Consumer Lending Group - Wells Fargo Lending Group Avid Modjtabai, Senior EVP, Consumer Lending and...

Consumer Lending Group

Avid Modjtabai, Senior EVP, Consumer Lending and Operations

Shelley Freeman, EVP, Consumer Credit Solutions

Dawn Martin Harp, EVP, Dealer Services

Franklin Codel, EVP, Home Lending

May 24, 2016

© 2016 Wells Fargo & Company. All rights reserved.

Business Overview Consumer Lending Group (CLG)

Wells Fargo 2016 Investor Day Consumer Lending Group 2

Home Lending

Mortgage and Home Equity

#1 Retail lender (1)

#1 Correspondent lender (1)

#1 Jumbo lender (1)

#1 Mortgage servicer (1)

9.1MM households

$1.65T Residential servicing portfolio (1)

$213.0B in 2015 originations

$114.7B Jumbo loans (2)

$68.8B Home equity loans

Unsecured Lending

Credit Card

11.2MM General Purpose Credit card households

4.4MM Retail Services households

$70.3B in 2015 POS transactions

$33.1B Credit card loans

18,000 Retail Services merchants

Personal Lines and Loans

1.8MM Personal lines & loans households

$9.2B Personal lines and loans

Student Lending

#2 Private student lender (3)

676K Student lending households

$12.5B Private student loans

Auto Lending

Dealer Services

#1 Used auto lender (4)

#2 Overall auto lender (4)

3.7MM households

$57.8B Indirect auto loans

$10.3B Commercial auto loans (5)

14,000+ Dealer relationships

Direct Auto

242K households

$2.8B Direct auto loans

Business overview

All household data as of Dec 2015. All portfolio balances as of period end 1Q16, unless noted. (1) Source: Inside Mortgage Finance, FY2015 as of Jan 2016. (2) Jumbo loans originated post February 2009. (3) Source: MeasureOne, Jan – Dec 2015, as of Jan 2016. (4) Source: Autocount, rolling 12 months, as of Feb 2016. Based on annual findings, excludes leases. (5) Included in the company’s C&I portfolio.


Experienced leadership team

Avid Modjtabai


23 years at Wells Fargo

Franklin Codel Home Lending


Mortgage origination for sale

Portfolio lending (jumbo loans, home equity)

Mortgage servicing

Capital markets

Credit card (General Purpose, Co-brand, and Retail Services)

Personal Lending Group:

- Student lending

- Personal lines and loans

- Direct auto

Shelley Freeman Consumer Credit Solutions


Indirect auto lending

Commercial auto

Dawn Martin Harp Dealer Services


Consumer Lending Group 4 Wells Fargo 2016 Investor Day

How we’ve performed

Delivered strong performance across our businesses

Repositioned the Card business for growth

Delivered disciplined growth in Auto Lending

Maintained leadership position in Home Lending

Grew new accounts and originations

Improved the composition of our portfolio

Maintained credit discipline

Delivered historically low credit losses

Simplified and de-risked the business

Continued our customer experience transformation


Delivered strong performance across our businesses

Grew outstanding balances at 13% CAGR since 2013, outpacing total market growth of 4% (1)

Delivered new products (American Express and Visa), digital capabilities, and an award-winning relationship rewards platform

Deepened our share of wallet across segments, including Affluent

Repositioned the Card

business for growth

Maintained leadership position in

Home Lending

Maintained leading market position in originations (retail, correspondent, jumbo) and servicing (3)

Expanded portfolio lending, originating nearly $100B in high quality jumbo loans since 2013

Invested in new originations and eLending platform

Maintained #1 position in used car lending; #2 overall auto lender (2)

Grew outstanding balances at 9% CAGR since 2013, slightly below total market growth of 11% (1)

Grew the number of dealers with ≥10 funded applications per month by 24% since 2011

Delivered disciplined growth in

Auto Lending

All growth figures represent end of year 2015. (1) Source: Federal Reserve Bank of New York, “Household Debt and Credit Report”, total outstanding consumer debt, 4Q13-4Q15, as of January 2016. (2) Source: Autocount, rolling 12 months, as of February 2016. (3) Source: Inside Mortgage Finance, as of January 2016.


Grew new accounts and originations

Consumer Credit Card (1)

New Accounts (in millions)

Auto Lending Originations

($ in billions)

1.5x

2015

$31.1

2013 2011

$21.4

1.9x

1.4

2015 2011

2.7

2013

Portfolio Home Lending Originations

($ in billions)

$57.2

2.5x

2015 2013 2011

$22.9

Jumbo Loans

Home Equity

Indirect

Direct

(1) Includes consumer credit card as well as certain Co-brand and Private Label relationship new account openings.

2.3 $27.6

$47.0


Improved the composition of our portfolio

68%

14%

18%

2011

$425

56%

19%

25%

2015

$460

78%

11%

11%

2013

$445

Liquidating (1)

Junior Lien (2)

Core (3)

Total Consumer Loans ($ in billions)

Balances are as of period end. (1) Non-strategic/liquidating portfolio consists of Pick-a-Pay, liquidating home equity, junior lien, legacy Wells Fargo Financial debt consolidation, and certain other legacy Wachovia portfolios. See pages 63-64 in our 2015 Annual Report for further information. (2) Excludes liquidating junior liens. (3) Excludes junior lien.

