Q4 2019 Earnings Call

January 14, 2020

After you'd state your name please press the pound.

Regina and I'll be your conference operator today.

At this time I would like to welcome everyone to the Wells Fargo fourth quarter earnings Conference call.

All lines have been placed on mute to prevent any background.

Yeah.

After the speaker's remarks, there will be a question and answer session.

If you would like to ask a question during this time.

Simply press star and the number one on your telephone keypad.

If you would like to withdraw your question press the pound key.

I would now like turn the call over to John Campbell Director of Investor Relations.

Are you may begin the conference.

Yes.

Thank you Regina.

Good morning, everyone.

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Thank you for joining our call today, where our CEO and president.

It really sharp.

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And our CFO John Shrewsberry.

Okay.

I will discuss.

Fourth quarter results and answer your.

Questions.

And this call is being recorded.

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Before we get started I would like to remind you that our fourth quarter earnings release in quarterly supplement are available on our website at Wells Fargo Dotcom.

I'd also like to caution you that we may make.

Forward looking.

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During today's call.

Thanks.

All that are subject to.

Okay and.

Yeah.

[laughter].

Factors that may cause actual results to differ materially from expectations are detailed in our SEC.

Thanks.

Including the form 8-K filed today.

Taking our earnings release in quarterly supply.

But.

Information about any non-GAAP financial measures.

Yes.

Wins, including a reconciliation of those measures to GAAP.

Sure.

And also be found in our SEC.

Thanks.

In the earnings release.

And in the quarterly settlement available on our.

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Yeah.

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Yes.

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I will now turn the call over.

Okay.

<unk>.

Thank you John .

Good morning, everyone.

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Good to be with you on my first earnings.

This.

This call.

As I go through my remarks.

I'd.

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Okay.

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You remember.

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With that I, just joined Wells Fargo less than three months ago.

It's a busy time, so I've been working to get to know the company.

There are opportunities and challenges.

And I've learned a lot.

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But as I just.

So my.

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And leaves.

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Is headed.

So early days.

This is.

I don't have all the answer is yes.

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But I will share more as we learn more.

Right.

Okay and as the year.

Yes.

John is going to cover the quarter in detail in a few.

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I will answer your.

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And you can see that a series of legacy issues.

Meaningfully impacted our results.

In the quarter.

Sure.

But even excluding these significant items.

Our results are not as strong as we.

Research.

Just.

With the strength.

The franchise.

Kevin.

Since.

Certainly.

Yeah.

In some areas of.

Yes.

So the opportunity to improve our results.

The significant.

And.

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Let me first share some of my observations and.

Before turning it over to John .

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It was honored.

Chosen to lead Wells Fargo.

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Because I believe this is an extraordinary.

Yes.

The plays an important role.

In this country.

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We came out of the financial crisis.

Is the most valuable and.

Adjusted Bank in the.

Yes.

So as you know.

So we made some terrible.

Thanks.

And have not.

Effectively.

For.

Thanks.

These circumstances.

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As of led.

To financial.

Purpose.

So we have one of the.

Viewable.

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So essential services franchise.

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Yeah.

As of the World.

Well.

Yes.

Please.

So I want to do what is necessary.

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Well again.

One of the most.

Successful.

Thanks.

Next in the.

Yes.

So fully capture this opportunity.

We must.

Strong.

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And move with an extreme.

Yeah.

The.

Currency.

Thank you.

To remediate.

Our historical issue.

Yes.

We still.

We have much more work to do to put these issues behind us.

But.

And our future depends.

So just doing the.

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So we can regain.

With all stakeholders.

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Including our.

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As long.

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As well as the broader.

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Ultimately.

For actions will dictate.

[laughter].

When that trust is.

Completely.

And.

It's not our.

Birds.

Given the importance of these.

Yes, I want to say a few more words about our situation.

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And particularly about the.

And the way of our.

Yes.

And importantly.

The different.

Beach.

Taking.

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Dress these.

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Providing an honest assessment.

Some clear priorities.

As Chris.

Yes.

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Kind of given a clear message.

Inside the <unk>.

I'd.

That we've not yet.

Okay.

At our own expectations.

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For the expectations of others.

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We must do what's necessary.

These.

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She is behind.

Yes.

Our ability to maximize the value of this great franchise.

Yes.

Dependent on us running the company.

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With the highest standards of.

Excellent and integrity.

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Beyond what we've done today.

Hey.

We are appropriately highly regulated.

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And while we.

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Till regulatory expectations.

Since.

And we recognize.

What we.

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And what regulators.

We are not.

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We are responsible for our.

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And they're responsible for ensuring.

And.

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That's a.

Since.

With early.

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And.

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Yes, it's our job to run the company.

Such that we.

For their.

Okay and those of the American public.

[laughter].

In other countries, where we operate.

Right.

Great.

This was earned in the past.

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And we will earn it.

As such.

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Since joining.

Concerning almost.

Yeah.

Most all of my time.

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I will say.

Several.

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But you should note there's still much work to do.

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Many have focused on the fed consent.

Right.

Yeah, but remember we have.

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The public.

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Enforcement.

Yes.

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Fire.

Sniffing.

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We saw.

Right.

Segment.

Yeah.

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While I certainly wish more of this work was behind.

Yes.

Required of us.

Fiscal year.

Sure.

Okay, and we will get it done.

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It's work that other banks have done already.

There is.

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Clear roadmap.

After what we need to.

Yes.

We're making significant changes.

As to our management.

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Structure.

Okay and processes to accomplish our.

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Work.

I will make us more.

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But like any other problem recognition.

And the importance in severity is.

As necessary first.

[laughter].

But this.

Yeah, Hi itself is inadequate.

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We will take whatever actions are.

Sorry.

As our future success depends on resolving these issues.

Yes.

So we will.

Accordingly.

Typically.

The management team.

He'd be judged and how.

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In held accountable.

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Resolving these issues.

Folks.

So you will ensure we have the right.

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The people in place.

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Both resolve these.

Please be the.

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Okay.

Yeah.

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The important Lee I want to acknowledge.

We have so many wonderful people at wells Fargo that have done an amazing job serving our.

I had some customers.

And in the face of a diversity for several years now.

Oh.

They've been through so much.

I have helped us.

The same such a great franchise.

Yes.

So I do want to say thank you.

[noise] them.

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All they've.

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On the warmed and.

Support I've been greeted with.

[laughter].

As I've discussed our shortcomings and work in front of.

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So as a great deal about the character of many of the.

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Yes, they understand.

Or.

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And progress makes their.

Okay.

Our more.

Yeah.

And they're looking to management.

To more to move the.

The.

Sport.

To get the work done.

[laughter].

We must.

Sure that we have the right.

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To that end we've made.

Important changes.

Senior.

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The complement.

The.

Scientists here at.

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Hi, Scott Powell joined Us as Chief operating.

Officer.

When I arrived at the company.

Many on the C.

The team.

In two to.

Correct.

So that they believed we needed stronger.

Consoles.

After.

Just several weeks.

The company.

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Yeah.

Turning to quickly.

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Got it will lead a transformation across the company.

Hi quality.

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And clear accountability.

Okay and operational excellence.

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Since our of our.

Yeah.

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Sure Bill Daily.

Quite has had a.

Joining us.

Yes.

She has a strong.

Experienced.

Because it brings.

Yes.

Sector.

Yes in the public.

Sorry.

So that we in business.

So do not generally.

Uh huh.

That are critical for us as we make.

Since.

Hi, Alan Parker.

[laughter] serve both.

General counsel and in terms CEO .

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Announced.

It's too will be leaving wells in March.

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Sure well into a search for the new general.

Oh.

Okay and excited about.

The quality.

Okay.

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I've read Moshe Baie has announced.

Yes, she will be retiring after 26 years at.

This.

Yes for go in March.

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We will be announcing a new.

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In a new.

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Yeah organizational structure.

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For these activities.

These stores.

Absolutely.

Great Fisher has also joined us to run our card and merchant.

This is this.

Our card business isn't.

An important to our franchise and we have an opportunity.

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I think it even more significant.

Yeah.

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Ray is.

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And part and merchant services.

The.

Who brings.

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Okay, and a fresh perspective to our.

Business.

These changes are in addition to many other senior people.

Who have joined the company.

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Over the past few years.

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As an important roles.

As such as.

It's of risk.

HR.

Our internal.

[laughter].

Okay and.

Yeah.

These new additions.

Strong talent.

Okay.

Anthony.

Okay, and I will continue to look at the structure.

Sure.

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We are.

Yes position for success.

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Yes, we need and we will have the best.

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Okay and strong leadership.

The.

Okay.

But we're also introducing a new set.

Disciplines, and how we run the company.

Yeah.

Which I'm confident we will improve our.

Yes.

Once these changes are not only structural and procedural.

But also.

Well.

To that point.

Parts of our culture our wonderful.

Well.

And it would take.

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People, who work here love.

Yeah.

But.

It really is like a second.

Okay.

Yeah, we focus on.

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No not on the individual.

Okay.

People want to be.

Accessible and do what's right.

It.

So we recognize.

We fund.

Thats all.

Well.

But our lack of progress.

Yes under.

Yes.

And point to.

Thanks.

Going forward.

We will operate as one company.

Not a series of decentralized business.

Yes.

We will continue.

To foster a culture.

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Partnership.

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But we will move.

Just need for.

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This and.

Open.

Yeah.

Yes discussions.

Yes.

So where we emerge with.

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We will have a different level of management.

Within than we've had in the past.

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Yes, and will value and.

Hi quality.

Yes.

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There will be clear responsibility and accountability.

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We will judge ourselves based upon our.

It's not our words.

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And we will ultimately judge ourselves.

It is.

Just.

Yes as we.

With that we should be the.

Just.

As we've begun to implement this new culture.

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Overwhelmingly.

Reported.

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If I understand.

It's different.

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Intend is a significant change for.

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We will be respectful of our.

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And of those who have built.

This franchise.

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As which.

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So many still of the company today.

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But we must.

Just.

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Move.

I am confident these changes will be highly.

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Okay.

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Though I understand.

I would like time frames around.

Okay.

And I cannot provide that today.

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Our job is to do.

The work that's.

Right.

Regulators and other stakeholders will determine.

