturity are in those prepayment our versus bond So, has reinvestment and X% low amount

and be If to back zero of the you X% used on years. couple the roll XX tape trade-off a cash years, yield on

plus or liquidity XX more on call in the basis There exposure much more how an to the points duration up extra, otherwise XXX cash are we And risk, how question by we than on and have much were X% we cash. OCI want it, do earning duration on or more that agency constraints are when load mortgage that was in securities. XXX mortgages so in the is we nothing if some the opportunity earning taking years Today, the much more mortgages.

is We have been it as hovers around that category as full portfolio our probably LCR much very in and could be. calculation

March Fed more out of then going Mae our Given have think the end, X and the if profile we it’s – the incrementally of more the the but moving circumspect happening back, people a to rest about like a question it’s curve. opportunity, change treasuries our it’s And so. that cash is curve further on is think attractive, that continue moves to do securities. bit this little I I while have liquidity Ginnie back an or to years whatever XX much so is, There least maturity straight percent next knowing have going profile, expectations been at it’s built current be really not it. up, steepening rates been, is with or And current our backup we it’s over where we a into from and more exactly a most or few year

relatively long to the curve if as flatten continuing attractive a over is up. of actually time cash and the that So to return move going than on result is rather

are about. we what thinking that’s So

capital those a deal closer tax those tax in the precise exposure didn’t thing if from reform all I existing as the you you less calculation. because much it plan the about would a OCI be so to about towards when XX%, we more get shield OCI losses that’s the thinking meaningful our is CETX the quarter of last of although – actually them are of OCI. in context in But further move that because is are a moving say see bigger of rate. our down this And we post We have world more losses, RWA about well, the from it to have down, exposure higher the

they an used have to. impact of they So more than capital on

a got I for it. that lot Thanks John. Okay,

Yes.

the Your next of go ahead. line Bernstein. from McDonald comes Please with John question

John. Hi

Good morning John.

equity…? mid-XXXX. separately John, home guys. I for timeline for what’s your the positively was Hi, that to wondering good the the loans stabilization to then inflect auto confidence And do morning have you outlook growth to in by

loan you businesses risk would every you make you I reward. and option loan are of on say series with questions, of one in the to auto good everyday Two know about those the choices as new loan have by faced

now, lines crossing along seeing of lines what I are point indications XX% of should that we XXXX. in level those level so that’s has at amortization are that growth up Laura And we the the both continue we those combination think year-over-year. we like of and the book Mary that in some and are giving

a little sooner, of we estimate it our like yes. It’s it we seeing the for been way could it’s rewards the way of that’s managed that we today, the we business trends well all risk fact a the And estimating the bit year. in reached with could are happens So more the that that are equity, then is complete through enthusiasm the middle mid-XXXX it interesting. be good. very we business, little to are are durable much But currently – risk home restructuring competing, bit a feels that be later, respect

new the we you in is but right. territory, are down equity mark a clearly loans looks and So equity legacy utilization of the on home portfolio can uncharted home like, spreadsheet of origination the pretty tick what

refi they of are are we first as not to give in if they they just going want home more going everybody refi, borrowing. has now a second the the or won’t leverage, their who to to are to to their are the of first. is getting up to in their first cash point they disturb about that using – last for do few refinanced years think source out another So think a not suddenly the willing money They

people whole interested responsibly a amount in quickly that, leverage new of is how are of that incremental people to So advantage what extent take world.

of the referral in an our people by branches. activity really the think are year-over-year described encouraged activity think quarter-over-quarter really we and have in what I we expression is I up

branch last in more getting events people of our process is referral own over the comfortable with Our given couple or the years.

are mortgage So this you because second going that your first of the way the your combination phenomenon refi new upping to a on payment what next go the we whole couple over see to is in can’t amount quarters. is with without of unfold

know – goal know credit. to to originate growth not it. re-emphasize loans, and John time our this, And the is is, think good important would make in I other talk I only we is grow and loan service is about goal point just I but our to any you customers that