2011-2015 Core portfolio CAGR of 11%


Maintained credit discipline…

Portfolio Distributions by FICO (1)

13% 8%

7%

9%

6%

14%

10%

57%

72%

4Q11 4Q15

4% 9% 6%

9% 9%

15% 15%

63% 66%

4Q15

5%

4Q11

5%

10% 8%

8% 8%

15% 15%

21% 20%

46% 48%

4Q15 4Q11

18% 16%

13% 11%

18% 17%

17% 18%

34% 38%

4Q11 4Q15

(1) Rounded, excludes loans with no FICO. (2) Includes direct and indirect loans.

Real Estate 1-4 Junior Lien

Credit Card Auto Lending (2)

Real Estate 1-4 First Mortgage

680-719

640-679

<600

600-639

720+


…and historically low credit losses

1Q16

0.07%

1Q14

0.27%

1Q12

1.39%

0.70% 0.85%

1Q14

0.70%

1Q12 1Q16

(1) Quarterly net charge-offs as a percentage of average loans are annualized. See explanation on page 21 of the Company’s First Quarter 2016 Form 10-Q of the accounting for purchased-credit impaired (PCI) loans and impact on selected financial ratios.

Real Estate 1-4 First Mortgage Real Estate 1-4 Junior Lien

Auto Lending Credit Card

Net Charge-offs (1)

(as % of average loans)

1Q16

0.57%

1Q14

1.20%

1Q12

3.62%

4.40%

3.16%

1Q14

3.57%

1Q12 1Q16


Simplified and de-risked the business

Aligned infrastructure and support functions across CLG lines of business

Streamlined and consolidated systems (e.g., legacy origination systems for run-off real estate portfolios)

Leveraged automation to take paper out of our processes

Right-sized the business to respond to market dynamics

Exited segments, including:

- Home Lending Joint Ventures

- Mortgage Marketing Service Agreements

- Auto Lending Warranty Solutions

- Government student loan servicing portfolio

Simplified product pricing structures

Launched amortizing home equity lines

Proactively managed home equity end-of-draw

Reduced Risk

Improved Productivity


Continued our customer experience transformation

Account Open and Onboarding

Learning and Planning

Engaging and Transacting

Launched consumer education and strategies centered around financial health:

Free access to FICO® Scores with in-depth, personalized credit tips

My FirstHome®, a multi-channel interactive experience guide for first-time homebuyers

Smarter Credit™ Center, an online resource to build, improve, and manage credit

Delivered fully integrated eLending platform for all Consumer Lending products, including:

Cross-channel applications

Real-time application status and updates (e.g., yourLoanTrackerSM)

Digital document upload (e.g., mobile camera phone)

eSign capabilities

Developed comprehensive digital servicing and transacting capabilities:

Mobile wallet and payment capabilities, including WF Wallet, Apple Pay, Android Pay, and Samsung Pay

Account management (e.g., real-time, 2-way fraud alerts)

Industry leading rewards redemption capabilities via mobile and ATM

FICO is a registered trademark of Fair Isaac Corporation in the United States and other countries.

(Example Score)

Looking Ahead


Despite some uncertainty, consumer outlook is positive

Household Net Worth (2) ($ in trillions)

2015

$86.8

2014

$84.2

2013

$79.4

2012

$69.6

2011

$63.4

17.7MM Projected light vehicle sales in 2016 (6)

Total WFC auto originations in 2015 up 13% from prior year

Housing prices are rising, up 5.7% YoY (3)

Average LTV of Wells Fargo mortgage loan portfolio

(4) was 65% in 4Q15, improved from 82% in 4Q12

US total retail sales continue to trend upward, reaching $4.7T in 2015 (5)

WFC credit card POS dollar volume and transaction volume in 2015 up 12% and 15%, respectively from prior year

Unemployment Rate (1)

2011 2012 2013 2014 2015

5.0% 5.6%

6.7% 7.9%

8.5%

(1) Source: US Department of Labor, Bureau of Labor Statistics, as of Jan 2016. (2) Source: Federal Reserve - Financial Account of the United States. Real estate equity calculated as value net of mortgage balances, as of Jan 2016. (3) Source: S&P/Case-Shiller 20-City Composite Home Price Index, as of Jan 2016. (4) All WFC owned mortgage and home equity, excluding PCI. (5) Source: U.S. Department of Commerce, Monthly and Annual Retail Trade Report (Total Retail sales), as of Jan 2016. (6) Source: National Automobile Dealers Association, as of Jan 2016.

Real Estate Equity All Other


We are well positioned

8,000 Retail locations (stores, brokerage, and mortgage)

45,000+ Platform bankers and financial advisors

7,000+ Home Mortgage Consultants

14,000+ Auto dealers

18,000 Retail Services merchants

Unparalleled Physical

Distribution

Consistent performance across businesses throughout economic cycles

Scale, cost, and balance sheet advantages

Discipline in credit risk management

Experienced CLG business leadership team averaging over 14 years of tenure (1)

Proven Business Models

41MM Wells Fargo consumer households; 27MM have at least one CLG product

Full product suite to meet a broad range of customer needs, through every life stage

Proprietary behavioral insights on our 70MM customers

Powerful Customer

Relationships

As of December 31, 2015. (1) Average tenure for top 4 levels of CLG managers.


