Wells Fargo & Company (WFC)

“And then as I sort of mentioned in the commentary, you know, we expect a little bit more, you know, NIM compression in the third quarter, and then things start to stabilize,”

“As we previously announced, we expect to increase our third quarter common stock dividend by 11% to $0.50 per share subject to approval by our Board of Directors at its meeting later this month.”

“The short answer on the second part is yes. On the deposits. And again, a little more weighted to interest bearing than non interest bearing as I mentioned, John, but we are seeing, you know, week to week, month to month sort of the growth that we expect there.”

“And so I think you will, you know, you will continue to see that, you know, across the markets business, I think, for into the coming quarters. But we feel really good about what we are seeing and the trend that we are seeing there.”

“But we expect to see some growth in loans, securities, You get the benefit of, you know, the fixed asset turnover given where rates are. And so I think it is all progressing. So it is not a bad assumption sort of relative to what to expect, but we still feel very good about getting to that 50 billion in total.”

“And the steady improvements in our returns continue to give us confidence in achieving our medium term 17% to 18% RoTCE target.”

“Our 2022 through 2024 vintages are now adding to profitability. Our 2025 and 2026 vintages are bigger, as account openings have accelerated so they offset some of the positive contribution from the earlier vintages Importantly, we have seen strong performance versus our original assumptions regarding new account acquisition and credit performance, which gives us confidence that we should see profitability and returns increase.”

“But more importantly, the growth and efficiency improvements that we have seen over the past several years are now broader based and it is these trends that give us confidence in reaching our goal of a sustainable ROTE of 17% to 18%.”

“But at this point, you know, as I said, we expect just a small you know, decline potentially in the third quarter. You know, hopefully, it ends maybe even being better than that, and then we sort of stabilize from there.”

“I think you will see home lending be stable. And then I think you will see some growth in the commercial portfolios in the second half of the year.”

“And so you will see it just start to more get to kind of more of a natural, you know, growth rate over the next step, you know, couple quarters.”

“And so I think, you know, it is supportive of, you know, a good second half of the year, you know, when you think about sort of delinquencies and charge offs.”

“And then, you know, the yield quarter to quarter, you know, in terms of, you know, what you see from the credit card deal, that will that will move around a little bit depending on sort of what we see from the new acquisitions. But over a longer period of time, you will see that continue to increase as those as those vintages mature”

“I think, you know, both but despite that, I think over the next couple years, will you will see you know, the profitability of that business, you know, just you know, continue to increase, and the return increase in the business, and that is, you know, the way we have been sort of managing it.”

“We still expect our RWA to go down as a result of you know, at least what was proposed by about 7%.”

“I think on the consumer side, you know, we continue to see really good growth in auto. We see steady growth in card. The home lending business is pretty stable at this point. And I think those trends, like, we would expect to continue as you sort of look at the rest of the rest of the year.”

“And as Charles mentioned, you know, there is, you know, over a slightly longer time period, like, there is opportunity to expand the NIM, not just stabilize.”

“You know, I think on the NIM side, know, as I said earlier on the call, you know, we do expect it to stabilize. After you get through the third quarter, and so that is definitely the case.”

“And so I think you will, you know, you will continue to see that, you know, across the markets business, I think, for into the coming quarters.”

“But more importantly, over time, that should also help us grow NIM as we attract more noninterest bearing over a period of time and away from NIM, we generate stronger trading revenues.”

“So I would expect the deposit cost to move just move up a little bit as you go in the second half of the year, but ultimately, I think that is actually a good thing from a profitability point of view and supports the broader set of business that we do, you know, with those customers.”

“But we expect it to be pretty stable from here.”

“we expect that we will continue to see more efficiency, you know, from here.”

“As we look at the second half of the year, we expect revenue related expenses to be somewhat higher than we expected at the beginning of the year, but we expect expenses in other areas to be lower through our continued focus on efficiency initiatives.”

“Regarding our expense outlook, we still expect 2026 noninterest expense to be approximately $55.7 billion.”

“In terms of markets, NII, as we all know, it is always hard to forecast. Higher short term rates typically result in lower markets NII, but as of now, we still expect market NII to be approximately $2 billion in 2026.”

“We had originally assumed some growth in noninterest bearing deposits, but we now expect them to be relatively stable, which is a negative to our original expectation.”

“So year over year, average loan growth in the fourth quarter will likely be higher than the mid single digit increase we assumed in our outlook, back in January.”

“We still expect net interest income, excluding markets, to be approximately $48 billion for the full year,”

“We are maintaining our guidance of $50 billion plus or minus of net interest income for the full year And similar to last year, we expect stronger growth in the second half of the year compared to the first half.”

“While we will talk more about our expectations for net interest income later on the call, we expect modest net interest margin compression in the third quarter broadly in line with second quarter's decline from the first quarter before stabilizing the fourth quarter.”

“The plan is working, as we are seeing incremental client growth and higher loan and deposit balances and we expect this momentum to continue as we execute on our plan.”

“We have significant opportunity to increase the pace of growth and this along with offering our broad set of products including credit cards, and mortgages, should drive low cost deposits higher over time.”

“You will see a little bit more compression from the first two drivers, but it will be less as we go into the second quarter.”

“While market conditions can change, the outlook for investment banking remains strong, and we entered the second quarter with a strong pipeline driven by M&A and equity capital markets.”

“We feel as confident as ever in that target. There is absolutely nothing that has changed.”

“We are actually really confident in the path to get from where we are, roughly 15%, to 17% to 18%.”