So ample the based seeing on to auto than we grow what are opportunity we today, see originations. more

very said as is going so to John responsible have and a I way. And but the do estimate are best we year, it next in mid

ever I surprised and right think would lien I home Wachovia would also the be merger. Wells sheet say more if end up of Wells in than were both and our of Fargo – we balance if with we paper alone second combination I on equity, versus the after surprised where mortgage same then pre-crisis percentage the

I think John. point, good that’s Yes, a

and ask you issues each comments in you just then are if negative issues kind management net And reputational wanted and you September your elaborate in hurting Tim, the flows your of headlines loan where your question, could talk underperformed that of wealth have reputational peers on to and just perhaps advisory these management trends. growth issues on are tension. John, And of some headlines a from if How Okay. on could asset performance wealth and then affecting front? you on the side advisor customer terms

Sure.

banking that it’s really GIB, of having compete and specifics bit harder some little in business is reputational of for government There terms of environment it’s we in wholesale, – team. bit little mostly institutional a more a of more just talked wholesale other In about that politically terms wholesale in we where some have this, call the that we of a it made it’s issues has probably and categories. how charged but

is some headwind in really can’t and of it a institutional You measurable, to in but it’s reveals for it’s government it, banking. But point not or I’d demonstrates itself say where people. our

the relatively in XX-year they quarter down primary second AG management flat third had John, and in we quarter you second being and were side, on agreements particular, And we the to which term was the factor the FAs, in of and as the saw XXXX. ended recall, investment the a quarter. it hiring termination And quarter wealth in the second Edwards

attrition in from third the the quarter. addition, second down quarter was In

well In in September, about think improvements fact, when as we have our and loan FA are of we we we was the And size is were we And net books. overall productivity. focused on headcount, seen then that finally, really for what population FA great. origination their up in improvements what in are as FA seeing existing is which team that

overall but are improvement and from is been issues. I but issues of this the of have see beyond making in there are reputation some some So, that us we important we that had, impact performance to the deal you with, reputational going some those think thing we the quarter, numbers some progress. headwinds and getting has still We the

have And timeline Okay. you missed projected reserve for requirements getting if this at removed sorry dialogue of Tim, your tone do in cap? then to and from of them quick the thing, I report any last beginning, federal any progress but the with or update terms and the asset

update. thrilling I a John, Well, made

on part I asset So, still I mentioned through earlier know that providing the year. under described you good. framework cap the dialogue constructive. earlier And but operating we to the very next that first They risk broadcast feedback are as what the planning continues management it being to here, be are of in very the

thanks. Okay,

Thank you.

ahead. Graseck Betsy Morgan of line the from comes with Please question next Your go Stanley.

Betsy. Hi,

a of much improvement you rationalization, rationalization past the and it in basis branch at how numbers good branch do line feel branch that Obviously, this XQ, track expense XQ questions. weekly in the we run-rate how trimming the the Hi, cuts you at stage? and quarter. in is benefit nice over looks of was the Couple wondered that And potential a much there the in for uptick to just morning. are can on like the run-rate comes I branch

Yes.

out there amount it’s is been branches. is they will quarter natural the quarter is attrition expense be way on other. way they consolidating will business branches lease period one are still dealt for allow into branch If really come or other. tail of one that’s front, of to by I would people a dispose XX the pretty What estate think right-size which that the the tends it tough of are to benefit we those the And won’t some to the remaining right from had when the then to absorb noticeable see a until happen the real branches over and trying people of consolidated or people which retail with in time. then the some we in to a been amount we

a about while to really will So, year. would actions, aggregate expect start this you to it we have I the in for it but talked be the year’s takes revealed. feel next number, past

a You this it the odd for XX selling this then course year. close And that we much be quarter premises that will the related over. of Again, will immediate branches more because are transferring transferring notice members light only a that XX, and selling, we that of wouldn’t the will bit team are to but switch. little that more all over expenses are are acquirer be that’s

of And as dealing to deposit you underway you attrition bit and those? efforts you a Got the the how are you in talk just what sense not retain can Can ones seen Sure. customers are on but the a the little that? closing, us the can you with you ones are selling, obviously that it. you give about are have to you closing ones

