Wells Fargo & Company (WFC) 12 Apr 242024 Q1 Earnings call transcript

Welcome, and thank you for joining the Wells Fargo First Quarter 2024 Earnings Conference Call. [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. Sir, you may begin the conference.

Good morning. our CFO, by first Mike and your joining Scharf; CEO, quarter for answer our and Santomassimo, questions. you call our today Charlie results Thank who'll discuss recorded. being is call This

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

Thanks, turn take results then and detail results we John. you more our first questions. to I'll update priorities. brief quarter some in on our call to I'll review then over before Mike our about your the comments make

quarter first me with start Let some highlights.

be we're offset we've fourth were expected quarter. making consistent. Average in from versus and portfolios, remains ago, income stable significantly noninterest our commercial we trends an year-over-year across declined prior stable last and in expenses efficiency the our results in spend commercial consistent initiatives, equity higher year from and revenue loans but properties, office the and exposure were that as with investments interest an has continuing continue changed ago also quarter weakness growth generally including our in diversify the growth fourth In from forecasted, expectations XXXX. Average year Investment specific as income. markets, and deposits. benefited down from relatively to quarter. demand quarters. as are a portfolios. continued the deposits than reduce not Noninterest solid we we the the gratifying higher to Mike the to Management commercial remain both continued our certain increase an fourth impacting delinquencies from perform lower franchise charge-offs since as business. Net what were than in every benefited to a to the quarter drove consumer U.S. the quarter interest-bearing anticipated the versus rates but execute on Wealth higher higher to of continues Consumer deposits third quarter Our making are to expected see Credit as will fourth headcount, discuss progress which net our noninterest-bearing the increase income reflect the items more we reducing have we're and certain see strength which in consumer our offset and contributing improve financial performance quarter in economy. decline in It's

returning and remains a to excess strong position Our capital remains capital shareholders priority.

year outstanding expect quarter, first earnings in ago. In XXXX. of stock, $X.X we stated repurchased shares we did total we to X% call, billion on our declined our than from common in we and last year this the common more average As a stock repurchase common a

as today issued making much it we regarding that practices in Earlier our with priorities, the work. confirmation our on important Now control around XXXX The was closure OCC risk is terminated a starting practices. update consent strategic you progress of order sales let differently operate year, and the we're an misconduct. me this this on sales order milestone

The track progress. This of and sixth consent closing framework and we is metrics numerous improving work risk our internal the effort, repeatedly along way. deliverables, that Wells our completing our our until important changes, remains that Building said, interim in be and orders we our and will risk work top see is of we and but work the we sign as joined XXXX. since priority track consent show implement terminated Fargo control clearly regulators we have we the control a I I is is satisfied effectiveness environment, are not our complete. that is order control all ongoing As an continuous

priority So not and it will change. top our approach will remain our

recent communities, year areas, $X.X and and letter, added company for over groups, we XXXX have customers, employees. a control-related we numerous and our more XX,XXX and I As we're my in highlighted per stronger, are than in billion risk spending annual approximately people these across in better

remain will actions. our While Regulatory further said at what we're and is regulators, validated past. forward I've confidence, ours with in we by I and it regulatory we complete of work such moving banks' long-standing on is pressures issues risk our repeat until the until as high,

on controls found oversight, heightened priorities issues implement and our could drive strategic control we time progress the higher as these actions. be time. and risk we're to better serve we're and over work, regulatory help our in our on result making may Additionally, same new returns customers At and executing

we they Autograph points as We travelers who launched wherever continue travel. attractive month, designed book to our introduce frequent Last Journey new credit build we business. for earn could products card

strong product new from card continue up $X XX% approximately or to drive offerings ago. year credit Our spend, a billion

product more industry grow the a continue in world-class coverage as he's and senior Investment Doug talent new Chairman. Corporate banking. Banking. XX We to banker, experience, who Vice in our many than years great More groups February, XXXX, working of Doug strengthen is Fargo of make technology CIB and assembled within XX he's alongside Wells a investments have the to and than joined joined since franchise. with hires Braunstein key continue and In to team has these to

development. issues In client Doug's he's experience, beyond on addition, given the breadth counsel broader providing of also business

helpful it's grounded always forward, look to facts. the we in be As

patterns to and expect, consistent of not continues commercial performing all are perform last continue changed economy. generally and credit quarter. to We views in using significantly have real since debit around our our is remain These credit U.S. Consumer year-over-year. grow continue cards well, wholesale to see consumers strength estate and as positives. Spending the credit we

In to the our performing increase confident efficiencies addition, in we are we remain And ability as targeted investment card, across committed such credit areas enterprise. and and investment trading have well. for banking

which fee across over on we our our as volatile. We revenue. share last early and a diversify are to other growth, of we income beginning were positives. of risk to again, businesses, managed as actions and will be important if managers, signs multiple rates We've trends net several opportunities And the remain see cycles revenues interest as believe are remain reduce well. position bullish percentage prepared and us and we markets that, And we've will said Having change. historically years the through likely that taken more credit

liquidity and capital strong have We positions.

