Wells Fargo & Company (NYSE:WFC) Q2 2016 Earnings Conference Call - Final Transcript

Jul 15, 2016 • 08:00 am ET


Wells Fargo & Company (NYSE:WFC) Q2 2016 Earnings Conference Call - Final Transcript


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Good morning. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Wells Fargo Second Quarter 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] I would now like to turn the call over to Jim Rowe, Director of Investor Relations. Mr. Rowe, you may begin the conference.

Jim Rowe

Thank you, Regina, and good morning, everyone. Thank you for joining our call today where our Chairman and CEO, John Stumpf; and our CFO, John Shrewsberry, will discuss second quarter results and answer your questions. Please remember that this call is being recorded.

Before we get started, I would like to remind you that our second quarter earnings release and quarterly supplement 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 release and quarterly supplement.

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, in the earnings release and in the quarterly supplement available on our website.

I'll now turn the call over to our Chairman and CEO, John Stumpf.

John G. Stumpf

Thank you, Jim. Good morning and thank you for joining us today. Our diversified business model and continued focus on meeting our customers' financial needs drove our performance in the second quarter, our 15th consecutive quarter of generating earnings greater than $5 billion. We produced strong performance during a period that has has had -- has included persistent low rates, market volatility and economic volatility, and we did it by focusing on the core building blocks of long-term shareholder value creation, that is growing relationships, loans, investments and deposits. Our loan and investment, and deposit balances are all at record levels, and we've maintained our strong risk discipline.

Let me highlight our results for the second quarter. We generated earnings of $5.6 billion and earnings per share of $1.01. We grew revenue compared with a year ago by 4%, with growth in both net interest income and non-interest income, and our pre-tax pre-provision profit grew 5%. We generated positive operating leverage, while we continued to make investments throughout our businesses.

Average loans grew over $80 billion or 9% from a year ago. Average deposits increased $51.4 billion or 4% from a year ago, and we grew the primary -- the number of primary consumer checking customers by 4.7%. Net charge-offs remained near-historical lows at 39 basis points annualized, reflecting the benefit of our diversified loan portfolio and continued underwriting discipline.

We returned $3.2 billion to our shareholders through common stock dividends and net share repurchases in the second quarter, the fourth