Wells Fargo mpany : Q4 2022 presentation

4Q22 Financial Results

January 13, 2023

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Actively helped our customers in 2022

Supporting our Customers

• Helped customers avoid overdraft fees and meet short-term cash needs:
• • Eliminated non-sufficient fund (NSF) fees
  • Eliminated transfer fees for customers enrolled in overdraft protection
  • Established Extra Day Grace Period which has helped ~3.4 million customers avoid overdraft fees by providing consumer customers an extra business day to cure negative balances and avoid overdraft fees
  • Rolled-outEarly Pay Day, which provides consumer customers who receive eligible direct deposits the ability to access funds up to two days earlier
  • Launched Flex Loan, a digital only, small dollar, short-term credit product
  • Over 1.7 million Clear Access BankingSM accounts, our checking account with no overdraft fees
• Banking Inclusion Initiative: Launched first 5 HOPE Inside Centers in Oakland, Houston, Greater Atlanta, Phoenix and Los Angeles as part of our work to introduce HOPE Inside Centers in 20 markets by the end of 2023, and redesign 100 branches in low- to moderate-income neighborhoods across the nation
• Helped over 244,000 homeowners with new loans to either purchase a home or refinance an existing mortgage
• $3.5 billion in new commitments (including forward commitments) for affordable housing under the Government-sponsored enterprise (GSE) and Federal Housing Administration (FHA) programs (consisting of 35,900 total units including 33,700 rent restricted affordable units)

New Digital and Product Offerings

• Reimagined Wells Fargo Mobile® app for consumer and small business customers
• • 28.3 million mobile active customers1
  • 6.6 billion mobile logins
• Launched two credit cards
• • Wells Fargo AutographSM: our new reward card which provides 3x points across top spending categories of travel, dining, and streaming services
  • BILT Mastercard®: allows renters to earn rewards on rental payments which can be used towards a down payment on a home purchase
• Relaunched Intuitive Investor®, a digitally automated investment platform, making it easier for customers to invest with a streamlined account opening and a lower minimum investment requirement of $500
• Introduced Wells Fargo Premier, a new integrated banking, lending and investment offering oriented towards the complex financial needs of our affluent clients
• Launched Wells Fargo Vantage℠ , a one-stop-shop digital banking experience for commercial and corporate clients which allows for the customization and personalization of the client experience
• Continued the development of payment APIs for commercial and corporate clients, invested in solutions to support our financial institution clients, and began developing digital commercial lending solutions

1. Mobile active customers is the number of consumer and small business customers who have logged on via a mobile device in the prior 90 days.

4Q22 Financial Results

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Actively helped our customers, communities and employees in 2022

Supporting Sustainability

• Published the Wells Fargo CO2eMissionSM, a climate alignment and target- setting methodology for our financing portfolios, and set the first interim financed emissions targets for the Oil & Gas and Power sectors
• Issued our second sustainability bond, the Inclusive Communities and Climate Bond, raising $2 billion in capital to support housing affordability, economic opportunity, renewable energy and clean transportation
• Published our first sustainable finance progress report highlighting the
  $68 billion in financing towards sustainable activities and businesses which is 14% of our $500 billion goal
• From the inception of our Renewable Energy & Environmental Finance (REEF) Group in 2005 to September 2022, REEF provided over $14.4 billion in financing to ~12% of the utility-scale wind and solar capacity in the U.S.1

Supporting Diversity, Equity and Inclusion (DE&I)

• Published inaugural Diversity, Equity and Inclusion (DE&I) Report highlighting internal progress and external work supporting underserved communities
• Continued efforts to sustain and grow employee-focused initiatives:
• • Completed inaugural Building Organizational Leadership Diversity (BOLD) program and launched the next cohort of participants
  • Continued the GLIDE - Relaunch returnship program hosting two cohorts with 105 fellows hired in 2022 with an overall cohort diversity rate of 87%2. Converted 88% of program hires into full-time employment upon program completion
• Expanded on-demand DE&I training to all employees
• Spent more than $1 billion with certified diverse suppliers

Amounts in the bullets are for full year 2022, unless otherwise noted.

1. Source: US Energy Information Administration (EIA). Monthly Electricity Report.
2. 73% diverse by gender, 63% diverse by race/ethnicity and 3% diverse by veteran status.

