Release Date: April 11, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Wells Fargo & Co (WFC, Financial) reported a 16% increase in diluted earnings per share from a year ago, indicating strong financial performance.
• The company successfully grew its fee-based revenue across various businesses, reducing reliance on net interest income.
• Wells Fargo & Co (WFC) returned $4.8 billion of capital to shareholders through dividends and share repurchases, reflecting strong capital management.
• The company achieved significant progress in closing five consent orders in the first quarter, demonstrating improvements in risk and control processes.
• Credit performance improved with lower net charge-offs, particularly in the commercial portfolio, indicating strong credit discipline.

Negative Points

• Net interest income declined by 3% from the fourth quarter, driven by lower rates and fewer days in the quarter.
• Revenue declined in several segments, including Consumer Banking and Lending, due to higher deposit costs and lower net interest income.
• Non-performing assets increased by 4% in the fourth quarter, driven by an increase in commercial and industrial non-accrual loans.
• The company faces ongoing economic uncertainty and potential volatility, which could impact future financial performance.
• Wells Fargo & Co (WFC) continues to operate under an asset cap, limiting its ability to grow certain business segments.

Q & A Highlights

Q: Charlie, could you expand on your thoughts regarding current customer sentiment? Are customers eager to move past the turmoil, or are they preparing for a prolonged slowdown? A: Charles Scharf, CEO: Customers are trying to figure it out. Both consumers and corporate customers show continued strength, but they are assessing the situation. Business hasn't halted, but people are cautious, waiting to see how things unfold. There's hope for positive regulation and trade changes, but caution remains in the short term.

Q: Mike, could you unpack more on the NII commentary, especially regarding rates and loan growth? A: Michael Santomassimo, CFO: There are many uncertainties, especially with rates. The short end of Fed funds is close to expectations, but the long end is lower. Loan growth was expected more in the second half, and we saw some growth in the first quarter. Deposit trends are mixed, with some positive retention. Overall, NII could move around as the year progresses.

Q: Charlie, regarding the regulatory backdrop, do changes in leadership impact your progress on consent orders? A: Charles Scharf, CEO: We don't need to adjust our approach. Regulators are objective and fact-based. We've closed 11 orders since 2019, and I believe the new administration will react positively to our progress. We remain confident in completing the necessary work.

Q: Mike, can you discuss the reserve adjustment and your view on the current allowance for credit losses? A: Michael Santomassimo, CFO: We made a modest adjustment reflecting potential economic weakness. Our allowance is based on significant downside scenario weighting, projecting unemployment at 5.8%. We add judgment-based allowances on top of model outputs. If the economy worsens significantly, the allowance might increase, but current credit performance is strong.

Q: Charlie, how do the closed consent orders impact management time and efficiency? A: Charles Scharf, CEO: Completing consent orders frees up management time and resources. While we continue the underlying work, we can now focus on efficiency and other priorities. It provides more degrees of freedom in running the company.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.