[laughter].

It will determine when.

It's on to their.

<unk>.

Hi, My experience is that our regulators are clear.

Yeah.

Jack.

But.

Uh huh.

The work is on us at.

Right.

Let me now turn to our medium and longer term opportunities.

This is.

Our franchises our world class.

Center in the sweet spot of providing necessary financial.

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As for consumers.

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Small businesses.

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Okay, and middle market and large corporate.

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And importantly.

We play an important role.

Yes.

Okay, and helping our customers.

And cost.

Yes.

As well as being.

An important.

Enabler.

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US economic growth.

Okay.

Well I.

While I've spoken at length of our.

Thanks.

And our.

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The underlying franchise itself.

As valuable as.

And our opportunities.

Yes.

These are greater than.

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The success of our business model.

Has proven.

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Assuming we run the company with the appropriate.

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Okay and work as one company with the goal of delivery.

All.

Good day.

Source.

So all of our business.

On community banking.

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Well the investment management and wholesale.

Okay.

Of the breadth and scale.

So it gives us.

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Significant.

Completive advantage.

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Okay and allow us to deliver truly.

Good products.

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<unk> expenses.

Yes.

As for our customers and.

Yes.

Our opportunity to use technology.

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Turning to drive both.

Okay and new solutions.

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We will only grow in.

Our.

So.

The vigilant.

To selectively.

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Our the envy of.

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While our resources and attention today are appropriately preoccupied with historical.

Yes.

As we move forward.

Third we will be in a position to leverage our unique.

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Okay and generate stronger.

Sure.

Actual results.

Circles.

And just to be clear.

We are well aware that our expense levels are significantly too high.

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Part of this is driven by significant project.

Makes sense.

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Hi historical.

It's.

Heart is due to the necessary investments in technology.

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Part is due to significant.

The concern.

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Is that exist across the organization.

Yeah, but theres no reason why we shouldn't have.

Best in class.

Okay.

With these businesses.

At this scale.

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Okay and that ultimately will be our goal.

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Oil and though we've had pockets of strong.

Yes.

And we're also well aware that our rate of customer and revenue growth is too low.

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Given what we've been through.

This isn't surprising.

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There are certainly an opportunity cost due to the.

Okay.

Management time and resources.

As have not been is focused on growth as they otherwise would have been.

And we have an opportunity to think differently.

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The different level of.

Yeah, but how to grow the.

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It's all of this points to great.

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So again.

<unk>.

I know you will want to know time frames and.

Yes.

But please understand.

And that.

It's too early after less than.

Three.

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At the.

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That said.

We've just begun that process.

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So rethink our.

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For 2020 and beyond.

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In a different level of detail.

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Well the opportunities for improvement are clear at the macro level.

We need business by business.

This.

Yes.

Accordingly.

We've just begun.

So what are really.

Both budget and broader business reviews.

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As we.

Look in detail at our.

Okay.

And we will be.

Reviewing.

Tim businesses in detail as well.

Okay.

As all of our enterprise function.

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So as you can imagine.

And technology is an important.

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So this isn't merely a review of the numbers.

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But one where we use.

The next.

Just.

From a.

Just.

Strategy.

Potential.

Buttons.

We are asking each.

Dennis.

Yeah the show.

Okay.

To class.

Efficiency looks.

I think.

And.

Our.

South achieve it.

Yes.

As we were viewing revenue and returned.

Once as well.

And what a.

The best.

Like for as well.

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Yes, we're discussing our competitors large and small.

Okay, and we're thinking through our unique.

Yeah.

And our special franchise.

These are analytical and.

So I don't think if.

And.

Lastly.

Just.

The company.

In some time.

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Given.

It's.

Sure.

The output of this.

Ill provide.

Yes.

Apps not only improve our.

Performance within.

Each.

Yes.

But also position us to understand our opportunities.

As a.

Correct.

The.

Okay.

Yes.

And prioritize.

Accordingly.

Quickly.

First and foremost.

This does include.

That's correct.

Clarity around ensuring.

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We're seeing.

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You are currently on historical.

Futures.

It's very early in our.

Yes.

Yes, I will say that every session. Thus far has reinforced.

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First at our.

These are.

We.

Simple.

We intend to be.

Thoughtful and.

The.

Due to.

This approach.

And given our.

It will take time.

Much of this year.

Okay.

Compute our.

But in many.

In the.

We will devote all necessary resources.

As a.

Risk control.

Yes.

And whats necessary.

We will be as diligent is ever to.

Deficiencies and control expenses.

Yes.

And we will begin to work through the business opportunities.

We havent.

None of.

Yes.

I'm confident in our ability to realize our potential.

Okay.

One that again puts us at the top of the.

I did.

Institutional.

Just.

There are more efficient organization.

With them.

Okay and higher revenue.

Both.

Okay.

While there is much to do and I know.

The path to success will be bumpy.

Okay.

I'm optimistic about our future.

Right.

Yeah and excited.

To be to.

So many great people.

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And.

Strong.

Sure.

He is doing it incredibly.

Important.

Burke.

Over to.

Yes.

Thanks, Charlie.

Good morning, everyone.

Okay.

Right.

We had a number of significant items in the fourth quarter that impacted our results, which we highlighted on page.

Issue of our supply.

Sure.

We had $1.9 billion of operating losses.

Including $1.5 billion of litigation accruals.

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For a variety of matters, including previously.

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Retail sales.

Yes.

So litigation accruals reduced EPS.

Hi, 33 cents.

As for share in the majority of them or not.

<unk>.

Michael.

We had a $362 million gain from the sale of our commercial.

List.

Richard.

This.

Stuart.

Sure.

We had $166 million.

Expenses related to.

This dziedzic reassessment.

Technology.

Yes.

Next and wealth and.

Yes.

Vision.

We had a $153 million.

Yes.

Toward or decrease in low income housing.

Okay.

Yes.

Reflecting.

The timing changes.

Yes.

And if it.

Action.

We had a $134 million gain.

Yeah and loan sales.

Yes.

Dominantly junior lien.

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As and we had a $125 million loan.

Yes reserve.

Please.

While our financial results in the.

Fourth quarter were impacted by these items as we show and.

We continued to.

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This momentum.

Yes on customer.

Equity, which I'll highlight.

Right.

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Oh.

On page four we summarize.

The full year results.

Compared with 2018.

[laughter].

<unk> revenue declined.

Yes.

4% growth.

Non interest.

Hello.

Yes.

More than.

Offset by.

Yes.

So.

Okay.

Net.

Trust income driven by lower.

Appreciate.

Yes.

Our expenses remained too high and increased 4% from a year ago driven by higher personnel.

Make sense, which.

Okay.

At $981 million of higher deferred comp.

Thanks.

Yeah.

She has been l.

Well.

Okay and higher operating.

Yes.

Loans grew 1% and deposits.

Three.

Yes.

The year ago.

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Our net charge off rate remained near historic lows and we returned a total.

$30 billion to shareholders.

Between.

Hi through common stock dividends and net share.

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As we've seen common shares.

Pricing.

By 10%.

Okay.

I'll be highlighting most of the balance sheet drivers on.

Hi throughout the call.

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But I will note here that we were $20 billion below the.

Yes.

The.

Yeah.

Fourth quarter.

Yeah.

Turning to page six I'll be covering the.

Implement.

Okay.

The call, but I want to highlight that our effective income tax rate.

The.

It was 19.1% in.

The quarter, which included a net.

Income.

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As.

A few hundred.

Good Commission dollars.

Dominantly.

Good to non.

Good.

Ductile.

Certain litigation.

Yeah.

Yes.

Turning to page seven.

Average loans increased.

Linked quarter and year over year.

With growth in both.

Good.

Both.

Consumer and commercial.

Yes.

Period end loans.

$9.2 billion.

A year ago, even as we sold or move to help.

For sale.

Sure so.

The total of five.

No $1 billion.

Relos.

Okay.

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I will highlight the drivers of the.

Third quarter growth in loans starting on page.

Yes.

Okay.

Commercial loans increased.

$3.4 billion from the.

Third quarter driven by.

He said.

But.

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Hi.

<unk>.

Both.

Corporate.

And in.

Yes.

Thank you.

As we show in page.

Each 10 consumer loans.

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Grew $4 billion from.

The.

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Yes.

Sure.

The first mortgage loan portfolio.

$3.2 billion.

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But.

Third quarter driven by.

Okay.

$17.8 billion have held for.

I guess when.

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And the purchase.

Yeah.

Billion dollars of loans.

It.

Sure.

As a positive.

Yes.

The in service.

Got it.

Yes.

Thanks.

Yes.

We're now substantially done with our cleanup call.

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The 2000.

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Third.

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And junior lien mortgage loans were down $1.3 billion from the.

Third quarter.

As pay down.

Okay.

We continued to outpace.

Who.

Yes.

Credit card loans.

This increase.

Yeah.

Just $1.4 billion.

Hey merely due.

Sure.

Tenacity.

Yeah.

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Our auto portfolio continued to grow.

With bonuses.

Up $1.1 billion from.

Yes.

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Our originations were down 1%.

Third quarter on seasonality.

Okay.

But.

45% from a year ago.

Reflecting a renewed emphasis.

Just on growing auto.

Following the restructuring.

Yes.

Turning to deposits on page 11.

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Average deposit.

Yes.

These 2% from the.

Third quarter.

Great.

Okay, and 4% from year ago.

Okay.

Our average deposit cost of 62 basis.

<unk> expense increased seven.

Just.

We are ago, reflecting promotional pricing.

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In retail banking for new deposits earlier in the year.

Sure.

Okay, and the mix shift to higher.

I suppose.

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Higher.

Yes.

Products across our consumer and commercial.

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Yes.

Our average deposit.

Slide nine.

This.

Yes.

For the third.

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Third quarter, reflecting lower rates in wholesale banking and win.

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We did not run any broad based retail banking marketing promotions for.

During the.

Third quarter.

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However, retail banking deposits.

It's increased two basis.

Yes.

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Yeah.

Sure.

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Due to.

Continued impact.

Back to previous promotional.

And deposit gathering.

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And strategies over.

Over the.

Sure.

Last year when interest rates.

Rates higher.

Sure.

While we continue to offer our customers competitive promotional savings.

