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Credit Suisse Financial Services Forum

David Carroll Senior Executive Vice President Head of Wealth, Brokerage and Retirement

February 9, 2011
2011 Wells Fargo & Company. All rights reserved.

Forward-looking statements and additional information

This presentation may contain forward-looking statements about our future financial performance. These forwardlooking statements include statements using words such as believe, expect, anticipate, estimate, should, may, can, will, outlook, appears or similar expressions. Forward-looking statements in this presentation include, among others, statements about: expected or estimated future losses in our loan portfolios, including our belief that quarterly provision expense and quarterly total credit losses have peaked and the allowance for loan losses is expected to decline; future performance targets for Wealth, Brokerage and Retirement; and certain proposed capital actions and our estimated Tier 1 common ratio as of December 31, 2010 under proposed Basel capital rules. Investors are urged to not unduly rely on forward-looking statements as actual results could differ materially from expectations. Forward-looking statements speak only as of the date made, and we do not undertake to update them to reflect changes or events that occur after that date. For more information about factors that could cause actual results to differ materially from expectations, refer to Wells Fargos reports filed with the Securities and Exchange lt t diff t i ll f t ti f t W ll F t fil d ith th S iti dE h Commission, including our Annual Report on Form 10-K for the year ended December 31, 2009 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2010, June 30, 2010, and September 30, 2010 including the discussion under Risk Factors in each of those reports. Loans that were acquired from Wachovia that were considered credit impaired were written down at acquisition date in purchase accounting to an amount estimated to be collectible and the related allowance for loan losses was not carried over to Wells Fargos allowance. In addition, such purchased credit-impaired loans are not classified as nonaccrual or nonperforming, and are not included in loans that were contractually 90+ days past due and still accruing. Any losses on such loans are charged against the nonaccretable difference established in purchase accounting and are not reported as charge-offs (until such difference is fully utilized). As a result of accounting for p purchased loans with evidence of credit deterioration, certain ratios of the combined company are not comparable to , p y p a portfolio that does not include purchased credit-impaired loans. In certain cases, the purchased credit-impaired loans may affect portfolio credit ratios and trends. Management believes that the presentation of information adjusted to exclude the purchased credit-impaired loans provides useful disclosure regarding the credit quality of the nonimpaired loan portfolio. Accordingly, certain of the loan balances and credit ratios in this presentation have been adjusted to exclude the purchased credit-impaired loans. References to impaired loans mean the purchased creditimpaired loans Please see pages 31 33 of the fourth quarter 2010 press release for additional information regarding loans. 31-33 the purchased credit-impaired loans.

Wells Fargo vision

We want to satisfy all our customers financial needs, help them succeed financially, be the premier provider of financial services in every one of our markets, and be known as one of Americas great companies America s companies.

Leading franchise Wells Fargo 4Q10 results Wealth, Brokerage and Retirement Business (WBR) overview

- Competitive advantage - Business model - Growth opportunities - Performance targets

Wells Fargo serves consumers and businesses in more communities than any other U.S. Bank

70 MM+ customers 9,000 stores 12,000 ATMs 57,000 , salespeople 18MM online banking customers

Wells Fargo Bank stores Wachovia Bank stores Wells Fargo Advisors offices Wells Fargo Home Mortgage stores

As of 4Q10.

Wells Fargo overview Diversified, scale businesses

2010 Revenues
($ in millions)

Key Business Segments: Community Banking Over 6,300 retail banking stores and 12,000 ATMs
- No 2 U.S. Deposit market share No. U S

Wealth, Brokerage and Retirement $11,730


No. 1 Small business banking (SBA lender) No. 1 Mortgage originator (4)
- No. 2 Mortgage servicing portfolio


Wholesale Banking $22,216

25% 62%

Community Banking $54,698

Wholesale Banking No. 1 Commercial real estate lender (5) No. 1 Insurance Brokerage (bank-owned) (6) No. 2 Asset management (bank-owned) (7) No. 3 Commercial loan syndications (8) No. 5 U.S. equity underwriting (9) Wealth, Brokerage and Retirement (WBR) 15,188 15 188 financial advisors
- No. 3 Brokerage Client Assets (10); $1.2 trillion

