Wells Fargo & Co ($WFC) Q2 2026 Earnings Call

Welcome 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, press star two. 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.

Good morning everyone. Thank you for joining our call today where our CEO Charlie Sharf and our CFO Mike Santomassimo 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, including the Form 8-K filed today containing our earnings materials. Information about any non-GAAP financial measures referenced, 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 $2 in the second quarter, up 25% from a year ago. Revenue grew 9% 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 US. 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 5% from a year ago and non-interest income grew 13% as we're making good progress against our goal to create a more balanced revenue mix by growing fee based revenues. Expenses increased 2% 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 6 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, including 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 remained strong across all portfolios and net loan charge offs 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% and average deposits up 10% from a year ago. Just 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 $9.88 billion 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% to 50 cents per share, subject to approval by our board directors at its meeting later this month. Our continued focus on improving returns was evident with ROCE increasing from 15.2% a year ago to 17.7% in the second quarter and 16.1% 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 of a sustainable ROCE of 17 to 18%. 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 and lending with 6% revenue growth from a year ago. After 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 5 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% in the second quarter from a year 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 2 to three years for vintages to season and earn 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 versus 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 were reflected 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 advisers 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 average balances were up 31%. In part due to becoming the preferred financing provider for Volkswagen and Audi vehicles in the US. Importantly, 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 15% from a year ago to over $2.4 trillion 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 advisers better tools to serve clients and grow their practices. Investments like this are improving productivity, strengthening the client experience, and driving improved advisor hiring and retention. We are also working to be our client's 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. Securities-based 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 advisers offering this product to their clients. Importantly, the opportunity in this business to grow investments and banking 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 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 profitability 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, hedging, 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 senior 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 and 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, our 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 US advisers by announced deal volume, reflecting our active role in advising our clients on franchise-defining transactions. We also have strong share in CRA capital markets, including being the number one non-agency CNBS bookrunner, number one in real estate loan syndications, and number one in CRA CLOs. This was a strong quarter across corporate investment banking and we still have significant opportunity to grow each of the businesses. Finally, let me highlight commercial banking which generated 6% 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 9% and average deposits grew 10% from a year ago. Our investments include targeted hiring in 20 high-density markets where we are underpenetrated 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. We'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 was up 5% from a year ago. We've been investing in coverage teams and payment platforms and are beginning to innovate using blockchain technology to create better payment solutions for our commercial customers. These 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, 7 days a week. As we look ahead, consumers and businesses remain strong. Consumer spending is higher, charge offs are lower, and savings and 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 near all-time highs, and credit spreads are narrow. Concerns around affordability and inflation exist, but the labor market and wage growth remain strong. The markets and US economy have absorbed macroeconomic and geopolitical uncertainty. While 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 US. We will watch carefully for signs of outsized risks and stress and continue to deploy our resources carefully and deliberately to serve our clients and build sustainable high returns and higher growth that can endure 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 which should endure through cycles. As I 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.

At 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 of Autonomous Research. Your line is open.

Hey, thanks. Good morning. Hey Mike, thanks for the color on the second half expected NIM trends. The two questions I have. One is just to get to 50 billion, I think we need to assume that the average earning assets continue to grow at around this 3% pace. And given your comments about loan growth and the deposit growth, is that kind of what we need to factor for to get there? Any other things we need to think about in terms of mix within? Thanks.

Got it. And then the second question is just on that NIM stabilizing in the fourth quarter, what are the pieces that kind of get there? Meaning like is it that one piece slows 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.

The next question will come from John McDonald of Truis Securities. 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.

Okay. Thanks. And then maybe just to follow up on Ken's line of questioning around the net interest 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?

The next question will come from Erica Negerian of UBS. Your line is open.

Hi. 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, obviously there is a lot of focus on this number. But I'm wondering if we could sort of separate the structural factors versus the cyclical factors. So first, what are you expecting for deposit costs in the second half of the year? Is there a rate hike priced in? I think you removed the cuts but Mike I just want to make sure what you were assuming for the short end. So what should we expect from deposit cost standpoint from here? And additionally you have two strategies that are sort of competing factors on the NIM. One is this great growth in markets which is obviously NIM dilutive and also strong momentum in card which in theory could be NIM accretive especially once the accounts mature. So, as we think of all of those factors, how should we think about whether or not we should expect more secular pressure on the NIM, beyond the fact the macro factors with rates and deposit costs in the second half of the year.

Let me just add, Eric, this is Charlie, if I can, a couple of things. Number one is, I think the way we think about this is to separate out our balance sheet and what you're seeing into a couple of different components. One is just the business that we have which generates the majority of NII, that is very stable. And then we have these businesses that we're looking to grow, both in the markets business but also ultimately expanding relationships and treasury management on the consumer side. And there, as we talked about, you're seeing growth in interest-bearing liabilities, and so it's those additional businesses that have narrower margin NIM that is bringing down the NIM. But we're looking at it in terms of what it means in the shorter term for profit growth and for returns, and we feel good about that at this point. But more importantly, over time, that should also help us grow NIM as we attract more non-interest bearing over a period of time, and away from NIM we generate stronger trading revenues. So that is the flywheel effect of that financing that we're providing. And as I've said, if we don't see that, then we can certainly pull back on some of that activity and improve the NIM. But as I said in our prepared remarks, we are seeing the payoff certainly on the market side at this point even though it's early. But that's a decision point that we have to make, and we'll be very conscious of what the impact is both on NIM but also on this balance between what you see in terms of NIM, profit growth, but returns.

