Wells Fargo reported 2019 net income of $19.55 billion, down from $22.39 billion in 2018. Revenue was $85.1 billion, down from $86.4 billion a year earlier.

Average lease financing loans at year-end 2019 were $19.42 billion, down from $19.5 billion a year earlier.

Q4/19 net interest income was $11.2 billion, down $425 million from Q3/19, predominantly due to balance sheet repricing driven by the impact of the lower interest rate environment.

The bank attributed its operating losses of $1.9 billion to $1.5 billion of litigation accruals for a variety of matters, including previously disclosed retail sales practices matters, noting that most of the litigation accruals were not tax deductible.

Commercial losses increased $64 million largely driven by lower recoveries and higher lease financing losses primarily related to railcar leases.

The provision for credit losses increased $152 million, reflecting lower recoveries, a lower reserve release, and higher lease financing losses.

Chief Executive Officer and President Charlie Scharf said, “Wells Fargo is a wonderful and important franchise that has made some serious mistakes, and my mandate is to make the fundamental changes necessary to regain the full trust and respect of all stakeholders.

“During my first three months at Wells Fargo my primary focus has been on advancing our required regulatory work with a different sense of urgency and resolve, while beginning to develop a path to improve our financial results. This work is necessary to build the appropriate foundation for us to move forward. Wells Fargo plays an important role for our country, and we know that ultimately our actions and results will dictate when that trust is fully regained. And while the work is substantial, I am confident that with the appropriate prioritization of resources, processes, and management attention, we can accomplish what is expected of us,”  Scharf added.

“In addition, even in my short time at the company, it is clear that our opportunities to improve our performance are substantial when we finish this work. Our cost structure is too high, and I believe there are many areas where we will be able to increase our rate of growth. While it is too early to put time frames around these goals, we will be diligent in pursuing them and I am confident the opportunities are meaningful,” he concluded.

Chief Financial Officer John Shrewsberry said, “…while we are spending what is necessary in order to improve risk management, our other expenses were too high and becoming more efficient remains a top priority. However, we continued to have positive business trends with both loans and deposits growing from the third quarter and a year ago. We also saw increases from the third quarter and a year ago in primary consumer checking customers, debit and credit card usage, Wealth and Investment Management total client assets, and Investment Banking market share. Our net charge-off rate remained near historic lows, and our capital levels were strong even as we returned $9 billion to shareholders through common stock dividends and net share repurchases in the fourth quarter, reducing common shares outstanding by 10% compared with a year ago.”