WFC Q2 '26

Moments, ranked

1. 110:21 ETprepared▼ -1.41%

   “This is the 24th consecutive quarter of HIC count”

   Management, 5.2x volume, adj. next 5 min: -1.63% raw vs -0.22% sector

   New, abnormal minute +1 min after the statement

   high confidence

2. 210:26 ETprepared▲ +0.97%

   “We are maintaining our guidance of 50 billion plus or minus of net interest income for the full year and similar to last year we expect stronger growth in the second half of the year compared to the first half.”

3. 310:17 ETprepared▼ -0.50%

   “our second quarter results were strong with broad-based revenue growth, disciplined expense management, improved earnings increased 17 percent from year ago to 6.4 billion and our diluted earnings for share grew to two dollars up 25 percent from year 32 million or net interest income increased 609 million or five percent from year ago and increased two percent from the first was driven by higher loan and”

1. +0.08%0:00OperatorWelcome and thank you for joining the Wells Fargo second quarter 2026 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks there will be a question and answer session. If you would like a question during this time simply press star one. If you would like to withdraw your question start. Please note that today's call is being recorded. I would now like to turn the call over to John Campbell director of investor relations. Sir you may begin the conference.
2. +0.08%0:36ManagementGood morning everyone. Thanks for joining our call today where our CEO Charlie Sharpe and our CFO Mike Sanamassimo will discuss second quarter results and answer your questions. This call is being recorded. Before we get started I would like to remind you that our second quarter earnings materials including the release financial supplement and presentation deck are available on our website at wellsfargo.com. I'd also like to caution you that we may make forward-looking statements during today's call that are subject to risks and uncertainties. Factors that may cause actual results to differ materially from expectations are detailed in our SEC filings
3. +0.40%1:17Managementincluding the form 8k filed today containing our earnings materials. Information about a non-GAAP financial measures reference including a reconciliation of those measures to GAAP measures can also be found in our SEC filings and the earnings materials available on our website. I will now turn the call over to Charlie. Thanks John. I'm going to provide some comments about our results and the momentum we are seeing across our businesses. I'll then turn the call over to Mike to review second quarter results in more detail before we take your questions. Let me start with slide two of the presentation deck where I will walk you through the broad-based strength we see in our business. We grew diluted earnings per share to
4. +0.06%2:00Managementtwo dollars in the second quarter of 25 percent from a year ago. Revenue grew nine percent from a year ago. Growth was broad-based with every one of our operating segments generating higher net interest income and non-interest income. We are clearly benefiting from the economic strength we see in the U.S. but the investments we are making and our improved operating discipline drove strong momentum and continued to result in improved performance. Net interest income grew five percent from a year ago and non-interest income grew 13 percent as we're making good progress against our goal to create a more balanced revenue mix by growing fee-based revenues.
5. +0.06%2:43ManagementExpenses increased two percent from a year ago reflecting investments we are making offset by continued expense discipline. Expenses excluding revenue related compensation declined. One of the ways you can clearly see the results of our efficiency initiatives is through headcount which has declined for 24 consecutive quarters and in the second quarter our headcount was 197,000 down 79,000 from six years ago, 15,000 from last year and 3,500 from last quarter. We are using these efficiencies to offset broad-based investments across the company to drive growth
6. -0.13%3:24Managementincluding adding branch bankers, investment advisors, commercial banking relationship managers, investment bankers and traders. We are also increasing our marketing investments, accelerating product development, investing in AI and increasing our cyber defenses. Consumer and commercial credit quality remain strong across all portfolios and net loan charge off's declined 10 basis points from a year ago. After years of not being on a level playing field with our competitors because we couldn't grow our balance sheet, we had strong growth during the first half of this year including in the second quarter with average loans up 12 percent and average deposits up 10 percent from a year ago.
7. +0.13%4:09ManagementJust a reminder growth can be risky and we are carefully deploying capital to grow and support our clients by taking risks that we think are prudent through economic cycles not just the strong environment we see today. We returned over 9.8 billion dollars of capital to shareholders in the first half of this year including repurchasing 7 billion of common stock while continuing to maintain the significant amount of excess capital. As we previously announced we expect to increase our third quarter common stock dividend by 11 percent to 50 cents per share subject to approval by our board directors at its meeting later this month.
8. +0.13%4:52ManagementOur continued focus on improving returns was evident with ROTCE increasing from 15.2 percent a year ago to 17.7 percent in the second quarter and 16.1 percent in the first half of 2026. While outsized venture capital equity gains favorably affected our returns this quarter we have said that they can be lumpy but that we do expect strong returns from these investments over time. But more importantly the growth and efficiency improvements that we have seen over the past several years are now broader based and it is these trends that give us confidence in reaching our goal
9. +0.53%5:32Managementof a sustainable ROTCE of 17 to 18 percent. We are often asked about the timing of achieving this goal and I know you all understand that interest rates markets and credit impact us and are hard to predict making it difficult to give a definitive answer. But assuming favorable conditions continue to exist we remain confident that our favorable trends will allow us to achieve this goal in a reasonable time frame and then reset the bar higher for the future. As we show on slide three our strategy is driving growth across all of our businesses. Let me start with consumer banking lending with six percent revenue growth from a year ago.
10. -0.10%6:17ManagementAfter years of little to no growth in checking accounts our investments in marketing and digital account openings are paying off and we have grown consumer primary checking accounts year over year for 13 consecutive quarters. We have significant opportunity to increase the pace of growth and this along with offering our broad set of products including credit cards investments and mortgages should drive low cost deposits higher over time. Over the past five years we have enhanced our credit card products and improved the customer experience which has driven new account and balance growth including new accounts increasing 46 percent in the second quarter from a
11. -0.10%6:59Managementyear ago. Building a larger credit card business is an investment that puts pressure on profitability in the initial years with new products having significant upfront costs related to marketing promotional rates onboarding and allowance. It takes approximately two to three years for vintages to season and burn through these upfront costs. Our 2022 through 2024 vintages are now adding to profitability. Our 2025 and 26 vintages are bigger as account openings have accelerated so they offset some of the positive contribution from the earlier vintages. Importantly we have seen strong performance
12. +0.07%7:41Managementversus our original assumptions regarding new account acquisition and credit performance which gives us confidence that we should see profitability and returns increase. I do want to note that the rate of growth is a decision point for us. We could have higher profitability in the shorter term by reducing our growth but we are prioritizing longer term results given the quality of the accounts we are generating. We evaluate this each quarter and will continue to do so. The momentum in our digital offerings continued with mobile active users increasing to 33.7 million in the second quarter. That's 1.6 million more than a year ago. The investments we've been making to improve the customer experience
13. +0.15%8:26Managementreflected in the 2026 JD Power mobile app study where we moved up to number two in mobile app satisfaction. We are also doing more for our affluent clients. We've been hiring licensed bankers and branch-based financial advisors and that investment is helping to drive better results with premier client assets up 13% from a year ago. Our auto business returned to growth last year after intentionally scaling back to improve our capabilities and the momentum has continued. Originations increased 41% from a year ago and the average balances were up 31% in part due to becoming the preferred financing provider for Volkswagen and Audi vehicles in the U.S.
