Wells Fargo(WFC) - 2024 Q2 - Quarterly Report

Financial Overview - The quarterly report for Wells Fargo & Company ended June 30, 2024, indicates a total of 3,403,770,246 shares outstanding[3]. - The financial statements include a consolidated statement of income, comprehensive income, balance sheet, and cash flows, providing a comprehensive overview of financial performance[4]. - Total revenue for the quarter ended June 30, 2024, was $20,689 million, a decrease of 1$20,533 million in the same quarter last year[5]. - Net income applicable to common stock for the quarter was $4,640 million, an increase of 8$4,659 million in the same quarter last year[5]. - Diluted earnings per common share increased to $1.33, up 11$1.25 in the same quarter last year[5]. - Total revenue for Q2 2024 was $20.7 billion, a slight increase of 1$20.5 billion in Q2 2023, driven by a 19% increase in noninterest income[21]. - For the quarter ended June 30, 2024, Wells Fargo reported a consolidated net income of $4.910 billion, a decrease from$4.938 billion in the same quarter of 2023[48]. - Total revenue for the quarter was $20.689 billion, compared to$20.533 billion in the same quarter of the previous year, reflecting a year-over-year increase of 0.76%[48]. Compliance and Regulatory Matters - The company is classified as a large accelerated filer, confirming compliance with filing requirements for the past 90 days[2]. - The company has submitted all required reports electronically, ensuring transparency and compliance with regulatory standards[2]. - The report addresses regulatory matters and critical accounting policies, ensuring adherence to financial regulations[4]. - The company expects a significant reduction in overdraft fees if the CFPB's proposed rule limiting such fees is adopted[18]. - The company expensed an estimated special assessment of $1.9 billion (pre-tax) in Q4 2023 due to FDIC rules related to bank failures[17]. - The company is required to prepare and submit resolution plans, known as "living wills," to facilitate orderly resolution in case of financial distress[200]. - The FRB and FDIC confirmed that the Company's most recent resolution plan did not have any deficiencies as of June 21, 2024[200]. Risk Management and Credit Losses - The report outlines risk management strategies and capital management practices, emphasizing the company's focus on financial stability[4]. - The provision for credit losses was$1,236 million, a 32% increase from $1,713 million in the same quarter last year[5]. - The provision for credit losses was$1.2 billion in Q2 2024, a decrease of 28% from $1.7 billion in Q2 2023, primarily due to decreases in auto loans and commercial real estate loans[21][24]. - The allowance for credit losses (ACL) for loans decreased to$14,789 million, maintaining 1.61% of total loans, down from $15,088 million[107]. - The company reported net loan charge-offs as a percentage of average commercial loans at 0.35$8,650 million as of June 30, 2024, from $8,443 million on December 31, 2023, marking a rise of 2.46$140,783 million at December 31, 2023, to $134,249 million at June 30, 2024, a reduction of approximately 4$193,061 million at December 31, 2023, to $183,201 million at June 30, 2024, reflecting a decline of about 5$2.0 billion of Preferred Stock, Series FF in July 2024 to strengthen its capital position[16]. - The Board authorized a common stock repurchase program of up to $30 billion, with approximately$14.7 billion remaining as of June 30, 2024[198]. Income and Expenses - Noninterest income for the second quarter of 2024 reached $8,766 million, a 19$7,370 million in the same quarter of 2023[30]. - Noninterest expense for the second quarter of 2024 was $13,293 million, a$306 million increase (2%) from $12,987 million in the second quarter of 2023[35]. - The effective income tax rate for the second quarter of 2024 was 20.3$261 million (113%) in the second quarter of 2024, driven by higher expenses related to legal actions and customer remediation activities[37]. - Noninterest expense decreased to $5,701 million, down 5$6,027 million in the prior year[50]. Loans and Deposits - Loans outstanding were $916,977 million, a decrease of 1$945,906 million in the same quarter last year[5]. - Total deposits increased to $1,006,806 million, with interest expense of$6,149 million, resulting in an average interest rate of 2.46%[27]. - Total loans decreased by $10,412 million (3$325,939 million in Q2 2024 compared to Q2 2023, primarily due to declines in Home Lending and Auto businesses[56]. - Total deposits decreased by $45,111 million (5$778,228 million in Q2 2024, driven by customer migration to higher yielding deposit products[56]. - Total loans outstanding decreased to $917.9 billion, down$18.8 billion (2%) from $936.7 billion at the end of 2023[94]. Economic Outlook - The forecasted U.S. unemployment rate is expected to rise to 4.4$28 million as of June 30, 2024, with interest rate risk averaging $30 million[157]. - Changes in interest rates may impact mortgage banking noninterest income, including origination and servicing fees, on a lagging basis[154]. Customer Engagement and Digital Services - Digital active customers increased to 35.6 million, up 4$128.2 billion, an increase of 3% from $124.9 billion year-over-year[50].