4Q22 Financial Results

Additional Actions to Support Our Communities

• Donated approximately $300 million to over 3,400 nonprofits in support of housing, small business, financial health, sustainability and other community needs
• • Included ~$15 million in grants to support sustainability-related philanthropic efforts
• Strengthened local communities through ~ 700,000 hours of volunteer service from Wells Fargo employees
• Launched $60 million Wealth Opportunities Restored through Homeownership (WORTH) program which aims to create 40,000 homebuyers of color in eight markets across the U.S.
• Started Growing Diverse Housing Developers, a $40 million initiative to increase affordable housing supply and grow success of diverse housing developers
• Collaborated with the National Urban League on new five-year Diverse Appraiser Program to increase diversity in the home appraiser industry in Charlotte, Atlanta and Houston
• Continued support for our Open for Business Fund helping small business owners acquire commercial property, equipment and other upgrades
• Distributed more than $22 million in grants for financial coaching to help people build savings, reduce debt, acquire assets, and improve credit
• Expanded our business coaching and mentoring program with the Nasdaq Entrepreneurial Center to reach 1,200 women-owned small businesses

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4Q22 results

Financial Results

ROE: 6.4%

ROTCE: 7.6%1

Efficiency ratio: 82%2

Credit Quality

• Net income of $2.9 billion, or $0.67 per diluted common share. Results included:

($ in millions, except EPS)	Pre-tax Income	EPS
Litigation, regulatory, and customer remediation matters, primarily related to a variety of previously	($3,287)	($0.70)
disclosed historical matters
Impairments of equity securities predominantly in our affiliated venture capital business6	(1,050)	(0.15)
Severance expense, primarily in Home Lending	(353)	(0.07)
Discrete tax benefits	510	0.13

• Revenue of $19.7 billion, down 6%
• • Businesses divested in 2021 accounted for $1.1 billion of revenue in 4Q21, including $943 million in net gains on sales
• Noninterest expense of $16.2 billion, up 23%
• • Businesses divested in 2021 accounted for ~$186 million of noninterest expense in 4Q21
• Effective income tax rate of (4.6)% included $510 million of discrete tax benefits related to interest on overpayments in prior years
• Average loans of $948.5 billion, up 8%
• Average deposits of $1.4 trillion, down 6%
• Provision for credit losses of $957 million
• • Total net charge-offs of $560 million, up $137 million, with net loan charge-offs of 0.23% of average loans (annualized)
  • Allowance for credit losses of $13.6 billion, down $179 million from 4Q21 and included a $397 million increase in 4Q22

Capital and Liquidity	•	Common Equity Tier 1 (CET1) capital of $133.5 billion3
CET1 ratio: 10.6%3
	3
LCR: 122%4	•	CET1 ratio of 10.6% under the Standardized Approach and 12.0% under the Advanced Approach
TLAC ratio: 23.3%5

Comparisons in the bullet points are for 4Q22 versus 4Q21, 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 23.
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 25 for additional information regarding CET1 capital and ratios. CET1 is a preliminary estimate.
4. Liquidity coverage ratio (LCR) represents average high-quality liquid assets divided by average projected net cash outflows, as each is defined under the LCR rule. LCR is a preliminary estimate.
5. Represents TLAC divided by risk-weighted assets (RWAs), which is our binding TLAC ratio, determined by using the greater of RWAs under the Standardized and Advanced Approaches. TLAC is a preliminary estimate.
6. Impairments of equity securities, net of noncontrolling interests = $749 million.

4Q22 Financial Results

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Capital

Common Equity Tier 1 Ratio under the Standardized Approach1

11.4%

10.5%

10.4%

10.3%

10.6%

9.2%

Regulatory

Minimum

and Buffers2

4Q21 1Q22 2Q22 3Q22 4Q22 Estimated

Capital Position

• Common Equity Tier 1 (CET1) ratio of 10.6%1 at December 31, 2022 remained above our regulatory minimum and buffers of 9.2%2
• CET1 ratio down ~80 bps from 4Q21 and reflected:
• • Decline in accumulated other comprehensive income driven by higher interest rates and wider agency mortgage-backed securities spreads resulted in a decline in the CET1 ratio of 85 bps

Capital Return

• Period-endcommon shares outstanding down 52.0 million, or 1%, year-over-year (YoY)
• 4Q22 common stock dividend of $0.30 per share
• Issued 38.5 million shares of common stock in 4Q22 predominantly associated with annual company contributions to our 401(k) plan
• No common stock repurchases in 4Q22; we currently expect to resume common stock repurchases in 1Q23

Total Loss Absorbing Capacity (TLAC)

• As of December 31, 2022, our TLAC as a percentage of total risk- weighted assets was 23.3%3 compared with the required minimum of 21.5%

1. The Common Equity Tier 1 (CET1) ratio calculated under the Standardized Approach is our binding CET1 ratio. See page 25 for additional information regarding CET1 capital and ratios. 4Q22 CET1 is a preliminary estimate.
2. Includes a 4.50% minimum requirement, a stress capital buffer of 3.20%, and a G-SIB capital surcharge of 1.50%.
3. Represents TLAC divided by risk-weighted assets (RWAs), which is our binding TLAC ratio, determined by using the greater of RWAs under the Standardized and Advanced Approaches. TLAC is a preliminary estimate.

4Q22 Financial Results

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