Our opportunities to grow

Customer journey with Wells Fargo

Bring more new households to

Wells Fargo

Win New Customers

Increase our Cross-sell

Meet all of the lending needs of

existing Wells Fargo consumer households

Deepen Engagement

Be top-of-mind and top-of-wallet with

existing CLG customers


Win new customers

“New-to-WFC” Households by CLG acquiring product

(2013-2015)

CLG is the 2nd largest source of new households to Wells Fargo

(1) Includes indirect loans. (2) Personal Lending includes direct auto, student lending, and personal lines and loans.

25%

6%

40%

29%

Auto Lending (1)

Home Lending

Retail Services

Personal Lending (2)

Total: ~9MM

households

How we will drive growth:

Attract more new households by expanding distribution (dealers, merchants, digital)

Develop new strategies to “lead with” lending products

Partner across businesses to turn more credit customers into long-term relationship customers


Cross-sell to existing customers

(1) Source: Hemisphere, as of Dec 2015; Includes total mortgage, home equity, general purpose credit card, and private student loan balances of customers who do not currently hold those WFC products.

(2) Data as of Dec 2015.

With CLG product

Without CLG product

2015

41MM

66%

34%

2013

39MM

62%

38%

WFC Consumer Households

WFC Consumer Households with CLG Products (2)

Total value of away-lending balances (1) of Wells Fargo

customers is $2.7T

79%

17%

4%

2 products 17%

1 product 79%

3+ products 4%


Deepen engagement

(1) Assumes 1% increase in each metric above, plus a 1% increase in home equity line utilization.

Line of Business Opportunities to Deepen Engagement

Credit Card Share of wallet – % of WFC credit card

customers total spend that we capture “on us”

Home Lending Recapture rate – % of servicing book

households who refinance or purchase an additional home with a WFC mortgage

Dealer Services Full spectrum dealers – % of dealers who

underwrite contracts at each of our credit tiers (vs. a single band)

Every 1% increase in engagement (1) of customers with existing

CLG products represents ~$5B in incremental balances


Consumer Lending Group: How we’ll execute

Simplify the end-to-end customer experience (e.g., streamlined authentication)

Deliver personalized financial information and guidance (e.g., contextual alerts and notifications)

Continue to sharpen value propositions to attract high opportunity segments (e.g., first-time homebuyer, affluent, millennials)

Transform the

Customer Experience

Grow digital (online/mobile) to become a significant sales channel and augment existing distribution channels

Expand distribution through Wells Fargo stores, Regional Business Centers (RBCs), and Home Mortgage Consultants (HMCs)

Drive targeted growth in our distributed and centralized sales teams

Continue to deepen relationships with retailers, dealers, and Co-brand partners

Expand and Deepen

Distribution

Use relationship data and insights to responsibly pre-qualify customers for their most relevant needs

Overlay marketing and risk analytics to drive improved response rates and efficiency of offers

Provide customers with a single unsecured credit limit that can be allocated across products by underwriting at the customer level

Leverage Data and Analytics

Credit Card


Credit Card: Our business model

General Purpose cards to meet payment needs from new-to-credit to high net worth

Distributed primarily through our stores, contact centers, or digital channels to existing customers

11.2MM households

82% of credit card households have a WFC deposit relationship

$25.1B Portfolio(1)

$61.4B in 2015 POS volume

Consumer Credit Card

Co-brand Credit Card

Retail Services

Co-brand credit cards issued on behalf of partners

Distributed through merchant partners (e.g., Dillard’s)

Committed to long-term growth in this sector

Customized Private Label credit programs and products to support merchants and consumers

Distributed through approximately 18,000 merchant relationships with over 33,000 locations

4.4MM households

19% of Retail Services households have a WFC deposit relationship

Acquired 1.2MM households in 2015

Data as of Dec 2015 unless otherwise noted. (1) As of 1Q16.


4Q11 4Q15

4Q11 4Q15

4Q11 4Q15

Repositioned the card business and accelerated growth

Credit Card Purchase Volume (1) ($ volume)

Credit Card Outstandings (1) ($ loans outstanding)

POS Active Credit Card Accounts (1)

(# of accounts)

14% CAGR

10% CAGR

16% CAGR

Strong portfolio growth across credit card businesses (General Purpose, Retail Services, Co-brand)

Engagement growth in consumer credit card

(2) portfolio since the end of 2011:

- The number of POS-active accounts have grown at 16% CAGR

- The rate of POS-active accounts (as a percent of total) are up 3.9 percentage points

Increased penetration in the Affluent (3) segment since 2013:

- Spend grew at a 16% CAGR

- Balances grew at a 20% CAGR

- Grew affluent and high net worth cards as a percent of total active accounts to 20%, from 9% (4)

(1) Reflects CCS cards including Co-brand and Retail Services. (2) General purpose cards. (3) Source: Experian. Affluent defined as combined annual cardholder spend on all cards of $25k or more. (4) Wells Fargo product mix reflects General Purpose cards only, and excludes co-brand. Product affluence based on type of card.


