Wells Fargo mpany : Q4 2021 presentation (PDF)

4Q21 Financial Results

January 14, 2022

© 2022 Wells Fargo Bank, N.A. All rights reserved.

Actively helping our customers, communities and employees in 2021

Supporting our Customers

• Helped customers avoid overdraft, overdraft protection and non-sufficient fund (NSF) fees:
• • Over 1.1 million customer accounts now benefiting from Clear Access Banking, our checking account with no overdraft or NSF fees
  • Our Overdraft Rewind feature helped over 3.1 million customers avoid overdraft, overdraft protection or NSF fees on 9.3 million transactions
  • Sent more than 1.3 million balance alerts every day to help customers avoid overdrafts by making a deposit or transferring funds from another account
  • Recently announced a set of overdraft changes in our continued efforts to better serve our customers and provide more choice and flexibility, as well as reduce overdraft fees, including:
  • • NSF fees will be eliminated by the end of 1Q22
    • Transfer fees for customers enrolled in overdraft protection will be eliminated by the end of 1Q22
    • Additional service and product changes expected to be rolled out later in the year include early access to direct deposits for qualifying deposits, 24-hour grace periods for overdrafts, and a new short-term credit product
• Helped over 585,000 homeowners with new low-rate loans to either purchase a home or refinance an existing mortgage: over 193,000 purchases and 392,000 refinances
• Extended forbearance options for over 1 million mortgage customers since the start of the COVID-19 pandemic
• Closed $2.2 billion in new commitments for affordable housing under the Government-sponsored enterprise (GSE) and Federal Housing Administration (FHA) programs (consisting of 105 properties nationwide with 25,800 total units including 24,900 rent restricted affordable units)

Amounts in the bullet points are for full year 2021, unless otherwise noted.

1. Source: US Energy Information Administration (EIA). Monthly Electricity Report, Table 6.02.b, as of 10/31/2021. 4Q21 Financial Results

Supporting Sustainability

• Announced a goal of achieving net zero greenhouse gas emissions, including our emissions attributable to our financing, by 2050 and joined the Net-Zero Banking Alliance
• Increased our sustainable finance commitment to $500 billion between 2021 and 2030
• Issued our first sustainability bond, the Inclusive Communities and Climate Bond, raising $1 billion in capital to support housing affordability, socioeconomic advancement and empowerment, and renewable energy
• Surpassed $13.3 billion in cumulative tax-equity investments in nearly 600 wind, solar, and fuel cell transactions since 2007. Between the inception of our Renewable Energy & Environmental Finance (REEF) Group in 2005 and October 2021, REEF provided financing to 13% of the utility-scale wind and solar capacity in the U.S. 1

Supporting our Employees

• Announced plans to raise U.S. minimum hourly pay levels to a range of $18 to $22, based on role, location, and market conditions
• In 4Q21, provided supplemental pay to eligible branch employees in active status until the end of 2021 and the first part of January, in recognition of their contributions during the pandemic
• Contributed $3 million to the We Care Fund to help employees significantly affected by the pandemic or unforeseen circumstances

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Actively helping our customers, communities and employees in 2021

Supporting the Small Business Recovery Through Our

Open for Business Fund

• Wells Fargo voluntarily committed to donate the gross processing fees received from Paycheck Protection Program (PPP) loans funded in 2020 to create the Open for Business Fund, a ~$420 million commitment
• The Open for Business Fund provides support for Community Development Financial Institutions (CDFIs) and other nonprofit organizations that provide capital, training and long-term support to small businesses
• Fulfilled our ~$420 million commitment, which included grants to 235 CDFIs and nonprofits, which in turn is estimated to help nearly 152,000 small businesses and maintain more than 255,000 jobs
• • Roughly 85% of small businesses served by grantees are projected to be those hardest hit by the pandemic, including Black, African American, Hispanic, Native American, and Asian American owned small businesses
  • Small business owners have used the funding to keep paying their employees, pivot to new business models, buy needed supplies, close the gap on rent and utilities, and meet other business needs
  • Announced $20 million grant in Charlotte, which will help ~1,000 Charlotte- area business owners make property, equipment and technology upgrades, and meet other business needs
  • Expect to make remaining grant announcements in 1Q22

Additional Actions to Support Our Communities

• Charitable Donations: $615 million in donations, including support for the Open for Business Fund
• Contributions and announcements included:
• • Addressing Housing Affordability: helped keep an estimated 300,000 people housed during the pandemic with more than $160 million donated to nonprofits (2020 - 2021)
  • • Engaged Habitat for Humanity and Rebuilding Together to build and repair more than 400 homes in low and moderate income communities across the U.S.
  • Investing in Minority Depository Institutions (MDIs): completed investments in 13 black-ownedbanks, fulfilling $50 million pledge made in 2020
  • Strengthening Historically Black Colleges and Universities (HBCUs): funded
    $5.6 million under the "Our Money Matters" financial health initiative to reach an estimated 40,000 students of color over the next three years, and awarded $1 million to the Thurgood Marshall Scholarship Fund in the fourth quarter to support HBCU seniors toward graduation
  • Launched Banking Inclusion Initiative: unveiled a 10-yearcommitment to help unbanked individuals gain access to affordable, mainstream, digitally-enabledtransactional accounts
  • Stepping up for Disaster Relief: provided $8 million in relief funding to nonprofits serving communities impacted by floods, wildfires, tornados and other disasters

Amounts in the bullet points are for full year 2021, unless otherwise noted.

