WFC - Earnings call transcript Q3 2020

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Operator

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. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. that is note recorded. Please Instructions] today's being call [Operator call to John I like the over Relations. would now Investor turn to of Campbell, Director begin may conference. you Sir, the

John Campbell

you today Thank joining John recorded. questions. Shrewsberry, results Scharf; everyone. This Good third-quarter you, CFO, Thank discuss answer Regina. and our our our where and call will CEO, call Charlie morning, being for your is

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

Charlie Scharf

environment third about good Thanks, quarter operating make direction. quarter our more third our detail. comments John provide then everyone. to results, over John, commentary turn brief results to review morning, the and and some the I'll some on I'll in call

year served an incredibly and Wells. for our John John, done. who you leader much all strategic my be this excellent first you've July. with financial start thank at in helpful Company announced John call Let and in that me by me my been earnings will acknowledging his very to has as retirement has for last

missed. You will be

first with CFO. running. on some remain the and than of tighter the gradual the and As measure peak institutions this than economy made Mike average finance pre-crisis but operating stimulus clearly the daily to businesses. the and volatility during spreads deepened joining most I'm X.X% ground reflect the you as to leadership and experience equity market volume Fed's a as and levels, improving risk unlimited after third the Corporate has fiscal to significantly to a improved rate rate and accommodations quarter. quarter the of have are appetite, The tightened March. in cost bid-ask, now liquidity. remains transfer issuance risk the levels of and support elevated. pledge and HQLA has below and new improved observed spreads other Labor monetary momentum significant improved significant the due materially well by I'm market also in the as XX% quarter. banking improve as second markets market financial jobless and posting us reopening are Most Mellon, week quarter. dislocation that Mike to their markets, by and trends Fargo since Wells environment impacted comments liquidity the XX markets, to making followed forward has continue start spread going CFO that credit improvement year be steady know, and BNY years will more Despite economy in volatility the and this served looking the hitting Mike of recently strong have continued in widening of Santomassimo modest

presenting and is X% below have third in headwinds. in rebound remains economy sales way some of pace and to long powerful risk there process. lower, in consumer lower, stimulus reopening The and path the the and recovery XX% restaurant The end significant its the programs spending real the important, full go, a are seen uncertain. and including slowed, levels. well all still the recovery. recovery job GDP quarter the X% the for pace diminished while below the rebound to this there's still remains And of peak, growth gains unemployment However, of we've leaves to Clearly, the quarter pre-COVID are pre-COVID

our items, primarily $XXX exception now of from loan second this interest Charge-offs of produced unchanged. commercial also loan quarter. the would quarter, was across or by and all client across after the strong performance turn customer benefited a million $XXX We driven over Revenues aggregate impacted stronger while were restructuring strong and rate by demand and performance charge. a quarter, reflecting than tax Expenses and -- strong still a me Credit in environment base. results. items was prior balances, elevated down impact our reported Let weaker income from fee-related which quarter, from to most lower significant largely and $X.XX billion we net two NII very anticipated improved banking, products mortgage allowance our the share. $X declined second the with lower of exceptionally the declined, million trading, quarter have the ago. almost accruals other

early without lost. and referred companies The good that have place earlier more than clearly to ending. be better the are individuals it's behind institutions are still shouldn't Fed, actions helped is consumers financial and much and of this Having we to at fact thing, us, support. is draw And a all until the in said that conclusions but that, COVID companies of I certainly risk expected yet. risks are too sizes, and these from a However, the our of government

regulatory also employees. I for experience work, Our top the actions clients, targeted control the priority improve to customers, communities implementation to and we're our continues will be later. discuss this risk taking of our but and

key Company. to to to senior team the of roles the add talent continue management in We the strengthen foundation

proving Clear experience than more account In Risk cost, serves with fees. no platform a is Ather digital standards transformation. manage is and strengthen the to low efforts lead of and of Banking, popular off new XX, month with create better In and a further part the easy-to-use simplify elected has on Committee. report to was me. of financial and operational Digital with and risk our a addition Company. added the including strong products to risk group, We our under to of to Innovations capabilities, head comprehensive Fargo combination Mike innovation the of up and and Home is clear, intended with drive Committee risk-taking target Mark launched corporate its people Access start more Directors. our Company's convenient key oversight and other this joining opportunities activities quarter, to define a our He is as broader Lending XXX,XXX we so finance CFO, joining far Chancy impressive we experience. Company-wide lead accounts leaders, manage and Williams planning, and part big services our signed and of years Strategy, third business, part Wells services will strategic August, In across of population. senior and bank model Board's customers. will and provide Mark Board Audit efforts that view over very XX the to announced of risk banking independent overdraft as to several and new for leaders a enhanced all He This and priorities, Access of also experiences Clear

of it our part efforts, we reducing the we with bankers making accounts for our checking offer, different and reducing both number will be easier legacy products. our while expenses consumer simplification of also associated As customers supporting

December. at don't We least this and have home XXX,XXX we over continue changing anticipate to employees until from working

Fargo to is industry COVID-XX recognized U.S. as was of enable of our under our as employees just using Just as and temporarily leading and ATM but XX% increased of our Wells recognition great from have quarter. tirelessly and to closed, lobbies possible. who customers work keep in the financial transactions. come teller transactions This the more all we've work a our X% those second for safe for our conversations instead Wells according nationwide our with branch branches customers opened recently safety at to in drive-thru to bankers, the remain services study. our And of

early June. We waiving May, from and but in our in was up payment card The same seven-day March, April. XXth September has X.X of the average down week in peak significant helped Consumer than levels granted is still and Debit deferrals spend third daily strong down being customers But hit new remain the since strong. across year week small ago, quarter has of year like full pre-COVID to the accommodations we've business returning a ago. last continue last as week and of spend their customers. of categories. end travel, still compared lower year-on-year. ago. year and improvement segments of compared reflects despite Commercial from Digital of usage in from rebound, a approximately to the variety an entertainment the a throughout week card in be quarter beginning the lower significantly steady approximately September significantly This for throughout fees. declined XX% approximately continue same million down consumers XX% as credit September, improvement last the of week a from trailing the remains XX% XX% an by and to of the fuel was payments to trends spend ago make Since improved X% -- more hard year improvement September remained a from deferring approximately to a

record a XXX% the was high volume up dollar was to deposit mobile third in year compared example, an and a ago. As quarter

last moment Let far our conversation franchise We on believe of we're me is started take today. quarter the capable earning expand I earning that expenses. more than to a on

nothing ratio had stop Wells in competitive our we efficiency was far are from a with continue it though an structural there's Fargo to from Prior our to XXXX, competitive peers. to today. more We ratio, having believe efficiency far that business us

remediation risk and have make This for know, elevated part people our significant in we've and controls, of expense you to had As underinvestment outsized litigation in and accounts and an to address investments base. expenses. customer prior technology also

focused for We the our and customers, financial clients, also significant operational also that actions on have and to experience believe actions opportunity targeted improving are should improve These take employees. performance. communities we that

our reducing and our lagged in and the revenue opportunities employees We our migrating and Company got we be more running includes our significant customers we've with substantial effectively clear, processes have digital make performance, redundancy also reducing to products, competitors and starts focus manual and to This work, and here also simplifying well. bureaucracy, organization, solutions. behind efficiently. improvements To as believe

byproduct and will this reviewing improve a environment. quarter. near-term, We're established layers of restructuring our and organized to each medium-term business of Lower improvements. and reviewing we actions, of structured Again, We're the serve including customers primary in the are teams other our things. our also spans will streamlining rate near-term were expenses the management easier on the These We've expenses charge to working across it businesses making actions took $X control million this and this These $XXX us should these entire Company. be We're for annually. gross ranks already reduce of long-term lines run of doing dedicated approach actions these each functions. billion All an over through and driven, driver and taking by actions. other.