Substantial opportunities to drive credit card growth

Win New Cards and Customers

Expand penetration within existing Wells Fargo households (both deposit and non-deposit)

Attract new customers through refreshed credit card product offerings

Expand Distribution

Deliver omnichannel experience by meeting our customers in their channel of choice

Reach customers in non-captive digital channels

Deepen Engagement

Grow share of wallet by expanding companion card offers

Strengthen the reward value proposition to drive card usage and engagement

Enhance Capabilities

Develop and deliver customer-centric digital marketing and customer experience capabilities

Increase customer engagement through financial education with online resources to build, improve, and manage credit


Drive growth by penetrating our household base

New marketing to WFC customers in Retail Services, Auto, Wealth & Investment Management, and new Home Lending households

Engage current cardholders

Acquire households without a card

Acquire new to bank households

21 Million Retail checking households (1)

20 Million Consumer non-checking households

41 Million WFC consumer households

Credit Card

(2) Retail Checking Household (1) Penetration (% of total HHs)

2012 2014 2015

Credit Card

(3) Consumer non-Checking Household Penetration (% of total HHs)

33.5% 37.4%

43.2%

10.0% 7.7% 9.0%

(1) Retail checking households include households that hold at least one retail checking account. (2) General Purpose and Co-brand, excludes Retail Services. (3) General Purpose card only, excludes Co-brand and Retail Services.

2013

41.5%

9.3%

2012 2014 2015 2013


New and refreshed offerings to win new customers

Straightforward, relevant products targeted to specific payment needs

New To Credit/ Repairing Credit Mass and Mass Affluent Affluent and High Net Worth

College and secured cards provide an accessible and responsible entry point

Lending, cash back, and points cards tailored to segments within the broader base of credit card holders

Premium-service value propositions for travel enthusiasts, clients of Wealth and Investment Management

• New Propel™ American Express

card rolling out nationally

• New Cash Wise™ Visa card launched in May


2012 2013 2014 2015

Go FarTM Rewards deepens engagement

Average monthly spend of customers (3)(4)

(Awards non-redeemers vs. Awards redeemers)

4.3x higher spend by cardholders who redeem

CAGR = 17%

Go FarTM Rewards delivers differentiated, hard to replicate, omnichannel earning and redemption experiences that engage across our customers’ Wells Fargo relationships:

Earn rewards in one account across all of the customer’s WFC consumer credit card products

Annual earning bonuses for customers with other WFC relationships

Easily pool or share rewards within a household, or with other WFC customers

Redeem rewards directly to nine WFC products (including paying down principal balance on a mortgage, personal loan, or credit card)

Redeem for cash at more than 13,000 WFC ATMs

Open Reward Accounts (2)(3)

(1) Corporate Insight Dec 2015; Wells Fargo received an A-, and tied for highest rated rewards program. (2) Includes all Go Far Rewards open accounts, excludes Co-brand and Retail Services. (3) Figures represent year end open accounts. (4) Represents 12-month average POS spend per account in 2015.

Non Redeemer Redeemer

Go FarTM Rewards received the highest rating given in the Credit Card MonitorSM “Rewards Redemption Options” report

by Corporate Insight (1)


Single Card Multiple Cards

Drive spend and balance growth with companion cards

Multiple cards meet full range of payment needs

Two networks One rewards program

One banking relationship

Travel Rewards and

Cash Back Lending

Significant opportunity: only 1.8% of primary credit card customers have more than one Wells Fargo Credit Card (1)

Early results show companion cards drive increased activity:

Our approach to companion cards is differentiated from competitors:

(1) Excludes Co-brand and Retail Services. (2) Source: Internal analysis; 3-month pre/post analysis reflects 2015 vintage multi-card

accounts, through November 2015.

Credit line flexibility One view of spending

Move line between cards

Average monthly spend (2)

(Before and after multi-card)

Average monthly transactions (2)

(Before and after multi-card)

Single Card Multiple Cards

+22%

+20%

My Money Map

https://www.wellsfargo.com/financial-health/track-your-spending


Enhancements to reach and serve our customers

Optimize and expand distribution across all channels

Adding capabilities to better engage our customers

Smarter Credit™ & Path to Good Credit Online and mobile credit building tips, education, and videos

Digital Wallets Secure payment options for our customers

Cash Track™ Clear, transparent graphics to communicate cash rewards balances and lifetime earnings

Digital Servicing Expanded and optimized alerts and chat

Increased focus on meeting customers in their channel of choice: stores, contact centers, or digitally

New digital marketing experiences are driving acquisition results


Continually refresh our product offerings to capture additional share of wallet and win more households

Offer a differentiated and award-winning experience with our customer loyalty/rewards program

Develop best-in-class digital tools and refresh experiences to exceed customers’ expectations

Transform the

Customer Experience

Strengthen capabilities to continue to acquire more customers through digital channels

Grow companion cards as a way to win new cards, deepen relationships

Build infrastructure and evaluate additional co-brand opportunities to grow our portfolio

Expand and Deepen

Distribution

Use relationship data to pre-qualify more customers and deliver better value propositions and targeted offers

Enhance our credit models to offer cards to new-to-bank and select non-Wells Fargo customers


Credit Card: How we’ll execute

Auto Lending


Auto Lending: Our business model

Indirect Auto Finance ($57.8B in balances)

Loans originated by dealers and purchased by Wells Fargo (dealers as “distribution”)

Specializes in financing for used vehicles

Dealer relationships managed through 57 Regional Business Centers (RBCs)

14,000+ Dealer

Relationships

3.7MM Customer

Households

Treasury Management

Commercial Services

($10.3B in balances)

“Deliver the whole bank to the dealer”

Floorplan Financing

Real Estate

Wealth Management

Employee Benefits (1)

Treasury Management

Direct Auto ($2.8B in balances)

Sales through traditional bank channels (stores, website, inbound/outbound phone, direct mail)

Primarily used by customers for refinance

Period end balances as of 1Q16. (1) Includes payroll, retirement plans, and discounts on Wells Fargo products for dealership employees.