we're have model our businesses, regardless differentiates franchise building compete us As from risk most many of value we done of And who a our of within so business environment. we of consistent and appetite. level the with,

So quarter. changed our our Simply said, what last outlook? this all does mean from views haven't for of

to there on we our date but While is pattern what change points alter see specific a our look data consistent helpful. a at not views, we guidance, is could enough of specific and

Our focus remains the same.

we the I'm investing will higher-returning Mike. future company call we've are Wells build We optimistic I I'm to are about best-growing ahead. over the made, with a pleased work and to opportunities turn well-controlled, the while more transforming and become efficient. and progress now to Fargo

was first everyone. good Thank income you, and share. quarter common diluted per the Net morning, $X.X for or $X.XX Charlie, billion

provided amount may included in disclosure. share for the billion FDIC, which Our by and FDIC including the first fund. potential updates to quarter per special results continue recent to and results failures additional the regional deposit as were the assessment Recall recoveries, result $X.XX quarter, determines recoveries or for assessment, as of last the reflects this change FDIC included losses a last our ultimate our assessment insurance special $XXX million year. the amount The bank $X.X actual their the of highlighted special

$X.X the X% of deposit as billion yields partially a by on migrating or rates loan higher assets. Net earning Turning impact costs, interest to year well impact higher to from ago higher-yielding balances, Slide income of products on offset funding to lower due as including X. interest the customers declined

results businesses a quarter the balances with expected higher as little largely were balances First loan our in and deposit a expectations. lower than little

net than XXXX. income to and Our approximately full quarter, from still year interest interest X% lower be income guidance not net last has changed X% XXXX expect to we

the interest rate from net level loans absolute were interest segment loan down operating loans into Average factors, customers from and uncertain, will alternatives. increased reflecting Slide almost deposits is variety early continued still highlight businesses We including year and of our in cash discussing results. year Credit yields ago. the when income to categories amount declined. and a specific year. points depend I'll this and also X, yield year, the highlight the quarter of we XX other ultimately, continue of fourth card grow, the a our shape to both interest It rates demand. On and drivers expect net basis mix a a of the income ago environment. are will end X% declined spending over towards lower of the higher-yielding ago, the continue consumer in deposits and from to deposit earn X%, curve reallocating on and year higher as Average loans reflecting of pricing, interest balances, deposits. Average loan we which many trough

bottom temporary some which up from of success operational end deposits commercial and growth of in deposits holiday. but that fourth were on included modest, the a growth payday from X% While in quarters, Period-end this we have quarter, the reflected by attracting driven consecutive our in our in was average quarter the the reflected was on clients' a chart page grown businesses a quarter deposits. X for fourth increase a the deposits

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XX%. deposits to of deposits mix of declining our percentage Our continue shift with noninterest-bearing to

Slide income with advisory fees reflecting and Turning fourth all banking interest in in lower investment ago was fees. We noninterest Growth business the ago. growth Noninterest more and were XX% deposit fees, than brokerage in offset and across net revenue strong growth up quarter growth segments. investment both a income, and year on our trading from a the noninterest commissions, pleased year from noninterest lending-related with income a income of to X. income

I Charlie conditions As results. the we discussing when businesses. highlighted, been we've segment well specific the growth as from in highlight our this will drivers investments of making benefited market as the

Slide to X. Turning on expenses

billion. historical approximately higher $XXX million to fees small advisory expense from behind assessment, matters compensation expense our increase and the unchanged stock $XX.X number higher and first XXXX equipment from for losses, FDIC in which predominantly taxes, noninterest operating special in payroll business, the technology expense year retirement-eligible offset X% professional in lower by are expense. higher that and first higher the expense contributions. the to was the services working expected Investment Wealth and fourth matching initiatives, of special declined losses remediation Not quarter driven including is partially efficiency driven employees These personnel seasonally for a increases year is quarter, customer our noninterest get revenue-related guidance FDIC and ago. in expense XX% hard the The still for by we in and expenses ago, Management quarter increase increased quarter, higher First and of operating including were be including due restricted XXX(k) by from year a an accruals to us. The approximately impact full expense, of driven were by assessment a investment outside

watch However, items. a we continue to couple of

of of guidance a operating in still a included with the reasonable losses is the $X.X which first level for estimate year, operating Our billion believe even we quarter. losses higher

expense higher, However, the at losses we could our continue or and fees regulatory have to advisory increase market could as than which operating remain litigation, remediation current outstanding move would thing. that remainder in Also, impact We'll the compensation higher update be year, matters in for good we levels would this valuations that guidance you be investment year of a progresses. during customer revenue-related and year. the assumed

reflected further estate trends changed. were the office from office Net to in fourth of of deterioration which quality points XX Slide fourth XX therefore, lower quarter not on what in with quarter loans. points reduction credit average quarter, down loan real our last expectations points average charge-offs to performance by quarter. our fourth declined Credit basis The we net portfolio. $XXX versus to and was did basis decline have Turning basis the X. X not loans. saw see CRE commercial from consistent of the were commercial million The We lower our driven portfolio the loan losses performance charge-offs,