some discussed, the downsize continue, cycle. to and company the initiatives in We take we of estate to like in on to our client you it's I magnitude of and XXXX you. will conducting of entire delivery, identified provide jeopardize and businesses, plans. to quarter. work, be pieces and optimizing medium simplifying also which many providing plans, the continuing reviews specifics will our stress our to our this that products in include regarding important this our more buildout more cannot and and our has said, importance to we implement. and just expense should need will portfolio. many and specificity necessary It regulatory many understanding review to of thorough planning enough. think that financial real understand is a in performance, operational before will also a The importantly of We would our of most understand we I timing ultimately operational and be fully longer are These to to The that actions our we chance cannot invest XXXX that and next call corporate term important we're immediately. we All I've work. expectations anything control do complete commitments. satisfy to the not Mike position risk work where the improved investments on that need do the which drive three time We midst specifics across the service infrastructure, he

will progress it performance. includes time, best-in-class expenses and the is business way. do to of show both competitive to competitive build our take there along much ultimate work and While level This hope is a and goal to revenue

and I to making Wells Finally, to call to want the I for continued our employees over all work now their of better. dedication hard thank will turn Fargo John.

John Shrewsberry

and $X.X driven high. quarter, our up We third Thanks, earned detail grew the billion describing too drivers expense. good lower our I'll by call. morning, $X more provision of Charlie, but quarter, the everyone. the be throughout in remained results the second billion We expenses in from revenue,

let me that few just summarize two. items we So, third page our results included impacted a on that quarter

over million billion highlighted, $XXX customer expense expected the million by restructuring charge, this matters $X possible. the reduce increase in for amount as and gross previously drove $XXX of an of quarter mostly We by of the our population, The time for the of matters, severance the is increase accruals matters. to resolving expense, while Charlie we expansion rate variety as disclosed and noninterest part quickly remediation had had driven As as of annually. a doing customers customer period ongoing of a our which expenses predominantly to run in and/or reimbursement accrual outstanding right our thing analysis reflected of the related third

non-marketable We in change noninterest $XXX partnership. affiliated million the a from related model income equity accounting also for measurement had to securities venture our of capital

typically the equity by losses valuations, you As driven securities which have quarter. we know, or gains had from again we in third market

we And our income expect effective was income fourth result third a for XX%, effective quarter than quarter expectations. less for the tax our be tax to rate primarily currently Our expected the as near rate tax of credits.

three. page to Turning

level third unencumbered the approximately of primary the minimum. regulatory totaled liquidity above $XXX liquidity Our regulatory XX sources billion our capital CETX our our strong and continued the and above LCR percentage At to minimum $XX.X be our with billion. quarter, points of end

growth driven to more Turning the in pools. buyouts of with $XX.X commercial COVID-related from detail, billion second of Consumer first Ginnie four. billion page to of the loans loans with and been due on in by drivers loans loans This construction commercial loans the in increase including in period-end data facilities, declined mortgage average declines explain I'll high repurchase by a by quarter, offset second balances had second more loans. loans than loans Both, and includes demand the have consumer in mortgage, commercial on categories projects which and commercial billion loan period-end industrial impacted the consumer partially This $XX.X higher estate strength revolving starting payment weaker in decreased quarter, from $X.X quarter, was our or paydowns, securitization levels, real utilization was capital reflecting the Mae quarter quarter. C&I market centers. not and by by particularly the X% the continued five. of growth offset page declined $XX.X lower real We estate pre-COVID negatively loans from demand, the from line pandemic. including estate driven reflecting in business. pool commercial markets, middle second in early real declining deferrals. loan from increased billion and multifamily these liquidity utilization, level Commercial in the that

after relatively also held $X for were as billion consumer declining reclassified loans for billion spending for investment. loans first quarters. increased second $X We card held the Credit from consecutive quarter of to two sale stable from mortgage over

X%. down economic originations balances with declined Auto $X.X and from ago, million were reflecting second However, quarter year $XXX the the loans a associated COVID-XX. slowdown billion from declined

on the to continue quarter second revolving while $XXX future by lower to loss improve. lending as lower security-based loans new loans personal offset take lines continued and was partially from Other increased certain mitigate and spreads originations million loans. installment higher to exposure, credit We actions student our and

from the strategic of customers the business certain we notified exit our loan our assess as priorities. quarter, ongoing as During process our part third of of student businesses pruning our we

page on deposits to Turning seven.

lower due have to in to we've We to manage the the Asset continue Cap. under taken deposit actions industry growth

driven points, ago from declined sheet basis as second funding liabilities, variable or additional points commercial in X rate income due to asset basis deposit premium Net MBS income and yields declined in and from taken quarter second sources deferrals deposits from billion and average the were X%. grew interest-bearing second X% other declined continued we've quarter, day environment, loan interest year a for quarter. from year cost the lower-yielding Consumer year reflecting declines and balances, higher faster higher assets, growth The of but down after including liquidity, than deposits to the Banking up due our balance This by stimulus million payment earning billion by even to million which well second up shifts noninterest-bearing were partially banking decline prepayment in basis a actions ago deposits, customers' quarter. checks. continued actions, second demand, reduce from of as the repricing linked preferences deposits billion which lower Average and the business balance which resulted deposits pricing grew However, low-interest by impact these offset one to to decline the resulted or X Period-end declined and was quarter. rates. the nonoperational sheet X%, higher XX were from Wholesale small businesses. points increased $XXX actions billion impacts, billion including ago primarily mix $XX.X while These was loan higher the amortization $XX.X and $XXX.X $XX.X in into quarter. COVID-related of $X.X as $XXX from consumer a from driven quarter cash X% deposits

of $XX.X net the billion. income first was For our nine interest XXXX, months

approximately net which lower we is year balances due MBS expect previous our full of now and guidance $XX be lower income commercial loan XXXX to amortization. completion billion, the than With interest premium higher third quarter, the to

from nine. fee-related Turning growth with in increased businesses. many Noninterest to income second page billion or XX% quarter $X.X the

