Wells Fargo mpany : Presentation (PDF)

Consumer Banking Overview

December 5, 2019

© 2019 Wells Fargo Bank, N.A. All rights reserved.

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Table of Contents

• Consumer Banking Overview
• Lines of Business
• • Community Banking
  • Small Business/Personal Lending Group
  • Home Lending
  • Auto

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Consumer Banking: Overview

• Located in more communities than any other bank(1)
• Serve 1 in 3 consumer households and 1 in 10 small businesses in the U.S.(2)
• A Wells Fargo branch or ATM is within two miles of half the U.S. census households and small businesses in our footprint(3)
• Mortgage presence in nearly 1,000 locations, includingstand-alone mortgage branches and other business partner sites

#1 U.S. Retail Branch Network (4)

#3 Bank Owned ATM Network (5)

#2 Retail Deposit Market Share (6)

#1 Debit Card Issuer by Purchase and Transaction Volume (7)

#1 Home Lender and Servicer (8)

#3 Overall Auto Lender (9)

(1) SNL Financials as of June 2019. (2)1 in 3 is enterprise-wide; U.S. Census data for consumer and Primary Bank Market Share (Q1 2018, rolling eight quarters) as defined by Barlow Research Associates for small businesses. (3) Claritas Demographics as of December 2018 and Dun & Bradstreet January 2019. (4) FDIC data, SNL Financial, as of June 2019. Excludes credit unions, non-continental U.S. territories, and non-retail institutions and branches. (5) Peer earnings reports and websites, 3Q19. (6) FDIC data, SNL Financial, as of June 2019. Retail deposit data is pro forma for acquisitions and caps deposits at $1B in a single banking branch and excludes credit union deposits. (7) Nilson Report, April 2019. (8) 1Q19 Inside Mortgage Finance. (9) Experian AutoCount as of 3Q19 (loan only excludes leases).

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Consumer Banking: Our Team

Mary Mack

Head of Consumer

Banking

Charlotte, NC

David Kowach

Michael DeVito

Laura Schupbach

Elli Dai

Small Business &

Community Banking

Home Lending

Wells Fargo Auto

Personal Lending

Saint Louis, MO

Des Moines, IA

Chandler, AZ

Charlotte, NC

Andy Rowe		Bill Senhauser		Jonathan Velline
Enterprise Customer			Chief Operating
	Risk Management
Excellence			Officer
	Charlotte, NC
Charlotte, NC			San Francisco, CA

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Consumer Banking: Businesses well-positioned for growth

Strong Franchise

Our Opportunities

Path Forward

• With70MM customersat Wells Fargo, we conduct more than 3.5MM branch and ATM transactions daily on average, and customers connect virtually over 15MM times per day
• Strong individualproduct and channel capabilitiesthat have grown organically and independently
• Over half of customers have only one servicewith us - opportunity to earn more of our customers' wallet share

• Integrated execution across businesses
• Develop a clear value proposition based onbuilding personal relationshipswhere knowing our customers helps us best meet their needs
• Create a strongeromni-channel approach, blending physical distribution, digital, human interactions, and relevant data to efficiently provide comprehensive financial solutionsto our customers

• Put thecustomerat the center of everything we do
• Effectiverisk management
• Improved executionto reduce risk, increase efficiency, and drive growth
• Accelerate pace ofbusiness transformation
• Provideend-to-enddigitizationof customer experience, with consistency across channels and products

• Opportunity to growby leveraging data to engage with existing customers and retain them through better integration of our businesses

• Optimize expense base tolower cost to serveand reinvest in our business

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Enterprise Customer Excellence Team

New team integrates insights and learnings to continuously improve the end-to-end customer experience

Enterprise Customer Excellence will partner with lines of business to help ensure that feedback loops, learnings,

process changes, training, root cause identification and analysis generate improvements in our customer experience.