Yes.

ones we So, consolidate sell them we discrete them got a because are such retain them some consolidating, on why really that’s proximity the leave choosing than area. market have are in of serving they way consolidated if to to rather everything dispose are and close other ones of or is we that game open that to is distinct have them or or we physical plan the the which

of the think I outcomes from branch. have to-date we realized So, retained the almost are the XXX% that deposits consolidated

or rate seen can’t which deposit you have also I think I really to rising consolidation. attribute environment. It’s in attrition X% even the this X%

the of for all have a deposits had run the have intention all other great been fed we at the deposits and that. is but keep reasons, customers of migrate and to We

Thanks so Okay. much.

Yes.

the Your with comes O��Connor Bank. line ahead. question Deutsche from of Please go next Matt

Matt. Hi,

Hey, Matt.

morning. Good

seasonality but bit there last and quarter. you loan make on obviously, up maybe are basis inflection that of a pointed ticked year-over-year to or maybe drags you was portfolio of a about also was as gain Is little both some there quarter, still the categories there given revenue quarter parts this a So, and of fee revenues in it think out this year-over-year some the hard enough QQ and last the as call?

if a grow you right. is – seeing mean, are basis thing it, about business, have I you look year-over-year. you Each I going the we important more our a our of quarter sequential you to revenue when but statement, feel is time. look across Matt, hope story ability over that more are products to gross on income quarter the confident our and I to of think

that’s I good think So, sign. a

scope the unclear love debt business, was country. John XX growing for good it’s September us. inflection in we business compete this we but to you point, exact business. clearly can’t it It’s given provider take long about As are are but have and to mortgage our will out, optimistic mortgage exactly a shake overall, the the And ability that whether I to now. in of that. broad the promise right we revenues, said, going in large that We overcapacity will be It’s how

growing as on out in the seems net to are some guess period Obviously, I of basis. on loans, about income, midyear a starting out the of the auto around talked they bottom specific it next you just drivers like And confidence look you year. end on interest

bit you fourth is less, see out the little a do level So, in drag that start quarter? to maybe loans

It’s I much demand anything. a going of function of hope. customer to as than be

on side, quarter, but a the consumer slower quarter origination it be terms from standpoint. bit tends to credit think the of apart bit components mortgage a stronger you I tends little seasonal little take tends when the be than fourth the third card be in to a to

good. that’s So,

good. consumer as fact a John it to new in but loans, saw the the As we think growth we relates I actually portfolio was described, world are that home equity across

we are in commercial ex quarter, On reasonable that quarter. for we optimistic the fourth uptick commercial cautiously the maybe third because described, end reasons saw some again, the estate the of the about the toward real growth a of portfolio John side,

the actually think is but the lastly a flag be flipside, And there, to I bit drag then I rates But on you over accelerates yield if just from reduces bit I time, know long have on a near-term. anything Okay. a think the NIM, in holds the the the accretable could it sell little there little your here. backup down XQ of it PCI

So, just be any would commentary that near-term helpful? and

what driver in biggest the with near-term is the pricing. think be very deposit I happens will

there me as outperforming we We are what about have have But helpful continue modeled, increase this for had would a We – at if and certainly – biggest we historical it but probably that realizing have be to talked a think rates we all if but something be certain difference. in happens the that better headwind. based than policy has what a still then that, forecast. are this, we we different will make occurred little there that’s bit way, is experience is the we are a a model we to NIM. will that to will But big we catch-up, on hard outperform and –

Okay.