“Again, that is not going to grow at the same pace forever, so you will see that moderate. We are getting some netting benefits now as it gets bigger, and you will start to see some of that come through in a little bit of a different trajectory as you look at the coming quarters.”

“We are either going to get the increased flows at a strong ROTCE or we are not going to use the balance sheet for it, and we are very confident at this point that we will get the returns for it based on the conversations and the things we have seen with our clients so far.”

“As Charlie noted, we expect to grow the Markets business in the context of also improving overall returns for the company and do not believe it will be dilutive or get in the way of us getting to that 17% to 18% return.”

“It should not be dilutive to our TCE.”

“Overall, the pipeline and the expectation is still to see a pretty active rest of the year.”

“That is going to have a bigger impact for next year than this year.”

“Ultimately, we have a really achievable path to 50 billion dollars, and if all works out, it could be better than that depending on how it all plays out through the rest of the year.”

“We are still going to stick with the 10% to 10.5% target for now.”

“It is just a matter of time before that more meaningfully contributes to profitability, and you will start to see a little of that this year as the earliest vintages mature.”

“I think as we go through this period, you are going to see ROA come down. As that stabilizes and matures and we get a little further into this growth period, that will start to moderate and you will start to see it either stabilize or start to grow as we start to add in the other business activity that we expect to see.”

“Regarding our expense outlook, first quarter expenses were in line with our expectations, and therefore, our guidance has not changed, and we still expect 2026 noninterest expense to be approximately 55.7 billion dollars.”

“Higher rates could result in lower Markets NII from what we expected at the beginning of the year, but as of now, our expectation of approximately 2 billion dollars in 2026 seems appropriate.”

“We expect this trend to continue throughout the year.”

“Our outlook was based on average loan growth of mid-single digits from fourth quarter 2025 to fourth quarter 2026. Average loans grew 4% in the first quarter from the beginning of the year, and if demand remains strong, average loan growth could be higher than the mid-single-digit increase we had previously assumed.”

“We are retaining our guidance of 50 billion dollars, plus or minus, of net interest income this year.”

“As I pointed out earlier, we had strong customer engagement in the first quarter with growth in both loans and deposits as we continue to transition back to growth, which we have supported with investments in marketing and bankers. In addition, similar to last year, we expect net interest income to grow over the course of the year, including Markets.”

“The rate of reduction has slowed and should continue to moderate throughout the rest of the year.”

“Regarding the G-SIB surcharge, under the current proposal, we expect to remain around 1.5% for the foreseeable future even as we continue to grow.”

“If the proposals do not change, and based on our current balance sheet composition, we estimate that under the new rules, our risk-weighted assets could decrease by approximately 7%.”

“Assuming some of the volatility subsides or stabilizes, you may see some of that start to come back.”

“If interest rates stay higher for longer, we will have to monitor deposit mix trends to see if there is any impact on noninterest-bearing deposits, which could put some pressure on net interest income, excluding Markets.”

“And as a reminder, the first quarter personnel expenses are seasonally higher and are expected to be approximately $700 million.”

“Additionally, other expenses reflect approximately $400 million of lower expense following the sale of our railcar leasing business in the first quarter of 2026. However, this benefit will be offset by a reduction in noninterest income.”

“We entered 2026 with our deal pipeline meaningfully greater than it has been at any point in the last 5 years, although market conditions can always change.”

“Just number one is we are not going to grow our trading business in any kind of outsized way, which would have a negative impact on our ability to produce the kind of returns that we want and you would expect.”

“I don't anticipate it's going to have any kind of negative impact on where we think returns go. The returns given the nature of it, the returns are fine, and it's not going to be going to have be dilutive relative to the overall returns of either the segment or the overall company.”

“And so you'll see that grow throughout the year, for sure.”

“While both the path and the timing to achieve our target is dependent on a variety of factors, including interest rates, the broader macroeconomic environment and the regulatory environment, we are confident that we can reach this goal by maintaining our expense discipline, realizing the benefits of our investments to drive stronger revenue growth and further optimizing our capital levels.”

“We continue to refurbish our branches, completing approximately 700 branches in 2025. Over half of our network is now refurbished and we are on track to complete the remaining branches over the next few years.”

“I do expect us to see some growth in the consumer deposit base. And I think you'll start to see that relationship between deposits and GDP start to move in sync again hopefully over time.”

“You will have an impact of rates come down, you'll have higher NII in the markets business, lower fees, but we should continue to be able to grow overall revenues in the markets business.”

“And at this point, what we're seeing and what's happening across the consumer base is just very consistent activity. And so I think as long as that continues, that should support those fee lines.”

“There's been good demand there for a while across a lot of different sectors, whether it's multifamily, industrial, data centers on and on. And so -- and the fundamentals there haven't shifted that much as we go into this year. So we do expect to see some continued demand come through in some of those subsectors.”

“And so that will continue to grow. Won't be a straight line, but it -- but we do expect to see some growth in the wealth business.”

“As we come into next year, as we said, you'll be growing a little bit of some of the lower ROA exposures. So that will have an impact on overall margin. And then you'll also have rates coming down again this year if the forward rates materialize.”

“And so we're long-term believers that those -- that the underlying business grows that we can take share, and so we would expect to see growth in those numbers.”

“That's not a number we guide to, John. But -- and obviously, in the markets business, it's going to be a function of what we see throughout the year in terms of the opportunity set that's there, the volatility and all the right caveats that go there. But we would expect the overall to be up, and we'll see by exactly how much.”