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Since the rates within our branches.

Yes.

As retail banking deposits.

Our.

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Executed.

To start to decline in the first.

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First quarter.

Great.

Yes as higher promotional.

Great.

Six.

Yes, Sir.

On page 12, we provide details on period end.

Which were 3% from a year ago and.

Yes.

Thanks.

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The.

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<unk> wholesale banking deposits.

Yes.

$50.9 billion.

<unk>.

During the third.

Third quarter driven by seasonality.

Yeah.

And growth in existing and new.

Faster.

Yes.

Consumer and small business.

This being.

This increase.

Yeah.

$16 billion.

At the border.

Sure.

Yeah, driven by higher retail banking deposits.

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And clean.

Both in high yield saved.

And.

It was during.

Christine.

Wealth and investment management.

What does.

Through.

It.

As.

Yes.

Which.

The allocation.

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In the past.

Cash into higher yielding liquid.

Sure.

Moderated during.

Remember.

These increases were partially.

Offset by lower corporate Treasury and mortgage.

Sure.

<unk>.

Yes.

Net interest income declined $425 million from the.

Third quarter, primarily due to balance sheet repricing driven by the impact.

Okay.

Of lower.

Yeah.

Okay.

And $104 million of lower.

Hedge ineffectiveness accounting results.

As well as $74 million of higher.

Scheme amortization.

Yes.

Due to higher prepayment.

It's.

We had 400.

$5 million of MBS.

Okay.

Premium amortization in the.

Fourth quarter.

<unk>.

Okay and based on the current interest rate.

And.

We.

Right.

Act MBS premium amortization to be relatively stable in the first.

First quarter, and then start to.

Sure.

Equal.

Although we.

Good to be higher in.

Full year 2020 compared.

With full year 20.

18.

As.

Adjusted net interest income was down.

Thanks.

Thanks, Chad.

2019.

Yeah.

Compared.

Yeah.

18.

<unk>.

Yeah.

We continue to expect net interest income to.

Yes.

Decline in the low to mid single.

Between.

However, as always net.

Trust income will be influenced.

Thats a number of.

Please.

Yes.

Just including loan and deposit.

A quick.

Thanks.

Pricing.

Thanks.

Sure.

As the level of interest.

Two.

Yes, it's.

It's in the shape of the.

Okay.

Turning to page 14, non interest income declined.

And $1.7 billion from.

Yes.

Yeah.

[noise], which included.

Yeah.

$1.1 billion gained from.

The sale of our.

Institutional retirement and.

Just.

<unk>.

Let me highlight a few of the other.

Linked quarter.

Which was.

We completed the sale of you still.

Secured on October Onest.

<unk>.

Jolting in a 300.

52 billion dollar gain that was reflected in other noninterest.

Fixed.

Okay.

This sale reduced commercial real estate brokerage.

As I one.

This.

Correct.

It's the $8 million.

There are.

With.

Third quarter.

Great.

Yeah, we provide a breakout of the revenue indirect.

<unk> expense related to.

<unk>.

This.

<unk>.

This page.

Just two seven in the appendix.

Twice.

We're assessing.

All of our businesses.

As part of the reviews were having since Charlie joined.

As for grow and there may be additional pruning.

Forward.

As we.

Correct.

Its mortgage banking revenue.

These $217 million from the.

[laughter].

Third quarter.

Our servicing income was up 100.

Six $5 million.

Yeah.

We do a negative MSR valuation adjustment in.

<unk>.

Third quarter.

Great.

Reflecting higher prepayment.

Yes.

Net gains on mortgage originations.

This increase.

200.

$6 million.

Features.

Due to a $4 billion.

<unk>.

In residential held for sale mortgage loan.

Yes.

In some other production merch margin.

It was.

At 100.

<unk>.

Between base.

Sorry.

<unk>.

Net gains on mortgage loan originations also.

First higher gains associated.

Good.

Exercising service or cleanup calls in the.

Fourth quarter.

<unk>.

Two weeks.

First mortgage.

[laughter].

The lower in the first.

First quarter due to normal.

We'll see.

Our net gains from equity Securities were down 500.

$5 million from.

<unk>.

Yeah.

Third quarter as lower.

<unk>.

And some are affiliated venture capital and private.

The.

Thanks.

EPS were partially offset.

At 200.

<unk>.

$3 million.

Increase.

Correct.

Deferred.

Plant investment results.

Okay.

Which again are largely.

You know.

People.

Turning to expenses on page 15, our expenses were too high and becoming more efficient remains a top.

The already.

Okay.

Yes, I will explain the drivers of the.

Fourth quarter and year over year increases in more details starting on page.

The team.

Action.

<unk> expenses increased $415 million from.

Third quarter, driven by higher personnel and equipment.

<unk>.

Chris.

The $320 million increase in compensation and.

We've been by $258 million.

We have hired.

<unk>.

Deferred.

Yes.

Yeah.

The.

Make sense.

Thanks.

We also had higher salaries.

<unk>.

Primarily due to changes.

Nothing.

Partially.

<unk>.

Set by lower.

Yeah.

<unk>.

As a reminder.

Yes.

We will have.

Seasonally higher personnel expenses in the first.

First quarter, reflecting.

<unk>.

Hi incentive compensation in.

MP.

Okay.

If.

It's it's.

Infrastructure.

<unk>.

This increase.

Next to higher equipment.

<unk> expense driven by the strategic reassessment of technology.

Thanks.

Excellent.

Thanks.

Our operating losses remained elevated.

Good.

But.

There were stable.

Linked quarter.

Sure.

So as we show on page 17.

This increase.

Yes.

Okay.

It could billion dollars from a year ago, driven by higher personnel.

Correct.

Experts.

Thanks.

That's an operating loss.

Yes.

Comp and benefits.

<unk> expense increased $1.1 billion, which.

<unk>.

At $691 million.

Repair.

Our topic.

Excellent.

Yes.

And as well as higher salaries.

As events.

<unk>.

It's primarily due.

What is happening.

And.

Annual salary.

<unk>.

Mysteries.

Running the business non discretionary.

<unk> expense increased.

By $1.5 billion of higher operating losses.

As partially offset by lower core deposit and other.

We are.

Yes.

Good.

On the earnings call last.

Last quarter, we said we.

Exceeded our 20.

An extensive.

Thanks.

As the approximately $53 billion was which was at the high end.

[laughter].

End of our 50 to 50.

Billion dollars target.

Yes.

As we showed on page 18, we came in above that.

<unk> expenses were higher than.

Thanks.

Primarily.

And be.

This.

First we had higher than forecasted outside professional services.

As events these.

<unk> expenses were primarily related to legal.

<unk> dollar GE and.

Chris.

Vision.

Second we had higher impairments and other write downs, including the strategic.

Technology.

With that I previously mentioned.

Okay and.

And as well as impairments on.

<unk>.

Finally, we had higher personnel related.

Correct.

At accruals.

This includes.

Thanks.

Yeah.

Thanks.

Turning to our business segments, starting on page 19 community banking.

<unk>.

Declined 500.

Third $70 million.

Okay.

Third quarter.

Yeah.

Primarily driven by lower.

Chris.

Net interest income and lower.

Net gains from.

She's.

On page 20, we provide our community banking.

Thanks.

We had $30.3 million digital active customers in the.

Fourth quarter up 4% from a year ago, including 7% growth and mobile.

Hi.

From a year ago.

<unk>.

Yes.

Primary consuming checking customers.

Sure.

Consumer checking customers grew 2% from year ago the.

First quarter of year over year.

Correct.

French customer.

And survey.

Subscription December increase from a year ago, reflecting the fundamental changes.

Just.

Good.

To prove the.

Our experience.

Makes sense.

And it's a decline in.

New customer.

Craig in.

<unk>.

From a third quarter was most likely due to.

Interesting.

Sure.

We're pleased that the progress we've been making to improve customer.

This action was.

<unk>.

Reflected in the JD power 20.

18.

Okay.

National banking.

This action study.

In December .

Is there.

Our customer satisfaction.

In scores improved by nine.

End points from.

Actually.

<unk>.

The largest.

Just increase among our.

Thanks.

Thus improving the customer experience across wells Fargo remains a priority.

And as part of.

So we're implementing the net promoter.

As.

System.

To allow even more dynamic.

Back and.

Right.

As a result of this implementation will no longer be.

Ripping branch customer.

Our experience.

And.

So first however.

Sure.

We will continue to share key business drivers.

Yeah.

The progress we're making.

Okay.

To prove the.

Six areas.

Justin.

Once and to drive Lloyd.

<unk>.

Okay.

Turning to page 21.

[laughter].

Teller and ATM.

The decline.

And.

From a year ago.

Excellent.

As a result of our.

Continuing to migrate to digital channels, we consolidated.

<unk>.

Just one.

For the 24 branches.

Yeah.

It's.

As in 29.

Thank you.

We have.

5300.

<unk>.

These branches at the end of 29.

Moving down.

And 12%.

Before.

Okay.

Three.

Tours.

We also continue to have strong card usage.

It's.

<unk>.

At quarter end year over year growth.

<unk>.

In both credit and debit card.

To.

<unk>.

Turning to page 22 wholesale banking.

Declined 100.

And $1 million from.

Yes.

Yeah.

The quarter driven by lower revenue.

We're an industry leader in businesses that.

Sure.

Support low income housing and renewable energy.

Yes.

Which.

Generate income.

Yes.

These income.

Deferred.

It's not included in revenue.

<unk>.

There was you can see in the table.

This age we report.

Reporting both.

Sure.

Consistent wholesale efficiency ratio.

And we're also providing our efficiency ratio adjusted for income.

Hi, this in order to make this ratio more.

<unk>.

With that of how we.

Yeah.

Correct.

It's.

Wealth and investment management earnings declined $1 billion from the.

Third quarter, which included a $1.1 billion.

Our pretax.

And for sale of our.

Institutional retired.

And.

Yes.

So the first time.

The first quarter of 2017.

Mhm.

And when had.

Linked quarter growth.

Both average.

Yes.

Okay.

Uh huh.

The.

<unk>.

Yeah, and total client assets.

Lets.

As.

10% from a year ago and higher market.

It is.

Wins, including 18% growth in retail brokerage advisory.