Yeah, hear you loud and clear, Charlie. I think that's why I wanted to frame it in terms of structural and growth. And to that end, the second question is just the opportunities in your areas of where you're focusing growth. So maybe talk a little bit about the investment banking pipeline, but also in terms of the equities opportunity. We're hearing that a lot of your peers are a little bit more limited in terms of prime equities financing capacity given the hyperscaler 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. Maybe describe a little bit more the prime financing opportunity that lies ahead, especially if the traditional counterparties have more limited capacity because of activities outside of the US.

Yeah, Mike, Eric, I'll start on both parts of it. So on the investment banking pipeline, the pipeline's quite strong. And I think we see that now very consistently for a while now. The environment is very supportive of deals. The markets are wide open both on the equity side and the debt side. And I think the art of the possible in the M&A space is quite alive. There's a lot of active dialogue there. And you can see our investment banking business had a really good quarter. All the investments that we've made over the last three or four years have positioned us to take advantage of this environment more than we would have been able to three, four, five years ago by a lot. And we're continuing to make more investments in targeted areas across different coverage sectors and in some of the product areas. So we feel good about the trajectory there, and we'll see how it progresses. And just on the broader question, I would just say listen, I think it's what we've said in the past still holds true, which is that there's a lot of great competition out there. There are people that are very large in some of these businesses including Prime. But what we have found is that people want more options, they want more counterparties. We have relationships with a broad set of these customers, and they generally like doing business with us, so they want to do more. So for us, it's a question of just pacing that addition in terms of the amount of business that we do properly. We're still very early in terms of growing out our prime business. So there's nothing really material in this current quarter relative to that, but it is an opportunity that we're going to be careful about. But that along with other trading flow opportunities that we have and the investment banking opportunities that we've talked about, we still think are incredibly significant for us.

Thank you.

The next question will come from Ibraim Punala of Bank of America. Your line is open.

Hey, good morning. So, not to beat a 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 appreciate Mike your comments on the trajectory of the NII, which I think is more important than what the NIM does any given quarter, but as we look forward beyond even this year, do you think the net interest margin given your balance sheet and the business strategy going forward is at a point where the margin should begin to stabilize post that third quarter compression you talked about? And one of the pushbacks this morning has been that the markets revenue growth is predominantly NII driven. So I guess the street is struggling to see the cross-sell of deploying that markets balance sheet into lower NIM 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 NIM for your balance sheet or business strategy?

Let me just add one thing, slightly different words but reinforcing a point that I made earlier. What we're seeing in NIM is not happening to us. What we're seeing in NIM is because of 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. 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-interest bearing 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. We understand that it's hard to see that as clearly from the outside, so we've got to do a good job of showing you how that's actually playing itself out. But 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. That's when I said on the last call, we're either going to get paid for it or we're not going to do it. That very much holds true. The fact that it is in our control is critically important and is a tool for us to help grow the returns and the profit of the company. We can either slow things down or reverse course if we had to, but nothing 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 you.

So I think that's a great point, Charlie. 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% ROTCE over 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 so to the extent you can address that, just through your crystal ball, how do you think about when you could achieve that target, maybe towards that 18%, which also, if I recall, you've talked about as a waypoint and we could go even higher than 18%? 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 you.

Appreciate you going through it again. Thank you.

The next question will come from Anan Kosalia of Morgan Stanley. Your line is open.

Hi, good morning. I wanted to dig in a little bit on loan growth. Clearly very strong this quarter. You noted upside to the original loan growth guide for the full year. Can you just walk us through some of the drivers on what you're seeing now? How much of the commercial loan growth reflects high utilization versus new customer activity? And I mean, I guess your willingness and ability to lean more on the auto side going forward.

Got it. Thank you. And then maybe on the capital side, $3 billion of buybacks this quarter, a little bit below the recent base. How should we think about where you want to manage to in your CET1 target range, and how should we think about repurchases going forward here?

Yeah. And just as a reminder, we still expect our RWA to go down as a result of, at least what was proposed, by about 7%. So we'll see how it gets finalized.

Got it. And 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 CET1 ratio, or on the ability for the new capital rules to give you more CET1? You would only act on that in terms of buybacks or capital deployment once the rules are finalized.

Got it. Thank you.

The next question will come from Matt O'Conor of Deutsche Bank. Your line is open.