No. 5 Family wealth (11) No. 5 IRA provider (12)

(1) Revenue excludes other segment revenue of ($3,434) million that includes the elimination of items included in both Community Banking and WBR, largely representing wealth management customers serviced and products sold in the stores. (2) FDIC, June 2010. (3) CRA. (4) Inside Mortgage Finance. (5) Mortgage Bankers Association. (6) Business Insurance Magazine, 7/19/10. (7) Strategic Insight, 12/31/10. (8) Bookrunner by number of transactions, FY 2010, Thomson Reuters LPC. (9) Bookrunner by number of transactions, FY 2010, SDC. (10) SNL Financial. (11) Family Wealth Alliance, 2010. (12) Cerulli Associates, September 2010.

Record quarterly earnings in 4Q10

Net Income
($ in billions)

$3.4 billion record NIAT


in 4Q10

NIAT up 21% YoY, 9% linked quarter annualized (LQA) $0.61 $0 61 earnings per share in 4Q10
3.3 3.4

3.1 2.8 2.6






(1) Net income after tax.

Earnings growth driven by strong, broad-based revenue

($ in billions)



$21.5 billion quarterly revenue, up 12% linked quarter annualized (LQA)


21.4 21.4


60% of revenue in 4Q10 came from businesses with > 10% LQA growth Revenue growth across the franchise in 4Q10: - Period end loans up 2% LQA, up 6% LQA excluding $6.0 billion reduction in nonstrategic loans (1) - Mortgage originations up 27% - Accelerating checking/savings deposits up 17% annualized

Community C it Banking Wholesale Banking WBR

4Q09 1Q10 2Q10 3Q10 4Q10

- Wealth, Brokerage and Retirement client assets up 12% annualized - Trust and investment fees up 15% 4Q10 expenses included: - $533 million in Wachovia integration costs - $827 million in loan resolution/loss mitigation costs - $400 million charitable contribution to Wells Fargo Foundation - Seasonally higher advertising, travel, equipment and software expense i t d ft

Noninterest Expense
($ in billions)
12.7 12.8 13.3 12.1 12.3






Percent changes from 3Q10. (1) The non-strategic / liquidating loan portfolio includes the Pick-a-Pay, liquidating home equity, legacy WFF indirect auto, legacy WFF debt consolidation and Commercial and Commercial PCI loan portfolios.

Earnings growth also driven by continued decline in charge-offs / provision expense

Provision Expense
5.91 0.50 ($ in billions) 3.99 (0.50) (0 50) 5.33 3.45 (0.65) 2.99 2 99 (0.85)

$3.8 billion net charge-offs in 4Q10, down 29% from 4Q09 peak Provision expense of $3.0 billion, down $456 million from 3Q10 ($ Q ($256 million fewer losses and $200 million higher reserve release) $2.1 billion decline in NPLs from 3Q10 Allowance for credit losses = $23.5 billion = 6.11x quarterly charge-offs Remaining PCI nonaccretable at 12/31/10 = 29.5% of remaining UPB (1)











Net Charge-offs

Credit Reserve Build

Reserve Release

Nonperforming Assets
($ in billions)
















Nonperforming loans

REO/Foreclosed assets/Other

(1) Unpaid principal balance for PCI loans that have not had a UPB charge-off. Wells Fargos charge-offs in part reflect reduced risk in the Wachovia portfolio due to PCI accounting performed for highest risk Wachovia loans.

Capital is strong and continued to grow internally

Tier 1 Common Equity Ratio Internal capital generation in 4Q10 = 12% annualized ($3.5 billion) Tier 1 common +36 bps in 4Q10
8.01% 8.37%

Other O h capital ratios growing i l i i Tier 1 Capital = 11.25% Tier 1 Leverage = 9.19%

2001-2007 Avg = 7.0%

6.46% 5.18% 4.49%

7.61% 7.09%

Tier 1 common under Basel II/III = 6.9% at 12/31/10 Objective: increase dividend, repurchase shares, redeem callable TRUPS (2)

3.12% 3 12%

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10

See the appendix for more information on Tier 1 common equity. 4Q10 capital ratios are preliminary estimates. (1) Pro forma calculations based on reported Tier 1 common equity, as adjusted to reflect managements interpretation of current Basel III capital proposals. These pro forma calculations and managements estimates are subject to change depending on final promulgation of Basel III capital rulemaking and interpretations thereof by regulatory authorities. (2) Subject to regulatory approval and, with respect to the TRUPS, the satisfaction of any other applicable conditions.