Yes.

Closed referred investment.

Yes, resulting from the partnership.

Which whim and community banking.

18% in.

Yeah.

Quarter compared.

Quick.

With year ago.

Good.

With December having over $1 billion.

<unk>.

And.

Referrals.

Our strongest month.

<unk>.

In June .

Between.

20.

Turning to page 24, we continue to have strong credit results.

With the two.

This means of net charge.

So.

<unk>.

Okay.

Our commercial losses were.

Recurring basis.

This.

Yes.

Okay.

Have.

So.

With.

Third quarter, driven by lower recoveries and higher.

Sure.

So at least.

Yes.

Makes sense.

<unk>.

Yes.

It's primarily related to.

Yes.

Yes, overall credit quality indicators in our commercial portfolio remained strong with our.

We are internal credit.

Okay.

Strongest levels.

In two years.

Users.

Consumer losses were 51.

At this point.

It's also up five.

So.

Sure.

Third quarter.

Sure.

So both of our consumer real estate portfolios were in a net recovery position.

In the.

The.

Okay.

There are other consumer portfolios.

Had slight increases in.

As.

The quarter, primarily driven by.

Hi.

Thank you.

Both our credit card and auto portfolios had lower.

It's in a year ago.

Yeah.

Yes.

Non accrual loans declined $199 million from.

Okay.

The quarter with lower non accruals in.

The commercial.

Both.

<unk>.

Clearly.

Yes.

Non accrual loans were 50.

At this point.

Because of total loans.

Thanks.

Sure.

At their lowest level in over 10 years.

Yes.

We adopted Cecil on January Onest of this year.

Except to recognize the one point.

He billion dollar reduction in our allowance.

Yeah.

<unk>.

Our spending increase and retained.

Systems.

This reduction.

Dominantly.

Thanks.

$2.9 billion reduction in the allowance.

As a.

So.

Credit.

Because under.

Yes.

Yeah.

Absolutely.

And shorter contractual maturities.

Yes.

These and the benign credit environment.

Yes.

While the allowance for consumer credit losses.

As expected.

To be one.

Thanks.

Yes.

$5 billion.

There's higher.

So.

<unk>.

Shifting.

Sure.

Longer.

Yeah.

Or indeterminant maturities.

Net of recoveries in collateral value predominantly related.

At the residential mortgage loans.

Thanks.

Which had been written down.

Significantly below current recovery.

During the.

Fiscal.

That's all.

As we've noted in prior quarters, we anticipate more volatility under Cecil due to economically.

The.

In the.

Correct.

Act of changes in the crew.

Yes.

Turning to capital on page 25, our Cetone ratio decreased.

As to 11.1% driven by returning.

$9 billion to shareholders.

As the.

<unk>.

And.

Yeah.

Dividend.

Correct.

Net share repurchases.

In the.

The.

Broker.

There are ratio.

Well above both the regulatory minimum of 9% in.

Our internal.

But.

As a reminder, we used.

Personally 65% of the grocery.

Just capacity under our most recent capital.

And.

The second half.

Good morning.

Okay.

<unk>.

And the repurchases will be lower during.

The.

Yeah.

For sure.

Sure.

<unk>.

Okay.

Between.

In summary, while we had a number of significant items that impacted our.

Fourth quarter financial results in our.

Expenses remained too high we continued to have.

<unk>.

Positive underlying.

Incidentals.

<unk>.

And can grow.

Sure.

Both in loans and deposits.

Yes.

Lets.

Customer.

Sure.

Okay and strong credit.

<unk>.

We also.

Vincent.

Yeah.

Hello.

<unk>.

Richard.

<unk>.

I'm excited about the opportunities ahead as we continue to do the work.

Just to.

Yes.

It's from Wells Fargo.

<unk>.

Early and I will note.

Sure.

At this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad.

The pause for just a moment to compile the Q1 day roster.

[laughter].

Our first question will come from the line of John Mcdonald with Autonomous research.

Okay.

Hi, good morning.

For John Charlie I wanted to ask you maybe for some high level takeaways on wells Fargo's technology, where do you see it.

No being up to par and best in class and what areas.

Yes.

You see the technology as behind in needing more.

And.

But.

Thanks, John it's a it's a great.

Yes.

I'm.

Yeah.

Certainly not in a position to be definitive.

<unk>.

For us the board.

Okay.

Given how.

Considering my.

<unk>.

I will say.

At the time that I've spent with solve them burden who is.

Our.

At of technology.

And B.

The company.

Yeah.

<unk>.

We have a.

Really.

Colin.

Of the.

Yeah.

We have to do.

Yeah.

Both.

Improve the underlying infrastructure.

Most of the.

Institution.

Sure.

Which.

We will benefit.

<unk>.

Our ability to grow at.

Thank.

Because.

Yes.

Is it really.

Our ability to.

Discussing all of our.

<unk>.

It's across all of our.

Since its.

As well as.

We possibly can.

Yeah.

And so it's a it's a robust.

Just.

Yes, there is a.

I want.

And all.

<unk>.

Kelly.

<unk>.

It is working through with this team all the right.

Prioritization.

And from time frames.

Yes.

Yeah.

At the same time.

If we are.

And when.

Yeah.

Some time.

Yes.

With all of our.

Thanks.

Okay.

We are thinking about.

Where we go next.

Just.

And how we use technology to create different.

An experienced.

Thanks.

And we see it in terms of some of the.

Yes, we've done in the digital.

We'll see.

Consumer.

Right.

And so.

Yeah.

<unk>.

Again I'm not.

I am on the position to be.

Specific.

Correct.

In this business of.

Yes.

Exactly where we're positioned.

And how we think about it.

Other than.

It's really.

The clear that.

Sure.

Okay.

That it.

The top priority inside the company.

<unk>.

And certainly all of the business.

Yes.

As I understand.

Britain.

And so technology will play going.

<unk>.

Our.

Okay Thats helpful.

Okay, and then want.

The Das John Shrewsberry in terms of.

Totally getting Charlie's point about.

Too early.

Yes.

Good to talk about expense improvement, but when we think about the jumping off.

Okay.

As we put all models for 2020 expenses John .

We think about this 53.7.

Adjusted expenses that you did for 19.

Is that a good starting point to think about 2020 expenses being the last you kind of Citi.

But to be flat in 2020 is at the right ballpark, we should be thinking about for the adjusted number.

So early on here, while we're still going through.

The setting process that.

Yes.

And that.

Thanks.

Much change other than.

Sure.

The.

<unk>.

So the.

Until may.

For.

Or.

Richard.

Okay.

Bore.

Operating loss.

That.

And they will.

As.

This.

As to.

And.

So.

Yes.

Okay.

But for now we're kind of thinking.

Okay.

You know flattish to that number that that's the right ballpark to start off with.

Yes.

Which ticket period by period not that much is going to change.

Which.

Yes.

Going forward.

And.

Okay.

Tim.

Mhm.

Yeah.

Because of the.

At this time.

And as we.

Yeah.

You get more.

Okay.

More clarity as a result of our.

Okay.

Okay and just one just quick follow up on that you know turn to the 600 million of operating losses.

It is.

Is that you talk about.

It really hasn't been that in many years.

But it's really.

It seems like more like 2 billion a year and.

Okay.

And what's hard to predict but.

Do you worry about it as anchoring too low on that 600 million should we kind of budget something higher than that just as a go forward.

At some point so that when we originally talked about.

<unk>.

The 600 it reflected the.

100.

$60 million.

<unk>.

Quarter.

We have.

Fraud related losses and other.

Okay.

Another run rate operating losses without regard.

Or.

Lets elevated over the.

Last quarter of years.

Yes, I do think.

This.

Good.

At.

This.

Thats probably.

Okay.

Going to be something a little bit more.

Okay.

It could be seven or 800.

We'll try and give better guidance.

<unk>.

With that.

But.

Yeah.

The higher run rate or the higher.

Sure.

Our realized rate that we've had over the last.

Last year.

Thanks.

There's roughly.

Next we have a combination of.

<unk>.

Thanks.

Yeah.

Good.

Yeah.

Rick.

And let me give.

On your first question, a little bit more clarity because.

Some.

Is.

I said this in my remarks.

Okay.

But.

But there are seasonally.

As is.

It.

In the quarter that.

Yes.

Okay.

But.

Yeah.

And out year after year.

This.

Psycho.

Retirement eligibility.

He said.

Yes.

The weather.

Thanks.

That will cause.

Standout in anyway.

There.

Touching.

Great. Thank.

Thank you.

Yeah.

Your next question comes from the line as Ken used in with Jefferies.

Hi, Thanks, good morning.

Thanks for taking the question Charlie on your points about just going after all the things to put the company on the right.

But forward how do we how do you start to assess.

Right.

Just if.

Right right things are happening underneath and coming back to the point just on related expenses I know, you've obviously had this build over time of.

By Ensign risk and those functions.

We even at the point yet were no.

Hiring is done in that regard right, where you're actually just got to people in place and it's more just about execution. How do you give us a sense of just kind of where you think youre on that story arc. Thanks.

Sure.

So on the first question.

And I think when.

No when you're on the inside of the company.

And we're managing.

One of the work that has.

Aspect on the way that we are.

Yes.

Our.

We have.

<unk>.

We are reporting we.

<unk>.

If current.

<unk>.

Oh item by item by item.

And so.

It's very very easy for us.

US understand whether we're tracking to milestones.

<unk>.

And having.

Oh no reviewed.

<unk>.

But the entire plans believe that those milestone.

Yes.

And we'll get us.

FSU eventual.

Closure.

Okay.

Her on.

Yes.

Slide honestly.

So we outside you obviously don't have the ability.

To that.

It's something that.

We provide to.

Yeah.

<unk>.

Ultimately.

Yeah.

Okay.

You are going to look for.

Closure.

Issues.

Yes.

And it was time it goes on that is.

As you know what we.

We hope to.

Each.

Sure.

Ultimately will be.

Yeah.

Six.

Yes.

As well.

<unk>.

You know on your second question about.

Okay.

Where are we I.

Yes in terms of.

So.

Okay.

The bulk of.

Makes sense as.

Sure.

Our.

Yes.

Again, I would say on that one.

Yes.

We're.

We can sit here today.