transaction increased While transaction by quarter, $XXX volume. from did to from should the Trust offset declined gains that billion continued the Mortgage customers higher billion, lower higher second and fixed expected $XXX points, despite the card volume second trading our from the quarter, production largest we've Card to record, from million the partially seasonal primarily quarter results fourth increase second to down fees the servicing origination similar from activities with customer to card and volume $X.X trading margins hedging fees and Mortgage ago. $XXX investment increased market for for by higher should higher in increased MSR banking levels. quarter $XXX held adjustment by third lower up driven fees, were from servicing second quarter, mortgage sale equity origination offset XX% primarily favorable XX second basis of counts the from banking credit advisory income the with remain up record quarter impacted increased quarter valuation waive second up net model a debit million million We results. year production second $XXX fees second income to investment second pandemic, declines, increased a volume as costs quarter quarter quarter results, deposit-related record levels, margin fees basis purchase million The be certain quarter due up expect XXX a fees quarter XX% negative in fees fourth prepayment result by partially Net second on $XX increased to the be quarter, and strong. and retail our brokerage currently the XX%. deal up assumptions repeat. MSR driven and Total from and from higher of by to basis points third billion to margins. quarter. the constraints typical capacity from continue mortgage trading residential XX originations in XXXX $X due from not and points the million

expenses to XX. page on Turning

$XXX throughout the to his the enabling more in comments from us I Wells reduce call. critical increased improving build progress generated organization. fresh from a expenses ratio, streamlined primarily renewed Charlie restructuring business and have also Our the by with in commitments. leaders to on XX only earlier agile continue the success, on the we our become is have our and on efficiency second our we customers quarter, charge expenses This $XXX highlighted the Fargo. to our invest been and meet focus and driven but million Many while that we're stronger ideas million perspective slide the highlighted making regulatory better future serve our to not details

business our to XX. Turning page segments, on starting

of make to composition refinements allocation methodologies. and continue to our operating We segments the

the a ATM a XX% approximately mobile record were year economy and year reopen deposited quarter and levels our as year increased second of X% COVID-XX ago year joining up the Fargo, XX% reached branches. more update in Mike will but Santomassimo, key we XXXX digital using comparative our the the we still the segment closed a high full the the to to began we're this provide ago. under a structure. fourth record second results, declined customers but teller page operating digital using metrics. and logins now reopened including expect quarter ago. declined of from another due from week. positions, from from our quarter. Additionally, and transactions Digital up from process XX% leadership million and active device We branches our from Wells quarter from transitioning We new number customers, second more disclosures, X% increased of Banking in financial the And our later X% Community temporarily including year channels, On a our quarter be XX, who of to checks and XX% had in results provide XXXX With third ago XX reporting

the million in on the in third $X credit benefiting billion from billion fees, deposits and gain client over the declined quarter, in or from declined income up in of from losses. $XXX June, third second the quarter. net ago balances the utilization reflecting reported activities loan net primarily from lower Turning to for and million year fees, the interest Banking deposit investment single lower in trust in second September unfunded by points the lower million ago, XXXX. XX% market from both The retirement gains XXX billion Wholesale to average in driven in credit were XX. of the third have XX the from of commitments $XXX driven our increased XX% and the higher page WIM a trading the year the provision loan-to-deposit costs sale basis $X.X second the quarter, Net declined $X.X at lower digits driven balances loan second asset-based quarter. second declined $XXX banking levels quarter brokerage X% and provision income from billion of which improved in up WIM were business Average by Revolving quarter, record and performance. quarter, a quarter second earnings Wealth X% $X.X Revenue the billion, were from higher quarter, up lower primarily basis for $XX and Management a driven trading declined accounts. income ago. of losses cash decline lending quarter fixed from increased from from and and due quarter. earned prior assets. institutional by was allocation points year second Investment from by

results Turning page on credit to XX.

basis basis which the charge-off ago commercial was XX environment. better net than to portfolios. a across quarter from consumer points, we rate the second quarter XX and given Our our points challenging improved economic anticipated Losses declined

customer and of charge-offs, However, net could start accommodations of status. the the delay nonaccrual provided recognition we’ve delinquencies since pandemic the

increases draw losses declined broad-based any declines future increase credit in the on quarter, offset on C&I, criticized in estate So, loans. quarter. by nonaccruals. partially real our the financing too second transportation the more we pharmaceutical based the portfolio C&I an the assets from about in other and Commercial in down oil million from from early offset were the and and as C&I third with quarter second Of care by in lease detail performance quarter. industries, second and XX% quarter services. and declines driven from oil to retail it's increased outstanding health and conclusions in loans stable provide total On largely XX, nonaccruals commitments page Nonaccrual the $XXX and financing XX% and real commercial were in higher real lease consumer by including of including by in industry, auto second estate second and were note, commercial quarter. estate, loans from gas, gas nonaccruals declines X%

we calculations of loans third consumer across detail These a portfolio of declines on retail to sectors. increase percentage provide Criticized XX. XX% other government, $XXX with had portfolios. hotel/motel, risk. that nonaccruals losses from commercial we page our on center assets Commercial the driven office show XX, shopping agriculture, we credit real the more minimal allowance The buildings. up consumer as which billion guaranteed quarter XX, quarter for at the loans. deferral the largest hotel/motel that estate estate second increases remained our of our $X.X by we Turning COVID-related and increase were insured have loan the as end than believe declines in of payment page or on portfolio page in mortgage first from the quarter categories increased or by XX% our real and million for exclude second credit the are with with by On declined, offset in

X.XX% third credit across with an increase loan stability allowance loans in was the total Our for card and classes most quarter for coverage loans.

In uncertainty quarter. and improving the credit third Our considered continued which quarter, current reflecting economic but economic with compared allowance environment improved during of due the with $XX.X billion as expectations we solid prior decreased performance from was the quarter levels allowance, our an determining third second unemployment in to stable conditions, COVID-XX.

of We support liquidity. models. reflected lower also and in loss borrowers' our considered performance to drove quantitative fiscal ability stimulus, the lender accommodations that recent credit expectations access These factors

activity portfolio to benefited for increased that the credit widely, our the credit real market and However, a exposure estate impacted to that significantly deferral and an forecasts our in including We recent economic deteriorate end. valuations end. transaction uncertainty limited may of variability there reflecting programs and elevated payment is commercial property industries, vary qualitative for reserves, types and effects future stimulus variety as our borrowers risk in factors, performance come wide increased default performance as

of eventual of the allowance the end we of an as the the the to expected recovery quarter. the in content remain believe While and timing our end captures economic loss that portfolio uncertain, pandemic the our of path