We in quarters. continue to expect losses coming the additional

likely net fourth amounts the quarter loan points expected and of continue be $XX charge-offs were up However, to and as from will average basis uneven the loans. to episodic. Consumer XX increase million

losses actions XXXX, card we increased in the auto realization quarter, the late losses assets the quarter. credit tightening to of benefiting from the reflecting driven pay our office While in starting nonaccruals, and with by in continue the decline, declined X% downs from losses fourth line expectations. lower CRE Nonperforming implemented

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Slide Turning and on to XX. liquidity capital

remains minimum quarter. continue position billion repurchased buffers. the XX.X% and X.X% Our common CETX strong, of capital our well ratio first above We to our in of $X.X stock be plus regulatory

to quarter expect While the did more repurchase will continue we we XXXX. stock repurchase stock than each we to common amount vary, year this in of

segments, our ago, lower on Slide Business year operating and and balances. with our Consumer, XX. revenue driven declined deposit to Consumer Turning starting from Banking Lending Small Banking a by X%

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refurbishment optimizing of network. modernizing are branch X% accelerating branch we declined and year a branches of number time, ago, are The at the the same We while network. from the our

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account strong, New from be continued up year. to growth last XX%

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loan estate, implemented portfolio. On real the types increased more reallocated interest deposit higher-yielding higher by a compared income market asset-based due driven was revenue customers into year balances to actively X% declined fees also given efforts to reduce alternatives to net last by balances with offset Lower valuations. Investment cash in In than our lower commercial and ago. Management we demand as increased market XX, in conditions, property credit due to year, addition tightening Slide certain weak to along Wealth actions

in of migration the year assets than as percentage as past X a quarters client a it has total deposits was higher significantly. ago, cash cash declined alternatives slowed into alternatives has the While of

so a as quarter market from of January As are the valuations beginning priced of a the results at reminder, majority were quarter, of which assets the reflected higher advisory WIM year first ago. X,

driven fees improved in the results performance. on quarter year both impairments. business in by we're the a of progress Revenue in corporate our ago strong making our results. X. Slide lower due grew grew which to year capital market growth from ago April results our a our highlights affiliated improve the from Asset-based financial to valuations summary, second reflect from will businesses. In first X, revenue, quarter were higher reflected as in venture our January fee-based and XX We

make We our initiatives. shareholders continue to capital strong We position. take your efficiency progress on maintained to and capital increased questions. return We'll our now

And our first Autonomous will Instructions] of John Research. McDonald question come from [Operator

underearning? Guys, mid-teens journey return common next the that over ask you're to Mike, ROTCE talk that how the you like the you the do kind what maybe profitability tangible targets And your look wanted about through about quarter. of on overearning, of of could kind couple Where does to this equity lens to of journey the and think seeing mid-teens years? you're goal. XX%

question. Thanks Mike. for it's John, the

So our in changed thinking on has topic. the look, not I much think

we've And about balance be to sort we the peers. so no now there's you of same still of are sort been to as for like long-term -- optimize our and continue drivers of shouldn't why obviously, while. We've capital talking sort reason as there's are And it's have today. on we returns where terms we to as think XX%, closer returns journey, a the basis, best go of got still of about businesses that through our sheet. towards it to the And -- we reason in no get a going of that we kinds

need not we've highlighted is of continue the was work and on and done, as and commentary. And quarter across return each start continue see, making this buybacks believe saw we'll via that Charlie we've to that some then our returns a it of stay quarter which the today. investments to We're those do across forward. is to company, whole You in to businesses, a seeing look drive us to of some the investments X got which a that and to the going to journey And so range we efficiency shows we're of of but the to some benefits businesses, there. of good bunch of good got a we're lot of on stay his efficiency we at making

those drivers get really get to it's have think that we're that going confidence there. we I so and still And

John, it's Charlie.

be near sustainable we couple to Let was and me was everyone, add we the just out look our one to clear, reminder or those that to a as things. certainly were points a didn't get to a but of earning, at journey we NII just Number that ROEs either on to is peak those we've the at got as at that as there tried continue peaks and clear sustainable, basis. rising

look I the got of are -- to You've right? any are quarter, the where we our losses, expectations conclusion very for talked which hard when think different operating the year than about second it's a obviously, got all, from full we've quarter. at draw specific which FDIC. We've

return that. about more well and it's the that see quarter. tried on, ability are. Number the conclusion we'd those So look but when see those talk the asset as we And going get to our we of consistent areas some performance, to as the as that still one well is don't business the draw as we what hard returns are bullish limitations continued highlight at like and have on to to are specific on areas increase there, of those is very because we we where things us capital parts we in very are improve company, we what improvement to cap. But a

and there our changed. in changed So hasn't views again, changed, confidence our hasn't our thesis haven't getting

feel like where then Do XX%, most is there. means CETX feels can ballpark kind regardless minimum running the of hang of ballpark, this of which at it follow-up just quick now? what probably return you XX%. the because And just are have bigger Does you XX%, aren't like XX% you're banks regional banks you think that at generating of X the that XX.X%? right out Okay. of have you kind G-SIBs super XX% You