WBR overview
Wealth, Brokerage and Retirement provides a fullarange of financial advisory, Wealth, Brokerage and Retirement provides full range of financial lending, fiduciary, and investment management services advisory, lending, fiduciary, and investment management services to clients using a planning approach tailored to meetmeet each clients needs to clients using a planning approach tailored to each clients needs Wealth Management Provides affluent and high net worth clients with a complete range of wealth management solutions including financial planning, private banking, credit, investment management and trust. Family Wealth delivers a complete and distinct experience focused on the wealth needs of ultra affluent families. lh d f l ffl f l Brokerage Financial advisors primarily serve affluent and high net worth clients advisory, brokerage and financial needs, through multiple channels, as part of one of the largest full-service brokerage firms in the U.S. Retirement Provides retirement services for individual investors and is a national leader in 401(k) and pension record keeping


WBR framework
Mission: To help our clients achieve financial peace of mind

Build enduring client relationships on a foundation of sound, thoughtful and objective advice Develop individualized financial plans to help meet clients financial objectives Help our clients build, manage, preserve and transition their financial resources and wealth

Vision: To be the premier provider of planning, advice, solutions and services in every one of our markets


WBR advice-based business model / market positioning

3rd Largest U.S. Retail Brokerage firm with $1.2T in client assets and 15,188 Financial Advisors 3rd Largest Managed Account provider with $235B in assets 4th Largest Wealth Management firm


with $390B in U.S. Private Client Assets

Wealth Management

5th Largest U.S.-based Multifamily Office with $23B in Assets Under Advisement and an average relationship size of $71MM (2) $198B in Assets Under Care

Retirement R ti t

2nd Largest Annuity Distributor (4) 5th Largest IRA provider (5) with $266B IRA Assets 6th Largest Institutional Retirement Plan Recordkeeper b l l dk based on assets d $231B Institutional Retirement Plan Assets $285B Custody Assets 7th Largest Retail Deposit base in the U.S.


with h

WBR Deposits

Attractive, stable funding source for the company with weighted average cost of 0.16%

Assets based on company data and peer analysis, as of December 31, 2010 unless otherwise noted. (1) Barrons 2010 Survey; Based on Assets Under Management in accounts > $5MM (as of June 30, 2010). Includes Brokerage Client Assets and Wealth Assets Under M U d Management. t (2) Family Wealth Alliance Multifamily Office Study 2010; Company figures reflect year end 2009. (3) Includes $48 billion in deposits as of December 31, 2010. (4) Sun Life Distributor Roundtable Survey (based on sales), May 2010. (5) Cerulli Associates (based on 1Q10 assets), September 2010. (6) PLANSPONSOR Magazine (based on 4Q09 defined contribution assets), July 2010.


Brokerage business model

Multi-channel model positions us to serve diverse client segments when, where and how they want to be served
Target Segments Seg e t Segment Potential

Investable Assets: $ $3.8T Liabilities: $7.9T

Investable Assets: $13.0T Liabilities: $2 9T Li biliti $2.9T

High Net Worth

Investable Assets: $ $7.2T Liabilities: $ 0.1T

Direct Financial Wells Fargo Solutions (DFS) Advisors Multi-Channel Delivery Model

Wealth Brokerage Services (WBS)

Private Client Group (PCG)

Independent Brokerage Group (IBG)

FiNet Advisors, HD Vest, First Clearing Correspondents


Data as of June 2008; source: Booz & Company analysis; Federal Reserve data.