XX. page to Turning

well increasing ratio highlighted CETX to remained regulatory XX.X% our earlier, in I quarter. the above our third As minimum,

were the recovery, we're approach in that the ratio questions. business. you your As said, reflecting standardized our That capital though will in under regulatory a predict still now and approach credit the In proximity. we'll this our results reducing full allowance, advanced economic we quarter the development our quarters, result expect both, they also and of a meeting improved And from assets Even coming contemplated to which and ratios path close our economic after trend the while on capital now significantly can the improving from CETX our other which ratios. higher business by our We can't ratings, summary, while in we in exceed our investing to of were the commitments year appropriately standardized risk-weighted take portfolio ago, expenses advanced expect are would reduce very approach performance third down currently focused assets. the targets loan impact internal considering under downturn. and requirements in in expected second see, ratios risk-weighted quarter, and maintain strong RWA-based internal in the regulatory

Operator

from the line will question with of first Betsy Morgan Stanley. Our Instructions] come Graseck [Operator

Betsy Graseck

through billion investments expenses morning. we Good One earlier as is to on couple billion $X your the Hi. about that well. the in that make questions. this A over reductions come improvement just a year. outlined is out look remarks. But realize prepared you of net wondering I to need in I'm in you're of as expected you that lot expense next $X talking

Charlie Scharf

real. and It's it's through on in referred we're remarks, control there. it It we're question. still Hey, as the Betsy. would well reduction. plans But, the for continuing go are It's We'll year. side. that as investment all Charlie. of side for both be Thanks will our see necessary, at investments next looking -- year, the say next I to the the I gross

clearer guidance too after it's on And next the the what is this I give quarter's be on call, we point But, like also work net Mike budget a himself. said progress numbers side the something definitive at taking to right review about think actions quarter, we point. look gets thing but at progress. the combination of is growth our early net on much show so, showing side. want this And and the to finish after to But, you I a as to last work

Betsy Graseck

Yes. it. Got

mentioning don't as when just the then, sense a you you but Could that? that. could early, -- get, There's highlight Okay. Where Charlie, us know I I see give you're Wells unquote your about you I you get quote thinking revenue. of get opportunities you how to separately, And side? the revenue were there's what efficient. for on more know, also do to to it's opportunities share opportunities

Charlie Scharf

defensive mean, talking long those opportunities look I been businesses. a had. banking leading put itself, work amount present and we business given consumer at the the A we time, of has that problems the business think look I and low by so, and for of the that franchise, all the at the now building let's tremendous at issues to folks NII of trajectory go small on our very quickly. a you second say, because When rate the done environment, by look business you when business side and about been -- Sure. our I would for we've when franchise just appropriately

Our affluent you for while very in we've about an customer marketplace to see had is way, with affluent, that of real even far been some which the the that we less us. extraordinarily traction. investing that the And segment, we've which digital the other lot grow -- says end, had out the franchise But the competitive base, tremendous rolled a and you getting at which are those capabilities, do opportunities is product customers see still our it, just deposit in what the think in about growth by of strong. awful

In And process the opportunities just lending to significant. consumer than the think this space, where in so, business, our the point space, I greater is at the small -- still business I are consumer ability the mortgage and demand that's and still, sit we today.

And defined in payments we it. way delivering within to staying we at have, -- as that bank, we customer an The card opportunities We on a We're just better standalone things the still extraordinary and our well corporate huge partnership us. products our doing in as space job the framework, I franchise. bank risk the products. in think, have there base a have we've are commercial both card that do the basis for with other we investment the opportunities do with leverage is things

we outsider on. that's investment in had where in we’re Investment and traditional still this one having strong. would the there. has But, have few business. space just sizable the the think, the been banking very I progress extremely even started the at with we've wealth have I that a work as our smart And again, business the space, in path performance very, Wealth building love. are and then to lastly, Our at customers, across together continue strong serving Wells franchise an that brokerage we're And business, space, Management be opportunities, said bank that in private our the quarter, business getting and of strength very that corporate we'll We've had across made it this the

look question So, the very I to a it's all at about And timing grow now feel businesses, good of these our when franchise. and prioritization. I ability

Betsy Graseck

Asset think the in saving for particular growth at the growth, of sheet the given Anything Okay. Cap on balance maybe way make least? you'd room to about is getting in kind of

Charlie Scharf

base franchise we're customer looking I businesses aren't all to And have. supporting things, at to that that. Yes. below core We're banking mean, I core the at exit -- that to looking of those only, portfolios very below described. that very we I U.S. so just actively which mean, actively are. we're not continue U.S. businesses going we that Not I the the but five think and the some all

we will over create And aren't by some expect sheet so,, that exiting things would I balance the core. next some room the on of couple quarters,

Betsy Graseck

Super. Thanks. Thanks, Charlie.

Charlie Scharf

I aren't because of Asset do exiting want large to just -- Cap. the corporate exiting I them serving on consumer just side. core they our because not want to We're base core customer to be and We're a them clear.

help. I think will that

Operator

the question line Deutsche Bank. come from with next Matt Our of O'Connor will

Matt O’Connor

Good overview morning. just about thinking That was how of picture a really businesses you're good from kind big of a the perspective.

that like on is kind to like something focused Day that But, And rollout kind I said. Cap, virtual regulatory do? looking issues. delaying the for driving you is timing that, obviously, plan of of what more of that meat put you're really COVID is just or Investor Asset this out would think, behind of of of you of that, lot big numbers getting assume. strategy something the are a some kind and Obviously, I do And the a investors say, something similar?

Charlie Scharf

doubt not. I the the I no and terms COVID you we'd the that than us that what environment and of different think, you in of over are business appreciate be about in Well, term opportunities Matt. thinking today medium way very which the said, Yes. is it shorter that there's trajectory this the what said early well, for we're

looks to it's this. have beyond we're so, that from far And well a when hard -- of conversation kind through meaningful that

that give is we're by us of was to franchise. I tremendous it. what listen, Company the think a time we stress that able look the environment in a But, it The said to more XXXX. and can I all I enough. what you clear to we can't a I process others said, And of different that on making that. that appropriate. doubt And work, the in that amount we're are our long advantage performance, means there albeit controlling in look like -- need factor then, don't exactly attention the work regulatory as a the doing that do is is go end to opportunities Others of asked have the that wish get you so, there's Company towards to look have the Cap, that gating things we putting an a it very-focused focused the improve to have. work that and for the the say understanding we be It's and the as and us, with through. of And which with to sure building next mentioned, we quarter, and do this effort time of eye ratios term. Asset that we exists for Asset And to one we on continue have no limitation have. the whatnot. impacts towards how limitations again, what my that's take which Cap That as while been we we'll we for in remarks, those We're doing control, this, about resources is the totally We're other

thinking able grow have the don't will of we gone. Cap after has today, are of if And want, opportunities that we we that can extract not little out a say, bit the doesn't Company where trajectory looks to talk what the mean to so, from the potential about does It and but the in to until it franchise the certainly like frames. factor the that be is about full our fair time we you into Asset

Matt O’Connor

as again, bit given something of you're post Asset and more little and investors behind just put is this, still some come you out outlook update, about Asset strategic while think targets the of piecemeal of in get 'XX and to some more then, going is be or Cap And a there to meat kind outlook? it kind and of out is there it, of and the view, terms to the presenting the that that expense clear, Cap in guidance kind kind call we'll strategic

