We have Wells Fargo. I'm delighted to have with us today Mike Santomassimo, Wells Fargo's Chief Financial Officer. Mike, thanks so much for joining us. Yeah, thanks for having me. All right. Mike, let's get right into it. Wells has a broad view into the economy across consumers and corporates. As you look across the businesses today, what are you seeing in the environment, and where have the biggest changes in client behavior been over the past few months? Yeah. Thanks. My guess is you're going to hear a lot of the same from a lot of people today. When you look at it, you're not seeing a lot of change in behavior over the last few quarters. People probably are maybe overusing this word resilient, but it's been very stable, very resilient, very good activity levels across really all of the businesses, which is really good to see. On the consumer side, people continue to spend. In May, across our debit and credit card spend, it was up 9% year-on-year. That includes the impact of gas being higher across that portfolio. That's a little under $1 billion of incremental spend sitting in there. Consumers are spending probably 45%-50% more on gas than they were more than a couple of months ago. That's all sort of within there. We're not seeing any real changes in the other aggregate categories of any substance. The employment picture across the country is still quite good. We're certainly seeing a little bit of strength now in the last couple readings, maybe start to reemerge there. That's translating into really good credit performance across all the portfolios. It's a little bit better than we model each month, not a little bit worse, and that's been a continuing trend now for a while. On the commercial side, there's been lots of caution still there, I think, across the commercial banking client base. People are still a little hesitant to make a big investment or overextend themselves too much on building inventory. I think they want to see sort of what happens with the overall environment. That, again, that translates into good credit performance across the board. I think overall, the picture is still quite good. I think even as you look at rising debt levels, income is keeping up. The ability to pay and kind of the debt-to-income ratio is actually in quite good shape when you look across most clients. Obviously, you have a little bit of dispersion between lower income, higher income folks. I think lower income definitely struggling a bit more, living a little more paycheck to paycheck. If you've got any investments or other liquidity, I think you're doing quite well relative to the history. Let's dig into the business, and let's start there with the consumer and consumer banking and lending. You've talked about rebuilding the growth engine in the consumer bank after several years of being under the asset cap. As you look across the franchise today, where do you think the biggest opportunity still exists, and what actions do you think you need to take to get there? I think there's opportunity really across all of the core things we do through the branch system or through the consumer bank. You look at our checking account growth, which is something that's lagged in the past. We reintroduced all of our incentives plans over the last couple of years. We're starting to see that take effect across the branches, but we still have a ways to go to get to kind of full productivity there. I think that's going to be a big opportunity as that continues to ramp. I think if you look at net checking account growth now, we're up almost every quarter year-on-year for the last 11 or 12 quarters. I think that is continuing to sort of get to pace and start to become much more meaningful, I think, than it was. I think you're seeing good growth in our credit card sales through the branches as well. We saw an uptick in the middle of last year through the branch system that has kind of sustained itself. We always have a little bit of variability quarter to quarter, but that productivity out of the branch system is quite good and great to see come through. Then we have the opportunity to provide wealth management services to the affluent client base that gets serviced out of the branches as well. We call that Wells Fargo Premier. It's combining banking and wealth management together. We combined that into the consumer segment at the beginning of this year or in the first quarter. I think you're going to see really good growth from those investment assets coming onto the platform as well. If we can do a good job on the wealth side, that usually brings more deposits and lending business into the picture for those clients as well. We're really excited about really across the board that opportunity. We're seeing that pick up as we go over the last few quarters or a year. We have a long way to go, I think, to get to kind of full productivity across the branches. That should provide some good growth for a long period of time. Right. Hold that thought on wealth because I do want to dig in there, maybe to round out the conversation on the lending side. On credit card, you've noted that earlier vintages from the new products launched in 2021 are beginning to mature and contribute more to the profitability of the business. Can you talk about how the earnings profile of the card business evolves over the next few years as these vintages season? Yeah, sure. We're really happy with the progress that business is making. Just as some of you may remember, it was almost a complete rebuild in terms of the product set. We've launched 13 products over the last number of years. Every go-to-market card is a new card that we launched in the last five years. When we've seen really good progress now as they go. We probably have a couple more to come over the next year or so, we'll see how those get rolled out. If you look at the earliest vintages, you're really starting in 2022. We had a little bit of the first Active Cash Card got rolled out in the latter part of 2021. 