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Investment Profile

Third Quarter 2016

Note: All data as of September 30, 2016 unless otherwise noted.

Wells Fargo & Company (NYSE:WFC) is a diversified, community-based financial services company founded in 1852 and headquartered in San Francisco. Wells Fargo’s vision is to satisfy our customers’ financial needs and help them succeed financially.

  • $1.9 trillion in assets, 3rd largest in the United States
  • $1.5 trillion in retail brokerage client assets, 3rd largest U.S. retail brokerage firm
  • Provides banking, insurance, investments, mortgage, and consumer and commercial finance
  • More than 8,600 locations, 13,000 ATMs, the internet (wellsfargo.com) and mobile banking
  • Offices in 42 countries and territories
  • Approximately 269,000 team members
  • Ranked 27th on Fortune’s 2016 rankings of America’s largest corporations
Metric Value
Net income
$5.6 billion
Diluted EPS
$1.03
Total revenue
$22.3 billion
Pre-tax pre-provision profit
$9.1 billion
Net interest margin
2.82%
Return on assets
1.17%
Return on equity    
11.60%

Allowance for loan losses

$11.6 billion

Balanced Business Model

Diversified Loan Portfolio



   

Commercial 52% 
Consumer 48%

Balanced Spread & Fee Income



   

Net Interest Income 54% 
Noninterest Income 46%

Diversified Fee Generation



   

Total Trust & Investment Fees 35% 
Total Mortgage Banking 16%
Deposit Service Charges 13% 
Other Noninterest Income 3%
Other Banking Fees 9% 
Card Fees 10%
Insurance 3%
Net Gains on Market Sensitive Revenue 6%
Lease Income 5%

Continued strong financial results:

  • Net income of $5.6 billion, compared with $5.8 billion in third quarter 2015
  • Diluted earnings per share (EPS) of $1.03, compared with $1.05 in third quarter 2015
  • Revenue of $22.3 billion, up 2 percent from third quarter 2015
  • Pre-tax pre-provision profit of $9.1 billion, compared with $9.5 billion in third quarter 2015
  • Return on assets of 1.17 percent and return on equity of 11.60 percent

Strong growth in loans and deposits:

  • Total average loans of $957.5 billion, up $62.4 billion, or 7 percent, from third quarter 2015
  • Total average deposits of $1.3 trillion, up $62.7 billion, or 5 percent, from third quarter 2015

Solid credit quality:

  • Net charge-offs of $805 million, up $102 million from third quarter 2015
    • Net charge-offs were 0.33 percent of average loans (annualized), up from 0.31 percent in third quarter 2015
  • Nonaccrual loans down $551 million, or 5 percent from third quarter 2015
  • No reserve build or release, consistent with third quarter 2015

Maintained strong capital levels while continuing to return capital to shareholders:

  • Common Equity Tier 1 ratio (fully phased-in) of 10.7 percent at September 30, 2016
  • Period-end common shares outstanding down 24.6 million from second quarter 2016

Strong provider of credit to the U.S. economy 

We continued our commitment to helping consumers and businesses grow, including $70 billion in originations of residential first mortgage loans, with an unclosed pipeline of $50 billion at the end of third quarter 2016. We continued to serve our customers experiencing financial difficulties; since the beginning of 2009, we have helped homeowners with over one million active trial or completed mortgage modifications, and provided nearly 11.1 million new low-rate loans to customers for home purchases or refinancing.

Nationwide, diversified financial services company

  • #1 total locations (8,600 locations)
  • #1 branches (more than 6,000 Wells Fargo branches in 39 states and Washington, D.C.)  
  • #3 retail brokerage provider (approximately 15,000 Financial Advisors nationwide)
  • A leading mortgage lending presence with approximately 1,200 locations including standalone mortgage stores and other business-partner sites  
  • A leading digital bank with 27.4 million digital (online and mobile) active customers, including 18.8 million mobile active users,
  • Advanced contact center technology and telephony infrastructure (over 440 million customer contacts annually)
  • #3 bank-branded ATM network (13,000 ATMs)

Earnings and per share data

$ in millions, except per share amounts

Quarter Ended September 30, 2016 June 30, 2016 September 30, 2015
Net income $5,644 $5,558 $5,796
Net income applicable to common stock $5,243 $5,173 $5,443
Total revenue $22,328 $22,162 $21,875
Pre-tax pre-provision profit (PTPP) $9,060 $9,296 $9,476
Diluted earnings per common share $1.03 $1.01 $1.05
Dividends declared per common share $0.380 $0.380 $0.375

Key performance measures

(Profitability ratios (annualized))

Quarter Ended September 30, 2016 June 30, 2016 September 30, 2015
Return on assets (ROA) 1.17% 1.20% 1.32%
Return on equity (ROE) 11.60%  11.70% 12.62%
Net interest margin 2.82% 2.86% 2.96%
Efficiency ratio 59.4% 58.1%

56.7%


Period-end balances

$ in millions 

Quarter Ended September 30, 2016 June 30, 2016 September 30, 2015
Investment securities $390,832 $353,426 $345,074
Loans $961,326 $957,157 $903,233
Allowance for loan losses $11,583 $11,664 $11,659
Assets $1,942,124 $1,889,235 $1,751,265
Stockholders’ equity $203,028 $201,745 $193,051
Total equity $203,958 $202,661

$194,043                   

Asset quality ratios

Quarter Ended September 30, 2016 June 30, 2016 September 30, 2015
Nonperforming assets/Total loans
1.25%
1.37%
1.47%
Allowance/Total loans
1.20%
1.22%
1.29%
Allowance/Nonaccrual loans
105%
98%
101%
Net charge-offs/Average total loans (annualized) 0.33% 0.39% 0.31%

Net income (loss) by operating segment

$ in millions

Quarter Ended September 30, 2016 June 30, 2016 September 30, 2015
Community Banking $3,227 $3,179 $3,560
Wholesale Banking $2,047 $2,073 $1,925
Wealth and Investment Management $677 $584 $606
Other $ (307) $ (278) $ (295)


Common stock price

Quarter Ended September 30, 2016 June 30, 2016 September 30, 2015
High $51.00 $51.41 $58.77
Low $44.10 $44.50 $47.75
Period End $44.28 $47.33 $51.35

Net income

The sum of net interest income, noninterest income (includes fee income), net of noninterest expense, the provision for credit losses, income tax expense, and income or loss from noncontrolling interests.

Diluted EPS

Diluted earnings per share (EPS) includes the effects of common stock equivalents (stock options, restricted share rights, convertible debentures, and warrants) that are dilutive.

Total revenue

The sum of net interest income and noninterest income.

Pre-tax pre-provision profit

Pre-tax pre-provision profit (PTPP) is total revenue less noninterest expense. Management believes that PTPP is a useful financial measure because it enables investors and others to assess the Company’s ability to generate capital to cover credit losses through a credit cycle.

Net interest margin

The average yield on earning assets minus the average interest rate paid for deposits and other sources of funding.

Return on assets

Net income as a percentage of average total assets.

Return on equity

Net income applicable to common stock as a percentage of average common stockholders’ equity.

Allowance for loan losses

The allowance for loan losses represents management’s estimate of loan losses inherent in the loan portfolio at the balance sheet date (excluding loans carried at fair value).