Okay, and say I can't sit here.

For today.

Okay and say.

The amount that.

Worsening.

And that will that we.

Okay.

Yes.

Is it.

<unk>.

At this.

This.

Totally appropriate.

Yes.

And by the way don't take that to mean.

Hi.

<unk>.

Yeah.

It's area by area.

Okay.

We've added.

A lot of resources.

Yes.

We need to understand whether we've added the right.

See.

Yes.

So whether we.

Full working together as wells.

We.

Yes.

Yeah.

Understanding.

Okay.

Yeah.

Since that we've built manually to.

Okay.

And where we can go.

To automate those items, which will make.

<unk>.

Not only just.

As far more efficient.

Okay.

So far more.

Our effective.

System.

Yes.

And so again when I say, it's really too early to be.

<unk>.

Definitive about.

Where we think about.

<unk>.

The level of.

Expenses and.

Thanks.

What's appropriate.

I put this into the same.

But again I just want to be.

The clear about this.

Yes.

We.

Yes.

That here.

I believe.

We have car launch.

Just on what ever.

We possibly want.

<unk>.

Any.

Thank you.

We are going.

Distant whats necessary on these.

The circle.

This is.

Okay, and you should assume that we will be extremely.

Okay.

The.

And.

About.

Sharing that were.

Our only thinking about our future, but thinking about our.

Yeah.

In terms of where it all.

Thats all.

<unk>.

Understood Charlie in just one follow up and your point I'd add that couple of months in.

You said, you're going to look at like 10 business lines and just see work you should think about things from a bottom up.

From what you at least see now.

Is the company.

Okay.

What it needs to look like going forward. The company has been trimming out of some areas over the course of time do you think that all the businesses. The company has today deserve to be inside the company from a go forward basis.

Thanks.

Yes sure.

<unk>.

I would say.

<unk>.

As far as the big.

<unk>.

Says that the company.

Okay.

Yes.

<unk>.

When we look at.

The.

Yeah.

The.

It's.

With that.

Okay.

At.

Okay.

From.

<unk>.

Having the combination of consumer businesses wealth businesses.

Just.

Yes.

And wholesale businesses.

As under one roof.

<unk>.

There are significant today and is.

As we look to the future.

<unk>.

And we believe they should be even more.

And so.

That level I would say.

<unk>.

Absolutely.

<unk>.

Right.

As John did mentioned in his remarks.

Thanks.

We have been pruning.

<unk>.

And as we go through these reviews and talk about some of the smaller things that we do.

<unk>.

It is a good opportunity.

He asked.

Okay.

Ask do we need.

To.

All of.

Leasing.

Okay.

That's all they make a difference.

Since.

Yes.

<unk>.

First to our.

Okay and ultimately to.

Yes.

And so I would expect to.

Okay.

I have some things come out of that.

Okay.

Yes.

But.

In the category pruning.

At.

At this point.

Got it thanks.

Right.

Your next question comes from the line of Erika Najarian with Bank of America.

Good morning.

Yes.

I wanted to follow up on on the line of questioning can just had Charlie said it sounds like as we think about what you mentioned during your prepared remarks as you focus on remediation gaslink. It sounds like you're also Theres also room to focus on inefficiencies at the same time.

In particular, a lot of your investors have pointing that date.

Your head count hasn't moved much.

Over the past 10 years in your head count is similar to.

Other period that is producing about.

40 billion more in revenue.

The new.

So just wondering I know thats kind of more like a statement, but the question really is is there room to also address some of the efficiencies as you think about remediation and investment.

Yes, I think.

Okay.

Again, what I want to make sure that.

Okay.

Yes.

Unclear about is that I think.

Okay.

Thank that.

Yes.

We have.

Yes.

Yeah.

Yes.

We.

We want to be able.

With.

Between a sheet.

As possible.

How about how we should.

Recently our.

Thanks.

And so that goes to answering.

Asking the question are.

We think.

He said.

Appropriately.

We see.

On the historical.

Yes.

Okay.

Number will be whatever we think.

Absolutely.

We.

We will focus on.

On a.

And so I want to and I want to.

But.

Just.

Yes.

I haven't said this in my remarks.

Thanks.

But it is important.

It's not as if.

It's not something the.

Yes.

And so when we look at all the additional resources.

Yes.

As I had been.

It's worth these activities.

They did.

Michael for you all.

Okay.

What we.

Have gained in terms of.

Yes.

As you.

Assume that our expenses.

Business.

As would be.

Yes.

The.

Substantially higher.

Sure.

Yes.

If we hadn't been.

And to see.

And the.

Something over the last several years.

So there is.

So having said that.

Tushar as I get to show up and take a look in.

Okay.

Ask a whole series.

As of questions as do some of the other.

And.

There are still.

Yes.

The big parts of the company, where we.

ER.

Extraordinarily.

In addition.

<unk>.

And to be fair, it's not just.

Spy.

Yes, and a new folks.

This is.

Yes, but it's.

The existing management.

<unk>.

It's about as well so.

We do believe they're significant.

<unk>.

He has held the first priority.

He is getting the issues.

For the past.

We should be able.

We continue to.

So.

And I do want to throw in the last category.

Which is.

Okay.

And part which is we are thinking about.

Sure.

And while.

Time and.

Thanks.

Our weighted more times the.

Our weighted more towards the.

Yes.

We're not ignoring the future and so.

If we do see there are opportunities which are.

Before.

So we want to have the latitude.

Yes.

Okay.

Think about how we.

Since unwisely on.

Yeah.

That's why we're.

Just very very careful about.

Leading you to.

A specific number.

Yeah.

Yes.

Yeah, because we're not sure where that all net.

It's about we want the time to be thoughtful.

Okay.

About.

Out.

Okay.

How to put it all together.

Okay.

In a way.

Yes.

At.

Yes.

We certainly believe.

Yes.

Right long.

Thanks.

Again.

Very.

As of.

Perfect.

<unk>.

We're stewards.

The.

Their owners out there and other stakeholders.

There is we have.

Okay.

Understood.

Sure.

And my second question as you mentioned that you will be announcing a new or structure shortly.

Yeah include the hires that you highlighted during your prepared remarks or.

We anticipate more changes to the operating committee from here.

I think.

I think what I.

Okay.

That.

Yes.

I said, which is.

As of the.

Retiring.

For two.

She is.

A whole series.

The things.

Yes.

As.

Thats Treasury services.

It's hard to innovation.

Digital marketing.

In a very very wide.

Okay.

Greetings and.

Yes.

We're actively working through what the right way.

Sure the company is with her retirement.

So.

Ben.

Okay.

Yeah.

You did.

Okay.

We will certainly make sure that you all know about.

Yeah.

Got it and just if I could squeeze in a third question I'm sure you loud and clear that the closure of the issues, just one way or investors and other stakeholders can measure progress at the company you know as we think about the end of the year.

What what other measures of progress would you see gesture.

Our current and prospective shareholders could you.

You can measure progress or is one you're simply too short of a time it given.

The transformation that you believe the company will go through.

So.

Yes, I guess, let.

So let me say.

Forwards and John could.

Add anything that he'd like.

Okay.

Again I.

Yes.

I think it's important.

Yes.

Okay.

We have a lot going on.

And I've been here for short.

Okay.

And so.

No.

Yeah.

We feel extremely.

Think about that medium and long term.

Just.

Yes.

We have lots.

So if you're.

Okay.

Question.

And as I pointed out some of.

Thanks.

Next.

Some of it will take.

It's a little bit longer than that.

Yes.

So.

Yes.

I think.

And Cancering the question of.

Thank.

That all.

Looks by the end of the year.

Okay.

At this point is.

Mature.

Yeah.

Sure.

But just know that.

This outcome.

Yes.

Sure.

So I think we'll be talking about.

As a.

Drove them.

Sure.

Okay.

The closure of issues.

Yeah.

Okay.

That was.

Those.

Okay.

Look.

Sure.

And then how we set ourselves up and our.

Our goal there is.

Sure.

What.

Okay.

So.

Process goes on in.

In conclusion, we have a better.

And if.

Yes.

Right.

And.

But.

Happy.

Yes.

End of year.

Sarah.

In there.

Okay.

That will be progress and I, just I don't want to dwell on if I just want to.

Recur.

I'm not.

Correct.

Adjusting here.

With that.

Great. Thanks.

Matt.

Yes.

Public issues will be.

We.

Last year.

Sure.

What.

Suggesting is that we're going to do all the work that.

Is.

Perfect.

At the time frames.

We will be driven by.

When we accomplish that work and when the regulators are satisfied.

Yes.

Our satisfied by.

Yes.

There is.

As I said, there's a.

We believe.

Sure.

Okay.

Have a certain level.

Complexity to them and.

We're.

Because of the.

Yes.

Good.

Thank you.

Yes.

Your next question comes from the line of Brian Kleinhanzl with KBW.

Hi, good morning.

Good morning.

Thanks.

Another question on the regulatory side I think one of the things regulators always.

That said as they wanted to see a change in the culture.

Sure.

At the bank as a sign.

Thats improving I mean is.

So.

And now.

Yeah.

Okay.

Ill.

Upstanding item studies, we address.

As a bit.

To address.

You've already.

Yes.

Yeah.

Well listen I think.

Yes.

I address some of.

Yes.

In my remarks.

That were prepared and I think.

Again, as the as an outsider coming in I.

Do you have the opportunity to make some observations.

Some of the things that we do versus.

Yes.

So the things that I've seen.

Yes.

Can help make a.

So.

Vessel.

Yes.

Through.

Issues that are somewhat like this.

Yes.

And so.

I do think that.

These.

Yes.

These changes.

As.

Okay.

So.

Okay.

Yes.

Our important.

And.

And do.

Helping.

Yes.

Thanks.

Vessel.

Yes.

Okay.

At closing these issues in a way.

Yes.

It has alluded.

Just.

And then second question.

On the numbers themselves I mean, if you look at.

Yeah.

Maybe on the commercial loans you've.

And.

Decent growth now our assay some.

Both.

Yes.

And your year.

And that portfolio looks.

Hi.

Pieces of it are coming from the non US also coming from.

Right.

So.

That investment.

Polio, two guys that update on the C and I lending side of it.

