Sterne Agee Financial Institutions Investor Conference. David Carroll Senior Executive Vice President Head of Wealth, Brokerage and Retirement

Transcription

1 Sterne Agee Financial Institutions Investor Conference David Carroll Senior Executive Vice President Head of Wealth, Brokerage and Retirement February 14, 2012

2 Wells Fargo vision We want to satisfy all our customers financial needs, help them succeed financially, be the premier provider of financial services in every one of our markets, and be known as one of America s great companies. 1

3 Wells Fargo serves consumers and businesses in more communities than any other U.S. Bank 70+ MM customers 9,112 stores Store Distribution Retail banking stores 6,239 Wells Fargo Advisors offices 1,375 Wholesale offices 773 Mortgage stores 725 Sales Force Platform bankers (1) 31,200 Financial advisors (2) 15,263 Wells Fargo Retail Banking stores Wells Fargo Advisors offices Wells Fargo Home Mortgage stores Home Mortgage consultants 10,360 Other Distribution Channels ATMs 12,211 As of December 31, (1) Active, full-time equivalent. (2) Series 7 brokers. (3) Combined active customers. Online banking customers (3) Mobile customers (3) 19.8 MM 7.3 MM 2

4 Breadth of product/business lines Deposits #2 in U.S. (1) Residential mortgage Lending Investment banking #1 Mortgage originator (2) #1 Mortgage servicing portfolio (2) #1 Small business lender (3) #1 Commercial real estate originator (4) #1 Used car lender, #2 auto lender overall (5) #1 Middle market commercial lender (6) #2 Education finance lender (private) (7) #2 Real estate lead arranger of loan syndications (8) #2 Middle market loan syndications (8) Top 10 underwriter of equity capital markets (9) Top 10 underwriter of domestic high grade and non-investment grade loans and bonds (10) #2 in Stock-picking (Research) (11) Insurance #1 Bank-owned insurance brokerage (12) Wealth Management/Brokerage #2 Bank-owned mutual fund family (13) #2 Annuity distributor (based on sales) (14) #3 Full-service retail brokerage (based on FAs) (15) #4 Wealth management provider (based on AUM) (16) Card Services #2 Debit card issuer (17) (1) FDIC data, June (2) Inside Mortgage Finance, 12/31/11. (3) U.S. in dollars per CRA data, (4) Based on volume and dollars in the U.S. Mortgage Bankers Association, October (5) AutoCount, January 2011 December (6) Lead bank market share, Greenwich Associates 2010 Middle Market Survey. (7) Individual company reports, (8) Thomson Reuters, FY2011. (9) Securities Data Company, FY11. (10) Bloomberg and Thomson Reuters, FY2011. (11) Among all eligible Wall Street firms, Financial Times/Starmine 2011 annual survey. (12) Business Insurance Magazine, July (13) Strategic Insight, 9/30/11. (14) SunLife Distributer Roundtable Survey, April (15) Internal and peer reports, 3Q11. (16) Based on AUM of accounts > $5 million, Barron s, September (17) Nilson Report, April

5 Continued strong diversification Diversified Loan Portfolio Balanced Spread and Fee Income Diversified Fee Generation 5% 14% 11% 5% 11% 40% 55% 53% 47% 19% 17% 5% 11% 7% Consumer Loans 55% Commercial Loans 40% Foreign Loans 5% Net Interest Income 53% Noninterest Income 47% Service Charges 11% Trust, Investment & IRA fees 11% Commissions & all other fees 17% Card Fees 7% Other Banking Fees 11% Mortgage Servicing, net 5% Mortgage Orig./Sales, net 19% Insurance 5% All data is for 4Q11. (1) Other noninterest income includes net gains (losses) on debt securities available for sale, net gains from equity investments, net gains (losses) from trading activities, operating leases and all other noninterest income. Other Noninterest Income (1) 14% 4

6 Record earnings and EPS in 4Q11 Wells Fargo Net Income ($ in millions) Wells Fargo Diluted Earnings Per Common Share 3,414 3,759 3,948 4,055 4,107 $0.61 $0.67 $0.70 $0.72 $0.73 Community Banking $9,080 WBR $1,288 4Q10 1Q11 2Q11 3Q11 4Q11 4Q10 1Q11 2Q11 3Q11 4Q11 Record earnings of $4.1 billion, up 1% linked quarter (LQ) and 20% year-over-year (YoY) $0.73 earnings per share, up 1% LQ and 20% YoY Total revenue of $20.6 billion, up $977 million LQ on both higher net interest income and noninterest income Pre-tax, pre-provision profit (1) of $8.1 billion, up $146 million LQ Strong credit quality (1) Pre-tax pre-provision profit (PTPP) is total revenue less noninterest expense. Management believes PTPP is a useful financial measure because it enables investors and others to assess the Company s ability to generate capital to cover credit losses through a credit cycle. 5

7 Wealth, Brokerage and Retirement Mission: To help our clients achieve financial peace of mind Build enduring client relationships on a foundation of sound, thoughtful and objective advice Develop individualized financial plans to help meet clients financial objectives Help our clients build, manage, preserve and transition their financial resources and wealth Vision: To be the premier provider of planning, advice, solutions and services in every one of our markets 6