Charlie Scharf

pretty belong and about expect that talk we we're that a we but how differences you quarter through looks, we're when clear where segment things about the belong, you, be -- able don't then, just an outlook, that businesses. about year get based talk on how just not that. our expense the quarter at the giving would think competition, I that we be make going we but the fits. we'll how And of to thinking report full stand the an the are giving those different end to what will when not And and we versus results which upon and also we'd be update

John Shrewsberry

look versus you also They way competitors, going to made forward. that intending and to have the been allow already decisions a them current the the at heads reflect strategic are basis run leaders on some up businesses

lot there's in So, of a that. information

Matt O’Connor

the and three does to don’t like, effort. and seem a can for And outside? But, CEOs, cumulatively, it's Because years, Chairs, like obviously the is that And looking much if share there been only three change, we from linger, like, be that so only I’m maybe much there's but you squeeze know. going on I February I and you of there investors a lastly, should how just years. it's but hopefully, of of lot four there's milestones, lot at in, from what Asset been is past I lot so accelerated year, it like seems then, a which important It's least going think there's view. I lot could has of external been an like a long think effort the know, me to Cap, ask then, be point three like it really of

we anything? what can So, look for, if

Charlie Scharf

Fed with it I at you for that same they've that looked ago today have the the can does And before. look thing asking or very ago. even think, the months look in the look environment terms than it's six you these that people look in of I've asking year they're for. mean, that what straightforward And is dealt for. in the as we big asked nine organization different I you issues at order, when consent banks they're can what other pretty or Listen, said, all roles have a is The fact today at

delivered. I is team understands So, experience to Again, -- I us, Company actively is of exactly what working could actually say be that Matt. actually I required the to extraordinarily what's that more, is the think, inside through getting wish And got important.

satisfaction. As of that their my the issues place I there's it's could again, ones different it the and It is many the the team have on senior company, these experienced, with a dealt amount working said, tell extraordinary. mind in we to that now of past. of team you, is spending which in going that's regulators done than all resources I when this issues in be sense in urgency is that before. I are think the But time we a first to has our to no it's determine what had question have on ultimately The class on

beyond be the required. You'd need time do shocked at again, we speak to can't amount for know I of that, we regulators. what's And because the

what I'd that's say. So

Operator

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

Ken Usdin

seeing assets of what Hey. stabilization NII premium John, you expect just Thanks. to this decline Does quarter the we're as earning NII point to mix fourth the in get still of of am. with loans would on a and next as kind and understanding think in the that your that you look what bottom out growth? be you into And with put drivers about deposit the year? kind point,

John Shrewsberry

Yes.

go, to bottom the pricing a it but of are digits digits deposit today. in the where and that's single on little it likely versus pieces as hand, one high more the meaningfully the is So, come down single low out bit will

things knowing single-digit we're a And end both On question softening and sort be will we for looking Fargo NIM, and today. down little happens would the next it, And side, factor so. in NIM yes, underperforming possible that or of the has estimates. at been to percentages where asset contributor of even the The at the forget course we of the it's steepening, we year over flat helpful. recent margin, Wells and industry what there, swing go the in if very be way NII particular we in a what for that to C&I up the know of the I think loans bit

forecasting year. the mentioned, Charlie As for done process next isn't

that security comes that there'll you are am. clarity. so, more Right guidance on on side, big probably drivers. be But, also into now, the the And premium as those mentioned

in down So, yield, X% a We're basis-point with, call securities bit it, current bring will average yields prepaying which little the book we've got overall replacing yields the mortgage XXX rapidly. too.

QX. So, forecast, little but in or that's different the happened a what continuation than our bit a in of it's --

next continue to We that right into expect premium year. amortization

Ken Usdin

through we NII but to just just Right. to John, or it can right? that can mean dollars, you NIM, flat you down all clarify? just again, re-go You heard I you ask said did so

John Shrewsberry

sorry, Yes. in I NII, meant dollars.

Ken Usdin

and to then, a on point, -- if all just got in a the delta help equal your helpful your you XX-year like net interest to can things means us a what we terms an of income, does And steepener what Okay. basis? steepener about it understand on do

John Shrewsberry

we to But, We're net the redeploy Yes. basis that. it's talking about with Well, more $X XXX how sensitive in the get billion choose terms could or at the yields curve. that, of it's up time, to are toward end into do same at we depends -- it income. what happens like quickly you of what the on long we mortgage interest but depends points, Again, we it much of it XX-year how something redeploy. if

Operator

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

Erika Najarian

understand that to thoughtful that going from time essentially they feedback Good community it's morning. The take plan, on indicates have the especially expenses. to investor

base thinking bit which what's than market surprising expected. upon was future potential think, today a we're reductions about higher the the little I gross is

out I future that Is suggesting investments? question quarter an should from run rate, $XX elevated out as which of of guess,, So, my and operating annual is, billion base right the also gross $XX.X third about expense the and billion. with think I take reductions base first losses imply restructuring we charges the that would

John Shrewsberry

Yes. No, infrequent losses our I to more and the would rate. not elevated run of would also math, we own be consider operating -- in part

rate of plans, But, couple but to not, and in the -- thinking quarters anticipated now is making consider have not this progress about the get a what's row, for be a what's levels are are be in level. by to losses, its run occurred more, I I'm own. are be So lower run numbers company my elevated operating certain, accounted way, because the of they be though numbers charges should a for. either. reported The even that number at will and will just there we're that they restructuring on And -- I that as the wouldn't evidence what rate

you that to a get lower So would number.

Erika Najarian

Got it.

Just a that follow-up -- on go ahead.

John Shrewsberry

Go ahead.

Erika Najarian

actually. follow-up Just a with that,

So, I think, $XXX annually. be you mentioned level previously a million normal would that more

elevated that out, the okay, power. would and your math there's different to then level then improvement be that And way in base, it? here, then this right $XX would of future think say, upon so, which if further is we Clearly, billion. Is earnings the from base I take the terms about

John Shrewsberry

about That's $XXX good it. how Yes. That a I seems think number. still million like

standard losses, fraud, what's robbery, those rate this in types have what of worth and do with for to is that $XXX more more consider million that operating legacy in had have think, I we to quarter, of closure a be run long issues. things episodic, quarter And above a we time. place of this been much

Erika Najarian

three interest in in follow-up it. just hit the very quarter a essentially bottom as to the fourth indicated that will bank income line bottom And either or has peers of hit questioning, question third a a Got helpful. Ken's Very, mega your of quarter. all cap net

change for in you're that no Assuming Asset bottoming? the in rates terms is saying obviously, a also no the that confident Cap, of and in change outlook NII statement on