14. +0.10%9:11ManagementImportantly, credit performance has remained strong and in line with our expectations. Turning to wealth and investment management, revenue grew 13% from a year ago. Wealth and investment management client assets grew 50% from a year ago to over 2.4 trillion dollars driven by increased market valuations and also benefiting from four consecutive quarters of positive net flows. We have invested over a billion dollars over the past several years to modernize the technology platform and in the second quarter we launched Advisor Gateway, a new desktop technology with Gen. AI capabilities that gives advisors better tools to serve clients and grow their practices.
15. +0.10%9:56ManagementInvestments like this are improving productivity, strengthening the client experience and driving improved advisor hiring and retention. We are also working to be our clients primary bank by expanding our deposit and lending capabilities and are seeing strong results with average deposits up 10% and average loans up 12% from a year ago. Security space lending has been a key driver of loan growth with average balances up 31% from a year ago reflecting our success in increasing the number of financial advisors offering this product to their clients. Importantly, the opportunity in this business to grow investments and
16. -0.33%10:37Managementbanking remains significant. We estimate that our existing customers hold trillions in assets at other financial institutions and their lending deposit and payment needs are large and growing. Turning to our commercial businesses starting with the corporate investment bank, revenue grew 16% from a year ago. In our markets business revenue grew 24% from a year ago. We've been growing our balance sheet to support our clients with average trading related to assets increasing 41% from a year ago driven primarily by financing related activity. While this financing activity impacts our net interest margin because it is lower spread, it has good returns and
17. +0.04%11:22Managementprofitability and positions us to attract more flow business. We track this by client and we're seeing higher trading revenue and wallet share gains from customers where we are providing financing. While the most immediate revenue benefits are expected within markets including trading, edging, and risk management products, these deeper client relationships also enhance opportunities across the broader corporate investment banking platform over time. In our banking business revenue grew 20% as our focus on providing a broader set of capital and advisory solutions is working. This was a record quarter for investment banking fees across the firm. Our willingness to invest more in
18. +0.16%12:05Managementsenior talent and in technology and dedicate more balance sheet to these activities is paying off. What's important here is having a growth plan that is properly paced and leverages the broader strengths of Wells Fargo. The team has executed with discipline, has hired and promoted the right people, and is taking risks that are in line with our risk tolerance. The favorable environment for M&A financing is helping drive higher revenues across the industry but our investments are also delivering strong results and we are increasing market share in key areas. In leverage finance our year-to-date market share is 7.2% and we rank number three. In equity capital markets
19. +0.16%12:48Managementour share has increased 74 basis points from a year ago to 3.8%. In M&A we have climbed from number nine to number four among U.S. advisors by announced deal volume, reflecting our active role in advising our clients on franchise defining transactions. We also have strong share in CRE capital markets including being the number one non-agency CNBS book runner, number one in real estate loan syndications, and number one in CRE CLOs investment banking, and we still have significant opportunity to grow each of the businesses.
20. +0.09%13:29ManagementFinally let me highlight commercial banking which generated six percent revenue growth from a year ago. The investments we've been making in the business over the past couple of years are driving strong results. Absent the transfers of loans and deposits to consumer banking and lending last year, average loans grew nine percent and average deposits grew ten percent. Our investments include targeted hiring in 20 high density markets where we are under-penetrated relative to the rest of the country. The plan is working as we are seeing incremental client growth and higher loan and deposit balances and we expect this momentum to continue as we execute on our plan.
21. +0.13%14:11ManagementWe've also focused on delivering investment banking and market products to our commercial banking clients. We've had success which has helped drive revenue growth but we still see significant opportunities to grow revenue here. While commercial banking is one of our more mature businesses we still have significant opportunities to grow. Our treasury management and payments revenues are embedded in our commercial bank and corporate investment bank results. Across both segments revenue is up five. We've been investing in coverage teams and payment platforms that are beginning to innovate using blockchain technology to create better payment solutions for our commercial customers.
22. +0.13%14:54ManagementThese solutions will use blockchain-based payment rails to make cross-border payments faster more transparent and more predictable and over time they will extend operating hours to 24 hours seven days a week. As we look ahead businesses remain strong costs are lower and savings investments are growing across customer segments. Businesses are cautious but balance sheets and cash flows remain strong resulting in strong credit performance. Equity indices are at or at near all-time highs and credit spreads are narrow. Concerns around affordability and inflation exist
23. +0.05%15:37Managementbut the labor market and wage growth remain strong. The markets and U.S. economy have absorbed macroeconomic and geopolitical uncertainty well. Strong environments like this don't last forever and we see large amounts of capital being deployed by both banks and non-banks across a broad range of risk assets. Often when times like this continue leverage and risks develop that are sometimes hard to see. We are proud of the progress we've made and remain excited about our competitive position and ability to execute and drive towards our goal of industry leadership in the U.S. We will watch carefully for signs of outside risks and stress and continue to deploy our
24. -0.19%16:21Managementresources carefully and deliberately to serve our clients and build sustainable high returns, the inevitable market shocks and economic cycles. In closing, we and most financial institutions are benefiting from today's environment. However, we're also seeing the benefits in our results from the actions we've taken with these cycles as I've said. Our metrics clearly show our momentum across all business segments and we will continue to remain focused on driving towards higher sustainable returns. I will now turn the call over to Mike. Thank you Charlie. Good morning everyone. Since Charlie covered the drivers of our improved financial results and the momentum we are seeing across
25. -0.50%17:06Managementour second quarter results were strong with broad-based revenue growth, disciplined expense management, improved earnings increased 17 percent from year ago to 6.4 billion and our diluted earnings for share grew to two dollars up 25 percent from year 32 million or net interest income increased 609 million or five percent from year ago and increased two percent from the first was driven by higher loan and
26. -0.50%17:48Managementinvestment secure as well as one additional day in the quarter. I was expected the net interest margin declined four basis points from the first quarter down from the 13 basis points decline we had last quarter where the decline in NIM in the second quarter and over the past year
27. -0.94%18:04Managementhas been growth in interest bearing deposits income up
28. -2.01%19:44Managementuncontrolling interest. It's important to look at these results after the impact of non-controlling interest. We also had double digit growth in investment advisory fees, brokerage commissions and investment banking fees from a year ago. We had over 900 million investment banking fees in the second quarter turning to expenses on slide nine. Non-interest expense increased 282 million