8 WBR overview Wealth, Wealth, Brokerage Brokerage and Retirement and Retirement provides provides a full range a full of range financial of financial advisory, lending, fiduciary, advisory, lending, and investment fiduciary, management and investment services management services to clients to clients using using a planning a planning approach approach tailored tailored to meet to each meet client s each client s needs needs Brokerage Financial advisors primarily serve affluent and high net worth clients advisory, brokerage and financial needs, through multiple channels Wealth Management Provides affluent and high net worth clients with a complete range of wealth management solutions including financial planning, private banking, credit, investment management and trust Abbot Downing Serves ultra high net worth (1) families and individuals, as well as their endowments and foundations Retirement Provides retirement services for individual investors and is a national leader in 401(k) and pension recordkeeping (1) Ultra high net worth defined as customers with investable assets of at least $50 million or with a net worth of $100 million or more. 7

9 WBR size and scope Wealth, Brokerage and Retirement $12.2B revenue $1.3T client assets $43B loans 15,263 Financial Advisors $146B deposits 1,375 Brokerage Offices 59 Private Banking Offices Brokerage 4.0 MM households Strategic Focus: Grow loyal client relationships by delivering peace of mind through holistic financial advice 18,811 Registered Reps 15,263 FAs Brands Wells Fargo Advisors SM Wells Fargo Advisors Financial Network SM First Clearing Client Segment Mass, Mass Affluent, High Net Worth Targeting HHs $250K $5MM Household data as of November 30, Wealth Management 320,000 households Strategic Focus: Client peace of mind Deep client relationships Objective, thoughtful advice Complete wealth solutions One Wells Fargo Brands The Private Bank Client Segment Affluent, High Net Worth Targeting HHs $5MM 50MM Abbot Downing Over 500 relationships $31 billion in client assets Nearly 130 professionals 15 offices Strategic Focus: Address the financial, social and human dimensions of multi-generational wealth Provide high touch client experience with low client-toadvisor ratios Serve individuals and families, as well as their foundations and endowments Brands Effective in April 2012, current brands will be replaced with a single brand: Abbot Downing, A Wells Fargo Business Client Segment Ultra High Net Worth Targeting HHs $50MM+ Retirement 3.6 MM retirement plan participants/pensioners from more than 7,600 business, union, and government plans 3.5 MM retail retirement households Strategic Focus: Become pre-eminent retirement provider for businesses and individuals Nearly 300 Sales Directors and Relationship Mgrs Brands Wells Fargo Institutional Retirement and Trust Wystar Global Wells Fargo Consulting (BPS&M) Union Hamilton Client Segment Institutional Plan Sponsors 8

10 WBR advice-based business model/market positioning Brokerage 3 rd Largest U.S. Retail Brokerage firm with 15,263 Financial Advisors 3 rd Largest Managed Account provider with $254 billion in assets Wealth Management/ Abbot Downing Retirement WBR Deposits 4 th Largest Wealth Management firm (1) with $377 billion in U.S. Private Client Assets 5 th Largest U.S.-based Multifamily Office with $21 billion in Assets Under Advisement and an average relationship size of $68 million (2) $198 billion in Client Assets (3) 2 nd Largest Annuity Distributor (4) 5 th Largest IRA provider (5) with $268 billion IRA Assets 6 th Largest Institutional Retirement Plan Recordkeeper based on assets (6) with $236 billion Institutional Retirement Plan Assets $317 billion Custody Assets 7 th Largest Retail Deposit base in the U.S. (7) Attractive, stable funding source for the company with weighted average cost of 0.09% in 4Q11 Company data and peer analysis, as of December 31, 2011 unless otherwise noted. (1) Barron s 2011 Survey; Based on Assets Under Management in accounts > $5MM (as of June 30, 2011). Includes Brokerage Client Assets and Wealth Assets Under Management. (2) Family Wealth Alliance Multifamily Office Study 2011; Company figures reflect year end (3) Includes $49 billion in deposits and $5 billon in Abbot Downing AUM as of December 31, (4) Sun Life Distributor Roundtable Survey (based on sales), April (5) Cerulli Associates (based on 2Q11 assets). (6) PLANSPONSOR Magazine (based on 4Q10 defined contribution assets), June (7) Source: company data; SNL Financial, as of 12/31/11. 9

11 WBR revenue and earnings contribution Share of WFC revenues and earnings WBR revenues by category Revenues Trust, Investment Fees, & Commissions 70% 85% Trust & Investment Fees 51% WBR 15% (up from 12% in 2009) Earnings Commissions 19% Other 6% 92% Net Interest Income 24% WBR 8% (up from 4% in 2009) 10

12 WBR best practices We have a defined set of best practices, from client discovery to periodic reviews, to ensure a solid ongoing relationship with our clients Best Practices: Consistent client experience Holistic advice understand the client s complete financial picture Identify unmet need, rather than push products Product agnostic deliver what is best for the client One Wells Fargo mindset across sales teams Ongoing communication Results: Growth of client assets and revenue Increased client loyalty and retention Improved success rates for onboarding new advisors Solid relationships with other Wells Fargo business partners 11