I continue think would say to it's something through. that we

needs existing at with is know You significant that III Basel but X.X%. X.X%, with everyone coming buffers At today revisions. our understands are Endgame likely

So we'll to come quarters out continue, think I be able wind and informed about I always -- be don't more where we'll will learn the as that more up. We've where we'll tried a end, to be but which the more much, there's too is that which back. this we on is point bought quarter amount we too bought at the conservative why much

The next question of of will Poonawala come from America. Ebrahim Bank

as guess have points about I probably your just levels, following on XXX of Basel, with you excess up think billion we that, capital even buffer, basis capital. $XX

Given higher that pace expect attractive Mike, be that where the trading, saw going which buybacks continue, heard enough give just still valuations? color. we should of year-over-year, you're XQ we is and I'm stock's I doesn't to to what wondering, you, but given in fairly

Yes, Thanks it's the for Mike. question.

quarter-to-quarter. guidance on do at provide specific look to not we're what pacing, like really we'll you going As the

to we've I think got easily to with where invest and handle capital Gives quite pointed obviously, with to us whatever out need Basel the of as with comes we out, we ability you be. to be there opportunities where as significant clients. III got we've excess able today. are be We'll

to at other, quarter, or spectrum, you that rates each looking the will then all cover are of than go got more we at it's capital risks on seeing and process then but the go each that we'll same there client after decision different very flexibility. And through year, thinking report. we're And leave every the across confident about whether as did through where sort pacing kind so And we've lots go, make a we're say, But of quarter is what looking of we we'll it. last we'll do we'll we pacing the requirements out from the going activity. of are which -- to quarter, still

referenced there's hiring think I order share capital lot and where I And of market it. in of the guess for color and Wells space corporate Lending, Corporate level additional where opportunity I needed there's share And of Got just winning markets, appreciate that markets you to Doug see a think Braunstein. market had. in terms focus on areas Charlie market within investment/infrastructure the IB what's separately, Would in competing be of share? capital beating for

Yes, start let me out.

I think we what the first of making investment talk when spending. we're investment in embedded about level we're the and of necessary, all, that's it's

normal And we course business. are that funding so of through

we're people of and folks replacing of Some the that's that are what is. other additions or but hiring others it part

And don't in the any We've kind about. of anticipate we're feel what step-up fund spend and actually ability to base the we so got to way we which to doing, great along expense the But see them this underpenetrated for space. been investment consistently, paying stronger off itself. Listen, which the we've segments extremely side. are we very is the banking all of I said on almost across debt

and management or here It's of that the the just opportunity of, that X.X opposite. to decades, was equity because relate it's the model, We just team that. have side. differently way, willingness own not invest to last the because of for we reasons on the not our very not something than by all the as senior feel strong our business supportive been And over

we existing investment But we our that we because us trading serve And upon of both how to a a talent wallets. what the and with then flow platform business there prioritizing as support haven't the side desire we space strength have part we do big we part great are also broad based look of but -- relates the lot ability relationship where significant strategic our the it feel of to our But bank. relationships here. And of broader that necessarily institutional leverage institutions, across have their there trading and when that and so to is to of really our where we efforts equity industry, within by to where and the coverage again, high-quality leveraged customers at look do is that we have set we when that. side those already our about in with we business, we're on a have, do the industries and debt -- the the platform

in investments to so that, not but we're in And people just do technology. making

as this -- way people, It are degree We of our think right we past. the on base credibility and the customer right I any not our we've that of we're tolerances. services, had of the alluded risk by and doing products, in rethinking the to, a right about calling different is with desire getting the really

comes of Ken next from question The Usdin Jefferies.

deposit we could of just talk of kind if bit that little wondering mile repricing. a I'm last about

just up. You what's talked And you pricing sides, and about wholesale? are consumer kind the and maybe rates get happening you that's of peak give both But and continue expect in side. just the just how wondering mix we -- this we still to [ noninterest If that stay on ]? shift to underneath interest-bearing as happening down us the you as and can this seeing dynamics

that, Sure. take Ken. I'll

it the at growth attract the well. look corporate sort It's quarter. not other in we've investment as way look last the operating We're bank. good one way of been has changed. some commercial able Good you side, commercial We've bank much as seen over you a to deposits news seeing pretty move significant is the not the As competitive. or in in

the as the as you expect. high And And Fed performing betas to stay that to really so will start we move. down all be And at on see you'd pretty way wouldn't pricing point. you until that's pretty to that happen. there eventually to expect expect move kind still competitive starts of It

accounts people side, On of really, moving. higher-yielding savings consumer is CDs seeing some it the that's and/or either continue pricing their And accounts. you're or to what is in standard not of money spend some you're into seeing move checking the

activity of across happening into still some some space, and the people see migration at moving higher-yielding pace least alternatives. still the that consumer have wealth you that so where space, you has And for The slowed now. of