Wealth Management business model

Three proven integrated delivery models
Client d li Cli t delivery model Financial Advisor Client

The Private Bank (TPB)

Wealth Team Client PB

Family Wealth
Family Office Client

How it works
Community Bank Wealth Brokerage Services





The Private Bank

Family Wealth

Partnership with FA driving Investment Solutions

Executed by integrated team of professionals # of Q alified TPB Clients Qualified

Holistic Family Office Management

Measure of Success

% Affluent Investment Penetration Rate

# of Families


Growing Balances B l

Increasing Cross-sell C ll

Improving Retention R t ti


WBR market opportunity

We operate in a large marketplace

$24T in U.S. investable assets $3T in liabilities in target segments

Assets represent a revenue pool of approximately $180B

with a high growth trajectory

Retirement Wave $4T in expected money movement over 5 years

Significant opportunities to capitalize on Moneyin Motion in-Motion and cross-sell cross sell services with affluent Wells Fargo Bank clients

thats consolidating

Big getting bigger Proliferation of small players

Top 3 firms dominate full-service space

and demanding holistic advice

Growth in need for Total Financial Management (i.e., Assets and Liabilities)

Winners are firms with the depth and breadth to offer the client a unified experience


The retiree wave is here and they want and need help
The number of retirees is expected to grow
Estimated Number of US Retirees 51 50 49 48
M Millions

People nearing retirement need help People in their 60 s have mixed feelings 60s about their upcoming retirement

- 46% are excited about the opportunity - 31% are nervous about having enough
y money

47 46 45 44 43 42 2011 2012

A sizable number still do not have a written plan showing how much and when they can withdraw savings in retirement ti t - 41% of people in their 50s have a plan - 46% of people in their 60s have a plan 64% of affluent investors in their 60s would value a formal retirement plan




% of US population 14.5%

Source: Wells Fargo, Retirement Survey, 2010 Harris Interactive telephone survey of approximately 1,800 middle class Americans; LIMRA Fact Book on Retirement Income 2010.


Optimizing advisor performance through best practices

Best practices are a defined set of processes and proven strategies that advisors implement to help them run their business, advise clients, strengthen existing relationships, and grow new relationships

Business Planning Client Segmentation Client Service Matrix How to RUN my business

How to ADVISE clients Envision Planning Advisory Cross-sell Recommended Investments

Client Information Management g Client Reviews

How to STRENGTHEN existing g relationships

How to GROW new relationships R f Referral Process lP Maximize Existing Client Relationship


Optimizing advisor performance through best practices

Best practices for advising clients and strengthening relationships include: planning, understanding, implementing advice and on-going client reviews

Envision PLAN Clie ent Infor rmation Mgmt.

Famil Occupatio Recreation Money ly, on, n, Financial Strateg gies Action Plan

Client Re eviews

Investments REVIEW

Credit Lending Banking


Risk Management g

Estate & Trust Planning g



Adoption of best practices yielding desired results

Success measured by penetration of financial planning (Envision), growth in advisory assets, holistic balance sheet advice through lending and client loyalty
Key HHs (1) with Envision Plans Advisory AUM
($ i billions) in billi )

86% of FAs have done an Envision plan on at least one of their clients Annual Lending Sales
($ in billions)

91% of FAs have Advisory AUM

Client Loyalty Scores

Clients Without A Plan


Client With A Plan 83% Score As Loyal Best Practice Clients 88% Score as Loyal

$ $7.2

52% Score as Loyal Non Best Practice Clients 47% Score as Loyal




59% of FAs have participated in delivering a lending product to a client

(1) Key HHs defined as those with $250,000 of assets with the firm. (2) As determined by Wells Fargo Advisors Client Satisfaction survey.

Best Practice clients are those who have a plan, an advisory relationship, and regular FA contact

Institutionalizing a planning culture Envision process

Investment planning is a key component of the best practices model and Envision is our proprietary planning tool

New goals or priorities

Define major life goals

Monitor progress

Understand The Envision Process

Ideal & Acceptable goals

Implement allocation

Prioritize goals

In balance targeted confidence

Stress test goals


Institutionalizing a planning culture - adoption metrics

Wells Fargo Advisors is successfully creating a planning culture that strengthens the client relationship, encourages loyalty, drives referrals, and promotes recurring revenue
Key HH Envision Adoption
8,000 7,000 6,000

Financial Advisor Envision Adoption

Key Househ holds

400,000 350,000 250,000 200,000 150,000 100,000 50,000 FA Count


5,000 4,000 3,000 2,000 1,000 0

FAs with 25+ Envision Plans

Over the last two years, the number of Key HHs with an Envision Plan has increased from ~160k to ~420k or approximately 71% of all planning eligible Key households Financial Advisor adopters (defined as FAs who have completed more than 25 Envision Plans) have increased significantly from ~3,800 to ~7,100 over the last two years Envision has helped identify more than $90 billion of client assets held away from the company
(1) Key HHs defined as those with $250,000 of assets with the firm.