29. -1.45%20:28Managementor two percent from a year ago and our efficiency ratio improved to 60 percent down four basis points from a year ago. The increase in expenses from a year ago was driven by higher revenue related and incentive compensation expense which I like to remind you is a good thing as these higher expenses are more than offset by higher revenue. We also have higher technology and advertising costs driven by the investments we're making in our businesses to generate growth. These higher expenses were partially offset by the impact of efficiency initiatives including a seven percent reduction in HIC count from a year ago. We are pleased to see the continued execution of our efficiency initiatives quarter after quarter. This is the 24th consecutive quarter of HIC count
30. -1.41%21:12Managementreductions and along with other meaningful efficiency initiatives we have been able to continue to invest in our businesses while managing overall. In fact as Charlie highlighted non-revenue related expenses were actually down from a year ago from slide 10. Our credit performance in the second quarter remains strong with our net loan charge off ratio down 10 basis points from a year ago to 34 basis points of average loans. Commercial credit continued to be strong with net loan charge off declined into 10 basis points. Consumer performance was also strong with loan charge us declining to 70 more basis points with improvements across order and continued net
31. -1.41%21:54Managementrecoveries in the residential mortgage portfolio. Non-performing assets as a percentage of total loans declined from the first quarter and from a year ago with improvements in both the commercial and consumer portfolio. Capital levels remain strong with our CET1 ratio of 10.3 percent within our stated 10 to 10 and a half percent target range and well above our CET1 regulatory
32. -1.08%22:35Managementminimum plus while the federal reserve stress test results do not impact capital requirements this year our results continue to be below the stress capital buffer floor of 2.5 percent. We repurchased three billion of common stock in the second quarter and common shares outstanding decline six percent from a year ago. We continue to have capacity to repurchase shares while also some operating segments starting with consumer banking and lending on slide 12. Consumer small and business banking revenue increased eight percent from a year ago driven by higher deposit and loan balances, wider deposit spreads and growth in non-interesting homes.
33. -0.18%23:17ManagementCredit card revenue grew two percent from a year ago due to higher loan balances. Home lending revenue declined seven percent from a year ago reflecting lower loan balances however the rate of reduction has continued to slow with balances relatively stable from the first quarter. Lower revenue also reflected the continued reduction in the size of our servicing business with third party mortgage loans service for others down 21 percent. Fundations increased 41 percent year over year but were stable from the personal banking results on slide 13. Revenue increased six percent from a year ago driven by non-interest income
34. +1.05%24:02Managementgrowth from equity investments revenue from the financing we do for renewable energy projects that come in the form of tax credits and investment banking as well as growth in net interest income from higher loan and interest bearing deposit balances. Investment banking on slide 14. Banking revenue increased 20 percent from a year ago with growth in investment banking fees and equity and debt capital markets as well as higher loan and interest bearing deposit balances. State revenue declined one percent from a year ago as higher capital markets activity and loan balances were more than offset by the impact
35. +1.05%24:45Managementof lower interest rates. Its revenue grew 24 percent from a year ago driven by stronger performance in equities and higher revenue across most fixed income products including the impact of balance sheet growth. As you know we've been at an increase of 198 billion since the end of 2024 with approximately 60 percent in financing balances, 20 percent on the trading side and 20 percent for the lending we do in this business. In our early tracking shows that is what's occurring. We track this on a granular basis and will continue to optimize with clients to drive growth
36. +0.96%25:25Managementand corporate investment banking grew 26 percent from a year ago with growth across wealth and investment management revenue increased 13 percent from a year ago driven by growth investment advisory fees from increased market valuations as well as higher net interest income due to lower deposit pricing and higher deposit loan balances. As a reminder the majority of WIM advisory assets are priced at beginning of the quarter so third quarter results will reflect market
37. +0.96%25:59Managementvaluations as of July 1st, May 26th outlook and slide 17. We are maintaining our guidance of 50 billion plus or minus of net interest income for the full year and similar to last year we expect stronger growth in the second half of the year compared to the first half. We still expect net interest income excluding markets to be approximately 48 billion for the full year but we have the key drivers starting with loans. As I highlighted average loans in the second quarter grew 12 percent as loan growth in the fourth quarter will likely be higher than the mid-single digit
38. +0.97%26:40Managementincrease which is a good thing since these higher balances help us keep in relationships the opportunity to attract non-interest bearing deposits in the
39. +0.97%26:58Managementfuture. The cap came off last year and we had
40. +0.28%28:39Managementdouble digit growth in both average loans and deposits from a year ago performance in both our commercial and consumer portfolios. We continue to return significant capital shareholders while maintaining our strong capital position. As Charlie highlighted we are seeing strong momentum in key business drivers and every one of our businesses continue to give us confidence in achieving our median terms 17 to 18 percent return on tangible.
41. -0.36%29:13OperatorAt this time we will now begin the question and answer session. If you would like to ask a question please first unmute your phone and then press star one. Please record your name at the prompt. If you would like to withdraw your question you may press star two to remove yourself from the question queue. Once again please press star one and record your name. If you would like to ask a question at this time please stand by for our first question. The first question comes from Ken Houston of Autonomous Research. Your line is open.
42. -0.36%29:51AnalystHey thanks good morning Mike. Thanks for the color on the second half expected NIM trends. The two questions I have one is just again to get to 50 billion I think we need to assume that the average earning assets continue to grow at around this three percent pace and and giving your comments about loan growth and the deposit growth is that kind of what we need to foot forward to get there. Any other things we need to think about in terms of mix within?
43. -0.54%30:16ManagementThanks. Yeah sure. Yeah I mean look when you look at what's going to progress for the second half of the year it's very similar to what we saw last year right in terms of the step up as we went through each of the quarters. You do you do benefit from an extra day as you sort of go into the third quarter so you sort of have to account for that. But we expect to see some growth in loans securities you know you get benefit of you know the fixed asset turnover given where rates are and so I think it's all progressing so it's not a not a bad assumption sort of relative to what to what to expect but we still feel very good about getting to that 50 billion in total.
44. -0.54%30:55AnalystGot it and then the second question is just on that NIMS stabilizing in the fourth quarter what are the pieces that kind of get there meaning like is it that one piece slow relative to the growth rate is it just that you kind of lap some comps you know what are the helpful things underneath that that can give us the confidence that that stabilization happens?