4Q21 Financial Results

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4Q21 results

Financial Results

ROE: 12.8%

ROTCE: 15.3%1

Efficiency ratio: 63%2

Credit Quality

• Net income of $5.8 billion, or $1.38 per diluted common share

- Revenue of $20.9 billion, up 13%

◦ Net gains from equity securities of $2.5 billion ($1.9 billion net of noncontrolling interests), up from $884 million in 4Q20 and $869 million in 3Q21

- Noninterest expense of $13.2 billion, down 11%

- Results included:

($ in millions, except EPS)	Pre-tax Income	EPS
Net gain on sales of our Corporate Trust Services business and Wells Fargo Asset Management	$943	$0.18
Change in the allowance for credit losses	$875	$0.17
Impairment of certain leased rail cars	($268)	($0.05)

• Effective income tax rate of 22.9%

• Average loans of $875.0 billion, down 3%; period-end loans of $895.4 billion, up 1% from 4Q20 and up 4% from 3Q21

• Average deposits of $1.5 trillion, up 7%

• Provision for credit losses of $(452) million, down $273 million

- Total net charge-offs of $423 million, down $161 million

◦ Net loan charge-offs of 0.19% of average loans (annualized)

- Allowance for credit losses for loans of $13.8 billion, down $5.9 billion from 4Q20 and down $917 million from 3Q21

Capital and Liquidity

CET1 ratio: 11.4%3

LCR: 118%4

TLAC ratio: 23.0%5

• Common Equity Tier 1 (CET1) capital of $140.6 billion3
• CET1 ratio of 11.4% under the Standardized Approach and 12.6% under the Advanced Approach3
• Repurchased 139.7 million shares of common stock, or $7.0 billion, and issued 28.6 million shares, or $1.4 billion, predominantly associated with annual company contributions to our 401(k) plan, in the quarter

Comparisons in the bullet points are for 4Q21 versus 4Q20, unless otherwise noted.

1. Tangible common equity and return on average tangible common equity (ROTCE) are non-GAAP financial measures. For additional information, including a corresponding reconciliation to GAAP financial measures, see the "Tangible Common Equity" table on page 20.
2. The efficiency ratio is noninterest expense divided by total revenue.
3. The Common Equity Tier 1 (CET1) ratio calculated under the Standardized Approach is our binding CET1 ratio. See page 21 for additional information regarding CET1 capital and ratios. CET1 is a preliminary estimate.
4. Liquidity coverage ratio (LCR) represents high-quality liquid assets divided by projected net cash outflows, as each is defined under the LCR rule. LCR is a preliminary estimate.
5. Represents total loss absorbing capacity (TLAC) divided by the greater of risk-weighted assets determined under the Standardized and Advanced Approaches, which is our binding TLAC ratio. TLAC is a preliminary estimate.

4Q21 Financial Results

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4Q21 earnings

$ in millions (mm), except per share data	4Q21		3Q21	4Q20	vs. 3Q21		vs. 4Q20
Net interest income	$9,262		8,909	9,355	$353		(93)
Noninterest income	11,594		9,925	9,134	1,669		2,460
Total revenue	20,856		18,834	18,489	2,022		2,367
Net charge-offs	423		257	584	166		(161)
Change in the allowance for credit losses	(875)		(1,652)	(763)	777		(112)
Provision for credit losses	(452)		(1,395)	(179)	943		(273)
Noninterest expense	13,198		13,303	14,802	(105)		(1,604)
Pre-tax income	8,110		6,926	3,866	1,184		4,244
Income tax expense	1,711		1,521	574	190		1,137
Effective income tax rate (%)	22.9	%	22.9	15.6	4	bps	737
Net income	$5,750		5,122	3,091	$628		2,659
Diluted earnings per common share	$1.38		1.17	0.66	$0.21		0.72
Diluted average common shares (# mm)	3,964.7		4,090.4	4,151.3	(126)		(187)
Return on equity (ROE)	12.8 %	11.1	6.6	177	bps	620
Return on average tangible common equity (ROTCE) 1	15.3		13.2	8.0	209		729
Efficiency ratio	63		71	80	(735)		(1678)

1. Tangible common equity and return on average tangible common equity are non-GAAP financial measures. For additional information, including a corresponding reconciliation to GAAP financial measures, see the "Tangible Common Equity" table on page 20.

4Q21 Financial Results

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