Wells Fargo 2Q13 Earnings Call Notes

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This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

“net charge offs down to 58 basis points and our total net charge offs down 48% from from just a year ago”

“Our capital levels continue to grow with our estimated Tier 1 common equity ratio under Basel III increasing to 8.54% And based on our initial review of the leverage ratio proposed, proposal issue this sweek, we believe our current leverage levels would exceed the well capitalized requirements at both the bank and the holding company. ”

“While commercial loan demand is still modest, jobs are being created, consumer confidence is increasing and the housing the market continue to demonstrate strong momentum.”

“we’ve been planning for a rising rate environment for sometime.”

“We do not manage Wells Fargo based on a specific rate environment. We manage Wells Fargo over decades to satisfy our customers’ financial needs. Rates rising for the right reason and improving our economy is beneficial for our customers, which then in turn benefits Walls Fargo. ”

“Excluding these liquidating loans, our core loan portfolio grew by $42.3 billion or a 6% from a year ago and was up $5.2 billion from the first quarter.”

“Deposit growth remain strong with period and deposits up $10.9 billion from the first quarter. Average deposits were up $23.6 billion from the first quarter and up $85.8 billion or 9% from a year ago.”

“Refis were 56% of the originations in the second quarter down from 69% in the first quarter. We have managed for many refi cycles in the past and we will adjust the size of our business based on production volumes through this cycle. Gain on sale margins decline to 2.21% and with the increase in mortgage rates we would expect further declines in our margins and originations.”

“the first call for any of our liquidity is always got to be to our customers in terms of loan demand.”

“today one of the primary drivers for why we’re investing more in our securities portfolio is because we think given the rate backup the returns are much more attractive. ”

“we haven’t got into a point that the balance sheet has completely repriced so that we could continue to see some continued compression in the net interest margin . The underlying factors really have changed.”

“we think that the gain on sale margin [for mortgages] is going to decline and it will decline somewhere in the range of what we’ve seen over the last few years. But it is going to decline”

“I don’t think anybody really know what the volumes in the mortgage business are going to be. I think one of the challenges for anybody in making that estimate today is that the complexion of originations is really changing…refinanced volume is certainly very much impacted by rates. But also we’ve seen now rates long enough start to come down 10 basis points just in a last few days and so we don’t know for sure where volume is going to be. We believe its going to be lower in this quarter and one other things that we’ve learned in the mortgage business it’s probably not a good thing to think six months out or nine months out because there can be so much variability. We think volumes are going to be down but whether it’s going to be 30% to 40%? I just don’t know.”

“we have a unique and pretty grounded way have seing real-estate across the country. And the view is better everywhere, has been better everywhere for going on some cases two years surely in the past year.”

“Some of the states that were hardest hit, Nevada, Florida, Arizona, California are showing huge or a very large price appreciation kinds of numbers.”

“The thing I hear most about when I am out in the marketplaces, the lack of inventory. So, we are expecting that prices will continue to improve I mean not to level to have in the past but housing surely has a strength to it.”

“When housing improves, people feel better. I mean two-thirds of Americans or so own a home. When housing improves, it improves the confidence. People spend more. The multiplier effect on buying washers and dryers and other consumer goods is just – it’s just very special around housing. So when housing gets better, it really lifts all boats on the consumer side.”

“who knows what’s going to happen in the third quarter but over time this diversified model is very helpful when you have one business where revenues might be coming down.”

“hen I wake up in the morning I get here, the first thing I look at is the checking account report from the day before. I love checking accounts, I dream about them…because it’s the formational account for a consumer. And the second probably most important is mortgage, and that’s why we’re almost — we’re obsessive about that, about serving customers.”