45. -0.95%31:18ManagementYeah sure and we know we've talked about this a little bit over like throughout the quarter but you know we didn't we don't expect to see the markets balance sheet the growth the same pace and so the the impact that we've seen over the last you know few quarters moderates and that's certainly part of the story as you get into the latter part of the part of the year and then I think you continue to get the benefit of all all what we just talked about in terms of the the growth and earning assets the repricing and then you sort of you know see the rest of the growth across the you know the balance sheet but at this point you know as I said we expect to have just a small you know decline potentially in the third quarter you know hopefully it ends up maybe even being better than
46. -0.72%32:00Managementthat and then we sort of stabilize from there.
47. -0.72%32:05OperatorThanks Mike. Next question will come from John McDonald of Truis
48. -0.72%32:11AnalystSecurities. Your line is open. Hi thanks. Yeah I was wondering Mike on expenses and efficiency what's the outlook I mean you've done a great job with the outlook on headcount so from here are you still looking to keep that flat to down and just the broader commentary about the opportunity for efficiency improvement from here to keep going. Thanks.
49. -0.72%32:35ManagementYeah sure I'll I'll take a shot and start in Charlie Kanata if he wants the you know on the headcount side you know just just more broadly on on efficiency you know we still come into the you know environment thinking the same thing we've now done now for a number of years like we've got a lot of room to go to continue to make the place more efficient and in part that drives headcount down and so given the size of our business the activity levels we've got we expect that you should we should be able to run this company you know with less headcount than we've got today certainly you know technology and AI helps us get at aspects of that you know in a different way or faster than maybe in the past but we expect that we'll continue to see more efficiency you
50. -0.75%33:18Managementknow from from here and then just more broadly you know it applies to just about everything we do and I know we keep talking about this over and over and over but but as you peel back the onion there's more opportunity to make things more automated to improve the client experience to you know make things more efficient in terms of how we serve clients every day and I think there's a lot still to to go and we you know we just come in every day and every week to sort of make sure that we continue to execute like we've done over the last few years.
51. -0.75%33:50AnalystThanks and then maybe just to follow up on Ken's Income Drivers the change in non-interest bearing from what you saw what you were expecting earlier in the year Mike is that related to any developments in your checking account growth or is it more attributable to rate seeking behavior on customers and just the rate environment what do you attribute the change in your nib outlook to?
52. -0.77%34:14ManagementYeah no it's actually not related to the checking account growth that's actually progressing quite well and as Charlie mentioned you know we're up in we're up in sort of the the checking account growth now for a number of quarters and months in a row and so I think that's actually going going quite well. I think when you look at just the broader backdrop in terms of the rate environment we expected a little bit more growth than we're seeing. We did see a little bit of growth you know from the first quarter and the second quarter so that's good but we expect it to be pretty stable from here. You know we are seeing really good success in growing interest bearing deposits and growing other business with you know with clients you know in the payment space and the treasury management space and so those those
53. -0.77%34:56Managementthings will bring that interest non-interest bearing deposits with them over time. It just takes a little bit longer for that stuff to get on board and to see the results there but but we're not seeing we're not seeing pricing pressure sort of or client behavior drive any of the
54. -0.72%35:11Operatorresults. Question will come from Erika Nagerian of UBS. Your line is open.
55. -0.72%35:22AnalystHi, good morning. Thanks for all the color so far. You know as we think about the trajectory of net interest income and net interest margin I'm wondering if we could maybe just take a step back because you know obviously there is a lot of focus on this number but I'm wondering if we could sort of separate sort of the structural factors versus the cyclical factor. So you know first you know what are you expecting for deposit costs in the second half of the year? You know is there a rate hike price then? I think you removed the cuts but Mike I just want to make sure what you were I understood what you were assuming for the short end. So what should we expect from deposit
56. -0.46%36:04Analystcost standpoint from here and additionally you have two strategies that are sort of a competing factors on the NIMM. One is you know this great growth in markets which is obviously NIMM dilutive and also strong momentum in card which is the one thing that we need which in theory could be NIMM accretive especially once the accounts mature. So you know as we think of all of those factors you know how should we think about you know whether or not we should expect more secular pressure on the NIMM you know beyond the macro factors with rates and deposit costs in the second half of the
57. -0.46%36:42Managementyear. Yeah okay there's a lot in there so I'll try to get it if I can. I think when you look at what's happening across NIMM obviously what we've got baked in to the second half of the year is you know the market's pricing in a little over one increase at this point and so I think we'll see it how that actually plays out but that'll have very little impact on the on the full year results just given you know the timing of it depending on when that happens and so I think that's not like a huge driver one way or the other. I think what's happening in our in our deposit book though is that we're seeing
58. -1.02%37:25Managementthe pace of interest bearing deposits grow at a really good clip and you can see that in the results quarter after quarter after quarter and I think even if you just look at the CID and the corporate investment bank and the commercial bank deposits where you've seen you know really good deposit growth year on year and sequentially and the majority of those deposits are going to be interest bearing deposits and so since they're growing faster and and you're seeing slower growth in the consumer side and and pretty stable non-interest bearing deposits you're going to see you know the deposit cost inch up a little bit and that's actually fine and expected and and frankly
59. -0.71%38:09Managementnot a bad thing because we're growing sort of these profitable balances across the businesses so I would expect that the deposit cost to just move up a little bit as you go in the second half of the year but ultimately I think that's actually a good thing from a profitability point of view and support sort of the the broader set of business that we do with those with those customers and then as I sort of mentioned in the commentary we expect a little bit more you know nym compression in the third quarter and things then it starts to stabilize and you get the benefit of all of the other you know impacts of you know you know that we that we sort of talked about in terms of the earning asset growth the repricing that's
60. -0.71%38:52Managementhappening across you know a large portion of of the book of the securities book and so and all and all of that I think contributes quite well and I think just keep in mind as we sort of look at nii you know what we're we're most focused on here is really growing nii over a long period of time that will generate really profitable business and relationships that that I think you know will see you know benefit us for you know for for many years to come and you may see a little bit of volatility in the nym number that you've seen over the last you know a few quarters and that's to be expected just given where we came from last year with the asset cap coming off and the pace of growth that you've seen you know since then let me just add eric this is charlie if i can do a couple of things
61. -0.22%39:37Managementnumber one is you know i think kind of separate out one is one is just kind of the like the business that we have which of and that is very management on the consumer side uh and there as we talked about you're seeing growth in interest-bearing liabilities and so it's those
62. +0.04%40:19Managementadditional businesses that have narrower margin bringing down what it means in the shorter end we feel good about more importantly over time that should also more non-interest bearing that we're providing and as i've said if we don't see that then you know we can certainly
