2014 Annual Conference| Keynote Remarks by John Stumpf

Thank you. Are we on? I think it was a wonderful introduction. Sorry, my voice is a little bit off. I've been traveling, and this is the most important part of my week, and my voice is at its worst, but I'll try to make it through. That was a wonderful introduction, thank you. As I was sitting there listening to it, I thought to myself, it's probably the second best introduction I've had this week. Yesterday, the guidance reps, I did it myself, but other than that, it was fabulous. I appreciate it. I was standing next to that beautiful Tesla right here and thinking about the zero carbon footprint. Our company goes back to 1852. We had something called a stagecoach, also had zero carbon footprint. Now, it had other footprints, but I want to tell you a little story about our company because I want to put in reference why the Ex-Im Bank is so important and so vital to America. Yes, we're a large bank today, but our history is very American, the American Dream. Our history goes back to 1851 when the founders of American Express Company, who were Wells and Fargo, decided in early 1852 to move the company west of the Mississippi. The rest of the shareholders said, 'That's never going to work. We don't like that. There's no states out there, and it's wild, and you can't get a Starbucks.' And Wells Fargo said, 'We'll do it anyhow.' So they sold their shares in American Express. March 18th, 1852, they sign the incorporation documents. July 13, 1852, they open their first office in San Francisco, and we're the seventh oldest business today that is still the business which we started. Things boomed immediately. Gold was discovered. We start moving goods and services. By 1869, they'd put the railroad across the country. Our internet, our stagecoach, which is our only mode of transportation, became irrelevant overnight, like many of the businesses we serve today. We had to reinvent ourselves. 1918, it was in April. The CEO was in the office I've been today, which is a very nondescript office. The carpet is still the same that we had in 1918. We had a call from the Secretary of the Treasury, who happened to be Woodrow Wilson's son-in-law. At the time, we had 10,000 offices across the nation. We were UPS before you heard of UPS. We had drones delivering goods and services before Amazon thought about it. And the Secretary of the Treasury said, 'In support of the World War I effort, we're going to use the power of eminent domain. We're going to take all your offices away but one.' Now, that's a lousy day with the federal government. We don't take direct calls anymore from the Secretary of the Treasury. So he started out with one office again. And then 16 years ago, the company I was with, the Minneapolis-based Norwest, merged with Wells Fargo. He mentioned the time we didn't even have an internet offering at the former Norwest. Now, Al Gore invented it, we had not heard about it in Minneapolis. But thank God Wells Fargo had. And five years ago, we merged with Wachovia. So today, just to give you a round off of the tape, we have 6,200 banking stores here in America, more than any other bank. 97% of our revenues are here in America, and 97% of our people are here in America. In 2012, although they don't show records of it, I think we're the highest federal income taxpayer of all corporations in America. Our tax rate last year was 32%. In 2012, we were the number one philanthropic organization of all companies of all industries in America. We employ one in 500 working Americans. We helped over 20,000 nonprofits last year. We're the 23rd largest bank of the world and the fourth largest in the United States. We've never been impressed with size. Some are two and three times our size, but if you take our market capitalization, the price of our stock times the number of shares, we're the number one market cap bank in the world by a factor of 30 or 40, $50 billion. So if you hire great people, serve local communities, give back, your shareholders get handsomely rewarded. We have a number one market position in ag loans. In fact, we make more—the next closest is one-third our size. We make more energy loans, both in the renewable space and hydrocarbons, more commercial real estate loans, more auto loans, more home loans, more middle market loans than anybody else. We're in the real economy. We don't focus on cornering the aluminum market, you know, somehow taking one tax authority and arbitraging another one. That's not who we are. And many, many of our stores are in rural America. I grew up on a farm, the second oldest of 11 children in northern Minnesota. My family is still in the farming business. And I think this discussion we're having, unfortunately, today about big versus medium versus small, whatever the industry is, is wrong. It's about all of us. All banks of all sizes, all companies of all sizes are important to the ecosystem of America. We're now starting soon to start the sixth year since the downturn of 2008, and we've had 58 or 59 months of sustained recovery. We added an average of 174,000 jobs in 2011, 185,000 jobs per month in 2012, 195,000 in 2013 on average. So why does it feel very good? Why does it feel that somehow we're not fighting at our punching weight or not doing the things that can be done? And the answer is because we're not. The economy, in the size of GDP, is back to where it was, I think a little bit above where it was before the downturn, but we're doing it with five or six million less workers. So the reason I took time to come here today is because I know how important jobs are to America. Jobs are the key. We're not going to tax our way out of our issues. We're not going to save our way out of