Investment Profile

Fourth Quarter 2014

Note: All data as of December 31, 2014 unless otherwise noted.

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

  • $1.7 trillion in assets, 4th largest in the United States
  • $1.4 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 8,700 locations, 12,500 ATMs, and the internet (wellsfargo.com)
  • Offices in 36 countries
  • Approximately 265,000 team members
  • Ranked 29th on Fortune’s 2014 rankings of America’s largest corporations
Metric Value
Net income
$5.7 billion
Diluted EPS
$1.02
Total revenue
21.4 billion
Pre-tax pre-provision profit
$8.8 billion
Net interest margin
3.04%
Return on assets
1.36%
Return on equity    
12.84%

Allowance for loan losses

$12.3 billion

Balanced Business Model

Diversified Loan Portfolio


  

Commercial 48% 
Consumer 52%

Balanced Spread & Fee Income


  

Net Interest Income 48%
Noninterest Income 52%

Diversified Fee Generation


    

Total Trust & Investment Fees 36%
Total Mortgage Banking 15%
Deposit Service Charges 12%
Other Noninterest Income 12%
Other Banking Fees 10%
Card Fees 9%
Insurance 4%
Net Gains From Trading 2%

Continued strong financial results; strong loan and deposit growth

  • Net income of $5.7 billion, up 2% from fourth quarter 2013
  • Diluted earnings per share (EPS) of $1.02, up 2% from fourth quarter 2013
  • Revenue of $21.4 billion, up 4% from fourth quarter 2013
  • Pre-tax pre-provision profit (PTPP) of $8.8 billion, up 3% from fourth quarter 2013
  • Total average loans of $849.4 billion, up $36.1 billion, or 4%, from fourth quarter 2013
  • Quarter-end loans of $862.6 billion, up $40.3 billion, or 5%, from fourth quarter 2013
  • Total average deposits of $1.1 trillion, up $89.4 billion, or 8%, from fourth quarter 2013

Continued improvement in credit quality

  • Net charge-offs, or loan losses, of $735 million, or 0.34% (annualized), of fourth quarter 2014 average loans
  • Nonaccrual loans down $2.8 billion, or 18%, from fourth quarter 2013
  • Provision for credit losses was $250 million lower than net loan charge-offs

Maintained strong capital levels and continued share repurchases

  • Common Equity Tier 1 ratio under Basel III (General Approach) of 11.04% at December 31, 2014
  • Estimated Common Equity Tier 1 ratio under Basel III (Advanced Approach, fully phased-in) of 10.44%
  • Period-end common shares outstanding down 44.7 million from third quarter 2014
  • Returned $3.9 billion to shareholders through common stock dividends and net share repurchases

Strong provider of credit to the U.S. economy 

We continued our commitment to helping consumers and businesses grow, including $44 billion in originations of residential first mortgage loans, with an unclosed pipeline of $26 billion at the end of fourth quarter 2014. 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 9.8 million new low-rate loans to customers for home purchases or refinancing.

Nationwide, diversified financial services company

  • #1 total locations (more than 8,700 locations) 
  • #1 banking stores (Approximately 6,200 Wells Fargo stores in 39 states and Washington, D.C.) 
  • #3 retail brokerage provider (more than 15,000 Financial Advisors nationwide)
  • A leading mortgage lending presence with approximately 1,600 locations including standalone mortgage stores and other business-partner sites 
  • A leading internet bank (24.8 million active online customers)
  • A leading contact center channel (500 million customer contacts annually) 
  • 14.1 million active mobile customers
  • #3 ATM network (more than 12,500 ATMs)

Earnings and per share data

$ in millions, except per share amounts

Quarter Ended December 31, 2014
September 30, 2014 December 31, 2013
Net income $5,709 $5,729 $5,610
Net income applicable to common stock $5,382 $5,408 $5,369
Total revenue $21,443  $21,213 $20,665
Pre-tax pre-provision profit (PTPP) $8,796  $8,965 $8,580
Diluted earnings per common share $1.02 $1.02 $1.00
Dividends declared per common share $0.35 $0.35 $0.30

Key performance measures

(Profitability ratios (annualized))

Quarter Ended December 31, 2014 September 30, 2014 December 31, 2013
Return on assets (ROA) 1.36% 1.40% 1.48%
Return on equity (ROE) 12.84%  13.10% 13.81%
Net interest margin 3.04% 3.06% 3.27%
Efficiency ratio 59.0% 57.7%

 58.5%


Period-end balances

$ in millions 

Quarter Ended December 31, 2014 September 30, 2014 December 31, 2013
Investment securities $312,925 $289,009 $264,353
Loans $862,551 $838,883 $822,286
Allowance for loan losses $12,319 $12,681 $14,502
Assets $1,687,155 $1,636,855 $1,523,502
Core deposits $1,054,348  $1,016,478 $980,063
Stockholders’ equity $184,394 $182,481 $170,142
Total equity $185,262 $182,990

 $171,008

Asset quality ratios

Quarter Ended December 31, 2014
September 30, 2014
December 31, 2013
Nonperforming assets/Total loans
1.79%
1.93%
2.38%
Allowance/Total loans
1.43%
1.51%
1.76%
Allowance/Nonaccrual loans
96%
95%
93%
Net charge-offs/Average total loans (annualized) 0.34% 0.32% 0.47%

Capital ratios/Risk-based capital

Quarter Ended December 31, 2014
September 30, 2014
December 31, 2013
Tier 1 capital
12.45% 12.55%
12.33%
Total capital
15.54%
15.58%
15.43%
Tier 1 leverage
9.45%
9.64%
9.60%
Common Equity Tier 1 (General Approach)
11.04% 11.11% 10.82%

Net income (loss) by operating segment

$ in millions

Quarter Ended December 31, 2014 September 30, 2014 December 31, 2013
Community Banking $3,435 $3,470 $3,222
Wholesale Banking $1,970 $1,920 $2,111
Wealth Brokerage and Retirement Services $514 $550 $491
Other $ (210) $ (211) $ (214)


Common stock price

Quarter Ended December 31, 2014 September 30, 2014 December 31, 2013
High $55.95 $53.80 $45.64
Low $46.44 $49.47 $40.07
Period End $54.82 $51.87 $45.40


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).