John Shrewsberry

get of could bit size net softer earn the a operating a all income next Cap. balances I balance sheet to with incremental on that year. bit expand -- us allow net an mentioned little these it a interest that with we're of little we're and deposit That doesn't the Asset gathering. Remember extra

a the we margin, that's maker. that other things don't. And a be NII have But, our into margin, of There difference go others that so, that is. constraint at at that what level could the are

Operator

John of line Evercore from next with comes ISI. Our question Pancari the

John Pancari

$X Could more expense the run timing the realization it of on the that? reduction, the front-end of give us more Back bit of a to you impact? expense little annual maybe rate could billion discussion loaded around be gross detail in terms the

John Shrewsberry

Yes.

and the but those So, accelerated run it impact a we've immediate number, be the drop the gross will the rate out. in expenses actions, costs is with will because associated

John Pancari

Okay.

it's there. more So, immediate impact

fourth on on $XX of in billion in give Okay. terms larger the quarter with before flagged give could the beyond get more that was detail And separately, to term detail details, longer the want the more you expense next expense of an when that target metrics, get expense Just -- then, additional what in the quarter, be maybe terms an expenses, opportunity of we and you an type efficiency position idea might that? potentially even to of a Charlie, us. of us

Charlie Scharf

give as at out what the quarter. was and said the I we're for clear now I expenses what you then, to you. was exactly of between that XXXX for What it outlook will we'll give to a to -- we think, figure end going expect

and you'll what differently our report. that seeing broken much also disclosure of We be the comparable out said to segments more others

business to and the said all was at and against compete and people end just what's quarter I efficiency is what at be clear, of we did to the that's ours, able the the mix others. be you'll and And looking efficiency we ratio so, by difference. said their ratio, our gaps last did between see what's the And we math business of

calculations different. it. And those so, base I reason say, as any well. look We're the our to is have expense why conversations all are acknowledging shouldn't we internally that there And assume those do you

in certainly be we actually in of and to doing types that which will we'll you'll -- are, see close talk things which So, about you'll others some the to the would progress gaps of be those to be be and gap, so come. a position what will

John Pancari

thing. helpful. ask could That's If one just I Okay. more

-- could the or give growth some you and just of at that around least know is stabilization some improvement outlook. front, you're seeing seeing is you're the And of we a big in I income C&I spread factor loan in terms color there, commercial On you us in pressure your still here? terms balances Can that C&I see mentioned what demand?

John Shrewsberry

Sure.

utilization there's In the going have institutional a of summarized for things stories and borrowers, of At more continued market, but on. not a of incremental middle seeing demand that they So, be upper the they handful but we for lines fund saying meaningfully to have could we're a in by corporate lower levels. down lot there's of has lot credit. of would the different the to pre-COVID Obviously, that all spike the market, our the first levels lending, inventory use customers including in financing But held facilities existing seeing of utilization who the asset-based is the year below that we're part middle that inventory. abated. and end

And Some of rebuilt, some but end. may at the also that’s say margin, not, it's, down them of be get those that's I'd back inventories on coming the may balances. as high pulling

the markets. for With by are, funding markets that's lines replacing open things of that as levered as the And capital capital in story. as bank utilization they the wide the is well credit both more those for high-grade credit, as

Charlie Scharf

And the the be And environment. will next in look out ultimately, levels conclusions, try the you going very I'll comes that can it's and that to careful just draw at early in it it there. is The the continue to be and And we therapeutics. the going demand, credit, which you to to and state be ultimately, a of do as to be get vaccine, business into activity the determine year, are -- were too safely, that how remarks learning as to you will same today's there saying right, while everyone beneficiary. will is there open, will happens obvious, drive time, that about what's recovery forward, of path world -- our demand that's even is when to any

Operator

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

Saul Martinez

First you dead But, good of what be expect. we going sorry beat all, a endeavors, on just I have to have forward. future these not I this make want good a John, I sure handle -- luck should to to horse on but question, sorry for to I guess, first your want with of all, and calls

go your at year-end to plan compare beyond enhanced feel determined what, goals segment allow comfortable, basis. is little date targets, those your to now? that as plan to long-term able will giving should hold if longer-term kind expenses of peers you reduction guess, targets expense disclosure, results more the kind I addition that will more and on get plans to of Is is the and and still and So, through for financial to we the me on in XXXX you or targets. guess, strategic just continue a maybe outlook which in for to effectively is unclear segment to, you're maybe us still expense review, be And at -- what's it'll far-reaching a all, a future go bit I see when give expect to and that

Charlie Scharf

I things, three line Saul. think of Well, the way, the questioning. By I completely appreciate

I that asked completely a fact it's the so understand. And bunch, being

around the like world of which we'll the finish get because some our We ratio. to our and couple internal understand offset need the ultimately effective the the takes risk longer-term same efficiency ability Company of it balance terms a then impact COVID, doubt need the environment At we're gives then build becoming what the that actually has the to that we it's grow a because Cap on of Company. all done. show reduction, to that NII you're a things of that and the running anything get number, both And more and timing. actions what no the of out in Asset say, on to at and you looks and time, work to to to today in basis impacts obviously, sheet pause to build through. going obviously to to work There's to does committing dependent very the have us We highly efficient the we're because invest what's regulatory do continuing that

right what around not is, detail. as everything it. provide we get you clarity we'll look tell know the time we clear do when so, And know but we we just more when more It's to those like, will that things

John Shrewsberry

what the thing results there some is you'll One some Saul, show the year of the that the already been end also have add, as to will XXXX positions reflect made. of as that results at more they see -- -- strategic

So, that the helpful at be margin. will

Saul Martinez

it. Got

of elevated when Okay. how of have last kind these quarters I litigation questioning line three normalized come get question like important have of want been And of currently. back normalizing back a lot more to you I helpful. a whatnot, pretty a to And really do now for the higher think expenses than I issues. been the to of it I on to that has some basis for anywhere time, the even it's have the is No. haven't quarters op normal you of so is, sort four a much, kind I more of think right amount feel the go the and sales of us guess, That's maybe and been about my customer Erika's losses Because like, before why but And quarter. is, number? fraud number? number years. I the and like that $XXX down? guess a you'll guess, been million course very And it that the that question seems accruals or much I there right is I the million and near in running mean, long $XXX of -- five guess,,

Charlie Scharf

of guess, understand Saul, this when and remediation we they start. what can I'll quarter customer are you these quarters the we very to and I is Yes. And I at what regulators us of John, where were on. to accruals we very add. they last going go ensure over current what couple means. inventory to try discrete which items they're to of are what quarter, where and make and we're past we're move everything would look for both, -- necessary the really say, period these through We're the to queue, put work have in do that remediation do what about time. went to means sure is around that did entire that actions we items to -- for have a our these we and working realistic for through with relates all prior us, practices of material customer put remediation, the exactly behind determine been And our to that that going behind our hard

it so, types going that see we've anything but the And but that of have took done as I things we at forward, won't that. materiality we've two, one two. it of there anything to opposed looks don't wish quarter taken all not would done. that And be

them And so, work we are to think booked. just the things it's implement in -- and doing good now. we're those a It's place,

John Shrewsberry

in to been litigation of then, but that's of been in this this a recur, pieces at to kind big being has to the two not RMBS brought settlement way practices there litigation, XX-year-old range have recent similarly of year. of we were there's one last into then, expected years, that this recur. -- to the settlement that be point people And contributed that expected is not earlier and litigation course, was related And that where among settled the process; sales the

up So, elevated look demonstrating roughly I to in that the million business, disaggregate which get run what it’s at [multiple are be But, and adds your $XXX million would the specifically a will for a is is year rate mentioned line related where But, legacy things done. I below $XXX or describe that what will what the to versus when long issues, been you as proof we helpful. point, the it be gets is, time. speakers]

Saul Martinez

since it's a been you've for while been Yes. while. Well, talking you've a been about and there number that

So...