2022 is sort of your first real vintage. The 2022, 2023, 2024 vintages are all profitable this year. 2024 has got a little more maturing to do over the next year or two, but we're seeing really good profitability. It's right on top of a business case and the modeling that we've done. The credit performance there, as I mentioned earlier, is actually better than what we would've modeled, not worse. Those vintages are like 60% existing clients, 40% new clients to the bank. Really good progression. You've got the 2025 and 2026 vintages, which are a little bit bigger. As I mentioned, we've seen really good uptake in sort of the originations. I think originations were up 20%+ last year. We expect more growth this year. Those will mature over the next couple of years. We're transitioning from these new vintages being a drag on profitability to contributing positively to profitability this year. That'll start to build as we go over the next couple of years. Progressing exactly as we would've thought and generating good returns. On average, how long does it take these vintages to fully mature? Two to three years. Some of the earlier vintages may be a little bit faster, but two to three years is sort of what the average is. Got it. All right. Let's talk about auto lending. You're becoming somewhat a full-spectrum lender again on the auto lending side. What does that mean in practice? How far down the credit spectrum are you comfortable going at this stage? Yeah. Look, it's full in quotes, right? We're not trying to be a lender to every part of the credit spectrum within the auto business. We spent a couple of years kind of reworking some of the servicing, the credit underwriting, and the modeling that we do in that business. You saw us reenter that sort of earlier last year, and we've seen some really good growth now over the last year-plus. Part of it is also the partnership that we signed up with Volkswagen and Audi in the U.S., and that's contributing quite nicely to it as well. When you look at the portfolio, the primary focus is still on prime customers. 70% of the book is 700-plus FICO, 80% is 660-plus FICO, in terms of the new originations. I think still the primary focus is there. We're seeing the return of that marginal new customer be exactly kind of where we thought it would be as we look forward. At the same time, we're investing in all of the dealer services that we provide to sort of the big dealer networks to make sure that we're getting the right mix of businesses. I'd say we're expanding a little bit in that business, but certainly not trying to go too deep down into the credit spectrum. Got it. All right. Let's talk about wealth. Wealth management has quietly become one of the stronger momentum stories within the company. You just spoke about initiatives like Wells Premier. What do you think has changed most meaningfully inside that franchise over the last 18 months or so? Yeah. It's really been a progression now for a number of years as we've been investing in the people, the technology, the products across that business. If you think about it, we've got really three primary channels that we go to market. One is what I referred to earlier, which is that Wells Fargo Premier, which is going after the opportunity, and that's for the client service out of the branch system. We've got roughly 2,500 advisors in the branches already across the network, and you're starting to see those flows really start to ramp. As I mentioned, that'll bring much more deposits and lending business with it as we do a better and better job there. We've got the kind of core financial advisor channel that others have as well. I think there, the focus has been on really three or four things. One is, if you go back six, seven years ago, we had a lot of attrition there. That's all stemmed. We've got really low attrition there. We've really been able to recruit some very significant teams and a whole bunch of great advisors into that channel over the last few years. When you recruit the right advisors, you're not only bringing the investment assets, you're bringing lending, you're bringing banking, you're bringing alternative. So you're bringing a whole bunch of the things that drive profitability in that channel, and I think that's what we're really excited about as you see those teams come on and sort of ramp up. We've also been investing in technology there. We just finished the rollout of a completely modern sort of advisor workstation across the whole footprint that we've got. We've been investing in sort of the banking lending products. We still have a lot of opportunity to get better penetration in the lending side of that business. No matter how you want to measure that, there's a lot of opportunity to do more there across the client base. Then really the last channel there is the independent advisors. As many as you know, that's the fastest-growing channel in the wealth management business here in the U.S. We're the only of our normal general peer set, that big bank peer set that can service those independent advisors. We're really starting to see the recruiting from not only the traditional wire houses, but also some of the independent providers come onto that platform this year. So we're excited about the growth there. Hopefully you'll see more growth come through this year. All right. Perfect. Maybe on the business side, let's round out the discussion on the corporate and commercial side. You've described a dynamic where your financing balances, and you expect some of the broader wallet share to follow over time. Can you talk about where you're starting to see that broader wallet share capture come through? Yeah. If you look at the markets business, trading business, if you look at it relative to where we ended 2024, which is really after that point is where it really started to see some of the growth in the balance sheet come through. The balance sheet's up roughly $180 billion since then. Call it 60% of it is in financing balances roughly. Roughly 20% of it is in the trading side, and another 20% in the lending that we do out of that business. You're seeing really good progression. On the financing side, the biggest piece of that are things like Treasury repo and other repo that we do to provide the financing that many of these clients need. As you can imagine, the bigger clients drive, call it the top 25 or 50 clients drive a big portion of those financing balances. What we're seeing there is financing revenues up, returns are good in that business. We're also seeing the trading side of it also increase quite a bit, right? If