in all have? material So the and up hedge long the effectiveness we move that moving that not is with from the

the instruments quarter back just deposit margin to real really so, it’s because at And generating I uneconomic, – business, variable end think calling over in hedge the I life impact think accounting that’s that a don’t net probably of zero expansion – we are it’s fundamental will itself over that discount next the outcome we tend and cash an the to from time, the the quarters be. interest out the be the determine the at of to quarter. hedge few I flow pricing strong I of biggest is mean how it’s it’s the it’s the that going could

my questions. Thanks taking for Okay. all

Thanks. Yes.

line Evercore ahead. go with next ISI. question of the Your Pancari John Please comes from

John. morning Good

it’s of key around of we seeing but so practice the the I in where of just issues, lately development I likelihood the that existing Thanks. Good lot morning, guess you issues, mean sales of issues could create of new some in you brand type investor similar the talk one Tim about the issues process how are concerns likelihood view just been development? mean scrubbing a headlines, are around I business new you the and issues, new have for can of

want that to for far the meet, but thing because and in expectations long customers, only we hopeful And in about a we we sense. I has just lot have be the very said am is because So any informed in my I do where along I makes remarks that so so I company. that on of transparent of have right every – are that in have been that’s you ourselves new is development. exceed we not every want John, part right our met more think And run focused that office, in think new geography updated of we are much issues look business, pace won’t you this the of we issues. recent reporting and to very that every across create to the regulatory some are that to development are process. all and the will we we opening we continue

our We and the we for about you to ultimately are make do will that sure right But it. are be going customers continue transparent. informed to thing very

at do color CCAR there then combined most – looking you timing XXX% recent when XX% you time updates Okay. are deploy, us you are now, that Thanks. know maybe we to you It’s and helpful. you And from feeling XX% think how of over can the to here? then think trend continue clearly a any target, of lot pay-out, you target how us and are just get the or trend side, on your gave that about about know I shy around payout that that to XX% just you can talk are result can just CETX can the about you any your how I capital changes post Thanks. so you

Sure.

there. is there a lot So

I need work has Investor Neil First to bit buffer had CECL would the would of guess all of stress things been at to little respect the target the and things the target. modify that our I to and If to XX%. of how that implementation that of confirm them think of than folks those we with higher or XX% say indicated worked once our be know in through implementation both CCAR are XX%, Day – have I both capital a

anticipate higher going bit work. how we I those little this it’s than don’t higher. are talked capital full, because really before be had it’s are Although but today this know probably not they in We XX%, don’t it much XX% a to things the enacting run growth, about in Embedded get is with that capital to X-year and we going. those estimations are in from for and along for a RWA plan where of all X-year rate calculations. trajectory we because the where generation to were our known matter to pay-out

than this billion income. RWA is almost more I in estimated we $X quarter as worth you after the So even billion we been $X efficient have are say XX.X% at why and had think again we paying today originally XX.X% or of net out

more has. earlier you that then it repurchase share We first of So result that of the are look of all With and as will look second sustained XX-month of this much it’s the it similar. expect continue first dividend we CCAR would that have we the would pay remains and the the months deployment quarter, and guidance. the of that, it, showed you regulatory throughout we it balance should of the will I like last that mentioned like X that cycle. in be can of quarter of containing happen third for pre-crisis prudent the then months XX recently. It’s the in expect the less to contained CCAR. versus it to expect the of the in reasons And it ratio of to relatively it levels year it half And respect we that in how so has through year payout about, intending talked most portion do all that out this period fourth recent we that know to a intend

John. Thanks, Got it. Alright.