WBR cross-sell opportunity Deepening relationships - 11% of retail bank households overlap with WBR Significant opportunity to further penetrate retail households with brokerage and retirement products i d Total Enterprise Households 40.2 MM Retail 22.1 22 1 MM HH

Non-Retail 18.1 MM HH

Retail Bank Overlap 2.6 MM HH Non-Bank Non Bank 2.5 MM HH

9.80 Cross-sell

5.1MM 5 1MM HH

HH = Household. Data as of December 31, 2010. WBR households are total combined households excluding Institutional Retirement participants. Cross-sell represents the number of products owned by WF household.


Cross-sell potential Wells Fargo banking customers

5% cross-sell generates over $600MM annual revenue
Wells Fargo Household Balance

HH Balances increase 6X 5.2MM WFC banking HHs (1) currently dont hold investment products $1.7 trillion investable assets

Bank & Brokerage Relationship

Bank Only Relationship Cross-Sell Opportunity

HH= Households. (1) Affluent Wells Fargo households with investable assets of $100K-2MM. (2) Household balances include deposits and investments.

Bank Only Relationship

We deepen our relationships with affluent households by cross-selling products across lines of businesses

WBR interest rate opportunity

2.50% 2.00%

Net Interest Margin

1.50% 1.00% 1 00% 0.50% 0.00% 0 00% 1Q10 2Q10 3Q10 4Q10


Average 3 Month LIBOR


2010 Average

Impact of 50 basis points (bps) increase in Avg. 3 month LIBOR on 2010 results: Avg Earnings up 18% over reported results Pretax margin up 200 bps Additional 270 bps of operating leverage


WBR financial performance

Total Revenue
($ in billions)

2010 Revenue by Line of Business

Retirement 6%

Private Banking & Trust 18%


Retail Brokerage 76%

2009 2010

Noninterest Expense
($ in billions)

Net Income After Tax

($ in millions)
$1,005 $1005

2010 Performance Measures


$9.8 $9.4







Pre-Tax Margin

Recurring Revenue


WBR performance targets

Pre-Tax Operating Margin
25% 19% 14%
22% 8% 2009 As Reported 14% 2010 2010 3 Yr Target As Reported Ex-Intangible Amortization & 2009 ARS Settlement 3.5% 3 Yr Target

Operating Leverage

5.3% 5 3%

Ex-Intangible Amortization

Recurring Revenue as a % of Total Revenue


Client Assets
($ in trillions)
$1.5 $1.4 $1.3

70% 65%



3 Yr Target





3 Yr Target

(1) Includes $50 billion and $46 billion of Wealth deposits for 2009 and 2010, respectively, previously not included.


Leading franchise Strong, consistent and high-quality earnings 4Q10 results driven by broad-based revenue growth, significant improvement in credit quality and loan growth Strong capital position Wealth, Brokerage and Retirement is well-positioned to capitalize on growth opportunities

- Leading provider across wealth, brokerage, retirement and retail deposit segments, fueled
by strong demographic and economic tailwind - Advice-based planning to achieve clients financial peace of mind - Deepen and enhance Wells Fargo customer relationships and add new customers - Strong growth segment for the company

Recurring revenue streams Optimizing advisor performance Institutionalizing a planning culture Proven internal partnerships p p Interest rate opportunity




WBR client service model

Services Family Wealth Wealth Brokerage Banking Investment Management Trust Brokerage Planning Insurance

Ultra High Net Worth

Client Management Directors

Private Bankers and Wealth Advisors

Private Bankers Financial Advisors

Investment I Managers

High Net Worth

Trust Officers

Financial Advisors

Planning Specialists/ Professionals

Insurance Specialists


Regional Bank Private Bankers

Mass Market M k t

Platform Bankers

Licensed Bankers


WBR status of merger integration

2009 2010

Feb - Dec


Wells F W ll Fargo Advisors Rebranding

Wealth Relationship Management Conversion

Brokerage Platform Conversion

WBR Conve ersions

Institutional Retirement Rebranding

Retail Retirement Rebranding

Core Trust Conversion Completed Conversions Pending Conversions

Defined Contribution Conversion (1-3 of 4)