you look at the first quarter as an example versus a year ago, first quarter 2026 versus first quarter 2025, equity and fixed income revenues are up 15% or 20% respectively. Total markets revenue's up 21%. You're seeing that business come through as we grew the overall balance sheet. As our CEO said a couple of weeks ago, we expect to have a good quarter this quarter with mid-teens growth in the markets business year-on-year as well. We're seeing that benefit. If you go client by client, you look at the top 10 clients, nine out of the top 10 are doing a lot more with us. One isn't. We'll figure out if we're going to keep providing those balances to that client or not, right? That's part of the natural progression that you'll have with these businesses. Most of it'll play out the way you thought, and you'll make decisions to reallocate balance sheet as you go. The financing business we're doing is very high quality, low risk, high return, driving that other behavior that we want to see across those client bases, across all the other businesses that we have in market. We feel really good about the progression. We're still in the early phases of seeing some of the business come on as you have to ramp up with those clients over time. Low risk, high return, clear momentum, and lots more to come. Right. All right. Perfect. Okay, on the investment banking side, you've hired roughly, I think, 100 senior investment bankers over the last several years. You're seeing those market share gains come through as well. Where are the biggest opportunities across the franchise today? Think about advisory, ECM, leveraged finance, sponsor coverage. I guess where should investors most focus? Yeah, look, we're really pleased with the quality of people we're getting. We're really pleased that we're getting them from really everywhere across the street, boutiques, big investment banks, people are attracted to the platform. I think when you look at it, not just only by product, you also look at it by the client bases we cover. We have a big opportunity to continue to do better in covering our commercial banking clients. They generate somewhere between $2 billion and $4 billion a year, and we're continuing to see that in investment banking fees, and we're continuing to see that market share increase, each year, but still more to do there. When you look at it by product, certainly the equity capital markets and advisory side are places that we know we can do better. We have a strong debt capital markets business, still, across both investment grade and leveraged finance, as we do better on the advisory side, we'll also do better on the acquisition finance side. There should be opportunity really across the product set. We're really excited about what we can do in the commercial banking client base. You'll definitely see some more activity across large corporates and some sponsor activity. It should be spread across the products. As I said, I think the advisory and the equity capital market side should be those places that you see more opportunity over time. Anything else on the commercial banking side? Anywhere you're seeing strong traction there? Anything else you need to do there? Look, I think we've got great national share in the commercial bank. There are a lot of markets across the U.S. where we don't have that same share. We've prioritized about 20 markets right now. Some of them are big markets like New York and Chicago and other places. Some of them are smaller across the country, but all places that have significant wealth and significant business creation. We've added a couple hundred bankers across the last couple of years to go after that opportunity. If you look at the new client acquisition results that we've seen now for a number of quarters, they're up 20%, 30%, 40% over year-on-year in terms depending on when you look at it, we're seeing some of that activity really come through. It's across the board in terms of lending, deposits, treasury management business, and some investment banking business as well. Not only sort of advisory and sort of the debt side, but also rates, FX, and other sort of activity that we can sort of help them with across the board. We're pretty excited about the opportunity there, and we're seeing some of the results come through and the new clients that are getting added to the platform. Right. Perfect. On the lending side, one of the other debated areas has been the growth in MDI exposures. You spent a lot of time and gave us a lot of detail at earnings around the exposures there. Where do you continue to see some of the best risk-adjusted opportunities in that business today, and what's the outlook for that business? Look, I think as we talked about at earnings in April, we feel really good about the exposure that we have there. It's a very granular book, right? It's not one thing. There's many things that sort of underpin that. I think the protection you get for the way these structures work and the way we go about underwriting them, I think, gives us the confidence that the risk-adjusted returns are there. I think you'll go through waves in terms of where the opportunity is, but the biggest parts of the portfolio are still going to be the capital call and subscription finance facilities that we provide to the biggest sort of private equity funds and the like. We've got a big business that supports the private credit space, what we call corporate debt finance. Again, I think you'll see at different points in time, you'll see sort of the growth rates move around there a little bit, but we think there's still a lot of opportunity to serve the best clients there. Let's pivot over to deposits and NII. Since the asset cap was lifted, you've gone from being one of the most consumer-funded large banks to now seeing much faster growth in the commercial interest-bearing deposit side. I guess that is weighing on NIM a little bit. How should investors think about the longer-term returns, and the longer-term implications of this transition? Yeah, look, I think the short answer is this business is really good business. These are commercial customers across the commercial bank and the corporate investment bank, primarily. You also see some interest bearing in the consumer side, but really you're talking about the