This growth in the non us where's that coming from and then.

How do you see these loans closes.

Subsea.

Okay.

At this.

So.

Sure so.

Yeah.

On the second part.

As to the.

Sure.

Till.

Exposures.

30.

Okay.

$8 billion I think.

This way, which.

Change.

Okay.

Yes.

This approach of investing in them in loan for.

Yeah.

Initially.

Just more accounting friendly.

The.

Yes.

Today.

Risk reward otherwise.

Yes.

We've made.

For part of.

Yes.

Yeah.

Of our.

That.

Excellent.

Yeah.

On asset.

Yes, we feel comfortable with the.

Risk reward and.

Okay.

In light.

Yeah.

But we.

Nicole.

Excellent.

For other reasons.

The bulk of the.

And I loan growth overall did come from.

Okay.

Virtual.

Corporate investment banking related.

Perfect.

Equity.

Some of its in the asset.

Back this area.

Thanks.

Yes.

And then also.

Feature corporate.

First.

Yes.

On on.

Probably not.

Net fundings.

Things we.

Thanks.

We will.

I will.

Yeah.

Funding.

Equity.

Security that ultimately.

Good.

With the canal.

<unk>.

Thanks.

In the capital.

Okay.

Absolutely.

So.

Switching.

I mean from.

Thanks.

Funded term loan.

Okay.

Virtual.

And I wouldn't read too much.

The.

Both.

Yeah.

So.

Yes.

That will.

And for a little.

Not likely to.

Fiber.

Okay.

In.

In the foreseeable.

Sure.

Okay.

Well thanks.

Your next question comes from the line of Marty, mostly with Vining Sparks.

Okay.

Thanks.

I don't want to ask.

First.

Okay.

So.

This $1.5 billion is.

I think.

Number for.

Good quarter, you been addressing these issues.

This views.

This became.

Typically but generic generally.

Oxy.

Yeah.

Was there.

Sure.

Yeah.

Stevia what was the.

He.

Also on recognizing another.

Yes.

600 meaningful slug of Ah.

Soft.

One Tom extraordinary.

Yes sure I.

Yeah.

And that can't talk too much about.

Specific.

Attractive litigation, but in general.

Hello.

All these amounts.

We recorded when the items become.

Okay.

I will end.

Yes.

So.

But we've had elevated.

In this area.

Yes.

Few quarters.

Okay.

As a result of.

Victor.

Stability.

Yeah.

Okay.

And then.

Yeah.

Charlie one year coming over now.

Hello.

Oh and.

Hey, Matt.

Okay.

That you went through initially.

Yeah.

Importantly.

We have an address the wells Fargo has on the dress.

Leases.

Susan.

The piece or the way.

I see.

You should have an order to.

I agree.

The press.

Yes, I don't know how do you look at.

At.

At assessing.

Okay.

Well.

Okay.

Some of these things went wrong I mean again.

Additionally, and maybe not.

Typically.

But.

Hi, you would've thought over these years there would've been a lot.

On.

Let Jan and lot.

Yeah.

To be.

Just doesn't seem like.

That's the case.

So your assessment of.

Uh huh.

The critical so I would just trying to figure out.

Ill.

Hello.

I'll put some context around.

Of that.

Yes, I guess, it's in the way I with them.

That.

<unk>.

The way I think about it is.

Is that.

What I am.

Opportunity to come in and.

We.

And look at where we are.

Hi, My judgments are.

Upon where we actually are.

Yeah.

I haven't.

I don't think Theres, a whole lot of value.

In terms.

But I.

Yes.

Just my time.

Yes.

In.

Going back.

And hearing.

Okay.

If I was here or what.

Might have done different I'm not sure I would have done anything.

Yes.

Not necessarily differently I wasnt in the seat I don't know.

With that already is we're I don't know what else.

It was going on.

That is a very very.

Now turning to do and generally something.

Thats very very.

No.

Though.

Okay.

Again I think.

It's what's relevant is.

This.

Is that.

Yes.

I've been able to.

Come in with.

This or set of eyes.

We believe that we.

We.

Opportunity to manage these.

Parties.

Blocks of.

Currently.

And with both the different set of processes.

Yes.

And people.

Okay.

And a great deal.

Of.

My time and attention as well as the.

Senior.

The name.

And based.

Based upon.

Yes.

The experienced that I've had.

Yes.

And.

Executing.

Okay.

All things as well.

As other members of.

It's in that we havent.

Thats.

Please now.

Okay.

Yes.

And understanding that.

We have.

Work, though.

I do feel.

And get it done.

And.

Thats.

My guess.

Just.

But still I guess, maybe.

Yeah.

As a different way to think about it is.

At least.

He.

That's happened in the past.

Asked.

Would you.

I'll just.

Yes, maybe there is a.

As the.

As.

We entered and which wells fargo's going to be held accountable.

Useful.

Just to kind of.

Yeah.

The board.

Third.

In order.

For.

Just a.

For the industry.

So in other words.

Jason.

Just the regulators.

No.

Yet.

And on.

I think.

Hi, they didn't really began.

Into.

Uh huh.

Figure out where they want everybody.

Sales.

So it's not like.

Turning up with everybody else.

Missiles.

Just maybe there's a surpassing.

All sitting.

And crop.

You know I am more forward.

For.

On.

The bottle that they are wanting to.

Got it.

So I didn't know as that are.

Good.

<unk> of it as well.

Or.

Or is.

Catching up with everybody else.

Missiles listen I think I've got a lot to do.

Yeah.

Just on behalf of Wells Fargo.

System.

And though.

It certainly wouldnt be right of.

Yeah.

Yes.

But I do think that.

Yes.

We.

Okay.

The.

Opportunity.

Great.

Okay.

To.

Is there.

By which.

Sure.

We.

Yeah.

You the importance of the.

Okay.

The manner in which we go about doing.

Yes.

And the way we hold each other.

Well getting.

Yes.

And so.

So again.

That is my.

Okay.

Thanks.

Your next question comes from the line of Saul Martinez with Bbs.

Thanks.

Hey, good morning, guys.

Speaking of.

Thanks, you need to do.

I would get closure on some of these issues I think in the past you.

Thank you.

You talked about.

I'll close to 10000 processes I think John you mentioned high single.

2000.

Ccs where you're.

Okay.

Identifying.

Okay.

Individual risk.

Thanks.

Controls and where.

Correct.

As needed.

Good.

Remediating those.

Good.

Briskin control functions.

Yeah.

So just give us incentive of where you are in that process, what kind of progress you've made more recently and.

I guess importantly, how how is your relationship with the regulators evolving as you kind of.

This.

Work through.

A lot of visa.

The.

Ill.

Yes.

Please.

Yes.

The first part.

So not all.

Okay.

9000, plus processes are created equally there.

Okay Fair.

Yes.

Yeah.

Discord and.

So.

Order impact.

Surgeon.

We're ahead of where we.

Studying.

Yeah.

We ended the year.

Great.

Sure.

Okay.

And we'll have the exact number.

Tony but the.

Those that are most.

Okay.

Excellent.

They will have been.

Yes.

As we.

Hi.

Yeah.

Sure.

Map.

Yes risk Aidid control I'd.

Sure.

Controls develops where.

Sales to.

These.

Testing over.

That.

Those girls.

Yes.

He has been.

Okay.

Yes.

In the.

In the first half.

By the end.

Fair enough.

So that.

Yes.

Thanks.

Yes.

And I think.

Because.

Okay.

To.

Yes.

Well we're watching.

Yes.

Yeah.

Yes.

Okay.

Good.

So.

Okay.

That's helpful. So.

Thanks.

It feels like you're making good progress on on the major.

Sure.

On the.

Again.

Yes.

Correct.

Again so.

Okay.

Yeah.

Hi.

The changing gears a little bit.

I think 166 million dollar.

Sure.

Net charge for reassessing.

Knowledge, you projects in wealth and investment.

Management.

Yes.

Can you just give us sense, what drove that decision in.

Okay.

No.

Whether we should be thinking.

Hi.

It could be other righty projects with that you're.

Looking at Reassessing and.

Cutting.

Going forward.

So John why.

As.

Substantially reconstituted the leadership.

From in women.

Okay.

They set their strategic priorities in direction and they.

And there.

Thank.

There are.

And then what had been under development.

It was.

The technology.

Sir.

Our different.

The business.

Today.

A few years.

Sure.

Which is what resulted in the.

Software.

And.

I wouldn't anticipate seeing a lot more of that and.

Yeah.

To be honest.

So we don't have.

Okay.

Extraordinary amount of capital.

Software development costs.

Yes.

This isn't.

This isn't that great.

Good.

Right.

From an accounting.

Correct.

Thanks.

Okay got it if I could just squeeze one more quick win and John .

You know just on.

The core fee.

The trust.

Yeah.

In general it seems.

Momentum is.

This.

Right.

No.

Has improved a bit.

In recent quarters.

Can you just give us sense and I'm not asking for specific guidance.

And just talk Directionally about.

Whether there's any reason to thank you.

You can't grow from.

You know.

Quarter levels, obviously, recognizing theres seasonality in light of.

Now please.

Is.

Yes.

Is this.

Yes.

Hi, good core run rates to use and there is there.

Do you feel good about your ability to.

Yes.

Grow some of these line items.

Yes.

Okay.

Well the.

The trust and investment fee.

Step off at a high level because they.

Yes.

Off of the.

The opening.

I think.

Which.

Sure.

Yeah.

For the S&P.

Looks.

Looks good.

For the coming quarter.

At that level.

Sure.

Cyclicality that.

Works for Us and.

Mortgage.

Yes.

As we said is probably going to be a lighter quarter in the.

First we are just because of.

Yes.

Seasonality.

Sorry.

Yeah.

For that.

And it.

Absolutely.

Okay.

As expected to be.

Thanks.

But.

Yes, it will.

Yes.

Thanks.

The smaller on the origination side in the.

In the quarter.

Perfect.

Our card fees tick up because there's more.

We're spending going on in the fourth quarter. So.

To be more.

Seasonally appropriate.

Sure.

The.

Yes.

This.

Sure.

And then it's hard to its hard to forecast trading activity.

Good.

Certainly.

With stronger.

Sure.

Year over year.

In the.

Sure.

