The potential for federal regulators to assess a $1 billion fine against Wells Fargo & Co. overshadowed the bank's first-quarter report Friday.
It also shoved to the back burner several logistical and customer service updates.
For instance, the bank said it closed 58 branches in the quarter, dropping to 5,805 as of March 31. There are plans to eliminate up to 300 branches this year.
After completing the Wachovia Corp. acquisition, Wells Fargo had 3,429 branches and Wachovia had 3,338, according to Federal Deposit Insurance Corp. totals on June 30, 2009.
That means the Wells Fargo branch network has been reduced by 14.2 percent over the past nine years.
When the bank reaches its goal of being at 5,000 branches by the end of 2020, that would represent a 26.1 percent drop-off post-Wachovia acquisition.
"We are also closely looking at how our customers are using our channels," Timothy Sloan, the bank's chief executive, told analysts Friday.
"Branches continue to play an important part in serving our customers, and we will have as many branches for our customers to use for as long as they want to use them.
"However, our customers are increasingly using our digital channels and digital sessions, and they increased 13 percent from a year ago, while teller and ATM transactions declined 4 percent," Sloan said.
Sloan said the bank continued to make progress "on our expense savings initiatives and remain on track to achieve our target of $4 billion in expense reductions by the end of 2019." That represents $2 billion each in 2018 and 2019.
The bank has identified areas for cost cutting that include marketing, finance, human resources, operations, technology, data and contact centers.
The bank added 3,000 full-time jobs during the first quarter. However, it is down 7,100 full-time or full-time equivalent employees since March 31, 2017, to 265,700.
Wells Fargo announced in December, as part of responding to the federal corporate tax-rate cut, that it would raise its minimum hourly wage to $15 an hour for 36,000 employees. Sloan said March 28 that the bank plans to provide raises to an additional 50,000 employees already at or slightly above $15 an hour.
Sloan told analysts that Wells Fargo granted in March an award of restricted stock rights to about 250,000 employees - 50 shares for full- time workers and 30 shares for part-time workers.
As of Monday's closing share price of $50.80, the shares were worth about $2,540 per full-time employee. For part-time employees, it was worth about $1,520 each.
With Wells Fargo having 5 percent of its overall work force being part-time workers, or about 13,200, the shares likely were worth in excess of $600 million.
To put the share offering into context, Wells Fargo had 4.87 billion outstanding shares as of March 31 and its market capitalization was worth $248.1 billion as of Monday.
The bank rolled out in the first quarter its You Know Me initiative, a response to online mortgage lender rival Quicken Loans' digital application process.
"In many cases, home buyers are now able to receive pre-approved loan decisions immediately, either online or through their mobile device," Sloan said. "In March, 10 percent of completed retail applications were through our digital mortgage application."
John Shrewsberry, the bank's chief financial officer, said its Overdraft Rewind initiative - which launched in November - is aiding in restoring customer trust while it has "costs us hundreds of millions of dollars." Sloan said more than 800,000 customers have benefited from the program to date.
The initiative serves customers with direct deposit accounts. The bank no longer charges an overdraft fee when a customer's checking account goes to zero but a direct deposit covers the deficit the next day.
"We have been sending out tens of millions of alerts to people to help to remind them before they would overdraft that they have got little balance so they can handle their affairs appropriately and not get charged," Shrewsberry said.
Sloan said that because the bank offers customers "a variety of ways to waive the standard monthly service fees on checking accounts based on account usage or direct deposit ... 90 percent do not pay a monthly fee."
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