Yes.

with Your next question comes from the Martinez line of Saul UBS. ahead. Please go

Saul. Hey,

Saul. you? How Hey, are

I the $XX.X fourth on bit Hey, a a taking good literally calculations actually little too maybe would But number is I NII, so my to you up. of quarter, morning, billion basically NII which versus the for am guidance flat keep by slightly flat of a good. am a quarters. couple guys. step imply if Hey, last down

get to assumptions or range a that within of you higher? reasonable it of I is little is a more are you that a that outcomes bit band the of to So, messaging flat broad of across trying mean, are being slightly kind within

succinct. to The latter. Not be too

much sense down at it’s whole other normalizing host for if in line And can into good. volatile, the bit been this core Okay. a line. too And look the of are significantly is there a flat just obviously income that kind seems you on like grow maybe of you No, us an have including to kind of But that’s items, to level revenues. recent sort quarters, think give but well, of non-interest of that items the what lot non-core little or a more setting how ongoing basis on was in think of the again. a a to and weeds question and items normalized of be? guess stabilized should on is of it level starting is we how about as that should sort expectations I what’s are it would what hear. seemed maybe it and about we revenue big That’s again I case of And part a expecting number to a revenues modeling investment

Other, in particular?

in particular, other, yes. Yes,

Yes.

the portfolios happen So, sales they major example. past other we many of pick-a-pay. of like the sold call infrequent in that things out pick-a-pay, quarters, as have occur we the And for

there. equity We private have had capital or gains venture through go

a things We have variety that. had of

to item volatile. It’s they in to harder in predict, out, something line point be you quarter. As meaningful that are most every quarters, etcetera. not There in tends

other letters time. commercial estate hesitant are when for good that charges would all the of I They bank. to put $XXX are to million. the call to They like pieces, relatively But wire transfer happy of ongoing these million overall we up been fees. things I run-rate business. smaller has platform. a growth reflect to basis fees and real on rely things it cash pieces, That’s network loans, continued look $XXX that And the something on brokerage, on actually to you fees, or They component and generating. Of over they stable credit, quarterly the into go a it That the So, take are have can the on. add it those occur. be for would them capital are say, component

that those harder XX to whether asset looking quite But estate in, say balance on But begin episodic we we then appreciated real pricing to it’s deeper be other move investments years. and goes on more that There you regenerate the generate way with. time reasonably feel the get or reflects we into the it it’s it gains because year. get say, volatile, that. further would run-rate those actually that so there. harder the gets would rich over tighter that. to gains It other I that if XX the things So, have are types we credit much last are I my The that you think of at, are the cycle that spreads is markets get, made backup, have is to I about are rates have into sheet continue we we items lot the for were the pre-crisis are fees should good sense The been the already that can a Commercial it seen predictable. of cycle. brokerage this reflects where a into is marked years back to levels certain so because

just can might and you be of you if estimate in preparations how there what bit – would I more impact And on more on financial when Got give one your it. CECL, to think color – able little there, could the you comment be? a just

Yes.

think feeling like we I own we are quite prepared our So with are capabilities.

I understand until will to so we accountants We occurs. are still working how to going be to it’s anticipate with [ph], prepare adopters, working them adoption regulators help and wouldn’t recalculate our with be continuing us early still work. to our

it have increase and I expected it how said this. applies specifically side talked applies year. the things the us allowance. think next our of observations as we which to hear to we numbers about will consumer But our you others tends about But to have and more about it on calculated

allowance. certain commercial are loans commercial That’s have the tends in taken calculated and it the specifically that anticipated calculations expected we side are the to loss On of the things emergence because shorter where of term these decrease and past amount to terms period of we approach then renewal.

bank on on probably commercial reflects and mix Based and impact the think can So of well. look so decrease a their an today to consumer as bank what and might would be be from you of that things see about as those net will the the the I increase outcome what their net on side. side I

difficult pricing differently I a At people to more the know for will competition some seen that really loan how point haven’t expect works. changing competing or or that loans or CECL loan terms impact. it once have would see less We

are that matters. lastly, then going yet loss know – to not it’s be big people are right, going based how how environment of going worse. and in we calculating be and As can I feel it’s incrementally life loss calculating in is don’t going can – And it’s CCAR to calculating life are the doubling and work of estimates what When it which we clear crystal be a conditions end matters times – the this today. today before it in also tougher that based punitive, are up loan we be when to loan are people clear front in those to on CCAR of expected on we a mentioned

are I a to in so understand worse what trying you all that because could think and that we giving means be especially are conditions it up. doubling are CCAR