DC Conversion (4 of 4)

Reg gional Banking g C Conversions







Remaining Eastern footprint


WBR revenue mix and trends

2010 Revenue Mix 4Q Revenue Growth
($ in billions)



Other 8% Retirement Private Banking & ki Trust Asset-Based / Other Recurring Fees 47%
$0.2 $0.5 $0 5
DFS/ WellsTrade DFS/ WellsTrade


Transaction Revenue 22%


Net Interest Income 23%

Retail Brokerage $2.0



(1) Does not foot due to rounding.



Tier 1 common equity reconciliation

Wells Fargo & Company and Subsidiaries (1) TIER 1 COMMON EQUITY
Quarter ended ($ in billions) Total equity Noncontrolling interests Total Wells Fargo stockholders' equity Adjustments: Preferred equity Goodwill d i G d ill and intangible assets (other than MSRs) ibl ( h h MSR ) Applicable deferred taxes Deferred tax asset limitation MSRs over specified limitations Cumulative other comprehensive income Other Tier 1 common equity (A) Total risk-weighted assets

, Dec. 31, 2010 $ 127.9 (1.5) 126.4 (8.1) (35.5) 4.3 (0.9) (4.6) (0.3) 81.3 8.37 %

Sept. 30, p , 2010 125.2 (1.5) 123.7 (8.1) (36.1) (36 1) 4.7 (0.9) (5.4) (0.3) 77.6 968.4 8.01

June 30, , 2010 121.4 (1.6) 119.8 (8.1) (36.7) (36 7) 5.0 (1.0) (4.8) (0.3) 73.9 970.8 7.61

Mar. 31, , 2010 118.1 (2.0) 116.1 (8.1) (37.2) (37 2) 5.2 (1.5) (4.0) (0.3) 70.2 990.1 7.09

Dec. 31, , 2009 114.4 (2.6) 111.8 (8.1) (37.7) (37 7) 5.3 (1.0) (1.6) (3.0) (0.2) 65.5 1,013.6 6.46

Sept. 30, p , 2009 128.9 (6.8) 122.1 (31.1) (37.5) (37 5) 5.3 (1.5) (4.0) (0.3) 53.0 1,023.8 5.18

June 30, , 2009 121.4 (6.8) 114.6 (31.0) (38.7) (38 7) 5.5 (2.0) (1.6) 0.6 (0.3) 47.1 1,047.7 4.49

Mar. 31, , 2009 107.1 (6.8) 100.3 (30.9) (38.6) (38 6) 5.7 (4.7) (1.2) 3.6 (0.8) 33.4 1,071.5 3.12

(B) (A)/(B)

$ 971.7

Tier 1 common equity to total risk-weighted assets

(1) T ier 1 common equity is a non-generally accepted accounting principle (GAAP) financial measure that is used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies. T ier 1 common equity includes total Wells Fargo stockholders' equity, less preferred equity, goodwill and intangible assets (excluding MSRs), net of related deferred taxes, adjusted for specified T ier 1 regulatory capital limitations covering deferred taxes, MSRs, and cumulative other comprehensive income. Management reviews T ier 1 common equity along with other measures of capital as part of its financial analyses and has included this non-GAAP financial information, and the corresponding reconciliation to total equity, because of current interest in such information on the part of market non GAAP information equity participants. (2) Under the regulatory guidelines for risk-based capital, on-balance sheet assets and credit equivalent amounts of derivatives and off-balance sheet items are assigned to one of several broad risk categories according to the obligor or, if relevant, the guarantor or the nature of any collateral. T he aggregate dollar amount in each risk category is then multiplied by the risk weight associated with that category. T he resulting weighted values from each of the risk categories are aggregated for determining total risk-weighted assets. T he Company's December 31, 2010, preliminary risk-weighted assets reflect estimated onbalance sheet risk-weighted assets of $814.4 billion and derivative and off-balance sheet risk-weighted assets of $157.3 billion.