Charlie Scharf

XXXX It's million. actually $XXX the of was second quarter

example. So, an that's

Saul Martinez

just seems full given you -- But, be down, 'XX clarity. it. one, it year your to rate exit that versus just of that's to you kind Is 'XX? as XXXX. hard final Got run When flat flat, say Okay. because

John Shrewsberry

the with It happens depends the But, on That's loan versus good what full is growth. full year a year. point. that

Operator

of with Steven Your comes Research. Chubak line Wolfe from next the question

Steven Chubak

mitigate to heard excess wanted question appetite on I John, your So, pressures. to liquidity messages a redeploy NII management. some with We've peers liquidity MBS different start off, and into regarding help from just

benefit You're arguably liquidity the year? frame currently in that remixing money contemplated with, could of hoping pool higher you into And provided of the guidance NII yielding from that And I next banks. was center any largest you for securities. running potential the excess all the is

John Shrewsberry

just redeployment, given at Yes. roughly things are contemplated requires which the which rate redeployment, is prepaying. What's of a of the continuation same level

long means problem environment and of from what a in earnings frankly lower what an question versus event go X% a a very of an how it's here want there's earnings get the you it's if backup, long stay even levels perspective. capital So, power rates the happens in sub that or trade-off it's yields mortgage XX-year time about for negative or low go these to problem, a a at with problem, a from

those an discussions, to discussion, happen measured those each are and look revisited the deposit is so, and flows ALCO and forward things. loan for what we what other And and trade-offs have given time could rates demand

for So, demand. liquidity available we have loan

probably like up But, -- you dollars seem into doesn't and I some even the tens in have into and/or or of at negative one great as duration treasuries. difference convexity of at from into liquidity competitors, of think, There's billions certainly our duration We characteristics really similar could there. loading levels locking these least more we MBS heard redeploy both, trade-off. a

redeploying now, stay the about And faced And so, we're with level. essentially we're to those at choices. right same same

Charlie Scharf

because also the some of here an running to we as Cap, about we liquidity and today say how terms that the we've other that what before, we we opportunity Cap actually so taken, to sheet is trying balance do to of how actions because Asset into and think us. So, have in can we today, the the sit that balance room think with, about have room but operate things sheet as clear of that factors is some exiting about because we where tried some just of have, live create have for I be Asset which to we

to the deployed. have we have, we've have currently towards others same we that loans deploy don't capacity than do while capacity capital so, And of our more

John Shrewsberry

That's right.

Steven Chubak

then, you you, to And going tack just try outlook. to maybe question for Thank for color. here. take great. That's on a the a I'm both expense that different Charlie,

anticipated, that one evident, lower to that is expenses clear especially Given significant revenue than of is we've sources attrition drive could difficult of be pushback and attrition handicap headcount the confidence protecting the But plans to while since seat last efficiency you as that the is Day has quite biggest revenue how greater what to were opportunity that hear you efforts cost help can is on begin recognizing and Investor executing attrition given and that taking revenue at been your level curious investors while in you update, not the time. and limit just reductions, achieve the we you're from the risk that gains the revenues?

John Shrewsberry

ways. Sure. a couple I of guess, let me answer it

in take of and we the consumer the look at are when who First more other reality happened all, of is terms commercial bank traditional of large of a competitors with. some the are just franchise we we a attrition, of what we and mean, compete to I

reduction the those others to us businesses so, the And in of impact an in relative on mix. business the because has outsized NII

at large business, of we franchise from business, all, business, at so, they're given middle our company doesn't customer that are franchise When the first that strong and take, think When well either in the it corporate businesses actually has what it's look as to And and a of for our things that in return say through. right we means been been the or our we terms going performing in actions the characteristics. business, wealth decline exit, consumer this loss with to look have not customer relationships. extraordinarily individual in fit how market is revenue to what do we're it going about as we I all

are is and saying, that not x taking have then, of And so, make we're are I everyone to say and look just Those a quality a we improving in and it company, is going the the business business. that of of make amount those types across and for by processes. through see to other see billions redundancy actions a of And common what in tried my that is. be a sense better-run that do and a a customers, multiple that work going our of -- but remarks, you'll decisions, efficiency if things about products, dollars around us common are getting deliver they the to line product We're company, drive more of core better internally clear, which platforms it. the -- do not to There's gigantic you set when this we are It cut be all are we're and the will do just we company. better go we who about can given done them up run Fargo so what efficient Wells to to have so franchise.

around heightened when And an franchise. or franchise. it antenna anything, as so, the the doing extremely And to the value in of value hurt impacts I of help we said, which everything fact, the have the the comes work risk to conversations could

Steven Chubak

great. luck John, color. That's Charlie all future Thanks, with your of best endeavors. for the And

John Shrewsberry

you much. Thank very

Operator

of line Juneja the Vivek from JPMorgan. comes question next Your with

Vivek Juneja

the that to of to given could check has that trying make by operating of that taking Thanks one that the you're there couple sure I clarification. expand been horizon forward, my Charlie, to the start to terms one fact in Hi. talked in losses, rate change potential want work we're number of regulatory customers, me of off that time going reimbursements just trying angle about John. quarters. on let the A there's that thing. you've been with questions, couple, for regulators, process because cetera, you signed this period, where so Charlie, needed The for the concerned on last -- the run this come, to it? you is et that or some still about to that

Charlie Scharf

say that belief arrived right a numbers Wells that any signed is at it about that make off whether be met the Without these with for and around by I'd that Fargo and put specific shouldn't the Yes. we by everybody on behind leadership regulators, issues disagreement. we've customers, business something sense being have

Vivek Juneja

Okay.

shift me gears. Let

one. Normally, you've talk deck. an you your slide business about this Treasury Just time that's total a give can Any quick the revenues for what know fee reason, about I management? you. revenues. treasury talked total us important you for revenue in management,

John Shrewsberry

think, earnings and it a the commercial Yes, is. that corporate I business. trade-off -- business is gets the the it we're I know split -- we're between way revenue. it, NII there's And between fee rate credit and for describing

the the a little way putting putting it environment of for noninterest-bearing described through a more that we're we've we don't talk right breaking out rate bit but all on fees about have I So, us, treasury is can in customers deck management with is where have we're in it any more We -- specifics it now the pay right for you sort of deposits to don't clarity now. now.