Got a helpful. very lot. it, alright, Thanks

of question RBC. ahead. comes line Gerard Cassidy Your go next from the Please with

morning. good Hi,

talked might share and with quarter to interest bit for a area deposit in net can the us John, grow you wholesale that fourth about deposit morning, the the deposits in of do guys in raising terms Good that quarter, you what growth you us the margin? end that some of at with you enables the share business also rates can

Yes.

you quarter at we was wouldn’t that the quarter think mentioned so I in in the spot cost the the quarter, balance even So that the though of up. seen end also later in we did interest the much have as

all we the tends are costs X% single-digits expect that fourth compete and like deposits growth wholesale deposit rates you for seeing to expect strongly being to of based X% quarter. in we wholesale equal fourth price anticipating would targeted those still our So to in the be call that, interest in would I the things The on low if us to deposits wholesale be the very terms way something relationship. in it there – higher quarter in

and very wholesale of those of our and Some to – important are relationships those. for are ones those we sole retain bank relationships, maintain rich it’s – many us

of or excess and deposits have incidentally about liquidity move and another in think a liquidity to from have to them LCR about of are we rating some to run everyday customers own up sitting who whether value We certain way. bank got types off and it it’s they those factors wholesale liquidity one think that those lots their on

track books, is up it’s Wells value something It’s to important, size kind much of little on but it the context to balance our relationship thing between bit benefit, we based for provide lot don’t pay incremental very So is sheet. balance want liquidity is a which gross just a to to but just Fargo. of what of as has else what retain there deposit dollars the that just sit a how of one on

I where a at because gross can the side that we the deposit of just FI just about that Gerard balance billions a it’s think to are sheet they have and of a about on of in we perspective But to example. about are for We rather deposits, perspective. are those loans put talking up extreme really deposits. it took put trillion of important down And talking valuable to use year than in dollars tens we it’s the we $X.X and talked not really beginning fund the

going be So, to as even competitive, it much material in how quarter. Fargo on impact John Wells increased to described, appropriately have is a not earns the fourth

billion, indicated Very you the your commercial coming was the about financials of think in when industrial quarter, third I loan second side sheet, then to grow non-depository portfolio, good. did asset the the that in balance the about loans talk $XX.X and to quarter? And that what you to

I not I in don’t or much plus yet, know the would range. but different. call it’s minus that going it be XX to

down revolve Those then, We a we it talk to I out I speaking bit. will probably up will that sure am a be at at call can balances in much. – hasn’t little going but the changed about and conference weeks. a am that that couple

that think how securitization, I asked Erika warehousing of etcetera. earlier to about is much

that than of just financing. and layer types rather a other term bit So, like on pop more little up each top of portions will down of

So, some there seasonality it. is to

your Very traditional up good. it was in of that seeing then the sliding speaking are C&I you loans, creep what is And all? utilization rate or credits, C&I down at

time. the in good, been long a Yes. area flat It’s super XX% for

the drawn, are drawn which is never weighted different of which Now, XX% of seasonally some are that revolving average facilities, a variety of drawn. of generally which and are of types some some of fully

it a at available average, weighted expect to use I that. the for of we I least we as revolving information want customers So, for incidentally incremental and hasn’t years paying wouldn’t I and negotiating you generally new much think it credit seen couple quarter changed the haven’t before but – quarter to available have is last looked which at when facilities credit, that the demand about in of

lastly, and the Tim, the call about quality financial this credit about chatted just and it comparing before last I and you to then And credit crisis. on Okay. time

a but standards I know you has your of strong, you of on Asking had influence is or little think today, this base? than CCAR to would credit to little a kind they when own your question are of organization? credit the more kind big like process pre-CCAR banks have the are do back sticking differently, off think CCAR otherwise the metrics what maybe because that totally your conservatively

for think to credit it’s underwrite Wells material But had speak I don’t how it company. at Fargo, other relates banks. impact don’t I to want as we a on the

the I always think we on and have been conservative continue to conservative will be side.