Good morning. Just a quick comment before my question here. As your markets business has gotten bigger, I know you give us the pieces that we could probably calculate it, but showing the NIM ex markets I think might be helpful and cut a handful of these questions related to it. My question is, the new credit card accounts as you pointed out are up sharply post lifting of the asset cap. I think it's up 50-60% now in the four quarters. 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, and then when does that inflect as that back book starts overwhelming the new accounts?

Okay, thank you.

The next question will come from John Pankary of Evercore ISI. Your line is open.

Morning. I just want to see if you can comment a bit more just around deposit price competition that you're seeing. How is it trending versus your expectations? And then related to that, I know you did comment on the growth expectation on the loan front on the mid-single-digit side. Do you still have confidence around a mid-single-digit pace growth as you look at your deposit strategy? Thanks.

Okay. Thanks. And then separately on expenses, I appreciate the color you already gave around efficiency and everything. Can you maybe just give us a little update around the risk and regulatory area of the clawback space? 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 lever for you? Thanks.

Okay. Thanks, Mike. Appreciate it.

The next question will come from Chris McGrady of Keefe Bruyette and Woods. Your line is open.

Oh, great. Just one on credit. It's been questions have been fairly limited on conference calls this quarter and throughout the quarter. Just a check-in on consumer health, the consumer, anything incremental you may be seeing. And then conversely, on the commercial borrower, demand for credit we talked about, but just any signs within the commercial book of weakening or normalization. Thanks.

Great. Thank you.

The next question will come from David Chevarini with Jefferies. Your line is open, sir.

Hi, thanks for taking the question. So you mentioned about the markets business asset growth should slow in the second half. Is that a function of this business getting to your comfort level, and from there the markets business asset growth should be in line with overall balance sheet growth?

Yeah. And as I mentioned in my commentary, we're up about $200 billion since the end of 2024. So that's a good clip over the last 18 months.

Got it. That'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?

Very helpful. Thank you.

The next question will come from VC Jania of JPMorgan. Your line is open.

Thanks. Can you hear me?

Yes, we can. Yeah.

Oh, thanks, Charlie. Mike, sorry. Stepping back on NII, stepping away even just from NIM. 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 or minus. Seems like a little bit of a shift. Any color on what's driving that? Is that a shift?

Okay, 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 what would be the driver of that?

Thank you.

And the last question for today will come from Gerard Cassidy with RBC Capital Markets. Your line is open, sir.

Thank you. Hi, Charlie. Hi, Mike. Can you guys share with us on credit? Obviously, your credit quality is very strong. The industry is experiencing really good credit 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 if not, what are you looking for as we go forward for some aggressive underwriting that could lead to issues in the next credit cycle?

Yeah, let me take a stab at it. Mike, you can either agree, correct me, or not. I think on the consumer side, we would say not really. What we see is consistent underwriting versus the people that we compete with. Everyone kind of comes and goes sometimes, and times are good, but not a lot on the consumer side. I think on the wholesale side, it is a very different story. That's where you see the deployment of significant amounts of capital, not just from banks, from non-banks. And there is a wide range of risk that people are taking in the lending activities. I kind of tried to allude to this in my remarks. We are staying true to who we are in terms of what our risk tolerances are in the context of a growing franchise. But when you look at things in data centers, some of the strategic transactions that are being done out there, there are more risk assets being created on the wholesale side. And there's a lot of capital out there to support that. We're doing the pieces of the transactions that we're comfortable with, that have the credit profile that we're used to underwriting, and there are others that are willing to take more 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 they're not primarily your customer because they tend to be a higher risk customer, but is there any way of making sure that there's not a second derivative effect on your better quality consumer customers?

Well, I'm not sure I'm following this. I think when it comes to 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. So that is totally within our control, 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. We talked about this last quarter. It's good information to have, but we're also selective about who we're lending to, because not everyone in that space has the same risk tolerances.

Understood. And then just as the last final question, I know this is probably hard to answer, but AI has been so powerful to the US economy in terms of capital expenditures. You mentioned data centers of course. Is there any way of getting your arms around second derivative exposures to the AI industry for Wells? I don't think you or many of your peers have direct data center construction loans, but I'm just wondering that if this boom slows down, is there some fallout that we could see potentially down the road on the second derivative of the suppliers or other folks that it's not as clear today that they have that kind of exposure in their business models?

Yeah, I mean, listen, when you look at the exposures that are being created to help finance the buildout, you're absolutely right. There are different types of things that are being financed: core and shell, power, chips, a whole series of things that go into the data center. We underwrite those different pieces of those financings very differently because we rely on different types of credit support for those to be paid off. It's very different lending to a chip maker that has 80% margins where we get paid back in a year and a half versus lending to someone else in the supply chain who it's going to take 15 years to get paid back or 10 years and hope that the LLM provider who's renting that space is going to be there. So that is the complication that everyone is working through in terms of who we lend to. And that's when I say that there are different kinds of risk that are being created here. We're working to stay within the lane of the risks that we understand. We're confident not just that we understand it, we'll obviously get paid back. Different people have different risk tolerances, and that's always been the case.

No, I appreciate the color. Thank you, Charlie.

All righty. All right. Thanks everyone.