Fourth quarter because of the blood Bath.

Yeah.

Good morning.

Thank.

That was weaker.

Yeah.

Every.

Thank.

Okay.

Historically, the first quarter is a.

As a.

Cricketer.

As a result.

Yes.

Asset managers reallocating.

And we're getting.

Sure so.

Okay.

There.

Thats.

Yes.

So to the types.

Yes that are likely to.

Sure.

Things that are little bit more ratable.

Deposit service charges or.

And.

Is there.

Okay.

Yes.

To be much.

Yes.

Sure.

Got.

Yes.

Helpful.

Okay.

Thank you.

Good.

Your next question comes from the line of Gerard Cassidy with RBC.

Thank you and good morning.

Thank.

Okay.

She was this I think you mentioned in your prepared remarks.

Thanks.

That.

Expected the net interest income to be down low to mid single digits for 2000.

Okay.

20 over 29 team.

If you compare.

Oh for us.

Yes.

What's.

Driver of that vis-a-vis what drove the decline in 2019.

More.

Having less higher yielding assets.

I'd like to pick a pay loans on the books in 2020 or is it a margin compression issue.

I would give us some color.

There.

Those a handful of things.

It was a bigger drop in 2019 because.

Yeah.

<unk>.

The original.

And.

In the in premium amortization on the.

Portfolio.

There.

In.

I'm not giving.

This is an order.

There are already.

But.

Systems.

Yeah.

Okay.

Thats.

The big their leg down in Libra.

Just had a big.

Vaccine.

In.

Okay.

Thats correct.

It could be a little.

Good.

As.

Yeah.

In 2000.

Between.

Okay.

Yeah.

We talked about retail.

Yes.

In the retail.

Yes.

Sure.

Okay and.

And how.

As.

It's for increasing we.

Okay.

Had.

Some.

Have a little.

We've been able to.

That tail.

Honestly in.

Good morning.

Yeah.

Between.

It will abate.

Thanks.

Thank you.

Yeah.

Okay.

All of.

Yeah.

Okay.

And Doug.

But it's.

Right.

Yeah.

Thank.

We've dropped.

Yes.

And.

19th.

Okay.

At least.

The front.

Yes.

The.

Did.

Yeah.

I see I think just to be.

Yes.

Yeah.

The number of variables.

And the range of.

Potential outcomes around those variables that goes into giving.

Yes.

The low to.

Two.

So there.

Yeah.

Thanks.

As flat can move as we've talked about we were.

I think we were.

Yeah.

To close on our estimation.

And for.

For 2019.

But we'll keep you updated as we roll along.

Between 20 and what.

Good.

Based.

Yes.

On on what.

You mentioned pick a pay I.

I should also.

Yes.

It was.

Full year basis.

Weve hundred million dollars worth of.

Interest income.

Mhm.

Coming.

Yes.

Okay.

Thank you.

Yeah.

Okay.

We don't have.

Yes.

Yeah.

You also share with us.

Pointed out that you grew the primary.

Consumer.

Okay and.

On deposit.

Percentyear over year.

What's what are you using is the hook to get customers to come in is there some incentives whether its a.

Higher.

Sure.

The upfront cash deposit or that you give them or reserve.

How are you guys driving that.

Thanks.

Yes, so that that metric is the number of.

<unk>.

On the deposit.

Yeah.

As associated with.

Yeah.

We've talked about separately.

Thanks.

Yeah.

Yes.

The branch network.

Yes.

Yeah.

It's a digital acquisition the combination of those.

Most things I wouldn't say.

Specifically.

Yes.

Okay.

Theres nothing.

This compelling people into the offers that we use or more around.

<unk> dollars.

Or.

Yeah.

Additional.

So capturing additional.

As.

These account openings.

Perfect.

Correct.

The.

Okay.

Three day business model.

It is going to be.

Thank.

And then the branches.

And the.

Okay, and then just real quickly you mentioned lower gains.

Yes.

In the quarter from your.

Venture capital.

Private equity.

Area, what's left in unrealized.

As gains in those two categories for you folks.

So.

Yeah.

Unrealized gains.

It's harder to come by these days because we tend to realize.

Yeah.

On a faster basis.

Since accounting change I guess now.

So.

A year and a half ago.

Well.

But used to be the.

Yes that we'd have to actually realized something to.

Yeah.

The benefits something that's at.

Diesel.

Yes.

Or go public in order for us it.

Gain in these days even.

With companies.

He is being subsequent private capital.

Yes.

As if it's at a higher level.

And we recognize.

The.

Yes.

The gain from that as it goes along.

So when the ultimate.

Realization.

There is less.

Because.

Ratcheted.

Which can gains along the way.

Okay.

So.

Assets led to.

Yeah.

More of.

I'll call it a front end loading over the last.

Several quarters of.

Okay.

From.

And it will increase.

Volatility.

We'll have down.

Capital raise rounds.

If things don't go as well.

These are.

We sold or.

Okay.

14.

Yes.

Hello.

It's been great.

Returns.

Our solid.

Sure.

Good.

The accounting.

Yes.

The revenue.

And do a little bit more choppy.

In.

Early quarters.

As for the.

So.

Thank you.

Okay. The.

Thanks.

Yes.

Your next question comes from the line of Scott Siefers with Piper Sandler.

Okay.

Hi, good morning.

Thanks.

For taking the.

Justin.

I was hoping to try to drill down into that.

I had.

Yes.

Once you have heard looking.

Yes.

And.

Okay.

In Brazil.

In the.

First.

Slides a.

I'm.

80.

The.

Congrats.

Over the remainder of the year.

Sure.

Yes.

After.

Yeah.

Because this year.

As adjusted.

$7 billion.

All.

Okay.

I mean.

And then Andy.

The.

For Internet.

And.

Moving.

When it off.

Yeah.

What sort of.

What.

Pat there.

Chris.

I am.

When.

So much.

On it.

Just curious.

Or is.

If.

Yes.

So were.

Yes.

We're not going to be that.

Specific about two years old that comment earlier about the first.

Yes.

Like every one.

As for it tends to be the high tech for.

Right for core expenses.

Because of.

Personnel.

Yes.

We.

Okay.

Sure.

Okay.

So like any other year on an adjusted.

Yes.

That would be higher in the first.

First quarter.

Okay.

And.

Yes.

In gravitate down.

Over the rest of the year, but were.

Where is.

As Charlie mentioned, we're going through.

Yes.

But look at our planning.

Correct.

As for year.

So theres no.

Yes.

Number at.

This.

Okay.

Right.

To put too.

Okay.

We are in the first.

Robert.

Its a.

At the.

Sure.

This.

Just happens every.

First quarter.

I'm pulling.

Yes, there is.

As we hire.

Okay.

We.

Hi, there won't be much more specificity around that until.

Completed.

This process and.

So.

Yes.

And.

In fact.

During the.

Yes.

Okay. So then rather.

So even though the.

I guess.

Since I've been.

I did not.

In addition.

Great.

Yes.

Any sort.

Good.

That trend.

Are there.

Or anything.

Yeah.

Basically.

So DVD.

Moving on.

But.

Yeah.

Okay.

Thanks.

All year.

I think.

Correct.

I think thats appropriate so that we though.

As we do have.

Okay.

Alright.

All.

Right.

Thank you very.

Very much.

Michael.

Your next question comes from the line of Betsy Grayson with Morgan Stanley .

Okay.

Right.

Yes.

Hi, good morning.

Uh huh.

Yes.

Just wanted to understand on.

You know planning process that Charlie you announced at the beginning I know trial, you're not talking about time frames.

It's been a lot of different.

Thanks.

Hi types of institutions and.

Lot of different you know.

Yes.

Types of scenarios and I'm wondering is this something that we should consider is.

Yeah, I get to best in class on a three to five year timeframe or is this more of a one to three just trying to understand.

Dave.

In broad strokes.

Yes.

Your thought process there.

Sorry.

Listen I wish I could answer the question at.

This.

Right.

Yeah.

For all the reasons that I've spoken about.

Yes.

I'm not in a position.

And to that I.

Thank you.

The.

Thank you.

Hi, I want to be repetitive so I apologize.

Is.

As.

How to do.

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The.

I understand.

<unk>.

Whether were.

Sure.

Appropriately resourced.

Just.

See.

Historical.

Yes.

And then honestly as we go through these discussions.

Yes.

Okay.

In terms of how you get.

It's a best in class.

Yeah.

Im sure.

And.

This.

Yes.

Honestly very very different in terms of what the timeframe is.

Yes.

Some of them will be.

Some of them.

Require.

For technology.

Yes.

But others could be burdened by just an inefficiencies that we can get.

Correct.

Though.

I'm not trying to be evasive I.

Just.

Yes, I can see there being.

Several.

But.

Yes.

So we look at different parts of the.

Okay.

That's what it will actually looked like when we're done with the.

Okay.

And.

So work.

Potentially have a result of.

Yes.

Exiting some of the businesses.

Do you think.

Okay.

That's really not on the table at this stage.

Well I think.

For Pete what I said before Betsy I think.

No.

When you look at our big business.

Sensors.

So.

Yes.

Because of the.

That's our customers.

Yeah.

And.

Okay.

That being under one roof.

Okay.

Yeah.

Okay.

But.

Like any other.

Yes.

The company we.

It's in the.

Last question.

And.

We do.

Absolutely everything.

Apps.

Okay, and we have been pruning.

And along the way and.

Okay.

We also more pruning that we.

Should hopefully do.

Yeah.

Good.

Okay.

All right now thank you very much.

So.

<unk>.

Your next question comes from the line of Steven Chubak with Wolfe Research.

Hi, good morning.

Thanks, Good morning.

So John I was hoping to drill into some of the fee trends that you had spoken to in response to an earlier question certainly appreciate the detail you guys gave.

<unk> 27.

And.

In solving isolate some of the impacts from gains and other related sell impacts.

Yes.

As we think about trying to evaluate the core fee income generation power.

For the franchise today.

Okay.

After adjusting for some of these cells.

Yes.

If I look at that 8.7 billion you guys produced this quarter.

Yeah.

Yeah I just for about 600 million that you guys cited in the slide.

Okay.

And then on top of that adjust for deferred comp other investment income adjustments.

So.