“But overall, revenue in the markets business, we would expect to be higher.”

“But when you look at the rest of the portfolio, we're seeing good growth, and that should continue as we look through the year.”

“And then you've got the continuation of deposit and loan growth coming throughout the year, and it's about a build as you go. And so the results will look better as you get towards the latter part of the year.”

“Putting this all together, we currently expect noninterest expense to be approximately $55.7 billion in 2026.”

“And finally, we expect other expenses to increase by approximately $800 million including expected merit and benefit increases as well as performance-based discretionary compensation.”

“Second, we expect approximately $800 million of incremental other investments, including in the specific areas highlighted on the next slide.”

“First, we expect approximately $1.1 billion of incremental technology expense, including investments in infrastructure and business capabilities.”

“We expect approximately $2.4 billion of gross expense reductions in 2026 due to efficiency initiatives.”

“We expect all other expenses to increase approximately $300 million in 2026 with the impact of efficiency initiatives more than offset by higher investments in other expenses.”

“We expect our FDIC assessment expense to increase by approximately $400 million in 2026 driven by expected deposit growth and the absence of the approximately $200 million special assessment credit that reduced FDIC expense in the fourth quarter.”

“We expect revenue-related expenses in 2026 to increase by approximately $800 million in our Wealth and Investment Management business.”

“Looking at the next bar, our assumptions do not include significant additional severance for 2026, which would result in an approximately $700 million decline in severance expense.”

“Average deposits are also expected to grow mid-single digits over this period with growth in all of our operating segments, with stronger growth in interest-bearing versus noninterest-bearing deposits.”

“However, this expected headwind should be more than offset by loan and deposit growth as well as continued fixed asset repricing.”

“Net interest income, excluding markets, was $46.7 billion in 2025, and we currently expect NII, excluding markets to be approximately $48 billion in 2026.”

“Our focus is on growing markets revenue, which we expect to increase in 2026.”

“As a reminder, while markets NII is expected to be higher, this growth is expected to be partially offset by lower noninterest income.”

“We currently expect markets NII to grow to approximately $2 billion in 2026 driven by lower short-term funding costs and balance sheet growth, including increased client financing activities, which as Charlie highlighted, tend to be lower margin and lower risk assets but are accretive to net interest income.”

“We currently expect total net interest income to be $50 billion, plus or minus, in 2026.”

“As we discussed on last quarter's call, we have a new medium-term ROTCE target of 17% to 18%.”

“With the investments we have made to improve our capabilities, we are now well positioned to methodically return to broad spectrum lending.”

“We will continue to focus on optimizing our capital levels as we manage to a CET1 ratio of approximately 10% to 10.5%.”

“Given we have many opportunities to grow organically, we currently expect share repurchases to be lower in 2026.”

“Look I think starting on the consumer side, you're seeing less of a drag from residential mortgage coming down. And so that's certainly helpful. And I think that will continue to likely decline in terms of the pace of decline there I think likely continues to get better.”

“So I think you'll see that grind down a little bit as we go through the year.”

“Fourth-quarter net interest income is expected to grow from the third quarter to approximately $12.4 billion to $12.5 billion.”

“We still expect net interest income for full year 2025 to be roughly in line with full year 2024 net interest income of $47.7 billion.”

“Given that we are now managing to a CET1 ratio of approximately 10% to 10.5%, we continue to have capacity to repurchase shares, and we currently expect fourth-quarter repurchases to be roughly in line with the third quarter.”

“We are also investing in our branch network and remain on track to have over half of our branches refurbished by the end of this year.”

“We expect this growth to continue as we continue to onboard new clients and accommodate customer trading flows and financing activity without significantly increasing our risk profile.”

“Office valuations continued to stabilize, and although we expect additional losses, which could be lumpy, they should be well within our expectations.”

“And as Charlie highlighted, we believe we have an achievable path to a return on tangible common equity of 17% to 18% in the medium term.”

“We believe the dividend payout ratio of 30% to 40% is still appropriate.”

“Over the life of the portfolio, they have strong returns as long as spend balances and credit results are in line with expectations. And this is consistent with what we are seeing, so we are confident that this will become more accretive to our results.”

“I don't anticipate the office portfolio to grow really at all or much.”

“I think as you sort of get to 17% or 18% returns, you should start getting to a more comparable efficiency ratio as part of that, right? And I think that would reasonable people can have a slightly different number, but that would get you to a number certainly much lower than it is right now.”

“We do expect to see a margin improvement in that business and that will contribute to overall returns as we look forward.”

“I think over a long slightly longer period of time, you'll start to see that overall grow again.”

“On the commercial side, you know, the betas are are we still expect them to be, know, quite high. And that's been the experience that been the experience so far. And no reason to think that's not going be the case as we go through the rest of the year and into next year.”

“Given the growth in our business, we plan to start breaking up markets net interest income next year.”

“In addition, as we now seek to grow consumer, small, and business banking, the increased returns in this business should also contribute to higher returns.”

“I spoke earlier of the negative impact on our financial results of growing our card business in the early years of investment, but as these vintages mature, we expect our card business to drive increased returns.”

“We believe our ability to grow the balance sheet after years of the asset cap constraints, the opportunities I've discussed to grow in each of our businesses, and our excess capital position should be catalysts for continued improved returns over time.”

“You can see on Slide 10 that we are now targeting a 17% to 18% ROTCE over the medium term and managing to a 10% to 10.5% CET1 ratio.”

“I think that likely picks up over time as people continue to gain more confidence that the economy is going to end up in a really in a good place and some other factors there and rates start to come down help as well.”