that Some non-banks. on is by was done pre-crisis sheets of the more being done aggressive some bank now lending balance

other and impact. material I both than guidance related it’s a but that had think CCAR anything, say regulatory is I wouldn’t

a There has bank what’s balance on been regulatory sheets. impact on

because not of CCAR. but Right,

Not any exist of of pre-financial crisis, for CCAR, credit most on was there balance mortgage sheets, because longer. a banks doesn’t of the so example, whole range but single-family which of

So, jumbo. mostly prime on books, banks’ it’s

We CCAR is have impacted are home adverse hit pre-crisis. hard the got modern for certain probably cards they But the banks, equity. than better trade-off by process get a home equity for some Credit so severely in risk/reward the scenario. much because

that really own what OCC our from a or the loan commercial our but which banks although of where books. CCAR of the not much on looks Fed necessarily very real result leverage CCAR of leverage estate, at it most around steward OCC and kept careful different want better type as been estate has As having least books. of away we treated it’s C&I, both real CCAR not And for get agency how banks and guidance the commercial has the most lending. which in on regulation, then There we

I aside, stronger cycle in is this why lower. on see when good mix sheet only back day even updates if but Gerard, of today terms is overall would one investor through we to maybe losses are the an balance CCAR think go that are into what really even a economic performance, our as at you think credit you we But reasons sort some downturn and you all much quality credit which step just provided of we set not of

probably NPV, a outcomes of impacted but the directly are more terms rest didn’t have you they of in sheet that those because the for of to caused portfolios, would in risks portfolios, ask the return Gerard, lot think securities the manage of the link people capital by etcetera, this, trading left And balance side direct to stretched banks generate those to treatment what CCAR I what and have the attract differently. CCAR. they of get derivatives you

color. all you. the Appreciate Thank

Yes.

bet. You

Thanks, Gerard.

next Research, of with LLC. Nancy question Please line Your go the from Bush ahead. comes NAB

Good morning, Nancy.

morning, Good guys. you? are How

Good.

you. for questions Two

we mentioned have headwinds in market the all now. in You have overcapacity we business that that and mortgage multiple know right the

about Given that XXX headcount mortgage, you and you reduction point what that? in or what sized you so have announced think change see a mortgage might minds – what the is your I for coming at company this

that have the So, we Nancy, based mortgage we about the got that way that business be improve upon think results is to we the today are to environment able in. our

agree of probably this today. Our an the it’s probably in both going over guess midst improve, overcapacity we but with seen given and we’ve cycles are period you time, that that few to a

team, the doing are DeVito and the trying are I by mortgage that. origination. on do of who digital focused Michael of we side mortgage need on for that servicing side. a So, business the is not continues it’s because have and can application. And business we as the so that the what’s declines to great you about the and or just introducing also think how at managing of modifications a defaults we looking more efficient happening more see, the How is to It’s do at job, way? like originate the portfolio that also, servicing lesser business was the mortgages? the way portion just And about technology Part can quality improve,

going but of continued efficiency that particularly that you environment the are we a overall, So, are an is in right we in now. business, improvement see assuming what to are that think I in in

the in for see saying coming now? are So, right-sized road now right what basically, you down you the built is you of have as right company mortgage

all to think to today, Well, for and back we expectation of efficiency comments only this for improve for about you So, how to gets expenses the do about the our but John’s can mortgage, Absolutely, and it? not it’s we our do what you is right-sized business but returns $XX next business? is that’s Yes, billion we what to down to the get couple our billion years. improve saying of today, over to can are all of how $XX businesses, it? to but

Okay.

expenses question probably your losses. Secondly, decline John, operating part in fairly this a you, is large for and a of was year-over-year decline

