Wells Fargo & Company (WFC) Q2 2023 Earnings Call Transcript

For the period ending June 30, 2023

July 14, 2023 10:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Welcome, and thank you for joining the Wells Fargo Second Quarter 2023 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Please note that today's call is being recorded.

I would now like to turn the call over to John Campbell, Director of Investor Relations. Sir, you may begin the conference.

John Campbell

Good morning. Thank you, everyone, for joining our call today where our CEO, Charlie Scharf, and our CFO, Mike Santomassimo, will discuss second quarter results and answer your questions. This call is being recorded. Before we get started, I would like to remind you that our second quarter earnings materials, including the release, financial supplement and presentation deck are available on our website at wellsfargo.com.

I'd also like to caution you that we may make forward-looking statements during today's call that are subject to risks and uncertainties. Factors that may cause actual results to differ materially from expectations are detailed in our SEC filings, including the Form 8-K filed today containing our earnings materials. Information about any non-GAAP financial measures referenced, including a reconciliation of those measures to GAAP measures, can also be found in our SEC filings and the earnings materials available on our website.

I will now turn the call over to Charlie.

Charlie Scharf

Thank you, John. And good morning, everyone. As usual, I'll make some brief comments about our second quarter results and then update you on our priorities. I'll then turn the call over to Mike to review second quarter results in more detail before we take your questions.

Let me start with some second quarter highlights. We had solid results in the quarter with revenue, pre-tax pre-provision profit, diluted earnings per share, and ROTCE, all higher than a year ago. The revenue growth reflected strong net interest income growth as well as higher non-interest income. While our efficiency ratio improved and we continued to make progress on our efficiency initiatives, we had modest expense growth from a year ago.

Net charge-offs have continued to increase from historical low levels, but overall credit quality was strong and consumer and business balance sheets remain healthy. We increased our allowance for credit losses by $949 million, primarily driven by our office portfolio as well as growth in our credit card portfolio. While we haven't seen significant losses in our office portfolio today, our detailed loan by loan review of the portfolio has given us a sense how the next several quarters could play out.