Indirect Auto Lending Originations ($ in billions)

Maintained disciplined growth in Auto Lending

$25.9

2011

$20.2

2015

$29.5

2013

Average FICO (2)

699 695 696

Maintained #1 position in used car lending; #2 overall auto lender (1)

Grew Indirect Auto portfolio to $57.8B in 1Q16, (from $39.6B in 4Q11); maintained credit discipline

Deepened relationships with our dealer customers:

- 9.6% of dealers had 20+ contracts monthly in 1Q16, up 24% YoY

- Since last Investor Day, added 3 new Regional Business Centers (RBCs), most recently in Texas and New Jersey

(1) Source: Autocount, as of Feb 2016 rolling 12 months. Based on annual findings, excludes leases. (2) Average FICO at point of origination for primary applicant.


Local Strategy

57 RBCs on the ground in communities, building long-tenured relationships with local dealers

Community-based origination teams close to local economic trends

Full spectrum approach allows us to capture more applications from each dealer relationship and supports our balanced approach to portfolio management

Integrated commercial model – differentiated from captives and other banks

Consistent Credit Approach

Deep expertise in financing pre-owned vehicles – every day transportation to and from work (65% of total volume is used vehicles)

(1)

Despite industry pressure, conservative approach to car valuations and loan terms – 84 month terms comprise <0.1% of our indirect auto portfolio

(1)

Stable market presence, consistent balance sheet funding through the cycle

Purchase-focused strategy (no leasing presence)

Our keys to success

(1) As of March 31, 2016.


Philadelphia RBC

54 team members

Manages 320 dealer relationships

6% market share (1)

$1.9B portfolio

$656MM in 2015 originations

Santa Rosa RBC

19 team members

Manages 99 dealer relationships

17% market share (1)

$508MM portfolio

$266MM in 2015 originations

Our 57 RBCs are central to our local strategy

Data as of December 31, 2015. (1) Market share FY 2015. Source: Autocount.


Deepening dealer relationships drives our growth

Greater engagement with dealer customers drives greater value through increased contract and funding volume, and conversion (efficiency of relationships)

Dealers with 20+ monthly funded contracts accounted for 21% of total application volume, and 29% of funding volume in 2015

2015 2011

45% 48%

10+ Funded

Total Applications up 1.4x

55% <10 Funded

52%

Indirect Auto Applications (by dealer segment)

2015

51%

49%

2014

29% Full

Spectrum

Not Full Spectrum 71%

The portfolios of dealers who underwrite contracts at each of our credit tiers (instead of focusing on a single band), are more profitable – these “full spectrum” dealer relationships have an ROA that is 22% higher than other dealers

Dealer Relationships (full spectrum vs. not full spectrum)


Average Products and Services per Commercial Relationship (2)

11.711.0

9.6

2015 2013 2011

Integrated Commercial Auto model is an advantage

Commercial Auto is a competitive advantage – captives and other finance companies do not offer a full suite of products

Dealers can have all of their financial needs met by Wells Fargo’s lines of business, with a single relationship manager

Significant synergies and benefits from retail and commercial relationships, including:

- Combined sales calls from retail and commercial managers

- Our top 150 commercial relationships generated 18% higher application conversion to loans than average indirect auto dealers (1)

(1) As of 4Q15. (2) As of end of period.


Access to credit for the everyday driver

Super-prime Prime Non-prime

% of total 2015 originations ($) (1) 27% 63% 10%

Borrower Characteristics

Annual income $104,894 $82,646 $62,550

Time at job (in years) 10.9 8.3 6.0

Time at residence (in years) 11.5 8.9 6.5

Collateral Characteristics

Vehicle age (in years) 2.7 3.8 4.9

Vehicle mileage 31,774 48,667 65,208

Loan to Value (2) 99.2% 117.0% 111.1%

Loan Structure

Amount financed $24,344 $21,381 $16,273

Terms (in months)

65.0 66.6 63.4

All data 12-month average for loans at originations, full year 2015. (1) Super-prime, Prime, and Non-prime categories based on Moody’s expected loss bands. (2) Loan to Value (LTV) is calculated as origination loan amount including add-ons divided by adjusted vehicle value (adjustments are made for manufacture rebates, year end model, and minimum sales price and book-sheet or wholesale value).


(1) Source: TransUnion Total Auto Peer Group Benchmarking; Vantage Score mapped to comparable FICOs.

Low delinquencies demonstrate portfolio quality

For 60+ DPD delinquency, WFC had among the lowest rates of delinquency in the industry both across the full portfolio and within the lowest credit band:

60+ DPD Rate (1)

All Vantage Scores

%60+

DPD

Rate

%60+

DPD

Rate

1.0

1.5

0.5

4Q14 2Q15 4Q15 2Q14 4Q13 4Q12 2Q13

3

4

5

2

1

6

4Q15 2Q15 4Q14 2Q14 4Q12 2Q13 4Q13

Non-Captive Peer Group 2

Captive Peer Group 1

Captive Peer Group 2

All Other Lenders Non-Captive Peer Group 1

Wells Fargo

60+ DPD Rate (1) Vantage <671 only (equivalent to FICO <640)

Other considerations:

In recent months, Manheim index has trended lower, driven by slowdown in post-recession pent-up demand and increasing number of off-lease vehicles entering the market in 2016

