Wells Fargo 2Q17 Earnings Call Notes

Timothy Sloan – President and Chief Executive Officer

Don’t really know what’s going to happen

“I mean the Fed has never had a balance sheet of this size. We’ve never been through a situation where they’re talking about reducing a balance sheet. We can talk about history all day long, but since we’ve never been through that, nobody knows exactly what’s going to happen. ”

A lot more transactions in CRE where we think the risk return isn’t there

“Having said that from time-to-time and again, this can be quarter-to-quarter or year-to-year there’s a fair amount of competition in stabilized commercial real estate projects, I mean there’s lots of liquidity out there. And so this quarter there just happen to be more transactions that we’ve looked at where we said, gosh, another risk return it just isn’t there, but I wouldn’t describe it, and that’s more based on underlying risk return in an individual transaction as opposed to stepping away from any region or any product type within CRE.”

John Shrewsberry

We became concerned about the underlying values of auto loan collateral

“I think a year-ago, we look at the market and what we saw in the market was the following. And that was that – remember that majority of our originations are for our used car loans. And so we saw – we would became concerned about underlying values of the collateral because of production levels by the industry. The number of cars that were coming off leases, we got concerned by the risk return in terms of pricing as well as term and we took that all into consideration in terms of ramping down our originations in improving the underlying quality. And on the short-term we gave up loan growth and so the metrics are not as good. We gave maybe some short-term revenue. But over the long-term, this is how we think about credit.”