$XXX think something. and I million

if are going what’s of still most fraud that case? decline? operating And Now, the losses right, that memory in losses. my serves me Is on

No. Yes.

robberies, – million – worth year, go around standard every losses, would that we estimate bank The in that fraud other is sales that have items years. the $XXX just wrong over the or really been and some remediation. occurred couple above of related practices uncovered It’s banks. amount and I the So, fixed of last things are of to things then as losses operating other and the litigation, outcome you described, that

to little continuing we to a particularly, that’s growth – of comps probably having take I had company the we’ll And bank, losses even much maybe, anything, back be I fraud too a are but credit a what outsized to of would last up sophisticated. in for or Fargo. So, like too want credit for bigger bit we credit. to tick the as you’ll that exposed operating don’t some the part much as more losses, incrementally see have banks baseline take and call so. they’re easy if a year time efforts shouldn’t over more business, risk regular become more that, persistent result The Wells as But operating card

Okay.

that basically, this decline So, saying probably year-over-year going flatten though is out? large to are you

third group right. that settlement finalized that’s a the ultimately pre-crisis the think of $X specifically, accrual in included this working quarter quarters And last last I RMBS of we year. billion couple for year the

So, exist said that last of this of wouldn’t Having that fourth there. of take was quarter very same versus quarter reserves, that, the know, the relationship fourth last given idiosyncratic. And so, everything year, that did benefit, year. to fourth expect we big if litigation in quarter would be I some in you year I that will,

you. Okay, thank

are You welcome.

Nancy. Thanks,

from Kleinhanzl Please final of come with Our will Brian ahead. question the line go KBW.

Hey, Brian.

Hey, Brian.

question know was pay that growth Hi, specifically, forward? loan the overall, first pay-downs a previous that you decelerate did quarter. it’s in quarter your an acceleration the going good morning. I from still or the on saw for One quick it but the expectations downs and headwind to what’s

talking You’re loan loans? just on growth or about

Yes, just the on pay-downs loans.

Commercial real estate.

just estate, real portfolio. of just describe as conditions I and of the duration would commercial terms reflective In being underlying and the that the

out years capital And to and markets, acquired some estate refinanced came a loans real the GE from etcetera. there commercial were that of got into the ago we that acquisition term few

little a probably bit that’s So, idiosyncratic.

progress Is Okay. mentioned you And success of good with put but haven’t you’re kind far? Propel seeing card the that there around really any thus numbers still quantify you the second the been you some has any that. can way then one, credit offering, what

still a is Well, little we are about declaring hesitant date. bit in we to excited But the being victory. early it’s are in the performance really process which why

about good originated which are is are a our I made be think seeing exciting are seeing convenience because and is the from that provide is of digital we a we’ve half service to lot – being which digitally is we customers. able what that to standpoint to of investments cards

really our it. are has is card we I overall, exceeded very And seeing excited really, about think But customers are existing the attracted which we expectations. be great. our performance to the

specific it months. We belt and we more probably will what after is here in accounts quarter say, X looked XX% and which a first few year-over-year were But XX% under earlier, have our or the momentum. when be mentioned we quarters back is good up credit linked new look purpose think to I in months Propel like including card, general we were X

that It what Now, Those lagging spend. lines to translate of issued up things I into balances. has the were has the into cards are translate indicators, along new mentioned. to but

point in you business got really, describing. John the the see one think are card, is you additional Brian, details far is when the so for to about being and providing And we of that returns But reasons the somewhat a lot that all model so of because why good. that’s metrics conservative

Okay, great. Thanks.

us. listening thanks, you. of shout want to Wells we company. progress making is with effort. work the spending our in on of Well, are for reflection XXX,XXX and very, members. have And also your to And all I Fargo today, goals that out Thank all transforming The hard are the you we six a we time for achieving team very focused that

So, very thank much. you

joining all conference. today’s Ladies this you and for Thank disconnect. now and concludes may gentlemen, you