Vivek Juneja

keeping granularity Any potential folks thing, operations. quarter, through you given you're in the business only to about, low? improve any low, on of also this businesses Is operating talking the One terms pretty changes? color, that management past. Okay. any delivered so that have last in what what's Wealth was it there XX% the a Charlie, margin

Charlie Scharf

possibility we're and of in a come mean, in it's spread that have down. There's loan what of yields it. I generating business certainly question a loan

that in much that past. a the business think opportunity by lending really belief other tapped securities that in we customers I bigger there's based types for the leadership among new a there's of wealth for lending haven't

So, that's probably going to be enhancing. margin

On change generation between likely fee the core margin and linear revenue business, relatively much, expense. connection the isn't very given to the

Operator

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

Gerard Cassidy

you this you mortgage-backed If in you share margin from level, the and -- start their can this current I then do having interest this which enforced going you meaningfully impact rates is obviously come kind the and into the to And on the on active will down securities? level? stay it's with with keeping think the Fed the to market what the -- actively have continue us, second, in Can it going amortization, buying when of buying, seen yields to be past at down guys 'XX. John, premium know said on you past cycles. in

John Shrewsberry

Yes.

securities, sort part even question. would to of answer refinancing throughout because of take expect amortization to of the in to up, the ability place quick premium I half process, your in the frictions the of because up So, speeds shift second part the Fed out the pace a mortgage in and stay meaningful impact and speed is which of prepayments. of XXXX, industry's

but of XX think people at That long going different it's And We away. in the to and isn't up. et a But, It's operating at way we've away, in right that tours, we'll going that parts our we about or closings paperless that's easier moneyness burn we're virtual still think, to that out speeding risk refi. the a of eventually, way go. CPR it's in virtual made accounted stock closings, don't the -- And now. I for whether things keep there's I business. least think mortgage inspections, electronic it of cetera. going have measure easier securities, of the to for

we our operating QX, think, margin. our and the mentioned, expectation for as so And terms volume but I a in like industry. QX mentioned looks capacity, I that and at think, much QX our near term, as lot of Charlie we're of very

Gerard Cassidy

of that point good. you, with guys asking you to Very the everything with amount I about you this are regulators. a did out I'm And right pivoting getting but spending tremendous Charlie, what question, the of time Asset not know Cap is

guys give send assume a of you're do the us work done? the give kind regulators But,, you a can of underway. start when penalty comfortable, are when maybe If of and… out you've decision where time then see I we out regulators to outside could the line the you figure that, of you that the box in already documents, it's us yes, could

Charlie Scharf

see urgency. right every it's the a to question -- a that's say They so, organized. whether answer. alongside hard how regulators are of think, doing. is They sense got we're I see single what we've They Again, – we're What exactly I'll the day. us see

It send and banks So, their with satisfaction. study specific is -- give them I has they they're timely it actually see the And we're know. because thing doing, or very forward in plays want it them how thorough that when extremely dialogue having a consent tackled with have issues hopefully, the to them -- get something whether don't order, their don't out time. the there we all doing different active than us, when -- in at And submit see we're with be right side-by-side us, been and us them something They're the as these wait past. our we focused them but -- sit again, just the them, very good for progress. work to we response. they will And doing offices experience and a and them then something that's something react. we we do. in and big to we for they're it's move My them what how and to we're what is on done we we'll and the work, their and satisfaction How ask

Operator

John Autonomous will McDonald from the question come Our with final line Research. of

John McDonald

of wrapping how any couple A on measurement, framework that guys. of does much just CETX, here, just cleanups up. the quick much John, that hits? idea, change CETX, the how impact Hey, for RWA, new kind

John Shrewsberry

Yes.

happens the mean, The -- the You what those change top is, can for passage have they're I RWA see comparisons in basically points. time. risk internal with of to the measurement other. of the on last what each ratings deck question as today, been

of anticipate meaningful. capital that the nothing we've And might but of something, well dollars the we've accounted we that or different be operating don't want our period that above or protecting tens pops allowance regulatory that's being came cetera. people really for There's place. the same been these and same framework basis that risks loans. -- this a just new that's an constrained the I loans. just change -- I bank been we if the about standardized so, know for regulatory -- we're it always through to It's in. time, of around and issue. But et expect into it our not this And And targets, to by minimums, points work own in It's our book now it's as the -- a regime pandemic. of since credit But,

John McDonald

NII. on just more And Got Okay. one then, the it.

is that quarter, third the fourth NII is quarter? flat guidance the implying your For to relatively

John Shrewsberry

specific It's don't think have expect Yes. but I around it flattish. wouldn't much I the that move guidance, we to in quarter.

John McDonald

Okay. and operated the mid-single for fourth then, if quarter digits. billion that'd if you at the annualized, year compare this annualize to be And we that down $XX that year, next

it I to growth, have right, couple have be would flat asking, to people just like have an Cap. of loan a and got you'd of So -- you it for how questions year-to-year, flat be Asset

John Shrewsberry

to growth it redeployment. of have A a for have steepening right have be and to They handful would things flat. or Yes. loan

So, that's give of beginning drivers. that get that's on And, those the to why closer range budget process down and the is a more reasonable mid digits. the of the think to we as complete I single we'll -- But, clarity flat expectation, year. are

John McDonald

the clarify, then, do just the timeline. thing communications hoping And and for what on Charlie. last Okay. kind you're to to of Charlie, just

January, for guidance through to us gotten expense you've you'll in once think 'XX, some So, give that more. some

later of get like that what January. are we'll for the great. to clarify be expense kind time that'd just an So, frames could be maps, long-term for terms guide for in that of road ROE the and But, going you further and and next year longer aspirations potential, efficiency If details, in on, cost term is depends?

Charlie Scharf

clearly, I whether over period But, confidence taking how about impact. much actions. well, share has we and we ratio, the on in thinking about we've supportable our having we're where plans done have a because as multiyear -- -- work the days efficiency depends bottoms-up COVID, interest the revenue our that ultimately, to think think, work and are the we it rate very environment as on we meaningful these do as expenses, work

and actions this that taken You will reserves for be see we that in the charge year. the these this quarter, provided

see positive next And the so, year. you'll impact

it investment together that the when cuts. are real. piece, expense piece the necessary building And It's and comes very a in so, the all of understanding of the question regulatory actions we're terms

and I again, people want just progress time quarter one see basis. we it to take a understand on net So, think, that a to have

Operator

over remarks. now further for I'll turn conference any the back

Charlie Scharf

All and We right. very to it, for we'll the you Everyone, quarter. talk appreciate thank time. much you next

Operator

gentlemen, joining. conclude you will for all call. and that Ladies Thank today's

disconnect. now You may

Wells Fargo & Company (WFC) 14 Oct 202020 Q3 Earnings call transcript