Wells Fargo(US:WFC)2024-05-02 21:18Company Overview - Wells Fargo reported a total of 3,486,315,358 shares outstanding as of April 23, 2024[3]. - The company is classified as a large accelerated filer under SEC regulations[2]. - Wells Fargo's principal executive offices are located at 420 Montgomery Street, San Francisco, California[1]. Compliance and Regulatory Filings - The quarterly report is filed pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the period ended March 31, 2024[1]. - The company has confirmed compliance with all filing requirements for the past 12 months[2]. - The company has a commitment to regulatory capital requirements and other restrictions outlined in the report[4]. Financial Performance - Total revenue for the quarter ended March 31, 2024, was $20,863 million, a 2% increase from $20,729 million in the previous quarter[5]. - Noninterest expense decreased to $14,338 million, down 9% from $15,786 million in the previous quarter[5]. - Pre-tax pre-provision profit (PTPP) rose to $6,525 million, a 39% increase compared to $4,692 million in the previous quarter[5]. - Provision for credit losses decreased by 27% to $938 million from $1,282 million in the previous quarter[5]. - Net income applicable to common stock increased by 36% to $4,313 million from $3,160 million in the previous quarter[5]. - Diluted earnings per common share increased to $1.20, a 40% rise from $0.86 in the previous quarter[5]. - Total equity decreased by 3% to $182,674 million from $187,443 million in the previous quarter[5]. - Return on average assets (ROA) improved to 0.97% from 0.72% in the previous quarter[5]. - The liquidity coverage ratio (LCR) was reported at 126, up from 125 in the previous quarter[5]. Year-over-Year Comparisons - The company reported net income of $4.6 billion for Q1 2024, down 7% from $5.0 billion in Q1 2023, with diluted EPS of $1.20 compared to $1.23 a year ago[24]. - Total revenue for Q1 2024 was $20.9 billion, a slight increase of 1% from $20.7 billion in the same period last year, driven by a 17% increase in noninterest income[21]. - Net interest income decreased by $1.1 billion, or 8%, to $12.2 billion in Q1 2024, primarily due to the impact of higher interest rates and lower loan balances[21][25]. - The provision for credit losses was $938 million in Q1 2024, a decrease of 22% from $1.2 billion in Q1 2023, reflecting lower losses in commercial real estate and auto loans[21][23]. Asset and Loan Management - Total loans amounted to $928,075 million, generating interest income of $14,741 million, with a yield of 6.38%[1]. - Nonperforming assets decreased by 2% to $8.2 billion, representing 0.89% of total loans as of March 31, 2024[23]. - The allowance for credit losses for loans was $14.9 billion as of March 31, 2024, down $226 million from the previous quarter[23]. - Total loans outstanding as of March 31, 2024, amounted to $922.784 billion, a decrease from $936.682 billion on December 31, 2023, representing a decline of approximately 1.5%[98]. Capital and Liquidity - The Common Equity Tier 1 (CET1) ratio was 11.19% as of March 31, 2024, exceeding the regulatory minimum of 8.90%[22]. - The company reported a stable outstanding balance in other consumer loans at $28,597 million as of March 31, 2024, compared to $28,539 million on December 31, 2023[123]. - The total short-term borrowings increased to $109.014 billion as of March 31, 2024, from $89.559 billion at December 31, 2023[159]. - The company has approximately $516.2 billion of available borrowing capacity at various Federal Home Loan Banks and the Federal Reserve Discount Window[157]. Economic Outlook - The U.S. unemployment rate is forecasted to rise to 4.1% by March 31, 2024, compared to 4.4% on December 31, 2023[139]. - The forecast for U.S. real GDP shows a decline of (0.3)% for Q2 2024, improving from a decline of (1.2)% in Q4 2023[139]. - The home price index is expected to increase by 1.2% in Q2 2024, following a decline of (2.3)% in Q4 2023[139]. Risk Management - The company plans to integrate climate considerations into its credit risk management activities moving forward[99]. - The overall credit process includes comprehensive credit policies and disciplined credit underwriting, with a focus on monitoring and reviewing existing loan portfolios[99]. - The company manages market risk through trading activities, which include debt and equity securities, and measures potential losses using value-at-risk (VaR) metrics[150]. Regulatory Environment - The company is subject to new proposed Basel III capital requirements, which may significantly increase its risk-weighted assets and capital requirements starting July 1, 2025[169]. - Credit ratings for the company as of March 31, 2024, include Moody's A1 for senior debt and S&P Global Ratings BBB+ for long-term ratings[165].