We get to a run rate of roughly 8 billion a corridor.

Yeah.

Our or fee income generation, I know, you're going to have equity market tailwinds.

So.

Just from what happened in the fourth quarter as we enter the year in 2020, but I'm just hoping to.

Aim weather.

At 32 billion annualized run rate is it reasonable jumping off.

And.

After adjusting for some of those factors or anything else that you would cite for that matter.

After.

Well so.

Our.

It's not unreasonable in a sense that.

It.

Yes.

The.

<unk>.

As the.

Yeah.

Diesel volatility of some.

These things that tend to.

<unk>.

The ebb and flow throughout.

Versus the year and.

Okay.

If we have adjusted.

Things that we sold.

Both from a game.

Okay.

And perspective, as well as the run rate.

Correct.

She has been it captures that.

Okay.

Yeah.

<unk>.

Hi.

We do have.

As.

This.

As.

As you'll know.

Yes.

Info.

Yes.

So relatively.

Okay.

From.

Okay.

Mhm.

Not just.

Okay.

Reported.

But from year to year.

Karen.

So we have had equity.

Okay.

Good.

You mentioned that we.

Mike.

Thank you.

That will come and go ahead.

Tend to look at.

Yes.

Longer time.

Some of those line items.

I am.

And with the.

Okay.

I would add over.

Sure.

Yeah.

The.

Or so.

Thank you.

Yeah.

Okay.

There's nothing on reasonable about that approach.

There are some of these that we believe.

Even.

Okay.

But we're doing our work, we should be driving and growing.

Okay.

<unk>.

And.

Okay.

Yeah.

And some that.

Michael the.

But we're.

Good.

Mortgage.

<unk>.

Each.

Where we are in the.

Rates go.

Okay.

Gotcha, Thanks for that color, John and just one more follow up for me I just wanted to clarify.

Yeah.

Some of your capital guidance, So I know that the last update that I can recall and I'm sorry, if this is wrong or misguided.

Good.

As you alluded to attending a quarter to tend to.

How.

And.

I'd see one target that you guys were managing to that always felt quite conservative.

Of.

And in the earnings release, you actually referred to an internal target of 10%.

And.

And I'm, just wondering as we think about future buyback and capital return.

Since.

Has there been any change in.

In.

Firms, our internal capital targets that you guys are ultimately managing to.

Before.

The for how you guys trying to think about.

Hi.

As you start to implement some of these changes that Charlie was speaking to earlier.

Here.

Yeah.

Next question.

We are.

What we've been waiting for.

Yes.

Specifically our internal.

It's 10%.

And that includes.

That buffer on top.

Of 9% regulatory.

A requirement.

Okay.

But we've been up we've been talking about.

Upping that could be 10 in the quarter to tenant half waiting.

Floor.

Sure.

No.

So it looks like and.

Yes.

And what the stress capital buffer guidelines actually look like.

Yes.

Once again.

Invented.

And.

Yeah.

This.

Yeah.

This belief certainly because we're getting.

No more she car clarity over the coming we.

Our.

Thanks.

No.

There were going to.

Answer.

Yeah.

And then.

So it's likely that the combination.

And of those.

Those things.

With that we higher.

With that because.

But we'll know for sure.

Okay.

Once we are operating in.

Okay.

For the World.

Yes.

Okay helpful color John Thanks for taking my question.

You.

Your next question comes from the line of Matt O'connor with Deutsche Bank.

Yes.

Good morning.

Turning a little tired.

Yes.

Next question.

Sounds of near term.

I did want to add.

Last longer term on.

Last.

Loss.

Just a Charlie you said about.

Okay.

In.

Yes.

Okay.

And how do you define that.

Hi.

Right and.

And I think a lot.

Hi.

Investors and analysts think of your.

Correct.

As.

Like America.

Right.

Pardon.

Okay.

Maybe a.

Yes all.

Yes.

Yeah.

Are you kind of.

And.

Seeing.

Hi.

And like you are efficient.

Like the shares should.

And.

<unk>.

Should ballpark.

Should.

But then there's.

As Dan.

And.

If it is.

Just to say, it's a bold comment.

Okay.

And.

And obviously.

Okay.

Some of.

Those are some.

Yes.

Sure.

Have you could just.

Just elaborate on some of.

Those.

Yes.

Sure we're going.

Yes.

Yes, we're going.

This business.

Yes.

And.

<unk>.

And.

Second the peer group.

Yes.

The.

Yes.

Yeah.

So.

Yes.

Either.

The.

Thanks.

Okay.

For the.

The.

Yes.

Segment.

With that.

It is published what best.

Okay.

Thanks could be the.

Thanks.

Because of our.

Speakers.

Yes, it could be the.

Yeah.

Yes.

Yeah.

Regional.

Perfect.

Thanks.

Yeah.

And.

To.

The Clinton pieces of others depending.

Because.

And what the.

This is.

Yes.

And.

For the company as a whole.

Okay.

The weighted average.

Thanks.

So.

Average.

Yes.

Those.

Yes.

<unk>.

Our results.

Okay.

In the.

Yes.

Thats part of.

This view.

You.

We had alluded.

Earlier.

[laughter].

Certainly.

Additionally, as we sit here today, but.

Thats.

The direction that.

I think ourselves.

Earlier.

And ER.

Every business.

Jennifer.

Mr.

We are likely to be in over the long term.

Okay.

We've got.

All of the.

The tail.

Yeah.

For.

Sorry.

Youre.

Got it.

Sure.

There may be.

Perfect reasons I will address.

Okay.

Yes.

And then why.

If we.

Okay.

Effectively.

Okay.

Yeah.

The most efficient.

Yeah.

Sourcing or.

Thanks.

Okay, and then without putting a.

I think numbers around at.

Thanks.

Thank you think about improving.

Thank you.

Yeah.

There were comments.

This growth.

I was.

If you want.

<unk> expenses.

We think about.

Yes.

Anything.

What balance or.

But majority.

Sorry.

Right.

No right.

Now.

Surely, though we know.

Yeah.

Yes.

Just work to do on.

Does that.

Too early.

Who.

To start contributing.

Presented.

Yeah.

For example.

And Matt I guess Thats a finite.

And.

So limited I just had one thing I got into.

Britain.

<unk>.

And.

This isn't something that.

I would say that John and I sit here in a room and.

And then we get in the room with others and they argue with.

Yes.

There is a clear understanding.

Okay.

From our.

Yes.

Or is that this.

Yes.

<unk>.

I would say.

Quite frankly.

Theres very little conversation internally.

Yeah.

About.

Okay.

Out.

The knee.

Yes.

The U.S revenue.

To improve the efficiency.

Because.

Thanks.

As we do understand that Theyre a series.

If that we do that are highly inefficient.

Okay.

That's not to say to get the best.

And.

Thanks.

Yes that we won't need some revenue growth to get there.

Okay.

But.

I just find it very encouraging.

Okay.

The way people internally.

Our thing about.

Okay.

And what Theyre.

We're talking about as.

Which was.

Yeah.

Yes.

We.

The types of things that'll be in the line.

Nothing.

Thanks.

Thank you for.

Right.

<unk>.

Your final question will come from the line of John Pancari with Evercore.

Good morning.

Great.

Yeah.

Good morning.

On the on the spread income guidance of down low to mid single digits.

You reiterated that.

Also indicated that you are still pruning.

Does that guidance.

During the pruning and accordingly.

The additional.

Okay.

Yeah.

Adjustments to your business base would not be all that meaningful to impact that guidance or would that guidance change if you did.

Continue to.

If we continued to prune and.

Yeah.

Yes.

Yeah.

Caused.

To shed either.

Loan to.

Thats it.

[laughter].

The company as.

Yeah.

Okay.

All right just wanted to verify and then.

In terms of Cecil.

Good day too.

Yeah.

Impact I just want to.

Okay.

Get your thoughts on yes, the appetite the Landon.

Certain longer duration consumer areas has that been impacted at all by the.

Pete.

The implications of the new.

Gee, that's a good question we've done the.

Yes.

Yeah.

Product by product.

Okay.

Consider what the return.

<unk>.

To start.

Thanks.

Our.

<unk>.

And.

At this point, it's not likely that we would change our appetite.

Right.

Longer duration consumer loans it definitely.

Yes.

Okay.

Good.

Okay.

Depending on where you are in the cycle that can cause.

I think differently about what your returns.

But it hasn't caused anything to drop below.

So a hurdle level.

To us we.

That's.

Peter.

Yeah.

Meaningfully.

We appreciate it or.

Sure.

Where we think weather.

<unk>.

Whether in.

The business.

Okay.

And then lastly, just just back to the expense expectations.

Yes.

And I know, it's too early to give a more accurate.

Expectation, but.

I know you're going through your planning process. So what's the timing of when should we think we will get a more.

For.

Precise expectation when it comes to four years.

Mr.

So.

Yes, I guess, there's nothing more than I can say that I haven't already.

He said.

I think.

It says that we got.

This process to go.

Just.

Yeah.

There's a.

Two.

<unk>.

When we know something we'll tell you I wish I could be more.

Mystic I really do.

Yeah.

<unk>.

Well we.

Lots to do.

Okay.

Yeah.

Yet.

But we think the right answer.

Should make.

Got it.

Got it thanks.

Yes.

Already listen.

Okay.

Thank you very much for your patience.

And.

And joining us.

This.

Just.

I do hope that you just walk away with.

Just a couple.

Yes.

<unk>.

Important.

Yes.

We have work to do.

Yeah.

So what we have to do we're committed to getting it done.

And we will get it done.

<unk>.

Quality of the franchise.

As.

So extraordinary.

<unk>.

We have thousands and.

Dozens of dedicated.

Full across the company.

Okay.

I mean every day.

Yes.

To.

Yeah.

<unk>.

For.

<unk>.

In sum.

They are doing extraordinary.

Okay.

And we're going to do our part to help them.

Their.

Yeah.

Even better as time goes.

And we think our futures very bright.

Right and so.

<unk>.

We appreciate again.

Other.

<unk>.

You have.

Okay.

Look for to more conversations.

And.

For the true.

Ladies and gentlemen. This concludes today's conference. Thank you all participating you may now disconnect.

Okay.

Q4 2019 Earnings Call

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