63. +0.22%41:03Managementuh pull back on some of that activity and improve the nym but as he said in our prepared remarks we are seeing the payoff certainly on the market side at this point even though it's early and but that's a decision point um that we have to make and we'll be very conscious of what the impact is both on nym but also on this balance between um what you see in terms of nym profit growth but returns
64. +0.22%41:27Analystyep carry it loud and clear charlie i think that's why i wanted to frame it in terms of you know structural structural and growth and and to that end the second question is just the opportunity set in your you know your in your um both areas of where you're focusing growth um so maybe talk a little bit about the investment banking pipeline but also in terms of the equities opportunity so we're hearing that a lot of your peers are a little bit more limited in terms of prime equity financing capacity given the hyperscalar trade in asia of course you're not quite big globally yet and you did mention it in your prepared remarks in terms of financing related activity
65. +1.17%42:11Analystmaybe describe a little bit more like the prime financing opportunity that lies ahead especially if the you know sort of traditional um counter parties um have more limited capacity because of
66. +1.17%42:25Managementactivities outside of the u.s yeah it's like eric i'll start and um start on both parts of it so on the on the investment banking pipeline you know the the pipeline is quite strong and i think we see that now very consistently for a while now and i think you know the environment is very supportive of of of deals uh the markets are wide open both on the equity side and sort of the debt side uh and i think you know the art of the possible in the mna uh you know in the mna space is quite um quite quite alive right and i think there's a lot of active dialogue there and i think you can see our investment banking you know business had a really good quarter
67. +0.87%43:07Managementum and and i think you know that all the investments that we've made over the last three or four years have positioned us to take advantage more than we would have take advantage of this the environment more than we would have been able to you know three four five years ago by by a lot and i think uh we're continuing to make you know more investments in in you know targeted areas across different coverage sectors and in some of the product areas and so we feel good about the trajectory there and we'll see how it how it progresses and just on the broader question i would just say listen i think you know it's about what we've said in the past still holds true which is that um uh there's a lot of great competition out there there are people that are very very large in some of these businesses including prime um but what we have found is that
68. +0.87%43:51Managementpeople want uh they want more counter parties uh we have relationships with a broad set of these customers and they generally like doing business with us and so they want to do more and so for us it's a question of just pacing uh that addition uh in terms of the amount of business that we do properly in terms of growing out our prime business so you know there's nothing really material uh in this current quarter relative to that but it is an opportunity that you know we're going to be careful about um but you know that along with you know other trading flow opportunities that we have and the investment banking opportunities that we've talked about
69. +0.78%44:34Managementwe still think um are incredibly significant for us
70. +0.78%44:38Operatorfrom ibrahim puna walla of bank of america
71. +0.78%44:49Analystyour line is open hey good morning so not to be the dead horse on the margin and i like the stock obviously sold off when you started talking about your margin outlook understand you're not running the bank on one day stock reaction but maybe i think just a bigger picture question if we take a step back and uh appreciate mike your comments around the trajectory of the nii which i think is more important than what the name does any given quarter but as we look forward beyond even this year do you think the the net interest margin given your balance sheet and the business strategy on the
72. +0.32%45:34Analystgoing forward is at a point where the margin should begin to stabilize post that three q compression you talked about and one of the pushbacks this morning has been like the x the markets revenue growth predominantly ni given so i guess the street is struggling to see the cross cell of deploying that markets balance sheet into lower name and then that translating into better fee growth on the market side or maybe help us understand that from a market standpoint and then how should we think about just a normalized name for your balance sheet or business strategy
73. +0.53%46:11Managementum sure um you know i think on the on the on the nm side um you know as i said earlier on the call you know we do expect it to stabilize after you get through the third quarter and so that's definitely the case and as charlie mentioned you know there's you know over a slightly longer time period like there's opportunity to expand the name not not not just stabilized and so i think that's that's certainly what we expect as we sort of look at the rest of the year i think when you start looking at the overall you know trading business there you certainly see see some growth in ai but it's not all because of the rate move that we saw you know you get paid you know in some of the in some of these trading businesses through
74. +0.53%46:54Managementuh through nii you think mortgages you know mortgage trading and other other areas of the of that business and so you do really need to look at overall sort of revenue uh in in the markets business and when you look at you know the financing you know and i'll break it down a little bit for you you look at you know the financing side of the business you know that's up uh that's that's up a you know it's not it's not quite a not quite a double but it's pretty close when you sort of look at you know the year-on-year performance in the overall financing revenue within the business and then you saw you know roughly a 20 plus percent you know increase in in sort of the trading related revenue you know off the back of that and so i think we've seen you know quite a
75. -0.08%47:36Managementbit of uh quite a bit of uh you know growth across you know these you know these parts of the business within trading and then more importantly when you start looking at the individual clients when we're we're deploying some of this incremental financing balance sheet to you know every single one of them all but you know a couple you know have done significantly more business with us than they did just a year ago and that's just getting started in terms of ramping up some of the volumes and so i think you'll you know you'll continue to see that you know across the markets business i think for uh you know into the into the coming quarters but we feel really good about what we're seeing and the trend that we're seeing there let me just add one thing slightly
76. +0.06%48:20Managementdifferent words but kind of reinforcing a point that i made earlier what we're seeing in them is not what we're seeing in them is because things that we're doing and those are things that we don't have to continue to do or we can unwind at some point as well and again the reason why we're doing it is because we believe that it'll lead to stronger NIM in some of these businesses in the future by attracting more non-exparing deposits or by attracting additional trading and that's either going to drive the kind of profit growth and higher returns that we believe we can deliver or that's a decision point that we can make and so we
77. -0.00%49:04Managementunderstand that you know it's hard to see that as clearly from the outside so we've got to do a good job of doing our best to show you how that's actually playing itself out as mike said when it comes to the financing as an example we look client by client and we're providing more financing we're getting more share higher trading revenues and so that's when i said on the last call you know we're either going to get paid for it we're not going to do it and that very much holds true and so the fact that like that is in our control is something i think that's critically the profit of the company had to but
78. -0.00%49:48Managementnothing suggests that we should do that because we believe that we're getting the payoff for it and we'll have to show that to