commercial businesses that drive most of the growth there. The marginal profitability of this business is very high. It generally brings with it a whole bunch of other stuff that we do with customers, whether it's lending, treasury management, FX, rates, and other things that we can do with these customers. It should drive really strong profitability over a really long period of time in that business. If you now take a step back and say, Okay, well, why is it growing so much faster now? It's because we had to stop growing it while we had the asset cap. If you go back into 2021, 2022, we actually had to push a lot of it off. During that time, we pushed probably half a trillion dollars of balances off and didn't participate in some of the growth that the rest of the industry saw there. Some of the bulk of this is coming from existing clients that have other relationships that are bringing more to us, which is really good to see. Some of it's coming from new relationships as we get the traction I talked about earlier in the commercial bank or even in the corporate investment bank. It all comes with other fee-based businesses around the treasury management, as I mentioned, or other markets activity. It actually should be a really good thing and drive really good profitability over a long period of time. You'll see the mix change a little bit in terms of the deposit base, but that's okay, right? It'll really drive some really good growth in those commercial businesses. As we think about those broader relationships coming in with the deposits, I guess, how long does it take? Does it happen concurrently? Does it take a few quarters or years to deepen the relationship? Some of it happens right away, and some of it grows over time as they transition some of those fee-based businesses away from others. Some of it's episodic, depending on what they need in terms of the FX and rates and other things. As some of the lending facilities or the revolving credit facilities they have, those obviously have some timetables to them as they sort of look at moving those things around. Got it. Okay. Then let's talk about NII. You maintained your NII outlook even as the market has repriced to fewer Fed rate cuts. The belly and long end of the curve are also higher now. I guess walk us through what has changed both positively and negatively underneath the hood on NII since January. If there's any updates you'd like to share there, would love to hear them. Yeah, sure. First, we're very confident in our $50 billion target that we have for this year, or guidance that we gave for this year. I think obviously you'll see the quarterly growth in NII that sort of underpins that as we go. I think when you look at some of what's happened, you've certainly seen a different expectation for rate cuts. We had two or three sort of in the guidance, but they were really back-end loaded. That's a modest positive for the banking book now that rates are effectively flat for the year. It's a modest negative on the markets NII, as that's a liability-sensitive business, you have some offset there. The net of it is actually a relatively small impact for us relative to the guidance we have off of the base of a $50 billion number. It's relatively small. When you look at what's happening across the rest, you have loan growth performing well. That grew 4% quarter-on-quarter in the first quarter. That is looking like it's going to be potentially a little bit better than what we had modeled as we go through the year, but we'll see. Obviously, there's things like tariff refunds, there's some seasonality there's a lot of things that we got to sort of watch and sort of see how that progresses, but that could be a positive relative and be a modest positive to net interest income as we sort of look in the year. You have the deposit side, and as we talked about, we're having a lot of success growing interest-bearing deposits. That's actually running a little bit better than what we'd have thought. That obviously compresses NIM there a little bit. On the non-interest-bearing side, we're seeing very stable balances there. We assumed they would grow a little bit. That still may be the case, but at this point we're assuming they're going to be more stable, particularly given sort of the higher for longer rates. Overall, it's actually performing quite well in terms of what we're seeing across the deposit side. We're not seeing more pricing pressure really across the board. We're just having a lot more success on the interest-bearing side, and non-interest-bearing are stable. Your net of it ends up being we still feel very confident in sort of the $50 billion number that we put out there. When you look at the quarter, for this quarter, you're obviously going to see a step up in NII. We expect that. That underpins sort of what I talked about in terms of the overall forecast. As I mentioned in the first quarter, you'll see a modest impact on NIM as we go into the quarter. Likely three or four basis points in terms of compression there, as you sort of see the mix there change a little bit. Again, that's kind of what we expected to see. We feel overall really good about the trajectory we're on across the NII space. Okay. I guess rates, slight positive, earning asset balances clear positive on both the loan side and the deposit side. We have some pressure on NIM as we get into the second quarter, and then how should we think about it from there? We'll see. We'll give more guidance as we go at earnings. I think as we said in the first quarter, that compression moderates. All right, perfect. Great. You brought up deposit pricing, and there's been this growing discussion out there on AI-driven cash optimization and what that might do to deposit pricing over time. How are you thinking about that impact right now? I mean, there's a lot going on in the space. You've got stablecoins, you've got tokenized deposits, you have legislation happening, a whole bunch of things that are out there. There's certainly going to be a role for some of these things. Like stablecoins, when you think about cross-border activity or even tokenized deposits and cross-border activity, there'll certainly be a role there. I think when you start thinking about AI more broadly, I think when you look at the core piece of