Investment Profile

Second Quarter 2015

Note: All data as of June 30, 2015 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 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
  • 8,700 locations, 12,800 ATMs, the internet (wellsfargo.com) and mobile banking
  • Offices in 36 countries
  • Approximately 266,000 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
$21.3 billion
Pre-tax pre-provision profit
$8.8 billion
Net interest margin
2.97%
Return on assets
1.33%
Return on equity    
12.71%

Allowance for loan losses

$11.8 billion

Balanced Business Model

Diversified Loan Portfolio


  

Commercial 49% 
Consumer 51%

Balanced Spread & Fee Income



Net Interest Income 53% 

Noninterest Income 47%

Diversified Fee Generation



Total Trust & Investment Fees 37% 

Total Mortgage Banking 17%
Deposit Service Charges 13%
Other Noninterest Income 7%
Other Banking Fees 11%
Card Fees 9%
Insurance 5%
Net Gains From Trading 1%

Continued strong financial results; strong growth in average loans and deposits

  • Net income of $5.7 billion, in line with second quarter 2014
  • Diluted earnings per share (EPS) of $1.03, compared with $1.01 in second quarter 2014
  • Revenue of $21.3 billion, up 1 percent from second quarter 2014
  • Total average loans of $870.4 billion, up $39.4 billion, or 5 percent, from second quarter 2014
  • Quarter-end loans of $888.5 billion, up $59.5 billion, or 7 percent, from second quarter 2014
  • Total average deposits of $1.2 trillion, up $83.8 billion, or 8 percent, from second quarter 2014

Continued strength in credit quality

  • Net charge-offs, or loan losses, of $650 million, or 0.30 percent (annualized) of second quarter 2015 average loans
  • Nonaccrual loans down $1.5 billion, or 11 percent, from second quarter 2014
  • Provision for credit losses was $350 million lower than net loan charge-offs

Maintained strong capital levels and continued share repurchases

  • Common Equity Tier 1 ratio under Basel III (fully phased-in) of 10.5 percent at June 30, 2015
  • Period-end common shares outstanding down 17.7 million from first quarter 2015
  • Increased quarterly common stock dividend to $0.375 per share from $0.35

Strong provider of credit to the U.S. economy 

We continued our commitment to helping consumers and businesses grow, including $62 billion in originations of residential first mortgage loans, with an unclosed pipeline of $38 billion at the end of second 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 10.2 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 (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 1,300 locations including standalone mortgage stores and other business-partner sites  
  • A leading internet bank (26 million active online customers)
  • Advanced contact center technology and telephony infrastructure (430 million customer contacts annually)  
  • Nearly 16 million active mobile customers
  • #3 ATM network (12,800 ATMs)

Earnings and per share data

$ in millions, except per share amounts

Quarter Ended June 30, 2015 March 31, 2015 June 30, 2014
Net income $5,719 $5,804 $5,726
Net income applicable to common stock $5,363 $5,461 $5,424
Total revenue $21,318 $21,278 $21,066
Pre-tax pre-provision profit (PTPP) $8,849 $8,771 $8,872
Diluted earnings per common share $1.03 $1.04 $1.01
Dividends declared per common share $0.375 $0.35 $0.35

Key performance measures

(Profitability ratios (annualized))

Quarter Ended June 30, 2015 March 31, 2015 June 30, 2014
Return on assets (ROA) 1.33% 1.38% 1.47%
Return on equity (ROE) 12.71%  13.17% 13.40%
Net interest margin 2.97% 2.95% 3.15%
Efficiency ratio 58.5% 58.8%

 57.9%


Period-end balances

$ in millions 

Quarter Ended June 30, 2015 March 31, 2015 June 30, 2014
Investment securities $340,769 $324,736 $279,069
Loans $888,459 $861,231 $828,942
Allowance for loan losses $11,754 $12,176 $13,101
Assets $1,720,617 $1,737,737 $1,598,874
Core deposits $1,082,634 $1,086,993 $1,007,485
Stockholders’ equity $189,558 $188,796 $180,859
Total equity $190,676 $189,964

$181,549                                    

Asset quality ratios

Quarter Ended June 30, 2015 March 31, 2015 June 30, 2014
Nonperforming assets/Total loans
1.62%
1.72%
2.05%
Allowance/Total loans
1.32%
1.41%
1.58%
Allowance/Nonaccrual loans
94%
97%
94%
Net charge-offs/Average total loans (annualized) 0.30% 0.33% 0.35%

Capital ratios/Risk-based capital

Quarter Ended June 30, 2015 March 31, 2015 June 30, 2014
Common Equity Tier 1 (fully phased-in) 10.5% 10.5% 10.4%

Net income (loss) by operating segment

$ in millions

Quarter Ended June 30, 2015 March 31, 2015 June 30, 2014
Community Banking $3,358 $3,665 $3,431
Wholesale Banking $2,011 $1,797 $1,952
Wealth Brokerage and Retirement Services $602 $561 $544
Other $ (252) $ (219) $ (201)


Common stock price

Quarter Ended June 30, 2015 March 31, 2015 June 30, 2014
High $58.26 $56.29 $53.05
Low $53.56 $50.42 $46.72
Period End $56.24 $54.40 $52.56

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).