our issues. All those are both important elements. We're going to grow our way out of our issues. I thought Larry ended his talk in a brilliant place. Our challenges are made by us, and they can be fixed by us. We do have 3% of our presence internationally, and I do get a chance to travel once a year or so internationally. And I can tell you, I don't care which country it is, which part of the world it is, they look here for leadership and guidance, and they would trade their problems for our problems all day long. I think, in fact, many countries have more confidence in us than sometimes we have in ourselves. So if we're so big in consumer lending and small business lending and middle market lending and energy and ag, why do we need an Ex-Im Bank? After all, we've run our company for generations: one dollar deposit, one dollar of loan. It's called a 100% loan-to-deposit ratio. Today, we have $11 of deposits and $8 of loans. It's like running an 11-cylinder car or an 11-solar car with 8 cylinders. We want to lend more money, and we have learned through our experience with Ex-Im that we can help more American companies produce more American jobs to help our manufacturers and other businessmen and women produce products and services that foreign markets want to buy, and in reverse, helping to finance those foreign buyers of those American products coming back this way. We think it's a natural. Now, I understand policy always has a give and a take and two different sides to it. I have a hard time finding what's wrong with this model. How can we not be for American jobs? I don't need to go to a focus group to find out the challenges in America. The challenges are around opportunities and income disparities. I go to a family reunion, I've got members of my family on every rung of the economic ladder, and they're asking the same questions you hear all the time. They want opportunities. They want opportunities that I had. They want appreciative children that they had, work hard, and education—all my education was through the public school system—and they want their piece of the American Dream. And when I look at the advantage America has, I can't tell you how bullish I am on America. I am a raging bull for these reasons: the rule of law. You want to start a business, what would you want? To start a business in the world that has the rule of law that we have. Government—we're here in the nation's capital, and things would always work very well here, we know that—but we do change government every two, four, or six years without tanks on the street. When I travel the world, families of means and families without means want to send their children here to school, especially the post-secondary education. We build stuff the world wants. Walk on any street in any major capital of the world, and people walk like this today. They've got something built in Silicon Valley in their hands. I didn't hear Larry's early part of this conversation, but we also have a gift of natural resources. And I'm not an apologist for the hydrocarbons industry, but let me tell you how special an opportunity we have. Because I'm pro-America, I happen to be pro-energy, and I'm pro-renewable. Then throw everything there is. There's six times the amount of power energy in a barrel of oil versus an MCF of gas. MCF is a million cubic feet of gas. So whatever a barrel of oil costs, the MCF of gas should cost one-sixth of that. Let's use $90 for a barrel of oil. It's easily divisible by 6. If a barrel of oil costs $90, an MCF of gas should cost $15. You go to China, barrels $90, gas is $15. Europe, most of the same. They happen to have a pipeline coming from Russia, but it's close to the same. What do you think the cost is in the United States? $90, happens to be $5 today. Because we're a cold winter, a year ago it was $3. You'd say, 'Well, how does that make any sense? Is it a commodity?' No, you have to liquefy it and cool it and pressurize it. If they have LNG plants, you have to have ways of getting it to foreign markets. We don't do that. So we have this enormous advantage, basically, over the rest of the world. With the way we play team ball, our entrepreneurial spirit, our schools, our education, and our natural resources, we have the world at our hands if we have the will to do it. I was introduced this morning by a friend from Texas. I spent six years in Texas, 1994 to 2000. I met the founder, Leland Snow, of Air Tractor. First, I just love that name, Air Tractor. I remember when I was a kid, you'd see this plane flying over, up and down like that, and couldn't quite figure it out, and they were spraying something. In 1995, when I met Leland, he was talking at that time about doing something internationally. This is the American Dream. An entrepreneur has an idea, works for a company, spins off, starts his own company. And today, in Olney, Texas, 10% of our population works for this company. They're producing products where half of their sales are international. And we've been their bank since the start, and we're humbled and honored to be their financial partner. But they would be where they are without Ex-Im. They simply wouldn't. There's certain things we could not have done without them. So let me end where I started. Thank you for showing up today. I am the, you know, the humerus between this giant, you know, Larry Summers and Elon Musk. So this is your time off, and I think we have so much to look forward to. Wells Fargo chooses to have its people here. We think we're so fortunate to have our business here. I know our largest shareholder, Warren Buffett, who owns 10% of our company, believes the same thing. Thank you for showing up today. Thank you for giving me a few minutes to talk with you.