“We are now managing to a CET1 ratio of approximately 10% to 10.5%, and we may have the opportunity to manage our capital levels even lower pending further changes from our regulators.”

“So hopefully that will be a good enabler for more growth as we go into next year.”

“I mean, yeah, Ken, think it's obviously longer than a year, but like it's a reasonable timeframe I think when you look at sort of medium term.”

“I think there's more to do there really across almost every part of the company, and I think we'll continue to drive that the same way we've done that the last number of years.”

“You're gonna see more marketing, you're gonna see more aggressive marketing, you're gonna see more merchandising in our branches. You're gonna see more local advertising as well as national advertising, as well as just, you know, expansion of footprint in areas, you know, where we think we have room to grow.”

“We believe we'll be consistently at that fifteen percent.”

“Our view on the tax rate over a longer period of time is still, you know, high kinda high teens.”

“Obviously, you're, you know, even with that, you're still gonna see, you know, you're gonna see pricing come down on the positive side and the commercial, you know, businesses.”

“We do expect, you know, to see, you know, further repricing of the securities, you know, portfolio.”

“So we do assume it grows above what used to be the cap, but not in any really meaningful way.”

“And so you can easily sort of model what the third quarter looks like based on where the markets ended, you know, already given most of the fees are already sort of certain. And then as long as the market sort of holds up or grows a little potentially as you go into the fourth quarter, that should be constructive.”

“On the commercial side, we do expect to see some, you know, modest growth as we go into the rest of the year.”

“I think you should see a little bit of growth in card.”

“You know, on the mortgage portfolio, we expect that'll likely just, you know, continue to come down just a little bit in the second half.”

“We still expect 2025 non-interest expense to be approximately $54.2 billion.”

“We expect to continue to add bankers to this priority sector and in a number of additional markets and sectors where we have room to grow.”

“As we previously announced, we expect to increase our third quarter common stock dividend by twelve point five percent to $0.45 per share subject to approval by the company's Board of Directors at its regularly scheduled meeting later this month.”

“We expect to be more aggressive in our pursuit of consumer and corporate deposits and we will selectively look to grow loans.”

“We are on track to have over half of our branch network refurbished by the end of this year, and to complete a refresh of the entire network by the end of 2028.”

“But as you get to the end of the year, you know, hopefully, you know, if things play out, we'll start to see a little bit more activity more broadly.”

“Hopefully, we'll start to see some of the commercial bank customers borrow a little bit more as well.”

“Hopefully, that will continue to grow in the second half of the year. But relatively modest in the overall balance sheet.”

“we see know, a pretty clear path in our consumer businesses for some material improvements.”

“we're you know, we aren't gonna be happy until we get to the 15% that we told you we were gonna get to.”

“remain confident that we will complete the work needed to close our other open consent orders.”

“the expectation is still pretty similar to what we talked about. Right? It hasn't changed much. So, you know, kinda flattish, you know, with more loan growth in the second half of the year.”

“loan growth you know, we're still expecting to see some loan growth. We think some of it will be resilient to the environment, but some of it, obviously, in the commercial bank and some of the corporate franchise. Is gonna be a function of, you know, the broader macro view here.”

“if the market you know, continues to decline from where it is today, you'll see less revenue-related expense particularly in wealth and investment management.”

“we didn't expect to see a lot in the first half weeks expected to see more in the second half. You know, and call it sort of mid-single-digit kind of growth rates. You know, kind of, you know, three-ish, four-ish percent sort of growth rates,”

“Regarding our expense outlook, we still expect 2025 non-interest expense to be approximately $54.2 billion.”

“We've not changed our net interest income outlook and we still expect 2025 net interest income will be approximately 1% to 3% higher than in 2024, However, given what has occurred over the past three months, we currently expect our full year 2025 net interest income to be in the low end of the range.”

“it is our current expectation we will face continued volatility and uncertainty and are prepared for a slower economic environment in 2025.”

“as long as the results play out on top of the models that we assumed, we know that's just a matter of time until those returns increase significantly.”

“I do think you'll start to see over time that those balances to trough grow a little bit and hopefully have better returns.”

“your, you know, your 40 or 50 basis points, you know, lower potentially on the forwards and part of the second half of the year.”

“hopefully, we get a little bit more clarity and things, you know, calm down a bit and we start to see some of that growth that we expect to happen.”

“There is an improvement embedded in the guide for trading-related NII.”

“At this point, we don't believe we need to be higher than where we are from a CET1 percentage.”

“We should see some card growth as we go through the year, and we should start to see some growth in the auto portfolio as well.”

“I think as you look at the Company, we still feel like there's a significant amount of opportunity to drive efficiency, and that's what you see in 2025.”

“And so, we would expect to kind of see the results start to come through more meaningfully over the near term, medium term.”

“And the second I referenced is we're still not at the level of profitability where we should be in home lending, just given as we continue to wind down that servicing book. And so, we think those two things will be helpful for us as we look forward.”

“We still expect commercial real estate office losses to be lumpy as we continue to actively work with our clients.”

“In the commercial bank, we're focused on adding relationship managers and business development officers in underpenetrated and growth markets to drive new client acquisition, future revenue growth, and we expect to hire even more in 2025.”

“In our auto business, we announced a multiyear co-branded agreement where we will be the preferred purchase finance provider for Volkswagen and Audi brands in the United States, starting in the first half of this year.”

“We entered 2025 with a solid pipeline in both Capital Markets and Advisory, while the market conditions can always change.”