79. -0.00%49:54Analystyou so i i think that's a great point charlie that the name is due to the deliberate actions you're taking and i think the one point of discussion that's come up repeatedly with investors over the last month or two is no one doubts when they think about can wells achieve a higher end of your 17 to 18 so let's call it 18 percent dot c or the next few years i think as the street is trying to digest what the execution around this growth strategy may imply i think the timing of that has become a bit more uncertain i would say over the last six months and then so to the extent you can adjust that like just through your crystal ball like how do you think about when you could achieve that target maybe
80. +0.11%50:38Analysttowards that 18 percent which also i if i recall you've talked about as a waypoint and we could go even higher than 18 percent maybe if you can provide some color around the timing of how you think about it i think that would be very helpful to your shareholders thank
81. +0.11%50:52Managementyou sure sure and listen i know it's a very busy day and you guys are trying to juggle lots of different companies i did talk a little bit about this in my prepared remarks where i talked about the fact that i know that people ask about timing it's difficult to answer because what i don't want to do what we don't want to do as a company is give you a definitive date and then have the interest rate environment change the markets environment change credit change and then you believe that we haven't actually delivered on something because the fact is we are subject to those things but assuming that the markets continue to behave and that conditions continue to be favorable what i said is that you know we would expect it to achieve in a you
82. -0.06%51:36Managementknow in a reasonable time frame and the one other thing i would say which is you know as time goes on and you know from last quarters underlying performance in our business trends in this quarters we feel even more confident about being able to deliver it and what i said in my prepared remarks is that our intention is to get there and then raise the bar higher for the future so if we didn't have the kind of confidence that we can get there in a reasonable period of time you know we wouldn't be saying that and again what gives us that confidence is looking at the underlying business drivers that we tried to lay out in the first two pages of the presentation because it's those things which are going to drive the continued growth of the franchise regardless to some extent
83. +0.09%52:19Managementof outsized performance in the markets so i know it's not giving you a definitive time frame you know i think what's important to hire not lower as each quarter goes
84. +0.09%52:32Analystby appreciate you going through it again
85. +0.09%52:35Operatorthank you question will come from an uncle salya of
86. +0.09%52:42Analystmorgan stanley your line is open hi good morning i wanted to dig in a little bit on on long growth you know clearly very strong this quarter you noted upside to the original long growth guy to the full year can you just walk us through some of the drivers on what you're seeing now how much of the commercial long growth reflects high utilization versus new customer equity customer activity and i mean i guess your willingness and ability to lead more on the auto side
87. -0.01%53:15Managementgoing forward sure i'll start maybe on the consumer side and then i'll bring it back on the commercial side so on the consumer side you know we can see continue to see really good growth in auto we see steady growth in in card and the home lending business is kind of pretty stable at this point and i think those trends like we would expect to continue as you sort of look at the rest of the rest of the year and so steady as you go in terms of what we've been seeing quarter to quarter there i think on the commercial loan side it's it's really not utilization you know we see a little bit in pockets of like slightly more utilization here or there but it's really not you know
88. -0.01%53:58Managementyou know substantially higher utilization of revolvers it is it is new business we've been bringing on that drives a lot of it in the cni in the cni space and i think you know we'll see how the rest of the year progresses you know as i mentioned in the script you know we know we certainly have seen you know higher loan growth than what we had assumed in the beginning of the year and that's a that's a positive you know we'll have to see how the rest of the year goes i think you know you definitely see tariff refunds coming through impacting some commercial bank clients in terms of the utilization and you see a bunch of other factors there but but i think it's been it's been good so far and we'll see how it progresses for for the rest of the for the rest of the year and and you know importantly with that we're not you know we're seeing really
89. +0.22%54:43Managementgood you know performance from a credit perspective across really all the portfolios and and i think that supports you know you know continued sort of execution across each of the businesses and growing you know those those portfolios
90. +0.22%54:57Analystgot it thank you and then maybe on the capital side uh three billion in buybacks this quarter a little bit below the recent pace how should we think about where you want to manage to in your cd1 target range and how should we think about repurchases going forward here sure i mean we're really comfortable in
91. +0.12%55:21Managementin the range that we put out there of 10 to 10 and a half really anywhere in that range we're we're comfortable with and we'll you know we approach buybacks the same way we do every quarter you know we look at you know what we expect to do from a client perspective and what growth we expect to see across the portfolios and the business we you know think about all the different risks that are out there including the rate environment and and the volatility that may be there and how that impacts capital and then you know we'll we'll we'll make decisions on how much we we will buy back each quarter and so we'll sort of keep that you know progression as we go this quarter and we'll see see where we get to but we certainly as we mentioned we bought back seven billion in the in the in the first
92. +0.27%56:05Managementhalf of the year and i think we still have capacity to buy back more as we go we'll make the decision as we go in the quarter and also and also keep in mind you know mike's talking about you know this absent the finalization of the capital rules and as we've said in the past you know the capital rules might not necessarily change uh you know that ct1 plus buffers but but but it could certainly change um goes into the calculation relative to freeing up capital through the rwa calculation for expect our rwa to go down as a result of you know at least what was proposed
93. +0.27%56:45Managementby about seven percent so we'll see how it gets finalized
94. +0.27%56:51Analystyeah if i can ask a quick clarification on that so you would need to see the rules being finalized before you act on that lower ct1 ratio or sorry on the on the higher capital on the ability for the new capital rules to give you more um ct1 you would only act on that in terms of buybacks or capital going with once a rule to
95. +0.23%57:19Managementyeah i think we need to see the rule get finalized um but hopefully that'll
96. +0.23%57:22Operatorget done pretty quickly got it thank you from matt o'connor of deutsch bank your line is open uh good morning
97. +0.23%57:35Analystuh just a quick comment before my question here um you know as your market business has gotten bigger i need to give us the pieces uh that we could probably calculate it but shown in them x markets i think might be helpful and cut a handful of these questions related to it um my question is uh you know the new credit card accounts as you pointed out are up sharply post lifting of the asset cap i think it's up 50 or 60 percent now in the four quarters um any way to estimate how much of a drag there is from those new cards and related promotions as we think about the credit card yield uh and then when does that inflect uh as that backbone kind of starts overwhelming
98. +0.46%58:16Managementuh the new accounts yeah so as um as charlie sort of mentioned in his script like we've made some you know intentional decisions to um you know see the growth like you know continue to execute on on growing those those accounts and i think you know the good part about what we've seen now for the last you know almost four quarters i guess started really in the third quarter of last year um is a lot of that a lot of those new accounts are actually coming through our either our branch network or you know people coming directly to wellsfargo.com and so the acquisition costs there are are lower than you know if you're if you're doing them through