And over how year, that of months. so slowed we'll through has it the a the but see the rest number progresses last of bit

and based on softness we into any is demand Or underneath? the to the And general goes unexpected there an have impediment side, And showed where think is Okay. just all rates that kind with on? of not you improvement that year But get you seeing of lending year. loan guys improvement. what I generically think hope seeing the baked it on I is start are, just in kind an you're function others to growth they the as at

Yes.

so exactly to we're of demand. exactly is at different is which what the different And there's we this I year. views what I expected seeing what beginning is know January, pretty think but in we have low the expected, back far see people

being corporate a as "Okay, as not I a function. in a substantially to and pacing impacts of cautious being making they're or of the saying, they're they're the might that. little When in but timing at still or than as commentary, I much clients -- we're investment different how environment." They're and it's that I'm lower some looking the really And bank, had about cost is commercial inventories build going investments my you what credit the at thoughtful it in clients and what look the the Now in from not bit point. hearing this demand said modeled of bank we

so on is the it commercial point. demand really at issue a this And side,

continue to some balances. card in see side, consumer you growth the On

size of bit X.X that then turn. to little of changes tightening start the years we we very mortgage where the to the whole decline seeing got and there. the continues more given And ago, a start of will market years about materially, to the sheet in going side given a little Given decline, from. And just made on sheet, ago credit some eventually, X.X not bit, year, given auto, we've balance the some the that's move X we're that balance

the right now. those think I that dynamics seeing we're So are

The will next come Stanley. Betsy of Graseck from question Morgan

here. is unchanged, could just interest is on environment that's of the remind rate outlook income the interest what that's us that couple One quickies case analysis? you net base A the for

somewhere Sure. guessing expect rate environment, underlying around what's baseline It's sort not And year. this the cuts look the this is we X of So our at right? Mike, sort embedded in different as Welcome sort variables happen, Betsy. our there, When going I forecast thinking Sure. that at think you look of what's point. that's you would back. that we're at of to

set that quarter, was assumption changed? And as that same same or last the has

better or and of reaction, the what's time happened this that the have the it's guidance of our it's isolation, on extrapolate today. And We're pretty that, short shifts I cuts. out our the a up being that did less for by you No, today last reaction bit mean, And than think really look do year? I time. the moderate that as definitely people either more think mix we time far, in X forecast to have less in feel slide was what of little clear, certainly rest mean going to put be I I react No. what happen even rate to day see rates, in there. too we put January. projected that's yes. we to is and got for you And But bunch out to from you or I over given to now back what's we -- and years careful over do context period let how certainly you to happening. we've every be than what the look of what a about our in January couple strong But a to think of, tends have play okay, market impact see you at we down look, right? and I over think seeing client seen with take of would a some a benefit in when behavior expectation that

see so plays -- we'll let's how out. And that

pulling rates long more How activity, in maybe opportunity long-end Okay. And here? bit about there curve. end volatility that? improved do anything the slightly you the on -- had set obviously, and think securities, some And reinvesting and a in given deposits for is the of quite of we've

Yes, have us for been yes. far. And trade, quarter so the think, a and securities, we've been I rates some mainly that's And starting buy given where started where we to some mortgages, that been. in have good levels degree to do to first

deploy so And forward cash securities some I think levels quarter. over to you'll next more certainly at into at modest see we us least the look as continue

from of will next UBS. The question come Najarian Erika

questions. Just to up on follow Betsy's

interest had had expected. a upgrade outlook, a modest net to outlook than peer you that income On that the more

or You the as end, the behavior. to and to fee cuts on to firm NII your client think above that mentioned or cuts, rate you Betsy's to held the guide. the not right? beyond to curve implication there guess no market, NII Like in volumes, whether be through is just are I question, response going we marking to

a terms wanted ago being I how X range is your And to so understand X, just outcomes of a couple estimates, of of the in I guess to talked days with in about about words, which of embedded about volumes think in and have about the considered as other behavior? we volume of deposit how range you're of In loans thinking curve outcomes you think terms wider do you outlook?

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related was a question market for was very to just the of another. It a hopefully clearly And -- it. was order of Got follow-up, X-part the kind Wells. how but huge lifting consent perceiving X the

potentially you're outperformance, As I and may extract in about of thinking about we had could like has the usual should clearly potential further Banking saves think be light remediation. And on but remediation, that a processes the cost that recycled ask think for us know focused not place, solely I these rates? we of Ebrahim how massive that seasonality, been Investment on back mentioned, board. run question, the as the Investment about And do we from it's Banking the expecting how all you there's in to reinvestment mentioned, obviously, guess we hard are base the and think is expenses, lot but Charlie new across about as you on underpenetrated And those you're accelerate? Trading, I what Trading. tell because start -- also the to a as

see So base should as of the moving a continue we forward? this up despite we to seasonality look

Okay, in there's lot a there.