“Finally, we expect other expenses to increase by approximately $800 million, including expected merit increases in performance-based discretionary compensation.”

“Second, we expect approximately $900 million of incremental other investments, including the specific areas we highlighted on the next slide.”

“First, we expect approximately $900 million of incremental technology expense, including investments in infrastructure and business capabilities.”

“We expect approximately $2.4 billion of gross expense reductions in 2025 due to efficiency initiatives.”

“We expect all other expenses to be up approximately $200 million with the impact of efficiency initiatives, more than offset by higher investments in other expenses.”

“And trading-related net interest income is expected to be higher due to lower interest rates which would largely be offset by lower trading-related noninterest income.”

“Deposits in all our deposit gathering businesses are expected to grow modestly, which would allow us to further reduce higher-cost market funding.”

“Underpinning our expectations are a series of key assumptions, including using the recent forward rate curve, which includes between 1 and 2 Federal Reserve rate cuts, given our modestly asset-sensitive position, this will be a slight headwind to net interest income.”

“We expect net interest income will be relatively stable in the first half of 2025, which includes the impact from two fewer days in the first quarter with more growth in the second half of the year.”

“Our current expectation is that full year 2025 net interest income will be approximately 1% to 3% higher than full year 2024 or approximately 3% to 5% higher than the annualized fourth quarter 2024 net interest income.”

“We still believe we have an achievable path to a sustainable ROTCE of 15% as we continue to make progress on transforming the Company, including the priorities highlighted earlier on the call.”

“Yes, certainly is. I think as you look backwards a little bit, we started launching the new products 3.5 years ago... but it will start to come through over the next year or two.”

“But rates coming down, as I said in the guidance is a slight headwind to sort of our estimates. And if they hold a little bit higher than what was in the forward, then I think that will be a slight positive.”

“As a reminder, the majority of WIM advisory assets are priced at the beginning of the quarter, so fourth quarter results will reflect market valuations as of October 1, which were up from both a year ago and from July 1.”

“Based on this expectation, we believe we are close to the trough.”

“We currently expect fourth quarter 2024 net interest income to be roughly in-line with the third quarter of 2024, which would imply an approximately 9% decline in full year 2024 net interest income compared with 2023.”

“While losses in the commercial real estate office portfolio declined in the third quarter, market fundamentals remained weak, and we still expect commercial real estate office losses to be lumpy, as we continue to actively work with our clients.”

“Commercial deposit pricing is responding quickly to Federal Reserve rate reductions, just as it did when rates were rising.”

“Pricing on sweep deposits and advisory brokerage accounts, which are aligned to money market funds, will continue to move in-line with Fed rate cuts.”

“The office market remains weak, and we continue to expect additional charge-offs in our commercial real estate office portfolio and have accordingly maintained strong allowance coverage.”

“We'll be able to handle with whatever comes out of Basel III quite easily with where we are today, gives us the ability to be there and invest as we've got opportunities with clients.”

“We remain committed and confident in our ability to increase efficiencies across the enterprise and areas we have targeted for investments such as credit card, investment banking and trading are performing well.”

“But at some point soon, that will start to -- we would expect that to stabilize, but we'll see exactly where it does.”

“In the consumer side, we would likely see a little bit of more decline as well as mix shift.”

“And then we expect a little bit of growth in the second half of the year and overall balances weren't going to do much for the full year.”

“And so the way we would think about it when we look at our own forecasting is we would expect to see our market shares rise over a period of time, and quarter by quarter, know that it will be subject to volatility that exists.”

“I think you'll certainly see us continue to deploy more cash into securities, at least at some modest levels as we look forward over the next quarter.”

“And in auto, we're seeing a little bit more decline given some of the changes we made about a year and a half ago, a year, year and a half ago on some of the credit tightening and eventually that will start to turn.”

“And you wouldn't really expect pricing to move there until the Fed starts to move. And it'll stay pretty competitive at that point. And we still expect betas to be pretty high on the way down as you start to see that eventually happen.”

“While the amount of stock we repurchased each quarter will vary, we continue to expect to repurchase more common stock this year than we did in 2023.”

“We continue to expect additional losses in the coming quarters.”

“Our guidance included $1.3 billion of operating losses for the year, which we still believe is a reasonable estimate even with a higher level of operating losses in the first quarter.”

“Not including expense for the FDIC special assessment in the first quarter, our full year 2024 non-interest expense guidance is unchanged and is still expected to be approximately $52.6 billion.”

“We also continue to expect net interest income will trough towards the end of this year.”

“Our full year net interest income guidance has not changed from last quarter and we still expect 2024 net interest income to be approximately 7% to 9% lower than 2023.”

“We are beginning to see early signs of share and fee growth, which will be important as we diversify our revenues and reduce net interest income as a percentage of revenue.”

“As we stated on our last earnings call, we expect to repurchase more common stock this year than we did in 2023.”

“Is it right at this year? Is it early next year? Like, it's going to be -- we're getting closer to that point in terms of when it's going to trough.”

“However, we have outstanding litigation, regulatory and customer remediation matters that could impact operating losses during the remainder of the year.”

“we expect stable deposits on the wealth and the commercial side. We do expect some declines on the consumer side, and an end to QT would be a positive.”

“we would expect that it would continue to trend a little bit higher from where it is.”

“you would expect NIM to continue to come down as the balance sheet stays stable and NII comes down.”

“assuming the balance sheets that are a relatively stable size as NII starts to come down, the NIM will compress, right?”