Continued decreases in used-car values could potentially drive increased loss severity compared to recent historic lows


Auto Lending: How we’ll execute

Enhance and simplify the Dealer experience through eContracting, dealer affinity and recognition programs, and core platform upgrades

Improve the end-customer experience through digitization, new mobile offerings, and increased transparency and financial education

Transform the

Customer Experience

Capitalize on off-lease used vehicle inventory through used-car expertise

Improve existing dealer engagement through focus on increasing full spectrum and 10+/20+ monthly contract relationships and deepening commercial relationships

Identify opportunities to open new RBCs based on market demand

Expand and Deepen

Distribution

Continue to enhance underwriting and credit models by incorporating behavioral insights and advanced analytical techniques

Leverage trusted source data to accelerate key processes (e.g., origination, fraud detection, collections)


Home Lending


Servicing for others and for our own portfolio ($1.65T servicing portfolio; 9MM households)

Originations

Originations through Retail and Correspondent channels ($213B total originations in 2015; 780,000 customers served)

Portfolio

Portfolio of high quality jumbo and home equity originations ($57B originations in 2015), as well as liquidating portfolios

Consistent Industry Leadership

(1):

- #1 Retail lender

- #1 Correspondent lender

- #1 Servicer

- #1 Jumbo lender

- #1 Lender to low-to-moderate income borrowers

Broad Retail Distribution to Serve Customers:

- Over 7,000 Distributed Home Mortgage Consultants (HMCs)

- Over 1,000 Centralized HMCs

- 500 stand-alone mortgage locations plus co-locations with Community Bank and Wealth/Advisors

Home Lending: Our business model

Servicing portfolio balance as of 4Q15. (1) Source: Inside Mortgage Finance, as of Dec 2015.

Servicing


A long-term commitment to the mortgage business

Our keys to success:

Committed, long-term perspective to the business

Experienced leadership team

Strong operational, credit, and interest rate risk management skills

Ability to lead at scale in origination and servicing

Ability to manage origination capacity through rate cycles

Disciplined sales and management culture

Leading retail origination franchise

Continuous innovation in technology and customer experience

We have been a top 5 lender and servicer for over 20 years, a claim no other lender can make, and profitable every year for 25 years

Source: Inside Mortgage Finance, as of Dec 2015.


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$200

$250

WFC Chase Quicken BofA US Bank PennyMac Freedom Citi Flagstar loanDepot

Retail Purchase Retail Refinance Correspondent Wholesale

12.0%

3.3%

6.6%

1.7% 2.0%

4.5%

1.6% 2.1%

2.8% 3.0%

28%

49%

72%

51%

1Q13 1Q14 1Q15 1Q16

Fannie Mae/Freddie Mac Sellers by Type

#1 Originator, balanced across channels

Top Mortgage Lenders in 2015

($ in billions, % market share)

Source: Inside Mortgage Finance, FY 2015; excludes home equity; Internal analysis.

Depositories Non-banks

Consistent leadership in Retail Purchase


Our origination mix reflects our strategic focus

(1) Sources: Inside Mortgage Finance FY 2015 for Industry (Home Equity includes newly originated HELOC commitments); Internal data and analysis for WFHL (Home Equity includes only funded amount on new originations). GSE = Government-Sponsored Enterprise. VA = U.S. Department of Veteran Affairs. RD = Rural Development. FHA = Federal Housing Administration.

WFHL Correspondent

(40% of Originations)

Total Industry

2015 Origination Market (1)

WFHL Retail

(60% of Originations)

23%

17%

1%

17%

10% 3% 3%

57%

40%

50%

9%

13%

46%

6% 5%

Home Equity

Jumbo

Subprime & Alt-A

Fannie Mae/ Freddie Mac

(GSE)

VA/RD

FHA


Continuing to add high quality assets to our portfolio

0%

5%

10%

15%

20%

25%

30%

$50

$100

$150

$200

$250

$300

$350

2009 2010 2011 2012 2013 2014 2015 1Q16

En

din

g B

ala

nce

Pre-1/1/09 Post-1/1/09 1-4 Res RE % of WFC Assets (right axis)

Post-1/1/09 Key Attributes (2)

Average FICO 748

Average LTV 61%

1st Lien % 94%

Full Documentation

Pre-1/1/09 Key Attributes (2)

Average FICO 679

Average LTV 71%

1st Lien % 70%

Includes Reduced Documentation

(1) Includes home equity (non-PCI and PCI), jumbo, Pick-a-Pay, conforming, and government insured/guaranteed loans. (2) As of 03/31/16.

Only 367 (or 0.14% of funded balances) of the

269,000+ jumbo loans funded since

February 2009 have ever been 60+ days past due

WFC Consumer Real Estate Portfolio Loans (1)

($ in billions)


Quicken

PHH

Walter Invest.

Ocwen

Citi

US Bank

Nationstar

BofA

Chase

Wells Fargo

#1 Servicer with $1.65T portfolio and 9MM households

Servicing $UPB (Market Share) (1)

($ in billions)

19%

32%

39%

44%

60%

51%

38%

1997 2000 2003 2006 2009 2012 2015

Top 5 Servicer Share

(1) Source: Inside Mortgage Finance, as of Dec 31, 2015. UPB = Unpaid principal balance. Wells Fargo includes Home Equity loans and lines.