13 WBR client needs Planning is at the core for understanding and addressing all client needs 12

14 WBR financial planning tools: continuum We invest over $50 million annually across our channels to deliver appropriate planning solutions for all of our clients across all segments Mass Market Affluent HNW UHNW My Retirement Plan Envision / Envision Online NaviPlan Asset Allocation Tool Interactive Client self-service Banker tied to Needs Assessment Advisor data link to Envision Basic functionality, focus on retirement planning Goals-based planning Advisor-led Focused on investments Online reporting Over 150 dedicated Wealth Planners inmarket Comprehensive: full balance sheet view Custom tailored to individual client situation, as needed 13

15 WBR results: our clients Planning helps our clients know where they stand and achieve financial peace of mind Based on a recent investor study by Harris Interactive (n=311). 14

16 WBR adoption of best practices yields results Our strategy of planning helps our advisors expand their client relationships, and thus build their businesses in virtually every category Best practices are a defined set of processes and proven strategies that advisors implement to help them run their business, advise clients, strengthen existing relationships, and grow new relationships Best Practices Adoption and Advisor Performance 2011 Performance Adopter of Best Practices (1) vs. Non-Adopter 2011 Production Revenue ($000 s) $ x Advisory AUM ($MM) $ x 2011 Closed Loans ($000 s) (2) $2, x Key Households with a Plan (% of Total) (3) 87% 1.9x (1) An adopter is an FA that is actively engaged around key best practices activities including: Business plans, Envision, Lending, Advisory Business and FA Education Programs. Excludes trainees from both adopter and non-adopter averages. (2) Loans include only those closed through WFA Lending and Banking Services. (3) Key Households defined as household with over $250K in investable assets with WBR. 15

17 WBR performance metrics Client Assets (1) ($ in trillions) $1.4 WBR Cross-sell $1.3 $ (2) Managed Account Assets and Net Flows ($ in billions) $197 $12 $235 $17 $254 $ $60 $50 $40 $30 Net Flows $20 $10 $0 Recurring Revenue (3) as a % of Total Revenue 65% 70% 73% Period end balances. (1) Includes Wealth deposits. (2) As of November (3) Recurring revenue defined as net interest income, asset-based and other on-going fees, excludes transaction-based, trading and other one-time revenue. 16

18 WBR cross-sell potential Wells Fargo banking customers 5% cross-sell could generate over $600 million annual revenue Wells Fargo Household Balance (2) 5.2 million WFC banking HHs (1) currently don t hold investment products with Wells Fargo HH Balances increase 6X Bank & Brokerage Relationship $1.7 trillion investable assets Bank Only Relationship Bank Only Relationship Cross-Sell Opportunity HH= Households. (1) Affluent Wells Fargo households with investable assets of $100 thousand to $2 million. (2) Household balances include deposits and investments. We deepen our relationships with affluent households by cross-selling products across lines of businesses 17

19 Efficiency initiative Expense management is a longstanding part of the Wells Fargo culture and operating model Project Compass is a company-wide initiative aimed at removing unnecessary complexity and eliminating duplication as a way to improve the customer experience and team member work processes WBR Initiatives: Consolidation of branch/regional structure Business optimization and efficiency - Completed sale of H.D. Vest Financial Services Streamline staff functions and combine technology efforts Workforce location optimization Execute client segmentation strategy Strategic initiative portfolio 10 work streams to drive revenue growth, best practice adoption, cross sell and enhanced client experiences 18

20 Well positioned for the future Wells Fargo had strong, consistent, high-quality and diversified earnings 4Q11 record earnings driven by solid revenue growth, loan growth, strong credit quality and continued strength in capital Wealth, Brokerage and Retirement is well-positioned to capitalize on growth opportunities - Leading provider across wealth, brokerage, retirement and retail deposit segments, fueled by strong demographics - Advice-based planning to help clients achieve financial peace of mind - Deepening and enhancing Wells Fargo customer relationships and adding new customers - Strong growth segment for the company - Recurring revenue streams - Optimizing advisor performance - Institutionalizing a planning culture - Strong internal partnerships 19

21 Forward-looking statements This presentation contains forward-looking statements about our future financial performance. These forward-looking statements include statements using words such as believe, expect, anticipate, estimate, target, should, could, may, can, will, outlook, appears or similar expressions. These forward-looking statements may include, among others, statements about: our future credit performance; our 2012 noninterest expenses and expense saving initiatives; our cross-sell opportunities; and the future economic environment. Investors are urged to not unduly rely on forward-looking statements as actual results could differ materially from expectations. Forward-looking statements speak only as of the date made, and we do not undertake to update them to reflect changes or events that occur after that date. For more information about factors that could cause actual results to differ materially from expectations, refer to page 14 of Wells Fargo s press release dated January 17, 2012 announcing our fourth quarter 2011 results, as well as Wells Fargo s reports filed with the Securities and Exchange Commission, including the discussion under Risk Factors in our Quarterly Reports on Form 10-Q for the periods ended June 30, 2011 and September 30,