and start, me you in. then Let Mike, chime

we're how you about in answer question and and again, Trading I should you -- of in do. to think can on Banking which So Banking we're over what Trading. we will But like the Mike, way are business, there of what period to share that's that's the is all, we're And future. we're we're Investment a comment building focused And not and on but it exactly on taking mean, of a we're building businesses? Investment be what first starting Are on focused time seeing. the profitable? going we are, is volatility What

we is market own a forecasting that it subject think be the would to that rise we time, we about look see will expect exists. period when And quarter-by-quarter, our volatility over shares so know at of and way to our it would

the seasonality run much And think going seen always on trading investment-grade quarter every as take side. certainly there's rate. on when issuance high about you've pretty That be you in Investment the just a that And Banking you happens side. very so the particular, side, first volumes on the to year can't debt some

some closings revenue forward but volatile, and later and pulling So the the embedded then given deals that's issuance that's somewhat of M&A year And timing be stuff. of in and the just maybe in see. some can episodic likely we'll there

to look longer And over of time. do at lines have those a X you period so

doing. were on question whether the and that about gotten we've your on control in We're exact is risk to not thinking we're all. not efficiencies the thinking is at we -- expenses, We're about then it which place again, doing that there And same be out work we're not are been, of work. all

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and whatever necessary So I spend we're for it the that get going comes to would focus done, to work fact committed not just still to separate us do efficiency. that's when is of to area the the continue to there, we're

That was clear, Charlie.

The Research. Steven of next Wolfe come Chubak will question from

the the just off unpacking question on Mike, start commentary more. you to a year. wanted end prepared you maybe be the bit troughing remarks, expected this towards a I of noted that to In NII So NII

that, about in that's concerned supporting speak stabilization, the rate less So assumptions the to cuts outlook. 'XX forward troughing beyond curve given the that are full you was just further reflected hoping expectation could year inputs I or that or around 'XX.

obviously words year? to certainty to -- going next Like it's difficult that we've we rest the deposits of But this in the with at date what's Yes. But starts quarters talked input the of of of the the of -- the you mix terms sort forward. this of project environment. of at some at sort use other Calling the nothing factors, just pricing over of -- that towards of And it's assets the drive you as sort degree sort look when balance of forward there's you and the Steve, you early last migration getting that's we're through think happening be you and is starts unique sheet. point happening where expect on are mix going loans look go securities, trough. sort little it then as different the When end high and intentional all few in Is year? then that. like over when of the repricing and that's point, that's out. we to And look asset sort exact sort about look you coming year. to of obviously net it and all would goes things and I'm deposit stabilize deposit forward. And and deposit key the to in at parts both going closer to with our that terms you intentional of a at a a Is right the I'm balance in sheet, the the it it's

helpful or just the much these externally, addressing of clearly focused consent earnings this regulatory you recognize question, potential different spending to might asset are internally be it various and follow-up, or the lifted, that cap quantify orders. but time about relates it but growth responded you're regretting uplift risk color. the remediating my I one That's given how to investors control asset that more you're cap speculate contextualize restrictions But once are get all And Charlie, on trading be timing just focus to that thinking specifically. last sources for evaluating relating Erika's the you on just in don't to those whether can to if can when it, potential you benefits. how for elevated recapture, of expect and investors, helpful eliminated, some it's might you expect in spend. Don't book deposit for return reduction

in get which question clear Sure. And question, and categories. level as a by frustrated is, as to I be you think, or your things try I guys couple want. I we'll answer, like you about. But the sure of ask of of to we put I'm feel not be careful can you the you that a to want you consistency entirely I'd to want whatever reasonable, don't into shouldn't on think position should the be I just what to asked I

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think, we'll that of to so just in actually I initially, be do. as And we'll opposed what terms factor viewed is an important how

done proactively got what manage X there I below we keep ourselves think cap, when X, we look the asset have you've to to at categories. company the are

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would are benefit short those being So places that the asset in the lifted. the term from cap

out we to dividend our when the and think the you I because amount capital that plenty as to our you business But of trying -- -- build whether things terms set, about, conservative our opportunities of still business. to businesses by through when what side. Across able business is product do constraints, higher that in are it's the spectrum buybacks have there's are full asset think keep as we the or side lending to and do beyond aggressive It's to we've deposit we -- more you of return the -- achieve returns take I be anything want our in banking and around it which reinvesting been cap we not the we when is inside we've and that we through our in Wealth very, businesses, on the of by get we have, to to where dramatic. much excess it Consumer our not that can should the around we're so different that, to an only would have been our share have don't look people issue. at when talked shareholders. But I don't we we describe being what reality very all of because do look terms deploy asked there about

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context, helpful Charlie. really It's

The next from of come ISI. question John Evercore will Pancari

guidance behavior. mention you there either And had NII know loan the help your that expectation this feel the are what NII Did you're about understand lower you on here the growth you watching what outlook guide, way, did customer you but that front? I us better outlook baked growth growth. that that's in able quarter is loan last On with quarter? versus loan to you XXXX I into

in seeing, What right? expected said is And to in what and So overall it's that's half do the the in but decline second full we January to loans bit we lower balances going we and then sort little expect the for the slightly what of Mike. we it's of a our of than again, John, that first half, about pretty year. much it's we're what so Yes. modeled, to weren't close growth expectation. year

off higher? little And it Maybe. it this so be on a Maybe. for bit? sure. And a at lower? point, could be Yes, little a be we could little Could that

where more What's place to -- And come What's pricing NII will that year to going it's the focus. so more the I deposits, think the ends meaningful this look think of mix? I back up, meaningful like, where level? to the be the And the but environment And what's drivers right? is? given

could any that, growth to expectation related share? deposit that And Okay. you

I you gave modeled. our the assumptions would coming seeing commercial where it's well mean, I Yes. flat -- guidance decline slightly that's full better side we the to what think pretty where we again, of year more so in we that thought far. in mix year, gave be where or we we to are, January, you again, see side, what the as shift. had as than And little consumer we you're started In would a bit we likely that's

we our making transparent predictions answers this, we're all not have be we're without We're We in as be can over seeing want about us to and of to none be getting skis what careful the right? to. trying really as that --