$1,649 (16.5%)

$910 (9.1%)

$565 (5.6%)

$424 (4.2%)

$296 (3.0%)

$291 (2.9%)

$270 (2.7%)

$247 (2.5%)

$224 (2.2%)

$196 (2.0%)

Serviced for Others Owned


Delinquency and foreclosure rates at pre-crisis levels

4.45%

5.38%

7.07%

5.83% 5.63% 4.94% 4.87% 4.72%

4.27%

0.88%

1.41%

1.89%

2.19% 2.33%

2.10% 1.53%

1.07%

0.92%

5.33%

6.79%

8.96%

8.02% 7.96%

7.04%

6.40%

5.79%

5.19%

2007 2008 2009 2010 2011 2012 2013 2014 2015

Home Lending Servicing Full-Time Equivalents (FTE):

20% in performing servicing

80% in default servicing

− FTE down ~17% since 4Q14 (as of 03/31/16)

Wells Fargo Home Lending Servicing Portfolio Delinquency and Foreclosure Rates

Foreclosure

Delinquency

Source: Inside Mortgage Finance.


What has transpired since our last Investor Day?

Continued to take steps to de-risk the business

- Exited higher risk business segments (Joint Ventures, Marketing Services Agreements)

- Reduced non-performing assets and delinquency levels

- Began managing through Home Equity “End of Draw”

- Reduced our FHA retail share from 9% (2013) to 3% (2015)

Put significant financial crisis exposures behind us and implemented major regulatory changes, including:

- Southern District of New York / Department of Justice FHA

- National Servicing Standards

- TILA/RESPA Integrated Disclosures (TRID) Rule; Consumer Financial Protection Bureau (CFPB) Servicing Rules

- Ability-to-Repay / Qualified Mortgage (ATR/QM) Rule

TILA = Truth in Lending Act. RESPA = Real Estate Settlement Procedures Act.


Emerging Trends How we’re positioning

Leveraging community-based, diverse sales force to expand

outreach; developing and deploying new policies and programs to

enhance access for growth segments

Demographic trends point to growth in new household formation,

homeownership rates, and increasing diversity of new homeowners

Consumers’ homebuying and lender selection process shifting from

referral-driven to self-initiated/researched

Customer expectations for digital capabilities raised by banking and everyday transactional experiences

Using data and analytics to anticipate customer needs and provide robust

early stage pre-approvals

Streamlining and reinventing the lending process (e.g., source data for

income and assets, document exchange and storage)

Wells Fargo and the industry are at an inflection point

We are moving from an era defined by the aftermath of the financial crisis to the “Age of the Consumer”


9 Million Competitor mortgage

15 Million

Non-homeowners

8 Million Do not have a

mortgage

26 Million Home-owning households

41 Million WFC consumer households

Recapture opportunity

First-time homebuyer opportunity

Other WFC consumer households

Lender switch opportunity

9 Million WFC mortgage

Servicing households

2nd Home and equity opportunity

We have significant opportunity within WFC's base

In the current environment, each 1% increase of WFC customer share equates to an additional ~$7B in originations per year


Using digital to transform the way we serve customers

Current Customer Engagement Customer Benefits WF Benefits

yourLoanTrackerSM experience

2MM+ customer sessions per month

eSign Consent

eDelivery (62% of customers access yourLoanTrackerSM and view documents within 48 hours)

Access, real-time updates, alerts via mobile

Deployed across production channels

Customers choose how they are served

Convenience (mobile or online)

Simpler, easier, and faster document submission (e.g., with mobile camera)

Increased clarity and transparency through eStatus updates

Faster closings

Highest satisfaction ratings are from customers who use yourLoanTrackerSM and work with an HMC

Reduced cycle times by an average of 5 days

Improved productivity

Lower costs

Improved compliance and auditability

Fully imaged-based

1.4MM eDelivered disclosures to date

2.2MM customer document uploads

~40MM document images per month

67% of prior-to-close documents available on yourLoanTrackerSM

(targeting 100% by the end of 2016)

Our strategy seamlessly integrates the best of both worlds: digital capabilities with personal guidance from trusted team members

The WFC brand, customer insights, and technology platforms afford us unique strategic advantages – our mortgage site has ~1.5MM unique monthly visitors

Mid-2015, we launched yourLoanTrackerSM – an online/mobile application experience with our integrated originations platform that delivers key capabilities:


Home Lending: How we’ll execute

Make the origination (including pre-approval) and servicing processes simpler, easier, and faster

Provide personalized education and trusted guidance to help customers before, during, and after their home purchase or refinance

Be known as a leader in access to credit and sustainable homeownership, both nationally and in local communities

Transform the

Customer Experience

Further build out digital/online/mobile capabilities to expand reach

Expand distribution through Wells Fargo referral sources

Drive targeted growth in our distributed and centralized sales teams

Expand and Deepen

Distribution

Build digital capabilities to leverage source data in originations and servicing, while improving the customer experience and efficiencies in our internal processes

Leverage data to offer pre-approvals to existing WFC customers to better serve their future mortgage needs



Key opportunities

Credit Card

Win new customers and increase penetration of existing WFC households (deposit and non-deposit)

Deepen engagement and wallet share through companion card offers, strengthened value propositions, and new digital capabilities

Maximize and expand distribution in both physical and digital channels

Auto Lending

Refine our local market strategy to win more business from existing dealer relationships

Capitalize on emerging market opportunities (e.g., off-lease used vehicle inventory) by leveraging our scale, relationships, and expertise

Maintain our consistent approach to credit risk

Home Lending

Capture the “next” mortgage of existing Home Lending customers and win new home lending business from other WFC customers

Serve the home lending needs of new and emerging segments (e.g., first time home buyers, diverse owners)

Transform the end-to-end lending experience with new digital and mobile capabilities

Biographies


Avid Modjtabai is responsible for Wells Fargo’s Consumer Lending Group (CLG) and Operations Group, and leads approximately 65,000 team members.