Customer Feedback		Channels		Complaints/Customer
			Remediation and Conduct
Infuse Voice of the Customer
			Respond to and resolve specific
throughout	Products		Services
	customer and employee issues, while
				helping to ensure there is a process to
				appropriately capture, categorize,
				and identify root causes
		Customer
	Customer		Consumer
	Feedback		Strategy
	Complaints		Conduct
	COE	Customer	COE
		Remediation
		COE

Consumer Strategy

Develop meaningful strategies to cultivate deep and enduring relationships with customers

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Community Banking

Community Banking: Overview

• Community Bankingserves the financial needs of customers in branches located in 36 states, offering a full array of financial products and services for Retail & Small Business customers, including key priority segments (Emerging Affluent, Small Business)
• We're undergoingtransformationin our branches to:
• • Meet simple needs with digital and otherself-service options
  • Satisfy complex needs withface-to- face conversations
  • Streamline and simplify operations
  • Tailor branch formats to meet customer segment needs

Key Stats

#1 U.S. Retail Branch Network (1)#1 Consumer Mobile Banking (2)#2 Retail Deposit Market Share (3)~24MM+ Primary Customers (4)13,000+ card-free ATMs

Serving More Communities

• Located in more states and ~2x as many markets as our competition(5)
• • We have branches in 36 states + DC
  • Our branches are in 47 of the 50 fast growing large U.S. markets, and we have #1 or #2 deposit share in 35 of the 47(6)
  • In 41 of the 50 highest income large markets, and we have #1 or #2 deposit share in 27 of the 41(6)

(6)

1. FDIC data, SNL Financial, as of June 2019. Excludes credit unions,non-continental U.S. territories, and non-retail institutions and branches. (2) 2Q19 Dynatrace tied for #1 overall performance in Mobile Bank Scorecard. (3) FDIC data, SNL Financial, as of June 2019. Retail deposit data is pro forma for acquisitions and caps deposits at $1B in a single banking branch and excludes credit union deposits. (4) Customers who actively use their checking account with transactions such as debit card purchases, online bill payments, and direct deposit; as of August 2019. (5)U.S. Markets defined as largest Core Based Statistical Areas (CBSAs) by population. Metropolitan and Micropolitan statistical areas (metro and micro areas) are geographic entities delineated by the Office of Management and Budget (OMB). Major Metro internally defined as Metropolitan markets with over 1MM population. Rural internally defined by "Unassigned" CBSAs. Counts as of 6/30/19. (6) Nielsen Claritas. Fastest-growing and highest income U.S. markets defined by population > 500,000. Five-year projected household growth rate and average household income data as of 1/1/2019. SNL Financial 6/30/19. Excludes credit unions, non-continental US territories, non-retail institutions/branches; caps deposits at $1B in a single branch.

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Community Banking: Branch Strategy

Customer Segments

We will continue a more segmented market program, reflecting competitor distribution shifts, customer usage changes, and market characteristics:

• In attractive markets, we will strive to maintain competitive parity, dynamically adjusting our branch count to match customer preferences, competitor actions, and relative shifts in sustainable competitive advantage (e.g. brand, marketing, technology, segments, product)
• In other markets, we will reduce branch counts more aggressively through consolidations and divestitures

Customer Segment Themes:Format follows function: mirroring branch operating model to customer segment needs

Advice	Specialists	Express
enabled by range of	supported by higher	augmented by digitally
collaborative spaces with	visibility and clarity	enabled team members
varying degrees of privacy	of partner capabilities

M

O

R

T

G

A

G

E

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Community Banking: Priorities

Staffing and service efficiency

Branch distribution

Change what branches do by focusing on client well-being

Branch infrastructure investment

Marketing and deploy new formats and financial centers

Leverage partnerships

Digital Integration

Strengthen risk management

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Small Business & Personal Lending Group

Small Business and Personal Lending Group: Overview

Small Business:

• Serves small businesses with up to $5MM in annual revenue
• Utilize a differentiated service model in recognition of the diversity of small businesses
• Offer full breadth of products and services, including deposits, lines of credit, term loans, credit card, real estate financing, merchant services, and practice finance

Small Business Stats

at• 3MMWellssmallF rgobusiness customers

• $1.9B in origination volume(1)
• 3 of 4 customers also have a consumer relationship at Wells Fargo

Personal Lending:

• Provides unsecured personal loans, lines of credit, and private student loans
• Private student loans includein-school financing as well as student loan consolidation options
• Primarily focused on existing Wells Fargo customers
• • Over 90% of personal lines and loans customers have a broader relationship with us
  • 58% of student loan households have a broader relationship with us

Personal Lending Stats

• 2MM personal lending customers
• $6.9B in personal loans and lines portfolio; $10.8B in student lending portfolio(2)

(1) Origination volume first nine months 2019. (2) Portfolio balances as of September 2019.