our deposit base, which is that consumer deposit account, the vast majority of those are first under $250,000. Average balance is a lot smaller. There's a whole bunch of operating cash that sort of you get to some stable balance there pretty quickly. It's not clear that you're going to see a lot of impact from that anytime soon, some of these agentic sort of ideas at least, anytime soon. We're not seeing any kind of behavior shifts as we speak. I think clients have a lot of opportunity if they wanted to optimize cash more. I think you're going to find very quickly that you get to some pretty stable balances there. Got it. All right. Maybe we should move to expenses. You've reduced head count for more than 20 consecutive quarters now. You're simultaneously investing in a number of growth initiatives. How should investors think about the balance between the efficiency gains that you're seeing and the reinvestment that you need to make over the next few years? Yeah. Well, look, we've done a lot on the efficiency side already. The good news is we still have a lot to do. It just takes time to sort of get at it. I think newer technology like AI sort of helps you maybe get at things deeper, faster than maybe possible a couple of years ago. We still have a lot of opportunity to drive efficiency over the next number of years. That's where we start the conversation with everybody across the businesses every time we talk about it, right? There's a huge amount to do across every area of the company still. We'll make decisions on sort of where we want to invest, as you've seen over the last number of years, we've been able to sort of find a pretty good balance between driving efficiency and the investment side, that's certainly the mindset that we bring as we sort of look over the next year or two. Maybe bringing it to this year, you've spoken about, I think your expense guide is about $55.7 billion for the year. Are there any updates to that? No change. Feel really good about it. All right, perfect. I'm going to come to the room in just a sec to see if there's a quick question. Let's talk a little bit about reserves. We spoke about the seasoning card book, momentum on both the card and auto side. Some of these loan balances do come with high reserves. I guess, how should people think about reserves going forward? Well, as I said, the good news is the credit performance is quite good, right? I don't anticipate any major shifts in overall coverage. As loans grow, they bring allowance, right? Obviously depending on which category grows more, they bring some allowance with it. It seems like a lot of financial modelers seem to forget that fact, that as loans grow, you have to add allowance, but the way the accounting works. I think we don't expect any significant changes in coverage ratio because credit has been quite good. Got it. All right. Are there any questions here in the room? All right. Maybe let's talk about capital here. With CET1 ending the quarter at about 10.3%, it's already within your target range. Obviously, there's capital accretion coming from the earnings side as well. There's the Basel endgame proposals. I guess when you're thinking about capital deployment here, how are you thinking about balancing capital return versus growth in investments from here? Yeah, look, I mean, the first priority is always going to be supporting clients and growing organically with clients. I think the good news is we've got plenty of capital to do that, right? We're generating a lot more as we sort of look forward. We have the opportunity not only to support clients and participate in growth, but also give more back to shareholders. We'll find that balance as we go. Obviously we go through the same process each quarter in terms of thinking about the growth opportunities, thinking about any of the risks that are there, including the volatility in rates, and then sort of we haven't been shy in terms of buying back stock over the last number of years. That same process as we sort of thought about it going forward. We'll see where the rules shake out ultimately. I think comments are due on the 18th, if I recall properly. We should hopefully the regulators will be able to work through that pretty quickly and get those rules finalized. We're not thinking they're going to be in place until 2028, let's see. Hopefully they get them finalized quickly. Anything specific you're focused on as we approach the end of the comment period? There's a whole bunch of small things that are part of the proposal. We're going to comment through the trades with a lot of the other banks, I don't think there'll be anything super surprising that comes out of that. Got it. All right. Perfect. Mike, maybe to wrap up, you're already on the path to that 17%-18% ROTCE target which you've laid out. A lot of it is executing on the opportunities that you've already invested in. As you look at the businesses, which of the drivers do you think is most underappreciated? I guess in terms of the contribution to getting Wells to that next level of returns, where should investors be focused? I mean, look, we feel great about the ability to get there in a reasonable time period. I think the good news is there's a lot of different paths to get there. We're not over-reliant on any one thing. I think when you look across a lot of the returns we're starting to see on the investments, you saw this in the first quarter results with originations and card and auto up a lot. You've seen the card. We talked about the card business. We've seen the improvement in the investment banking side, which is obviously high margin fee-based revenue. We talked about wealth. We talked about all the growth we're starting to see sort of in the consumer base more broadly. Those are the things that will drive us to the return. Then you complement that with really good, strong expense discipline. I think we feel like we've got a lot of different ways to sort of get there, like I said, in a pretty reasonable time period. So we feel very confident about that. As we've said over and over, we don't think that's the end. We think there'll be opportunity to continue to improve overall returns from there once we get there. All right. With that, we're out of time. Mike, thanks so much for joining us. Yeah, thank you.