Investment Profile

First Quarter 2016

Note: All data as of March 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.

  • $1.8 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
  • 8,800 locations, 13,000 ATMs, the internet (wellsfargo.com) and mobile banking
  • Offices in 36 countries
  • Approximately 269,000 team members
  • Ranked 30th on Fortune’s 2015 rankings of America’s largest corporations
Metric Value
Net income
$5.5 billion
Diluted EPS
$0.99
Total revenue
$22.2 billion
Pre-tax pre-provision profit
$9.2 billion
Net interest margin
2.90%
Return on assets
1.21%
Return on equity    
11.75%

Allowance for loan losses

$11.6 billion

Balanced Business Model

Diversified Loan Portfolio



   

Commercial 52% 
Consumer 48%

Balanced Spread & Fee Income



   

Net Interest Income 53% 
Noninterest Income 47%

Diversified Fee Generation



   

Total Trust & Investment Fees 32% 
Total Mortgage Banking 15%
Deposit Service Charges 12% 
Other Banking Fees 9%
Card Fees 9% 
Other Noninterest Income 8%
Market Sensitive Revenue 7% 
Insurance 4%
Lease Income 4%

Continued strong financial results; strong growth in loans and deposits

  • Net income of $5.5 billion, compared with $5.8 billion in first quarter 2015
  • Diluted earnings per share (EPS) of $0.99, compared with $1.04 in first quarter 2015
  • Revenue of $22.2 billion, up 4 percent from first quarter 2015
  • Pre-tax pre-provision profit of $9.2 billion, up 5 percent from first quarter 2015
  • Return on assets of 1.21 percent and return on equity of 11.75 percent
  • Added $30.8 billion of loans and leases from GE Capital acquisitions
  • Total average loans of $927.2 billion, up $64.0 billion, or 7 percent, from first quarter 2015
  • Total average deposits of $1.2 trillion, up $44.6 billion, or 4 percent, from first quarter 2015, with an average deposit cost of 10 basis points

Solid overall credit quality

  • Net charge-offs of $886 million, or 0.38 percent (annualized) of first quarter 2016 average loans
  • Nonaccrual loans down $276 million, or 2 percent, from first quarter 2015
  • Reserve build of $200 million, driven by deterioration in the oil and gas portfolio, compared with a $100 million reserve release in first quarter 2015

Maintained strong capital levels and continued share repurchases

  • Common Equity Tier 1 ratio (fully phased-in) of 10.6 percent at March 31, 2016
  • Period-end common shares outstanding down 16.2 million from fourth quarter 2015

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 $39 billion at the end of first 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 10.7 million new low-rate loans to customers for home purchases or refinancing.

Nationwide, diversified financial services company

  • #1 total locations (8,800 locations)
  • #1 retail 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 1,200 locations including standalone mortgage stores and other business-partner sites  
  • A leading digital bank with 27.2 million digital (online and mobile) active customers,
  • 17.7 million mobile active customers,
  • Advanced contact center technology and telephony infrastructure (over 440 million customer contacts annually)
  • #3 ATM network (13,000 ATMs)

Earnings and per share data

$ in millions, except per share amounts

Quarter Ended March 31, 2016 December 31, 2015 March 31, 2015
Net income $5,462 $5,575 $5,804
Net income applicable to common stock $5,085 $5,203 $5,461
Total revenue $22,195 $21,586 $21,278
Pre-tax pre-provision profit (PTPP) $9,167 $8,987 $8,771
Diluted earnings per common share $0.99 $1.00 $1.04
Dividends declared per common share $0.375 $0.375 $0.350

Key performance measures

(Profitability ratios (annualized))

Quarter Ended March 31, 2016 December 31, 2015 March 31, 2015
Return on assets (ROA) 1.21% 1.24% 1.38%
Return on equity (ROE) 11.75%  11.93% 13.17%
Net interest margin 2.90% 2.92% 2.95%
Efficiency ratio 58.7% 58.4%

 58.8%


Period-end balances

$ in millions 

Quarter Ended March 31, 2016 December 31, 2015 March 31, 2015
Investment securities $334,899 $347,555 $324,736
Loans $947,258 $916,559 $861,231
Allowance for loan losses $11,621 $11,545 $12,176
Assets $1,849,182 $1,787,632 $1,737,737
Stockholders’ equity $197,496 $192,998 $188,796
Total equity $198,504 $193,891

$189,964                      

Asset quality ratios

Quarter Ended March 31, 2016 December 31, 2015 March 31, 2015
Nonperforming assets/Total loans
1.43%
1.40%
1.72%
Allowance/Total loans
1.23%
1.26%
1.41%
Allowance/Nonaccrual loans
1.29%
1.24%
1.45%
Net charge-offs/Average total loans (annualized) 0.38% 0.36% 0.33%

Net income (loss) by operating segment

$ in millions

Quarter Ended March 31, 2016 December 31, 2015 March 31, 2015
Community Banking $3,296 $3,169 $3,547
Wholesale Banking $1,921 $2,104 $1,974
Wealth and Investment Management $512 $595 $529
Other $ (267) $ (293) $ (246)


Common stock price

Quarter Ended March 31, 2016 December 31, 2015 March 31, 2015
High $53.27 $56.34 $56.29
Low $44.50 $49.51 $50.42
Period End $48.36 $54.36 $54.40

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).