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Investment Profile

Fourth Quarter 2016

Note: All data as of December 31, 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
$5.3 billion
Diluted EPS
$0.96
Total revenue
$21.6 billion
Pre-tax pre-provision profit
$8.4 billion
Net interest margin
2.87%
Return on assets
1.08%
Return on equity    
10.94%

Allowance for loan losses

$11.4 billion
  • Net income of $5.3 billion, compared with $5.6 billion in fourth quarter 2015
    • Included net hedge ineffectiveness accounting impact of $(592) million
  • Diluted earnings per share (EPS) of $0.96, compared with $1.00 in fourth quarter 2015
    • Included net hedge ineffectiveness accounting impact of $(0.07)
  • Revenue of $21.6 billion, consistent with fourth quarter 2015
    • Net interest income of $12.4 billion, up 7 percent
  • Return on assets of 1.08 percent and return on equity of 10.94 percent
  • Total average loans of $964.1 billion, up $51.9 billion, or 6 percent, from fourth quarter 2015
  • Total average deposits of $1.3 trillion, up $67.3 billion, or 6 percent, from fourth quarter 2015
  • Provision expense of $805 million, down $26 million, or 3 percent, from fourth quarter 2015
  • Nonaccrual loans of $10.4 billion, down $998 million, or 9 percent, from fourth quarter 2015
  • Common Equity Tier 1 ratio (fully phased-in) of 10.7 percent at December 31, 2016

Strong provider of credit to the U.S. economy 

We continued our commitment to helping consumers and businesses grow, including $72 billion in originations of residential first mortgage loans, with an unclosed pipeline of $30 billion at the end of fourth 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 19.6 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 December 31, 2016 September 30, 2016 December 31, 2015
Net income $5,274 $5,644 $5,575
Net income applicable to common stock $4,872 $5,243 $5,203
Total revenue $21,582 $22,328 $21,586
Pre-tax pre-provision profit (PTPP) $8,367 $9,060 $8,987
Diluted earnings per common share $0.96 $1.03 $1.00
Dividends declared per common share $0.380 $0.380 $0.375

Key performance measures

(Profitability ratios (annualized))

Quarter Ended December 31, 2016 September 30, 2016 December 31, 2015
Return on assets (ROA) 1.08% 1.17% 1.24%
Return on equity (ROE) 10.94%  11.60% 11.93%
Net interest margin 2.87% 2.82% 2.92%
Efficiency ratio 61.2% 59.4%

58.4%


Period-end balances

$ in millions 

Quarter Ended December 31, 2016 September 30, 2016 December 31, 2015
Investment securities $407.947 $390,832 $347,555
Loans $967,604 $961,326 $916,559
Allowance for loan losses $11,419 $11,583 $11,545
Assets $1,930,115 $1,942,124 $1,787,632
Stockholders’ equity $199,581 $203,028 $192,998
Total equity $200,497 $203,958

$193,891                  

Asset quality ratios

Quarter Ended December 31, 2016 September 30, 2016 December 31, 2015
Nonperforming assets/Total loans
1.17%
1.25%
1.40%
Allowance/Total loans
1.18%
1.20%
1.26%
Allowance/Nonaccrual loans
110%
105%
101%
Net charge-offs/Average total loans (annualized) 0.37% 0.33% 0.36%

Net income (loss) by operating segment

$ in millions

Quarter Ended December 31, 2016 September 30, 2016 December 31, 2015
Community Banking $2,733 $3,227 $3,169
Wholesale Banking $2,194 $2,047 $2,104
Wealth and Investment Management $653 $677 $595
Other $ (306) $ (307) $ (293)


Common stock price

Quarter Ended December 31, 2016 September 30, 2016 December 31, 2015
High $58.02 $51.00 $56.34
Low $43.55 $44.10 $49.51
Period End $55.11 $44.28 $54.36

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).