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Small Business: Priorities

Enhance acquisition and relationship model

Invest in relationship-based approach using branch, phone, and digital channels

Accelerate digital capabilities

Streamline account opening and ongoing money management for small business owners

Deepen customer relationships

Provide trusted advice and customer-centric solutions to help small businesses be more

successful

Focus on quality

Maintain high quality portfolio

Strengthen risk management

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Personal Lending Group: Priorities

Expand student segment focus

Partner across Wells Fargo to provide seamless customer journeys from

pre-college through post-graduation

Accelerate digital capabilities

Improve ability for customers to select, initiate, and manage their loans

Prioritize relationships and customer education

Engage experienced loan consultants to review options, provide education, and cultivate

multi-year relationships

Focus on quality

Maintain high quality portfolios

Strengthen risk management

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Home Lending

Home Lending: Overview

• Mortgage industry leader with adiversified business modelincluding Retail and Correspondent Production, Capital Markets and Servicing
• Home Lending Retail serves customers throughbroad distributionoptions including local home mortgage consultants, centralized call centers, wellsfargo.com, Community Bank, Wells Fargo Advisors and Wealth Management
• Significant opportunity togrow through existing customer relationshipsand leverage what we know about Wells Fargo customers to create simplified, differentiated experiences
• • ~30% of all new mortgage industry originations in 2019 had an existing Wells Fargo enterprise relationship(1)
  • Wells Fargo services 8.2MM mortgage loans, totaling $1.4T(2), representing a large retention opportunity

Key Stats (3)

#1 Mortgage Lender

#2 Retail Lender

#1 Correspondent Lender

#1 Mortgage Servicer

#1 Jumbo Lender

#1 Fannie/Freddie Issuer

Landscape/ Key Trends

• 2019 and 2020 origination market expectations currently higher than originally forecasted(4)
• Highly competitive market environment
• Fast-pacedindustry innovation and adoption of technology
• Changing homebuyer demographics
• On the policy/regulatory front: GSE and FHA reform, housing affordability

(1)Internal analysis, first seven months 2019. (2) Internal statistics, as of 9/30/2019. (3) inside Mortgage Finance, through 3Q19 year-to-date. (4) Internal and external industry forecasts,	16
Including Fannie, Freddie and MBA.

Home Lending: Transformation

Delivering differentiated, simplified lending experiences to grow Wells Fargo customer relationships

Continuing to invest in digitizing the end- to-end home lending experience

• Building comprehensive digital capabilities from origination to servicing
• Further expanding trusted source data to deliver a seamless, frictionless customer experience
• Developingdata-driven decision automation capabilities that result in a highly efficient home lending experience

Customer utilization of Online Mortgage

Application continues to grow

• Full rollout of online mortgage application completed in April 2018
• Over half of all mortgage applications taken in October 2019 utilized the online mortgage application

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Home Lending: Portfolio Trends

Home Lending Portfolio quality remains very strong

WF Consumer Real Estate Portfolio Loans (1)

($ in B)

	$400										35%
	$350										30%
	$300										25%
Balance	$250
										20%
$200
Ending											15%
$150
	$100										10%
	$50										5%
	$0										0%
	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	3Q19

Post-1/1/09		Pre-1/1/09		1-4 Res RE % of WF Assets (right axis)(2)

Only 1,350 (or 0.28% of funded balances) of the 487,000 jumbo loans funded since 2009 have ever been 60+ days past due

(1) Includes home equity, jumbo, Pick-a-Pay, conforming, and government insured/guaranteed loans. (2) 1-4 Res RE = 1-4 Family Residential Real Estate (based on average balance).

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Home Lending: Priorities

Grow Wells Fargo customer relationships

Create differentiated, simplified home lending experiences

Enhance data-driven decision automation capabilities

Continue to digitize and automate the end-to-end experience to drive operational

excellence and simplicity

Focus on quality

Maintain high quality portfolio

Strengthen risk management

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Auto Lending

Auto Lending: Overview

WF Autoprovides financing solutions for consumer and dealer customers through a centralized operating model

