Investment Profile

First Quarter 2015

Note: All data as of March 31, 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 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, the internet (wellsfargo.com) and mobile banking
  • Offices in 36 countries
  • Approximately 266,000 team members
  • Ranked 29th on Fortune’s 2014 rankings of America’s largest corporations
Metric Value
Net income
$5.8 billion
Diluted EPS
$1.04 
Total revenue
$21.3 billion
Pre-tax pre-provision profit
$8.8 billion
Net interest margin
2.95%
Return on assets
1.38%
Return on equity    
13.17%

Allowance for loan losses

$12.2 billion

Balanced Business Model

Diversified Loan Portfolio


  

Commercial 48% 
Consumer 52%

Balanced Spread & Fee Income



Net Interest Income 52% 

Noninterest Income 48%

Diversified Fee Generation



Total Trust & Investment Fees 35% 

Total Mortgage Banking 15%
Deposit Service Charges 12%
Other Noninterest Income 11%
Other Banking Fees 10%
Card Fees 9%
Insurance 4%
Net Gains From Trading 4%

Strong financial results; strong growth in average loans and deposits

  • Net income of $5.8 billion, compared with $5.9 billion in first quarter 2014
  • Diluted earnings per share (EPS) of $1.04, compared with $1.05 in first quarter 2014
  • Revenue of $21.3 billion, up 3 percent from first quarter 2014
  • Pre-tax pre-provision profit (PTPP) of $8.8 billion, up 1% from first quarter 2014
  • Total average loans of $863.3 billion, up $39.5 billion, or 5 percent, from first quarter 2014
  • Quarter-end loans of $861.2 billion, up $34.8 billion, or 4 percent, from first quarter 2014
  • Total average deposits of $1.2 trillion, up $97.5 billion, or 9 percent, from first quarter 2014

Continued strength in credit quality

  • Net charge-offs, or loan losses, of $708 million, or 0.33% (annualized), of first quarter 2015 average loans
  • Nonaccrual loans down $2.1 billion, or 15 percent, from first quarter 2014
  • Provision for credit losses was $100 million lower than net loan charge-offs

Maintained strong capital levels and continued share repurchases

  • Estimated Common Equity Tier 1 ratio under Basel III (Advanced Approach, fully phased-in) of 10.53% at March 31, 2015 
  • Period-end common shares outstanding down 7.4 million from fourth quarter 2014
  • No objection from the Federal Reserve to our 2015 Capital Plan, which included a proposed dividend rate of $0.375 per share for second quarter 2015, subject to Board approval, up from $0.35 per share in the first quarter 
  • Approval to use Advanced Approaches for capital requirements granted from the Federal Reserve and the Office of the Comptroller of the Currency starting in second quarter 2015

Strong provider of credit to the U.S. economy 

We continued our commitment to helping consumers and businesses grow, including $49 billion in originations of residential first mortgage loans, with an unclosed pipeline of $44 billion at the end of first 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 9.9 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 March 31, 2015 December 31, 2014 March 31, 2014
Net income $5,804 $5,709 $5,893
Net income applicable to common stock $5,461 $5,382 $5,607
Total revenue $21,278 $21,443 $20,625
Pre-tax pre-provision profit (PTPP) $8,771  $8,796 $8,677
Diluted earnings per common share $1.04 $1.02 $1.05
Dividends declared per common share $0.35 $0.35 $0.30

Key performance measures

(Profitability ratios (annualized))

Quarter Ended March 31, 2015 December 31, 2014 March 31, 2014
Return on assets (ROA) 1.38% 1.36% 1.57%
Return on equity (ROE) 13.17%  12.84% 14.35%
Net interest margin 2.95% 3.04% 3.20%
Efficiency ratio 58.8% 59.0%

 57.9%


Period-end balances

$ in millions 

Quarter Ended March 31, 2015 December 31, 2014 March 31, 2014
Investment securities $324,736 $312,925 $270,327
Loans $861,231 $862,551 $826,443
Allowance for loan losses $12,176 $12,319 $13,695
Assets $1,737,737 $1,687,155 $1,546,707
Core deposits $1,086,993 $1,054,348 $994,185
Stockholders’ equity $188,796 $184,394 $175,654 
Total equity $189,964 $185,262

$176,469                                     

Asset quality ratios

Quarter Ended March 31, 2015 December 31, 2014 March 31, 2014
Nonperforming assets/Total loans
1.72%
1.79%
2.19%
Allowance/Total loans
1.41%
1.43%
1.66%
Allowance/Nonaccrual loans
97%
96%
93%
Net charge-offs/Average total loans (annualized) 0.33% 0.34% 0.41%

Capital ratios/Risk-based capital

Quarter Ended March 31, 2015 December 31, 2014 March 31, 2014
Tier 1 capital
12.39% 12.45%
12.63%
Total capital
15.30%
15.53%
15.71%
Tier 1 leverage
9.48%
9.45%
9.84%
Common Equity Tier 1 (General Approach and Standardized Approach with Transition Requirements)
10.86% 11.04% 11.36%

Net income (loss) by operating segment

$ in millions

Quarter Ended March 31, 2015 December 31, 2014 March 31, 2014
Community Banking $3,665 $3,435 $3,844
Wholesale Banking $1,797 $1,970 $1,742
Wealth Brokerage and Retirement Services $561 $514 $475
Other $ (219) $ (210) $ (168)


Common stock price

Quarter Ended March 31, 2015 December 31, 2014 March 31, 2014
High $56.29 $55.95 $49.97
Low $50.42 $46.44 $44.17
Period End $54.40 $54.82 $49.74

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).