X small the relatively to you point. when the said big deposit a months a relative going down it at activity we're like less on this lending really more in in here, change NII it's drive there. touch terms to so from not ago terms NII a all the of what's and and touch what customer is There's And seeing, that of we boil flows big the side. It picture

again, to It's it's the of go then market couple upon said relative number thing helpful I that. and certainly, context, wanted if early as we of is changes and saw But to rate again, in environment, remarks, to just might we by. and the pure months a full whole the relative seen see curve to pan provide too mark Mike say, it. And we've a we've overall big way we'll how year said rate based also what is it's along said the out. guidance. what just just -- the to just to and we But my change -- let's So it piece has continues we is there, had this it's tweaking

side. you Okay, there? encouraging volatile. inflows? talk color CRE to about could just Did along credit more decline ask the Is and that's can there track a pullback the NPA there see that very NPA helpful. side? maybe you be appreciate that? I it Can is I there. If in X just see you I know Did anything on the

or about I not about space Yes. not estate, when all get No, on what and commercial office. talk seeing -- get the office you you quarter. look, you're what talking real saw worse at is the in And actually the it you're worse really think moved in

they so bit we've and And charged by not coming other space you loans, off little replaced -- the down assets CRE actually as in items. nonperforming saw a weren't some

movements And the a portfolio. everything in There's of substantial sort not it's the is then around expect. of would that sense the deteriorating across rest so point. you positive at that's else not moving this And as like

of question Bank. O'Connor Matthew next from comes Deutsche The

you that's to up comment How those are revenue buckets, I higher out, but of this year goes a frame there if same kind investment earnings market-sensitive higher follow is if can so would operating that continue the assume revenues in overall. strong. costs positive you cost if higher, the and on the to banking XX% could that net that? pick how which would $X to leverage be and Want revenues, advisory, But would Obviously, you trading come frame on billion XX%?

that Yes. terms And ratio is referring market where really we're what when pretty in we're where -- levels the given we And stable Management is comp. focused, Wealth of primarily that business mention the is to there business the cost-to-income is are. revenue-related in

think about terms less than to little And XX% so it. how in it's of a

So the leverage good. is operating

come. that, those positive is pressure overall think revenues invested that in strong. if could earnings Okay, cost there's And operating Trading, something it to seems those very I has that's that very, know see segment leverage the revenues in And you upward a surprise? but... But the can helpful. just and some then specifically been from Banking you on continue upfront to guys we again, when that so cost businesses like continue Or to

cost Yes. Charlie think the there, No, already invest right, in to is our that's look, noted, so there. as I numbers,

way in already this that our point And bit the at a obviously, we're don't expectations you that. too. come a or revenues would far being as exceed positive like a if So way, we that other. comp, But of with see know, one point, pressure little anticipating big

overall. that good would So be a thing

come next Markets. Gerard will from The Capital RBC question of Cassidy

you rates touched XX-month look guys as horizon? deposits of noninterest-bearing XX% Assuming Mike, maybe noninterest-bearing have on a a declined for the up, over not about stable to you down normalization we what's sense bit? do have level little they deposits. your long-term deposits out come the you go Do rates,

Yes. [ to the Gerard, or in chunk the operating good accounts minus of certainty, a stabilize It you lot each consumer as we've as Look, going where accounts to seen, as stabilize deposit some with A it's X start are But the we it are this some whole and XX of I generally exactly mean, our will deposits plus number consistent, you've people, underlying as -- a we'll at for will stabilize. expect But say look to had a at mix through pretty would hard where of thing quarters. consumer soon, point, terms of it's point lot quarter so some exactly than go. They in to less right? that gone base, a particularly we've will thing of bit, that little stabilize of last we see does. at ]. but

deposit the betas is in And betas where out is rate assume change as eventually to well? it the of flatten that declining, those deposit fair

seeing related are when the people's get then Yes. of Once And And growth is -- then savings your will together, Once of that I in stabilize, that's account, low very accounts, you're right? see the operating people costs for accounts, side spending right? higher mix, right? that the sort mix and money stabilize. of to on you'll balance in stabilize. they're related to consumer stabilization more earlier, are their cost mentioned first checking those you us. It's noninterest-bearing, question that's as seeing in start interest people what when in you're deposit see -- cost. both seeing you Because now around some of which you'll kind shift Once core CDs

a you charge-offs the estate pointed numbers highlighted. to you that then line as especially good And up in guys up in the real put expectations. you cards, were the with area, Obviously, Great. out on but overall and as credit commercial Coming that back follow-up just credit.