“We do expect that our repurchases will be higher than what we did in 2023.”

“We're expecting stabilization of pretty stable deposits across the commercial and wealth management businesses.”

“We had a number of impairments across our venture capital portfolio this year. At some point, that should start to peter out, and we'll see that inflect.”

“We do expect that you would start to see a trough as we get to the end of the year and into 2025.”

“We expect the revenue growth that these investments should generate in businesses like Corporate Investment Banking and Wealth And Investment Management will help fund additional investments.”

“However, the current profitability of this business has been impacted by acquisition costs and allowance build, and we expect profitability to improve as the portfolio matures.”

“As we continue to streamline this business, we expect the profitability to improve.”

“We also expect merit increases of approximately $700 million, which are primarily awarded to employees with lower salaries.”

“we're also continuing to invest and we expect approximately $1.1 billion of incremental technology and equipment expense, reflecting higher costs related to the amortization of investment in prior years, as well as new investments planned for 2024.”

“We expect approximately $2.7 billion of gross expense reductions in 2024 due to the efficiency initiatives.”

“we expect severance expense to be approximately $1.3 billion lower, driven by the $969 million expense we took in the fourth quarter for planned actions”

“And while we expect additional losses in the coming quarters given the market fundamentals, and capital markets and liquidity challenges in this sector, the amounts will likely going to be uneven and episodic.”

“We repurchased a total of $12 billion in common stock in 2023, and we currently expect to be able to repurchase more than this amount in 2024.”

“We have seen and have said that we expect net interest income to decline from the high levels we saw as rates were rising last year.”

“Continued execution of our more focused home lending strategy should also produce higher returns and earnings over the next several years.”

“We still believe, we have an achievable path to a sustainable 15% ROTCE over the medium term as we continue to make progress on transforming the company.”

“We believe the actions we have taken and continue to take, provide the path to 50% ROTCE.”

“it is certainly possible, the balance sheet will get smaller throughout the year.”

“we're hopeful that that won't be the case. And so, and we're going to generate more capital as we go through the year.”

“But I would think that 100 basis points, at least for now is sort of the bottom end of the range.”

“there are opportunities to be on the front foot and actually grow share on an organic basis.”

“And so we would expect our share to continue to grow.”

“If the risk weights hold there, it's just -- the math just doesn't make sense from a return perspective. And so we'll probably have to do less -- we'll probably do less of those.”

“We do expect higher losses over time, and we continue to increase the coverage ratio in our commercial and -- in our CIB commercial real estate office portfolio from 8.8% at the end of the second quarter to 10.8% at the end of the third quarter.”

“We are closely monitoring our portfolios and taking credit tightening actions where we believe appropriate. Our capital levels have increased, and we expect to continue to return excess capital to shareholders.”

“We continue to reduce head count in home lending in the third quarter, down 37% from a year ago, and we expect staffing levels will continue to decline.”

“We believe we still have additional opportunities to reduce head count and attrition has remained low, which will likely result in additional severance expense for actions in 2024.”

“We now expect full year 2023 net interest income growth to grow by approximately 16% compared with 2022 with the fourth quarter 2023 net interest income expected to be approximately $12.7 billion.”

“Looking forward, we expect to continue to have capacity to increase our CET1 ratio, while we plan to continue to repurchase shares as we wait for the capital rules to be finalized.”

“Based on where we ended the quarter, we estimate that our CET1 ratio would be 50 basis points above the fully phased-in required minimum if the proposed rules were implemented as written after factoring the growth in RWAs and the resulting decline in our stress capital buffer as well as the impact of the new G-SIB buffer calculation changes.”

“At this point, we still see a path to concurrently increasing our level of CET1 as appropriate, increasing our dividend and repurchasing common stock.”

“I think we have to get there and get these finalized, and then we'll also take actions once we have good clarity on what's going to change or not change as we go over the next year. So I mean, we're probably 9 months to 12 months away from getting a final rule”

“While consumer credit performance remained solid overall, and we’ve continued to take incremental credit tightening actions across the portfolios, we expect consumer net loan charge-offs will continue to gradually increase.”

“While we expect to repurchase more common stock this year, we believe continuing to maintain significant excess capital is appropriate until there's more clarity on the new capital requirements that Charlie highlighted.”

“While any changes to regulatory capital requirements are expected to be phased in gradually over several years, we are considering the potential impacts in contemplating the amounts of our future repurchases.”

“However, we do expect our capital requirements will increase.”

“As we previously announced, we expect to increase our third quarter comp stock dividend by 17% to $0.35 per share, subject to approval by the company's Board of Directors at its regularly scheduled meeting later this month.”

“So, we feel we'll be able to continue to return capital and still maintain a very conservative position.”

“We're not anticipating significant additional capital needs. We're not anticipating that any potential downturn could create additional capital need inside of the business.”

“we do feel like we have the ability to continue to return capital to shareholders while we still have plenty of flexibility to deal with anything which could come our way.”

“And so, I think on the large corporate side, you'll see those be pretty consistent from here and the consumer side will be a function of all the things we talked about earlier.”

“I think it will still be pretty moderate. I wouldn't expect huge growth in loans over the rest of the year. And embedded in our guidance is some low-single-digit growth rate in terms of loans for the year.”

“as we said, over time, we'll get closer to 100 basis points or so above those -- above the 9.2%.”

“I think the simple answer to your first question is no. We don't expect that to continue to keep drifting up.”

“So I think our focus is to get the return to a sustainable 15% in the medium term by not having to rely on that.”

