Wells Fargo (WFC) 2026년 1분기 실적 발표 회의록

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DATE

Tuesday, April 14, 2026 at 10 a.m. ET

CALL PARTICIPANTS

- 최고 경영자 — Charles Scharf

- 최고 재무 책임자 — Michael Santomassimo

Full Conference Call Transcript

Charles Scharf: Thanks, John. I am going to provide some brief comments about our results and update you on our priorities. I will then turn the call over to Michael Santomassimo to review first quarter results in more detail before we take your questions. Let me start with our first quarter financial highlights. We saw continued positive impacts from the investments we have been making with diluted earnings per share increasing 15%, revenue increasing 6%, loans growing 11%, and deposits up 7% compared to a year ago. Revenue growth was driven by a 5% increase in net interest income and an 8% increase in noninterest income.

Our consistent focus on investing across all of our businesses helped contribute to broad-based revenue growth with each of our operating segments increasing revenue from a year ago. Consumer Banking and Lending revenue grew 7% and Commercial Banking revenue grew 7% as well. Within our Corporate and Investment Bank, we saw an 11% increase in banking revenue and a 19% increase in markets revenue. Wealth and Investment Management grew 14%. While expenses increased, driven by higher revenue-related expenses, we remain focused on expense discipline.

At the same time, we are increasing our investments in areas like technology, including AI, as well as in advertising, while continuing to execute on our efficiency initiatives which has resulted in 23 consecutive quarters of headcount reductions. With revenue growing faster than expenses, pre-tax, pre-provision profit grew 14% from a year ago. Credit performance remained strong, and our net charge-off ratio was stable from a year ago at 45 basis points. Given that nonbank financial lending has generated a lot of interest lately, Michael will do a deep dive into that portfolio later in the call.

But I will say we like the risk-return profile of the portfolio, given our deep understanding of the collateral, the diversification across both clients and asset types, and structural protections in place. And finally, we returned 5.4 billion dollars to shareholders in the first quarter, including 4 billion dollars in common stock repurchases, while continuing to operate with significant excess capital. Turning to the progress we made during the quarter on our strategic priorities. Last month, we closed our final outstanding consent order, bringing the total to 14 terminated since 2019. We are incredibly proud of the hard work and unwavering commitment that was required to reach this milestone and understand the importance of sustaining our risk and control culture.

With this work behind us, we are now focusing more fully on accelerating growth and improving returns. We are seeing momentum across many business drivers, which we highlight on Slide 2 of our presentation deck. Let me share some of them starting with our consumer franchise. In the first quarter, we launched two new travel-focused reward credit cards available exclusively to new and existing Premier and Private Wealth clients. Over the past five years, continued enhancements to our credit card offerings have driven higher purchase volume and loan balances, which were both up from a year ago. New account growth remains strong, increasing nearly 60% from a year ago, driven by higher digital and branch-based openings.

We also had continued strong growth in our auto business. Originations more than doubled from a year ago, benefiting from being the preferred financing provider for Volkswagen and Audi vehicles in the United States as well as our methodical return to broad-spectrum lending. Importantly, credit performance has remained strong and in line with our expectations. We have continued to invest in marketing to help drive new primary checking accounts, and consumer checking account openings increased over 15% from a year ago. While this momentum is encouraging, we are not yet growing accounts at the pace we expect to over time. As customer expectations evolve, we continue to modernize our digital offering, complementing our in-person service with seamless mobile experiences.

The momentum continued in the first quarter, as mobile active users surpassed 33 million, Zelle transactions increased 14% from a year ago, and Fargo, our AI-powered virtual assistant, reached over 1 billion customer interactions less than three years since its launch. We had continued momentum in our Wealth and Investment Management business, with client assets growing 11% from a year ago to 2.2 trillion dollars. Company-wide net asset flows accelerated in the quarter, reaching their highest level in over ten years. Turning to our commercial businesses. In Commercial Banking, we continue to hire coverage bankers to drive growth, and we are seeing the early signs of success with higher new client acquisition as well as loan and deposit growth.

Average loans and deposits both grew by approximately 5 billion dollars in the first quarter, demonstrating accelerating momentum. We are also continuing to grow our Banking and Markets capabilities while not significantly changing the risk profile of the company. We continue to invest in senior talent to improve client coverage and broaden our product capabilities in investment banking. These investments helped drive 13% revenue growth from a year ago. While market conditions can change, the outlook for investment banking remains strong, and we entered the second quarter with a strong pipeline driven by M&A and equity capital markets. We continue to grow our Markets business amid a mixed and volatile trading environment, with revenue up 19% from a year ago.

Client sentiment is cautious but engaged as macro and geopolitical uncertainty has increased, and clients have largely shifted to a more selective and defensive posture. Finally, we completed the sale of our railcar leasing business at the beginning of the quarter. We have now substantially completed our efforts to refocus and simplify the company by exiting or selling 12 businesses since 2019. Let me now turn to the future. I want to start by highlighting what we are watching in the economic data. The U.S. labor market continues to cool in an orderly but uneven fashion, with few signs of systemic stress. Layoff activity remains contained. Weekly jobless claims reinforce this picture and are not signaling labor stress.

The unemployment rate dipped to 4.3% in March, but this continues to reflect slower rehiring and longer job searches, not renewed labor market strain. Despite slowing employment momentum, U.S. economic growth has held up. The U.S. consumer remains resilient in the aggregate but increasingly bifurcated beneath the surface. Spending has held up into early 2026 despite slower job growth, supported by higher-income households, steady wage growth for incumbent workers, and continued access to credit. However, confidence indicators and underlying balance sheet trends point to rising stress for less affluent consumers. Upper-income consumers continue to benefit from elevated equity prices, home equity, and cash buffers accumulated earlier in the cycle, allowing discretionary spending to remain firm.