New	$46.7B (1)
30%
70%	Retail auto loan
Used
	portfolio

• Retailbusiness provides auto financing to consumers through a national dealer network. As of 3Q19, average loan size was $24.6K (2)with an average FICO score of 740 (3)
• Commercialbusiness provides floorplan financing, real estate loans, acquisition support and other treasury services to dealerships. Approximately 800 dealers have floorplan financing with WF Auto with $10.6B (1)outstandings and an average utilization of 74%

Key Stats

• 12,000+ Active Dealer(4)relationships
• 3MM Consumer customers
• #3 used auto and #3 overall U.S. retail auto lender(5)
• $18.7B Retail Auto originations through the first nine months of 2019

4 Centralized Hubs

(1) Ending balances as of 3Q19. (2) Average Loan Size is first nine months of 2019. (3) FICO score based on Q3 originations. (4) Dealers with at least one funded retail auto loan over the prior

three months. (5) Experian AutoCount as of 3Q19 (loan only excludes leases).

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Auto Lending: Portfolio Trends

We've made significant advancement in our business transformation, moving from a period of stabilization to growth

Retail Auto Originations (1)

($ in B)

$9.0							770	
							760
$8.0							750
$7.0							740
							730
$6.0							720
$5.0							710	
						700
$4.0							690
							680
$3.0							670
1Q16	3Q16	1Q17	3Q17	1Q18	3Q18	1Q19	3Q19

Our primary focus is returning to broad spectrum lending while maintaining strong risk discipline and appropriate returns

Monthly originations in 2019 was trending at $2B+ a month

Auto Lending Originations

Average FICO at Origination

• Our transformation has made us faster, more consistent and easier to do business with
• • Speed of decision, a dealer requirement, via automation, has especially increased our Prime volume
  • More consistent buying has earned us more applications

Retail Auto (2)	3Q17	3Q18	3Q19
New Originations ($B)	$4.1	$4.6	$6.9
Automated	24.3%	40.3%	47.3%
Decisioning Rate

.

(1) Indirect and Direct Auto. (2) Indirect Auto.	22

Auto Lending: Priorities

Continuing our business transformation to maintain relevancy in an evolving digital marketplace, create deeper connections to the Consumer Banking experience, and reduce risk

Optimizing our mix of business to achieve targeted returns

while operating within enterprise risk tolerance

Integrating into the Enterprise enabling WF Auto to be fully part of the

overall Consumer Strategy, including wellsfargo.com

Developing digital capabilities to meet the growing digital demands of

existing and potential dealer and consumer customers

Modernizing origination and servicing platforms

and automating manual processes

Continuing standardization to increase consistency

in processes and improving service

Focus on quality

Maintain high quality portfolio

Strengthen risk management

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Forward-looking statements

This document contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. In addition, we may make forward-looking statements in our other documents filed or furnished with the SEC, and our management may make forward-looking statements orally to analysts, investors, representatives of the media and others. Forward-looking statements can be identified by words such as "anticipates,"

"intends," "plans," "seeks," "believes," "estimates," "expects," "target," "projects," "outlook," "forecast," "will," "may," "could," "should," "can" and similar

references to future periods. In particular, forward-looking statements include, but are not limited to, statements we make about: (i) the future operating or financial performance of the Company, including our outlook for future growth; (ii) our noninterest expense and efficiency ratio; (iii) future credit quality and performance, including our expectations regarding future loan losses and allowance levels; (iv) the appropriateness of the allowance for credit losses; (v) our expectations regarding net interest income and net interest margin; (vi) loan growth or the reduction or mitigation of risk in our loan portfolios; (vii) future capital or liquidity levels or targets and our estimated Common Equity Tier 1 ratio under Basel III capital standards; (viii) the performance of our mortgage business and any related exposures; (ix) the expected outcome and impact of legal, regulatory and legislative developments, as well as our expectations regarding compliance therewith; (x) future common stock dividends, common share repurchases and other uses of capital; (xi) our targeted range for return on assets, return on equity, and return on tangible common equity; (xii) the outcome of contingencies, such as legal proceedings; and (xiii) the Company's plans, objectives and strategies. Forward-looking statements are not based on historical facts but instead represent our current expectations and assumptions regarding our business, the economy and other future conditions. 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 the "Forward-Looking Statements" discussion in Wells Fargo's press release announcing our third quarter 2019 results and in our most recent Quarterly Report on Form 10-Q, as well as to Wells Fargo's other reports filed with the Securities and Exchange Commission, including the discussion under "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2018.

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