Wells Fargo(US:WFC)2023-07-31 16:00Company Overview - Wells Fargo reported a total of 1,823,028,137 shares of common stock outstanding as of July 21, 2023[3]. - The company is classified as a large accelerated filer under SEC regulations[2]. - The company has indicated that it is not a shell company as defined by SEC regulations[2]. Financial Statements - The financial statements include a consolidated statement of income, comprehensive income, balance sheet, changes in equity, and cash flows[4]. - The report indicates that Wells Fargo has filed all required reports under the Securities Exchange Act of 1934 during the preceding 12 months[2]. - The company is subject to regulatory capital requirements and other restrictions as outlined in the financial statements[4]. Revenue and Income - Total revenue for the quarter ended June 30, 2023, was $20,533 million, a decrease of 1% from the previous quarter and an increase of 19% from $17,040 million in the same quarter of 2022[5]. - Wells Fargo's net income for the quarter was $4,938 million, a decrease of 1% from the previous quarter and an increase of 57% from $3,142 million year-over-year[5]. - The company reported net income of $4.9 billion for Q2 2023, a 57% increase from $3.1 billion in Q2 2022, with diluted EPS rising to $1.25 from $0.75[23]. - Total revenue for Q2 2023 was $20.5 billion, up 20% from $17.0 billion in Q2 2022, driven by a 29% increase in net interest income[23]. Credit Losses and Provisions - Provision for credit losses rose to $1,713 million, a 42% increase from the previous quarter and a significant increase from $580 million in the same quarter of 2022[5]. - The provision for credit losses was $1.7 billion in Q2 2023, compared to $580 million in Q2 2022, reflecting increases for commercial real estate loans and credit card balances[23]. - The allowance for credit losses (ACL) for loans increased to $14.8 billion at June 30, 2023, up $1.2 billion from December 31, 2022[26]. Loans and Deposits - Loans totaled $945,906 million, remaining stable compared to the previous quarter and up 2% from $926,567 million year-over-year[5]. - Total loans for Q2 2023 amounted to $945.906 billion, with total interest-earning assets at $1,719.705 billion[31]. - Total deposits decreased to $823.339 billion in Q2 2023, an 8% decline from $898.650 billion in Q2 2022[62]. Noninterest Income and Expenses - Noninterest income for the second quarter of 2023 was $7,370 million, an increase of 8% compared to $6,842 million in the same quarter of 2022[34]. - Noninterest expense totaled $12,987 million for the quarter ended June 30, 2023, a slight increase of 1% compared to $12,862 million in the same quarter of 2022[42]. - Personnel expenses increased by 2% to $8,606 million in Q2 2023 from $8,442 million in Q2 2022, driven by higher salaries and severance expenses[42]. Capital and Equity - Total equity at the end of the quarter was $181,952 million, a decrease of 1% from the previous quarter and an increase of 1% from $179,798 million year-over-year[5]. - The company maintained a Common Equity Tier 1 (CET1) ratio of 10.73% as of June 30, 2023, exceeding the regulatory minimum of 9.20%[25]. - The company issued $1.725 billion of Preferred Stock, Series EE in July 2023[20]. Risk Management - The report includes a section on risk management, highlighting the company's approach to managing financial risks[4]. - The company continues to integrate climate considerations into its credit risk management activities[121]. - The company employs various credit risk management activities to mitigate risks associated with loan concentrations, economic conditions, and interest rate changes[120]. Market Conditions and Forecasts - The forecasted U.S. unemployment rate is expected to rise to 5.9% by Q4 2024, up from 4.2% in Q4 2023[164]. - The forecasted U.S. real GDP is projected to decline by 1.5% in Q4 2023, with a slight recovery to 1.0% by Q4 2024[164]. - Commercial real estate asset prices are forecasted to drop by 12.4% in Q4 2023, indicating significant market challenges[164]. Trading and Investment Activities - The company engages in trading activities primarily within its Corporate and Investment Banking (CIB) businesses, utilizing debt and equity securities, trading loans, and derivatives[177]. - The average Company Trading General VaR for the quarter ended June 30, 2023, was $38 million, reflecting an increase compared to the same period a year ago, primarily driven by changes in portfolio composition[178]. Liquidity and Funding - As of June 30, 2023, the Liquidity Coverage Ratio (LCR) was 123%, exceeding the minimum requirement of 100%[182]. - Total High-Quality Liquid Assets (HQLA) amounted to $349.1 billion, with eligible cash at $121.1 billion and eligible securities at $228.0 billion[183]. - The company issued $8.5 billion of long-term debt in July 2023 to support operational requirements[187].