By contrast, lower-income households are more exposed to higher interest rates and energy prices. Financial markets have absorbed these crosscurrents with resilience, but we expect continued volatility driven by geopolitical headlines and outcomes as well as the unfolding impact of higher commodities prices. Turning to what we are seeing from our customers. The financial health of consumers and businesses remains strong. Consumers are spending more than a year ago, which includes spending more on gas, but they have not slowed spending on everything else. Gas represented 6% of our total debit card spend and 4% of our total credit card spend before the rise in oil prices. They now represent 75% of debit and credit card spend.

Note that these numbers are higher for low-income households. We have seen historically that it often takes consumers several months to reduce their spend levels on other categories to adjust for higher oil prices. And while we do not know the exact timing, we would expect to see the same in the second half of the year. We also expect that higher energy prices will impact other goods and services. The duration and severity will be driven by the level and duration of higher oil prices.

The ultimate impact on credit performance is not yet clear due to the uncertainties I just mentioned, but the strength across our consumer portfolios, including lower charge-offs and improved early-stage delinquencies in our auto and credit card portfolios from a year ago, provide time for consumers to adjust their behaviors. Having said that, at this point, it is likely there will be some economic impact based on what has already occurred, but there are both risks and potential mitigants, so it is hard to predict the ultimate impact. Middle market and large corporate clients are in a similar position.

They have been resilient, and balance sheets are strong, but they tell us they are approaching the remainder of the year cautiously. As we grow our balance sheet, we are cognizant there are risks that we do not yet see in our data and will respond accordingly. Putting all of this together, it is likely energy prices will have some impact on the economy, but we feel good about where our customers and our company stand today. We have managed credit well over many cycles and are well-positioned to support our customers and navigate a variety of economic scenarios. Turning to the recently proposed capital rules.

We appreciate that the work our regulators have been doing is based on analysis, interagency coordination, public comment, and a focus on reforms that unlock economic potential. Importantly, the proposals are designed to maintain a strong and resilient banking system that allows the industry to support the flow of credit and help grow the broader economy. We continue to work through the details, but view the proposals as a constructive step in supporting our role in serving households and businesses. If the proposals do not change, and based on our current balance sheet composition, we estimate that under the new rules, our risk-weighted assets could decrease by approximately 7%.

Regarding the G-SIB surcharge, under the current proposal, we expect to remain around 1.5% for the foreseeable future even as we continue to grow. In closing, we delivered solid financial results in the first quarter that were consistent with our expectations. We have clear plans in place and are focused on driving continued organic growth and increasing returns across the franchise using our broad set of capabilities. We are executing our plans, and I am encouraged by the momentum we have built and continue to have confidence that we can continue to deliver stronger results in all of our businesses. I will now turn the call over to Michael.

Michael Santomassimo: Thank you, Charlie, and good morning, everyone. Since Charlie covered the key drivers of our improved financial results and the momentum we are seeing across our businesses on Slide 2, I will start my comments on Slide 3. Our first quarter results included 135 million dollars, or 0.04 dollars per share, of discrete tax benefits related to the resolution of prior period matters. Income taxes also benefited from the annual vesting of stock-based compensation, and the amount of the benefit in the first quarter was similar to the amount in the first quarter of last year. Turning to Slide 5.

Net interest income increased [inaudible] or 5% from a year ago and decreased 235 million dollars, or 2%, from the fourth quarter. Most of the decline from the fourth quarter was driven by two fewer days in the first quarter. The reduction also reflected the full-quarter impact of the rate cuts in the fourth quarter of last year on our floating-rate loans and securities. This decline was partially offset by higher markets net interest income, higher loan and deposit balances, as well as continued fixed asset repricing. I also wanted to explain the 13 basis point decline in net interest margin from the fourth quarter.

As expected, the largest driver of the decline was the growth in the balance sheet in the Markets business. As we have highlighted in the past, while the majority of these assets are lower ROA, they also have lower risk and are less capital intensive. Our ability to support this client activity should lead to more business. Second is the growth in interest-bearing deposits and other short-term borrowings. And lastly, the impact of lower interest rates. When we provided our full-year guidance last quarter, we anticipated some margin contraction for these reasons, and I would expect additional margin compression next quarter. I will update you on our full-year net interest income expectations later on the call. Moving to Slide 6.

We had strong loan growth with both average and period-end loans increasing from the fourth quarter and from a year ago. Period-end loan balances grew 11% from a year ago and exceeded 1 trillion dollars for the first time since 2020. Average loans increased 87.8 billion dollars, or 10%, from a year ago, driven by growth in commercial and industrial loans as well as growth across our consumer portfolios, except for residential mortgage. Turning to Slide 7. Last quarter, we provided more detail on our financials except banks loan portfolio. Today, I want to build on that by giving you an even deeper look into the portfolio's composition and risk profile.

I will be anchoring my comments on how these loans are reported in our 10-Qs and 10-K, which we think is a better way to understand our portfolio. We also report loans to nondepository financial institutions in our call reports. Since we often get questions on how these disclosures differ, we have included a reconciliation in our appendix to illustrate the differences. At the end of the first quarter, financials except banks loans totaled approximately 210 billion dollars, or 21% of our total loan portfolio. While our financials except banks category is large and has been growing, it is comprised of many different types of lending and collateral.

We have been making these types of loans for many years, and we typically have broader relationships with these institutional clients. As with any loan portfolio, there are inherent risks, but we are comfortable with our exposure based on the profile of borrowers, the diversity of collateral, our historical loss experience, and our underwriting practices and lending structures. The lending structures and overall risk management are run by specialist groups with expertise in assessing and structurally mitigating the risks assoc