99. +0.46%58:58Managementthird-party affiliates and others and so that's a really good thing you know and with that comes really high quality you know accounts we know these customers uh you know the majority of it's still existing customers that are you know coming uh you know coming to uh you know us for these uh you know these cards and so i think that's a good thing um and i think as you know those vintages are a little bit bigger than the you know the early vintages and so uh but but overall we continue to make you know we'll continue to make those decisions as we go quarter to quarter and decide sort of you know what we're seeing and and how happy we are with the quality of it um and i think you know but but despite that i think over the next couple years you will you will see you know the profitability of that
100. +0.34%59:41Managementbusiness you know just you know can continue to increase and the returns increase in the business and that's you know the way we've been sort of managing it and then you know the the yield quarter to quarter you know in terms of you know what you see from from the credit card deal but that'll that'll move around a little bit depending on sort of what we see from the new acquisitions but but over a longer period of time you'll see that continue to increase as those as those vintages mature and you transition from the intro uh the aprs or the you know balance transfer aprs into sort of real revolve revolving balances um and that'll happen over the next
101. +0.49%60:16Operatorcouple years okay thank you next question will come from john pancari of evercore isi your line is open morning i just want to see if you
102. +0.49%60:30Analystcan um comment a bit more just around deposit price competition that you're seeing how is it trending you know versus your expectations and then related to that i know you did comment on the the growth expectation on the loan front on the mid single digit side do you self-confidence around a mid single digit pace growth as you look at your deposit strategy yeah i mean the short answer on the
103. +0.49%60:55Managementsecond part is is yes on the deposits and and again a little more weighted to interest bearing than non-interest bearing as i mentioned john but we we're seeing you know week to week month to month sort of the growth that we expect there uh so i think that's that's good um you know on the on the pricing uh competition question you know it really hasn't changed over the last few quarters you know on the consumer side you know our our standard you know rates haven't moved uh we're not seeing you know shifts in behavior uh than what we've seen over the last few quarters there in terms of you know people yield seeking and um uh in any in any way uh so i think that's that's good and then on the commercial side you know rates are always competitive
104. +0.18%61:39Managementbut what we have not seen uh we've not seen rates get more competitive than what we would have expected normally you know across across those businesses and we're really careful to you know not overpay to attract uh balances and so i think we're not we're not seeing that kind of pressure and you know there's always there's always an example of you know of something to the contrary to what i said but but i think when you look at the vast majority of the activity we're seeing it's all very much right in the fair way of what we would have expected to see thanks and
105. +0.25%62:11Analystthen separately on expenses i appreciate the color you already gave around the efficiency and everything can you maybe just give us a little update around the risk and reg area of the of the cost base i know there's still a fair amount of headcount dedicated to that area is this broader area now that a lot of the regulatory issues have been worked through becoming a greater expense
106. +0.25%62:31Managementlever for you and and i think you know we we talked about that over the last couple years right as we completed the work and moved past you know the the consent orders that we had in place you'll see us continue to make that process those processes that we put in place more efficient and if you think about where we started this journey five six seven years ago now you know i think there's better technology there's better ways to do things and and so the normal streamlining that sort of happens is happening and but that'll be a very methodical sort of approach and you'll see that you know happen over you know over over time but it's certainly you know part of some of the efficiency that you're seeing come through in the last couple
107. -0.12%63:14Operatorquarters. McGrady of Keefe, Brouillette, and Woods. Your line is open.
108. -0.12%63:28AnalystOh great um just want to credit it's been um questions have been fairly limited on conference calls this quarter and throughout the quarter just i guess a check in on consumer uh health of the consumer anything incrementally may be seen and then you know conversely on the commercial bar or you know demand for credit we talked about but just any signs within the commercial book of of weakening or normalization. Thanks.
109. -0.12%63:54ManagementOn the consumer side it really is um you know the delinquency trends are better than we model most months uh really every month that we've seen now for the for all year across each of the portfolios um we're not seeing signs any you know we're not seeing any any cohorts of clients whether you break it by FICO or other other other ways to look at higher or lower income levels we're not seeing any of the trends uh in any of the cohorts change um really at all um certainly not in anything meaningful um and so i think you know it's supportive of you know a good second half of the year you know when you think about sort of
110. -0.05%64:36Managementdelinquencies and and charge-offs and so i think that's really good and that's supported you know by you know the strong you know uh employment you know picture that we see more broadly and we've seen you know good wage growth to counteract some of the inflationary you know issues that we've that we've had and so overall you're seeing really good performance on the consumer side. Um on the commercial side um same um really there's no systemic issues that we're seeing you know come through the portfolio there's always you know individual idiosyncratic issues you might see with an individual borrower but overall we're seeing really good credit performance i think people are still being very cautious about
111. -0.12%65:16Managementyou know big investments um they still have more liquidity in most cases than they did you know maybe historically you know pre-COVID days um you're not seeing people you know make big investments in terms of hiring lots of people but you're also not seeing people fire a lot of people at least in from what we can tell in our book and so i think overall you know i think people are managing their liquidity and managing their uh you know overall balance sheets quite quite well on the commercial side and so again you know we have not seen anything that would suggest
112. -0.12%65:47Operatorthere's a change to that at this point. Verini with Jeff
113. -0.12%65:59AnalystRies your line is open sir. Hi thanks for taking the question so you mentioned about the market's business asset growth should slow in the second half is that a function of this business getting to your comfort level and then from there the market's business asset growth should be in line with overall balance sheet growth?
114. +0.11%66:23ManagementNo it's not necessarily that i think you know you know when you think about what happened you know pre-asset cap we really had to constrain that business and so you know the the financing balances that we added you know starting in the second half of june last year you know was at a pace that is just not you know sustainable for you know forever and so it really was the re-emergence and the you know the re-entry i guess in some cases into sort of the financing activity that we had just more broadly across that that business and so you'll see it just start to more get to kind of more of a natural you know growth rate over the next you know couple quarters and then we'll see how we'll see
115. +0.06%67:05Managementand then we'll decide you know how fast it goes from there based on the opportunity sets that's there but but it really you know the pace you saw was really a reflection of us coming out of the asset cap and being able to deploy balance sheet at a at a pace that was just different than normal. And just as a reminder because we haven't mentioned this in a while that when we had to live with the asset cap we reduced the balance sheet in markets more significantly than any other place in the company because we didn't want to limit things like consumer loans consumer deposits and things like that and so you know a lot of what we're seeing is just kind of a return of the balance sheet that they had originally had and we'll have a normal pace of growth going forward. Yeah and as I mentioned in my commentary
116. +0.06%67:47Managementwe're up about 200 billion dollars since the end of 2024 that's a good clip I think over the last 18 months.