The Consumer Lending Group serves 27 million households and helps consumers with their borrowing needs—from everyday goods and services, to major purchases, to achieving and sustaining homeownership. CLG includes Home Lending, Dealer Services, Direct Auto Finance, Consumer Credit Cards, Education Financial Services, Personal Lines and Loans, and Retail Services.

Wells Fargo’s Operations Group manages core bank functions across Wells Fargo, including check processing, statement processing, ATM operations, ACH and wires, fraud disputes, cash vaults, lockbox, safe-deposit processing, armored logistics, accounting support for retail stores, and deposit document retention.

A 23-year veteran of Wells Fargo, Modjtabai has served in a number of leadership roles. Prior to leading CLG and Operations, she was the head of the Technology and Operations Group and Chief Information Officer. She also served as head of Human Resources and led the Internet Services Group. Her early roles at the company included management positions in Consumer Deposits and the Investment Group, following work at McKinsey & Company, where she focused on strategy initiatives in financial services.

She earned a Bachelor’s degree in industrial engineering from Stanford University and an MBA in finance from Columbia University.

Avid Modjtabai Senior Executive Vice President,

Consumer Lending and Operations


Shelley Freeman is head of Wells Fargo’s Consumer Credit Solutions (CCS), a group focused on providing consumers the financing they need to achieve their financial goals and dreams. The group includes direct auto lending, consumer credit card (general purpose, co-brand, and private label), personal lines and loans, and Wells Fargo’s industry leading private student lending business. Shelley also leads the group’s collections and servicing, marketing and strategy functions.

Prior to taking the helm of Consumer Credit Solutions, Shelley served as the Community Bank’s Affluent Segment and Customer Experience Executive, overseeing all aspects of customer service in Wells Fargo’s banking stores and launching the company-wide effort to drive the partnership between the Community Bank and Wealth and Investment Management businesses.

Shelley also served as lead region president for Wells Fargo’s Florida Community Bank, regional president of Wells Fargo’s Los Angeles Metro Community Bank, and head of Wells Fargo’s Investment Internet Services. She joined Wells Fargo in 1996 to lead its bank brokerage business.

Shelley serves on the board of directors and executive committee for the Point Foundation and as a member of the board for the Jewish Federation of Los Angeles. She has been honored with the Point Passion Award (2011), the Jewish Vocational Service Leadership Award (2009), and the L.A. Community Development Corporation Community Responsibility Award (2009). A graduate of Wilkes University, she holds Series 7, 24 and 66 licenses.

Shelley Freeman Executive Vice President,

Consumer Credit Solutions


Dawn Martin Harp Executive Vice President,

Wells Fargo Dealer Services

Dawn Martin Harp is the head of Wells Fargo Dealer Services, the nation’s second largest auto finance lender, offering an integrated financial solution for the auto industry. She is responsible for the strategy, growth, and profitability of Indirect Auto Finance and Commercial Services. Wells Fargo Dealer Services has relationships with over 14,000 automobile dealers and serves 3.7 million households. Dawn is a member of the Wells Fargo management committee.

Previously, Dawn served as Chief Operating Officer for Wells Fargo Dealer Services from 2006 to 2011. From 1999 to 2006, Dawn served as Chief Information Officer with WFS Financial and was the Director of Network Computing with WFS Financial from 1997 to 1999. Wachovia acquired WFS Financial in 2006 and then merged with Wells Fargo in 2008.

Dawn spent 10 years as System Integration Officer with American Savings Bank. She also held management positions with Imperial Automation, On Line Computer Systems, and The Coding Factory. She has 30 years of experience in auto finance and technology.

She currently serves as a board member of the American Financial Services Association and is Vice Chair of the organization’s Auto Finance Committee and a founding member of the Women’s Leadership Council. In addition, she is a member of the Consumer Lending Group Diversity and Inclusion Leadership Committee.


Franklin Codel Executive Vice President,

Home Lending

Franklin Codel serves as head of Wells Fargo Home Lending. Wells Fargo Home Lending is the nation’s leading combined mortgage and home equity lender and servicer, funding nearly one of every eight loans and servicing one of every six loans in the country.

In his role, Codel leads a team of 40,000 mortgage professionals in sales, operations, servicing, capital markets, portfolio management, and related business, risk management, and supporting functions. Codel joined Wells Fargo in 1993 and previously served as head of Mortgage Production (2011-2015) and as head of Mortgage Finance (2004-2011).

Codel earned a Bachelor’s degree in engineering science from Harvard University in 1986. In 1989, he received his M.B.A. in Finance from the University of Texas at Austin. He currently represents Wells Fargo Home Lending on the board of the Mortgage Bankers Association and the Housing Policy Council of the Financial Services Roundtable. He also currently serves as a board member for the Des Moines Community Foundation and the United Way of Central Iowa. Codel and his family live in West Des Moines, Iowa.

Consumer Lending Group - Wells Fargo Lending Group Avid Modjtabai, Senior EVP, Consumer Lending and...

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