“that efficiency on those expenses will be out a little while. It could be years in terms of -- before we really get at some of that.”

“And when you think about wealth, it's been pretty stable, the trend. It's not accelerating. It's not decelerating at any significant clip at this point. And what we see there is we're capturing that cash that -- those cash alternatives that people are buying in the wealth business. And so, I think that trend will continue for a while.”

“we expect repurchases to continue.”

“During the first quarter, we successfully marketed mortgage servicing rights for approximately $50 billion of loans serviced for others that we expect to close later this year.”

“We continue to reduce headcount in the first quarter, and we expect staffing levels will continue to decline due to the strategic changes we announced earlier this year.”

“Our full year 2023 noninterest expense, excluding operating losses, is still expected to be approximately $5.2 billion, unchanged from the guidance we provided last quarter.”

“Our full year net interest income guidance has not changed from last quarter as we still expect 2023 net interest income to grow by approximately 10% compared with 2022.”

“we expect to continue to prudently return excess capital to shareholders in the coming quarters.”

“There are pockets of risks such as commercial office real estate, which will likely impact institutions differently, and we're proactively managing our own exposures.”

“I wouldn't try to predict it exactly over the next couple of quarters. But I think if you look at -- we're about 32% in the quarter. And if you go back a number of years, pre-pandemic, that was in the mid-20s. And so -- so it could -- and we've said this in other forums that you could see it start to trend towards there. Will it get down there? Unknown, but I think you'll see it trend down a little bit more.”

“and I think we may find that hopefully that it gets -- that maybe we're being a little conservative there, but we do think at this point, it will still be competitive. And I think the betas will be pretty reasonable, though on the consumer side, when you look back after the rates rise stop.”

“So, we're hopeful that there's upside, but -- to the forecast, but we'll see that in the second half of the year, and it will be a function of how all those factors play out, but we're hopeful that we'll see that and there'll be some upside there.”

“I think you'll see us focus there. And hopefully, what you've seen in that segment is a consistent quarter-on-quarter decline in headcount and other factors, and that will sort of continue to hopefully be the case.”

“And even as we downsize the portfolio on the servicing side, the whole point -- our servicing portfolio can be substantially, substantially lower, and we'll still have scale to be able to originate the product and we would say in a more profitable way than we're doing it today.”

“What I was trying to say in those remarks was the impact on rising rates is continuing to impact customers on a period-over-period basis, and we would expect that to continue, but it's not accelerating.”

“As we look at the efficiency of the company, we do expect to continue to get efficiency ratio improvement in the place.”

“we'll be managing somewhere in the 100, plus or minus, a little basis point range.”

“Well, I think if you look at what we've said over the last quarter or two, there's been roughly in the third and fourth quarter 200, 250 just BAU op losses that have happened, just broad normal stuff that you should expect to continue.”

“Additionally, we expect to benefit from the investments we are planning in our businesses, which I highlighted earlier.”

“Finally, by investing in our operations and branches, we expect not only to improve the customer experience, but also improve efficiency, reduce operational risk, and drive and account growth.”

“And while we continue to focus on executing our efficiency initiatives, we're also continuing to invest and expect approximately 1.7 billion of incremental investments in our businesses in 2023.”

“And through our efficiency initiatives, we expect to realize an additional 3.2 billion of gross expense reductions in 2023.”

“Based on current market levels, we expect revenue-related expense in Wealth and Investment Management for 2023 to be similar to 2022.”

“These increases are expected to be partially offset by approximately 100 million of lower revenue-related expense, primarily driven by decreases in loan lending.”

“We expect expenses in 2023 to increase by approximately $1 billion due to both, merit increases, including inflationary pressures and an approximately $250 million increase in FDIC expense related to the previously announced surcharge.”

“We also expect a headwind for lower CIB Markets net interest income due to higher funding costs.”

“We don't expect this action to have a significant impact on our 2023 financial results.”

“As rates continue to rise, we would expect deposit betas to continue to increase in customer migration from lower yielding to higher yielding deposit products to continue.”

“However, as expected, losses are slowly increasing from historical lows, and we expect them to continue to return toward pre-pandemic levels over time as the federal needs to take actions to combat high inflation.”

“As we look forward, we're carefully watching the impact of higher rates on our customers and expect to see deposit balances and credit quality continue to return toward pre-pandemic levels.”

“And if those are a little bit better than what we're modeling, then I think that provides some opportunity as we look at the second half of the year.”

“And so, we're all in a little bit of uncharted territory here, but I do think that there's some opportunity potentially in the second half of the year as we look at the forecast, but it will be dependent upon how we fare over the next quarter or two.”

“So I think those – that program will continue to evolve, but we still feel we’ve got more opportunity to drive incremental efficiency, and we’re on track for the things we laid out.”

“We said we would deliver about $3.3 billion of impact in 2022, and that’s – we’re on track to do that.”

“The higher level of operating losses in the third quarter will cause us to exceed our $51.5 billion expense outlook for 2022, which included $1.3 billion of operating losses for the full year.”

“It will come slowly back year-by-year as the maturity of the bonds get shorter.”

“I think so far, the betas have played out the way we expected them to do at this point in the cycle. And I think as rates continue to go up, we would expect them to increase, and that was part of the playbook and the analysis we had done going into the environment. And so – and that’s to be expected, right. And the if rates are going to go up even higher than we originally thought, then the betas will continue to go up with that.”