117. +0.06%67:55AnalystThat's helpful and then shifting over I was curious about advisor hiring can you talk about the competitiveness and the pipeline you're seeing there?
118. +0.12%68:06ManagementYeah I mean advisor you know getting really good advisors and teams of advisors you know has always been competitive and and I think continues to be competitive. We're very disciplined about our approach to that we don't overpay we have not changed our deal you know you know to recruit advisors in a while and don't plan to so we may miss out on some teams if if that's the case so what we try to make sure that we're providing is the right platform with the right capabilities to attract these advisors and I think that's really resonated and if you look at the last you know three quarters you know we've had close to if not record recruiting in terms of the the amount of business they bring so
119. +0.12%68:48Managementthink about it as like revenue that's coming on to the platform over the last three quarter each quarter of the last three quarters and so it's been quite good to see those advisors and our yeah and our attrition is is at you know record low for us in terms of attrition that we're seeing you know across the advisor space and and what's good about the types of advisors we're attracting is they bring really good investment business but they also bring the need for banking which is you know both deposits and lending which I think really rounds out the profitability of the business that's coming out of the platform which helps improve the margin of that business over a longer period of time and so the team's done a really nice job
120. +0.05%69:31Managementattracting you know the right types of advisors and and the pipeline that we've got is quite it's quite good in terms of what helpful thank you question will come from Vivek
121. +0.05%69:48OperatorJanaja of JP Morgan your line is open thanks can you hear me
122. +0.05%69:55Analystyeah we can yeah oh thanks Charlie Mike sorry I'm just stepping back on NII we're stepping away even just from them both you and Mike said at conferences in the second quarter you were very confident about the 50 billion NII and today you've gone to 50 billion plus seems like a little bit of a shift driving that is that a shift what's driving that little shift
123. -0.01%70:29Managementyou know in fact no no shift at all the 50 billion plus or minus is exactly what we said in January and exactly what we said you know in the end of the first quarter in what I said at Morgan Stanley you know the conference and others and so I think no shift at all and we're very confident no intention to shift anything or guidance is the same and we feel
124. -0.01%70:50Analystconfident about it that that that was an important clarification commercial loans your period end growth slowed a little bit any color on what's driving that do you expect that to pick up again and then what would be the drive of that
125. -0.24%71:05Managementanything yeah look at it like the period end numbers driven by lots of factors uh Vivek you have some seasonality through the quarter you saw some you know tariff related uh refund related pay downs but but there's nothing that I would highlight as sort of a change in overall sentiment that you know is impacting the clients and as I you know said earlier I think on the consumer side you're going to we expect to see more growth in uh you know in auto and in card I think you'll see home lending be stable and then I think you'll see some growth in the commercial uh portfolios
126. -0.24%71:39Operatorin the second half of the year thank you and for today we'll come from Gerard Cassidy with RBC Capital Markets your line
127. -0.24%71:52Analystis open sir thank you hi Charlie hi Mike can you guys share with us um on credit obviously your credit quality is very strong the industry is experiencing really good credit uh in this period are you seeing any signs of risk taking by your competitors in terms of underwriting in the commercial loan area or it could be in consumer and and if not what are you looking for as we go forward for some aggressive underwriting that could lead to issues
128. -0.21%72:29Managementyou know in the next credit cycle yeah let me take a stab at it um and Mike you can either agree correct me or not um I think on the consumer side we would say um not really um what we see is kind of you know consistent underwriting versus the people that we compete with um you know everyone kind of comes and goes sometimes times are times are good uh but not not not a lot on the consumer side I think on the wholesale side it is a very very different story um and you know that's where you see the deployment of
129. -0.30%73:10Managementsignificant amounts of capital not just from banks from non-banks um and there's a wide range of risk that people are taking in lending activities um I kind of try to allude to this in my remarks you know we are uh you know staying true to franchise but when you look at whether it's you know things in data centers you know the uh the strategic transactions that are done you know that are being done out there um there is you know there are more risk assets being created on the wholesale side um and there's a
130. -0.30%73:53Managementlot of capital out there that's you know you know we're doing you know the pieces of the transactions that we're comfortable with that have the credit profile um that were that were used to underwriting um and there are others that are willing to take
131. -0.50%74:09Analystmore risk than we are and just as a quick follow-up to that answer Charlie on the consumer is there any way you guys measure or can capture the non-bank consumer lenders and I know that it's not primarily your customer because they tend to be a higher risk customer but is there any way of making sure that there's another second derivative effect on your better quality consumer customers?
132. -0.50%74:41ManagementWell I mean I'm not sure I make sure following this I think you know when it comes to you know the the consumer credit that we're extending we're making our own credit decision with every single loan based upon everything that we know including looking at bureau information and things that they might have away from us to the extent we can see it and so you know that is that's totally within our control um and we understand that. We do see some of the activities in the non-bank universe through what we do on the wholesale side in terms of who we finance um we've you know we've talked about this last quarter uh it's good information to have but we're also you know selective about who we're lending
133. -0.40%75:23Managementto um in that space. Understood and then just as the
134. -0.40%75:36Analystlast final up um final question I know this is probably hard to answer but AI has been just so powerful to the U.S. economy in terms of capital expenditures you mentioned you know data centers of course um is there any way of getting your arms around of second derivative exposures to the AI industry for wells so that you know I don't think you or many of your peers have direct data center construction loans but I'm just wondering that if this when this boom slows down is there some fallout that we could see potentially down the road on the second derivative
135. -0.31%76:18Analystof the suppliers or other folks that it's not as clear maybe today that they have that kind of exposure in their business models?
136. -0.31%76:28ManagementUm yeah I mean listen I think you know when you look at uh the exposures that are being created to uh to help finance the build out I mean you're you're you're absolutely right there are different types of things that are being financed right there's core and shell there's power there are chips and there are whole series of things that go into the data center um and you know uh we underwrite those different pieces of those financings very differently um because we rely on you know different uh types of um credit support for those to be paid off um and you
137. -0.37%77:11Managementknow it's very very different lending to a chip maker that has 80 percent margins where we get paid back in a year and a half versus lending to you know someone else in the supply chain who it's going to take you know you 15 years to get paid back or 10 years to get paid back and hope that the LLM provider who's renting that space uh is going to be there and so you know there are and so that is the complication um that you know everyone is working through in terms of you know who we lend to and that's when I say that you know there are different kinds of risks that are being created here um and we're you know working to stay within the lane of the risks that we understand uh we're confident
138. -0.37%77:54Managementum not just that we understand it will obviously get paid back um and different people have different risk colorances and you know that's uh no I appreciate the color