thinking for does later you when think goes credit not do recession cards? head Assuming you net into around are say X%, like guys up in that? peak a the charge-offs economy And What could or unemployment this X%. a reach year and stays to it you

set. I Look, new what's faster got right? just the players, now the balances middle been to a other We're for into really you we've think coming of seeing and making the product better dynamics on happening investments than dig in of We're of in years. part in Yes. given our growth new portfolio, the accounts X the underlying maybe of refresh

we -- that you'll looking a should normal behavior. But here. I'd each kind vintages. new of of at of start maturation At to, peak of that so see the the come lot to Everything in much credit time have back with sort spend the And the and that just underlying a be and putting better. vintages quality some of comes expected -- pretty point, some top looks new are -- of couple good slightly the quality what performing very of is continues very maybe the on them much we're the of cases, And we or, case. on would accounts of to

we're maturation. the like you phase peaks, that that sort it in just would as quarters. say be of when sort know there, I And it we'll feel should coming let coming of normal sort but we over of we're of So

from And Point come the next Dave of question will Rochester Compass Research.

side NII sensitivity past. was think if headwind, in levels any, be and commercial amongst outlook. the loan any loan all of your you all in just this big a the Appreciate elections general color could trend to presidential in the that the if how you've activity year? on noted And I customers wondering on at

Yes. mean, hard. that's I

at making. not that data. of would point, certainly, will be how want empirical of aggressive kind I incorporate any people this be factor out it with or to really prove be to of into they're But a think thinking their that they hard investments and sort

with sort we're things generally is environment think to here. through the factor people most rates some the point, I some to in from small this and least at go macroeconomic of we're what But go will at point that just uncertainty degree around where high we related overall seeing in year. as sure a at such having I'm

Yes.

had the Okay, mentioned momentum line, appreciate then Matt on that. trading earlier. you've And I just seen the

last in had year. year Trading obviously great You a

investments recent You in had making talked yet you've about lot years. quarter And of business strongest in year. a the this your

well grow year You're like you having lot still in have year. this making you seems momentum area It despite a now. as huge could where last those of year that this a

on get Just your that. wanted take to all

the matter Well, lot. to going a is environment

of X we've last been by that certainly X, we've over the some seen volatility so the quarters. helped And

industry trade all the in change could for line. that the us materially of and quite so the And outcome

see that So performance those made keep as to that. And some But we're point of feel that we the -- good feel some the about continue Charlie been a good businesses. somewhat also last about you share make to of mind. couple think said, the constrained we noted, systematically we've as we make continuing there, in good some cases and we're the I investments those has from market team progress investments. making across But view in But over years. of

And final come today question from for Vivek JPMorgan. of Juneja will our

of A questions. couple

on those some what not give numbers Can What types you color, been that's of quarter since Firstly, building? anymore? advisers? Mike? color disclosed year, financial past new advisers. you Any Is the have from recruits over that past college? Are doing

Yes, sure.

team sort over Barry but see workforce. in I So also years of as some that to really But saw stem and again. the And up attrition Sommers hard the only -- you working the declines through. we ago, go seeing think last some pointed have the if come you not definitely you out, a were recruiting been of that couple and starting adviser of of back ramp some to we're to really begin

And very is so the high-quality which we're a across to -- lot recruit business, advisers. normal, we're good slightly below good. And normal to back ability of our attrition levels that like feeling more maybe about

definitely to that and different. a think you focused mostly I on experienced a ago that And little of advisers, so And you we'll saw it. as couple recruits stay continue mentioned, of was years less on, at type trend college thing. We're

no Vivek, X I thing is I it's -- mean, there's recruiting we're Yes, prototype this the only listen, mean, -- here. -- across --

these our that across the same -- going several side, out But last different because recruited trajectory And entry-level our in the that workforce. more to X.X chose in branches be that they have some very to the we've have and was those than come FA of willing People And years with that competitive our board. we traded We before doubt today are it's population there's the teams ago. and pay are wouldn't banker over them. At of we're staffing we're up come the are the bank issues. of what people. is no biggest of here the country to the people Wells Fargo years. come capabilities, have to because not And it of because

higher given helpful. to in less back pushed to cuts Okay, not -- I the to But sorry, NII different 'XX, we rate for if rates if completely A eventually are I cuts you, that dead we does want could a mean, horse. that mean better go that's that rate NII, see question, But further now. and so that help troughing NII -- back? get should of beat

sort at is mean, I the to we'll of Obviously, how you from about all stabilize? cuts but exactly Where competitive it environment? Vivek, Yes. also of react? the it's of part sort we've trough. we look, going that So does see, And call, pace mix of the at what do of exactly rate sort broader equation, troughs. shift where have throughout as a exact sort how look And talked we trends look depositors do that the -- the where right? to of of see do matters

talk you, We'll quarter. All Thank Appreciate next right. everyone. it. you to

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