“I mean if you look at the – in the Consumer Banking and Lending segment, we have got the mortgage banking income there. It’s only a little over a $200 million for the quarter. So, even a relatively substantial percentage decline is a pretty small dollar decline these days given the run rate. But I think if you look at what happened this quarter, we probably came in a little bit better than what we guided in July. Spreads were a little bit better in August than what we had forecasted, but they came back down in September, and so we would expect that to continue.”

“We don’t feel like we need to build from here.”

“Revenue also declined from a year ago due to lower equity gains in our affiliated venture capital and private equity businesses, and given current market conditions, we don’t expect equity gains to improve in the fourth quarter.”

“So, while there will be another step down in asset-based fees in the fourth quarter it will be less significant than the third quarter decline.”

“We continue to remove excess capacity to align with the reduced demand and expect these adjustments will continue over the next couple of quarters.”

“The extra day grace period launched in the beginning of August and early payday begin in select states in mid-September, so we would expect our deposit-related fees to decline further in the fourth quarter.”

“As Charlie highlighted, outstanding litigation, customer remediation and regulatory matters still remain – that will still remain and will likely result in additional expense in the coming quarters, which could be significant.”

“We currently expect our fourth quarter other expenses, excluding operating losses, to be approximately $12.3 billion.”

“We currently expect full year 2022 net interest income to be approximately 24% higher than a year ago, with fourth quarter 2022 net interest income expected to be approximately $12.9 billion.”

“As rates continue to rise, we would expect deposit betas to continue to increase in customer migration from lower yielding to higher yielding deposit products to also increase.”

“We will continue to prudently manage our capital levels to be appropriately prepared for slowing economy and market volatility.”

“We are closely monitoring risks related to continued impact of high inflation and increasing rates as well as the broader geopolitical risks and we do expect to see increases in delinquencies and ultimately, credit losses, but the timing remains unclear.”

“I would expect that there is going to be – there could be some further declines as we go.”

“While the mortgage market adjusts to lower volumes, we expect it to remain challenging in the near-term and it’s possible that we have a further decline in the mortgage banking revenue in the fourth quarter when originations are seasonally slower.”

“certainly, the exit rate is going to be a lot higher than even where we are today.”

“We think that probably moderates a little bit from what we saw in the first half of the year, but you'll see some loan growth there as well as it steps up.”

“I think ultimately, the exact progression over the next couple of quarters will be a function of how the Fed moves on rates. But I would think of it as somewhat of a ratable step up quarter-to-quarter.”

“I think as Charlie highlighted, we feel good about where we are... at this point, we don't feel like we need to build capital from where we are to build a bigger buffer and then we'll just be prudent on buybacks as we go through, and through the next few quarters.”

“Mortgage banking, as you highlighted, I think, is likely going to come down a little more in the third quarter, but it's off a much smaller base.”

“On the deposit side, it's been pretty -- we saw a step down in the quarter, largely a result of the changes we made in overdraft fees. We'll see a little bit more step down as we go through the year, probably more a fourth quarter thing than a third quarter thing, as we implement the additional changes there.”

“I just don't think what we've seen in the second quarter will continue to happen at the same pace.”

“And so when you look at cumulative betas, you really have to look at... those will probably move faster than even we've modeled, but it's a small piece of it.”

“I think what we can say though is as you look at the next couple of rate rises, I think you're going to start to see more acceleration.”

“Well, I think we've -- as you think about each asset, each type of deposit, to-date, they're tracking pretty close to what we saw last cycle. But you then look at the mix of our deposit base... if beta stayed the same as last cycle byproduct, given our mix has changed, you would see a lower average deposit beta.”

“our mindset going into it is that we have significant opportunities to become more efficient... but we do go into this process with the expectation that we want to see net expense reductions.”

“we expect these changes will help millions of consumer customers avoid overdraft fees and meet short-term cash needs, and we continue to review other ways we can help consumers manage their finances.”

“While we expect credit losses to increase from historically low levels, our consumer and commercial customers are not showing any meaningful signs of stress.”

“As we look ahead to the second half of the year, we expect the growth in net interest income to more than offset any further pressure on non-interest income.”

“We are making adjustments to reduce expenses in response to lower origination volumes, and we expect these adjustments will continue over the next couple of quarters.”

“Additional changes will be rolled out in the second half of this year, which will further reduce deposit-related fees.”

“Putting all these factors together, we still expect our full year 2022 expenses to be approximately $51.5 billion, as lower revenue-related expense is expected to offset higher operating losses.”

“As I previously highlighted, we would expect deposit betas to accelerate as rates continue to rise and customer migration from lower yielding to higher yielding deposit products would likely increase as well.”

“We remain on target to achieve a sustainable 10% ROTCE, subject to the same assumptions we've discussed in the past, on a run rate basis in the second half of this year, and then we will discuss our path to 15%.”

“It's hard to see in the near term increasing them to the level that we had back in the pandemic.”

“I think you can certainly see a little bit more decline from here potentially. I think that's not an unreasonable expectation.”

“We will continue to be prudent and consider current market conditions, including interest rate volatility, potential loan and risk-weighted asset growth as well as any potential economic uncertainty with respect to the amount and timing of share repurchases over the coming quarters.”

“I think we won’t -- it’s hard to imagine we’ll see some of the peaks that we saw last year in that revenue line item. But I do expect we’ll continue to see some good performance across those businesses.”

“And that will continue to decline as prepay slow throughout the year.”

“Will it -- I think it will be -- it’s a little bit dependent upon again how things progress, but it’s not unreasonable to think as we look at the next quarter that it’s somewhere in the ballpark of what we saw from -- on a linked quarter basis this quarter.”