Investment Profile

Fourth Quarter 2015

Note: All data as of December 31, 2015 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.

  • $1.8 trillion in assets, 3rd 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
  • 8,700 locations, 13,000 ATMs, the internet (wellsfargo.com) and mobile banking
  • Offices in 36 countries
  • Approximately 265,000 team members
  • Ranked 30th on Fortune’s 2015 rankings of America’s largest corporations
Metric Value
Net income
$5.7 billion
Diluted EPS
$1.03
Total revenue
$21.6 billion
Pre-tax pre-provision profit
$9.2 billion
Net interest margin
2.92%
Return on assets
1.27%
Return on equity    
12.23%

Allowance for loan losses

$11.5 billion

Balanced Business Model

Diversified Loan Portfolio


  

Commercial 50% 
Consumer 50%

Balanced Spread & Fee Income



Net Interest Income 54% 

Noninterest Income 46%

Diversified Fee Generation



Total Trust & Investment Fees 35% 

Total Mortgage Banking 17%
Deposit Service Charges 13%
Other  Noninterest Income 2%
    Lease Income and All Other Banking Fees 11%
Card Fees 10%
Insurance 4%
Market Sensitive Revenue 8%

Full year 2015:

  • Net income of $23.0 billion, consistent with 2014
  • Diluted earnings per share (EPS) of $4.15, up 1 percent
  • Revenue of $86.1 billion, up 2 percent
  • Pre-tax pre-provision profit of $36.3 billion, up 3 percent
  • Return on assets (ROA) of 1.32 percent and return on equity (ROE) of 12.68 percent
  • Returned $12.6 billion to shareholders through dividends and net share repurchases

Fourth quarter 2015:

  • Net income of $5.7 billion, stable compared with fourth quarter 2014
  • Diluted EPS of $1.03, up 1 percent
  • Revenue of $21.6 billion, up 1 percent
  • Pre-tax pre-provision profit of $9.2 billion, up 4 percent
  • ROA of 1.27 percent and ROE of 12.23 percent
  • Total average loans of $912.3 billion, up $62.9 billion, or 7 percent
  • Total average deposits of $1.2 trillion, up $67.0 billion, or 6 percent
  • Net charge-off rate of 0.36 percent (annualized), up from 0.34 percent
  • Nonaccrual loans down $1.5 billion, or 11 percent
  • No reserve build or release , compared with a $250 million release in fourth quarter 2014
  • Common Equity Tier 1 ratio (fully phased-in) of 10.7 percent

Strong provider of credit to the U.S. economy 

We continued our commitment to helping consumers and businesses grow, including $47 billion in originations of residential first mortgage loans, with an unclosed pipeline of $29 billion at the end of fourth quarter 2015. 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 10.4 million new low-rate loans to customers for home purchases or refinancing.

Nationwide, diversified financial services company

  • #1 total locations (8,700 locations)
  • #1 banking stores (more than 6,000 Wells Fargo stores in 39 states and Washington, D.C.)  
  • #3 retail brokerage provider (nearly 15,000 Financial Advisors nationwide)
  • A leading mortgage lending presence with approximately 1,300 locations including standalone mortgage stores and other business-partner sites  
  • A leading internet bank (26.4 million active online customers)
  • Advanced contact center technology and telephony infrastructure (400 million customer contacts annually)  
  • 16.2 million active mobile customers
  • #3 ATM network (13,000 ATMs)

Earnings and per share data

$ in millions, except per share amounts

Quarter Ended December 31, 2015 September 30, 2015 December 31, 2014
Net income $5,709 $5,796 $5,709
Net income applicable to common stock $5,337 $5,443 $5,382
Total revenue $21,586 $21,875 $21,443
Pre-tax pre-provision profit (PTPP) $9,187 $9,476 $8,796
Diluted earnings per common share $1.03 $1.05 $1.02
Dividends declared per common share $0.375 $0.375 $0.350

Key performance measures

(Profitability ratios (annualized))

Quarter Ended December 31, 2015 September 30, 2015 December 31, 2014
Return on assets (ROA) 1.27% 1.32% 1.36%
Return on equity (ROE) 12.23%  12.62% 12.84%
Net interest margin 2.92% 2.96% 3.04%
Efficiency ratio 57.4% 56.7%

 59.0%


Period-end balances

$ in millions 

Quarter Ended December 31, 2015 September 30, 2015 December 31, 2014
Investment securities $347,555 $345,074 $312,925
Loans $916,559  $903,233 $862,551 
Allowance for loan losses $11,545  $11,659 $12,319
Assets $1,787,632 $1,751,265  $1,687,155 
Stockholders’ equity $193,132  $193,051  $184,394
Total equity $194,025  $194,043 

$185,262                            

Asset quality ratios

Quarter Ended December 31, 2015 September 30, 2015 December 31, 2014
Nonperforming assets/Total loans
1.40%
1.47%
1.79%
Allowance/Total loans
1.26%
1.29%
1.43%
Allowance/Nonaccrual loans
101%
101%
96%
Net charge-offs/Average total loans (annualized) 0.36% 0.31% 0.34%

Net income (loss) by operating segment

$ in millions

Quarter Ended December 31, 2015 September 30, 2015 December 31, 2014
Community Banking $3,303 $3,560 $3,333
Wholesale Banking $2,104 $1,925 $2,095
Wealth and Investment Management $595 $606 $519
Other $ (293) $ (295) $ (238)


Common stock price

Quarter Ended December 31, 2015 September 30, 2015 December 31, 2014
High $56.34 $58.77 $55.95
Low $49.51 $47.75 $46.44
Period End $54.36 $51.35 $54.82

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).