-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, TecFre7WF/mLcgz0ySqbOGTDoJusfKyr0TvhUlibhnpybToKzp1tQJP9h0cHs6zR bszAx+yuMDCrPskW7C2JuQ== 0000912057-94-000115.txt : 19940121 0000912057-94-000115.hdr.sgml : 19940121 ACCESSION NUMBER: 0000912057-94-000115 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940118 ITEM INFORMATION: 5 FILED AS OF DATE: 19940120 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WELLS FARGO & CO CENTRAL INDEX KEY: 0000105598 STANDARD INDUSTRIAL CLASSIFICATION: 6021 IRS NUMBER: 132553920 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 34 SEC FILE NUMBER: 001-06214 FILM NUMBER: 94501974 BUSINESS ADDRESS: STREET 1: 420 MONTGOMERY ST CITY: SAN FRANCISCO STATE: CA ZIP: 94163 BUSINESS PHONE: 4154771000 MAIL ADDRESS: STREET 1: 343 SANSOME ST 3RD FL STREET 2: WELLS FARGO BANK CITY: SAN FRANCISCO STATE: CA ZIP: 94163 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (date of earliest event reported): January 18, 1994 WELLS FARGO & COMPANY (Exact name of registrant as specified in its charter) Delaware 1-6214 No. 13-2553920 (State or other jurisdiction (Commission File (IRS Employer of incorporation) Number) Identification No.) 420 Montgomery Street, San Francisco, California 94163 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (415) 477-1000 Not applicable (Former name or former address, if changed since last report) Item 5: Other Events ------------ Attached are the Press Releases announcing: (1) Wells Fargo & Company's financial results for the quarter and year ended December 31, 1993. Final financial statements with additional analyses will be filed as part of the Company's Form 10-K in March 1994. (2) An increase in Wells Fargo & Company's common stock dividend. SIGNATURE --------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunder duly authorized, on January 18, 1994. WELLS FARGO & COMPANY By: FRANK A. MOESLEIN -------------------------------- Frank A. Moeslein Executive Vice President and Controller FOR IMMEDIATE RELEASE Tues., Jan. 18, 1994 WELLS FARGO REPORTS FOURTH QUARTER EARNINGS OF $190 MILLION; FULL YEAR PER SHARE EARNINGS $10.10 VS. $4.44 A YEAR AGO. Wells Fargo & Co. (NYSE:WFC) today reported net income of $190 million for the fourth quarter of 1993, compared with $58 million for the fourth quarter of 1992, an increase of 228%. Per share earnings for the fourth quarter of 1993 were $3.18, compared with 83 cents in the fourth quarter of 1992. Earnings for the full year of 1993 were $612 million, or $10.10 per share, compared with $283 million, or $4.44 per share, for 1992. Both fourth quarter and full year 1993 results reflect smaller loan loss provisions than were taken in comparable periods in 1992. "Our credit quality improved over the last year and we saw new business opportunities emerge in the latter half of 1993, especially with small and mid-size companies," said Carl E. Reichardt, chairman. "The challenge in '94 will be to build upon this foundation." Return on average assets (ROA) was 1.46 percent and return on average common equity (ROE) was 19.85 percent in the fourth quarter of 1993. In the year-ago period, ROA was .44 percent and ROE was 5.85 percent. ROA was 1.20 percent and ROE was 16.74 percent for full year 1993, compared with .54 percent and 7.93 percent, respectively, in 1992. Net interest income on a taxable-equivalent basis decreased to $666 million in the fourth quarter of 1993 from $677 million a year ago. For the full year 1993, net interest income on a taxable-equivalent basis was $2.659 billion, compared with $2.698 billion for the prior year. The company's net interest margin for the fourth quarter of 1993 was 5.69 percent, down from 5.73 percent in the same quarter of 1992. The net interest margin for the full year of 1993 was 5.74 percent, compared with 5.70 percent for 1992. Noninterest income (NII) in the fourth quarter of 1993 was $295 million, compared with $258 million in the same quarter of 1992, an increase of 14 percent. The increase was largely due to net gains on sales and distributions from equity investments, primarily highly leveraged transactions, (up $15 million) and higher service charges on deposit accounts (up $10 million). For full year 1993, NII was $1.093 billion, compared with $1.059 billion in 1992. Noninterest expense (NIE) in the fourth quarter of 1993 was $557 million, compared with $527 million in the same quarter of 1992, a 6 percent increase. The increase primarily resulted from higher personnel- related expenses (up $33 million) due to incentive bonus programs, including the company-wide employee appreciation program announced in December 1993. NIE totaled $2.162 billion in 1993, compared with $2.035 billion in 1992. The provision for loan losses in the fourth quarter of 1993 was $80 million, compared - more - Wells Earnings -4- with $120 million in the third quarter of 1993 and $300 million in the fourth quarter of 1992. For 1993, the provision totaled $550 million, compared with $1.215 billion for 1992. Improvements in the company's loan portfolio in 1993 resulted in a reduction of the provision. Net charge-offs totaled $81 million, or 0.97 percent of average total loans (annualized), for the fourth quarter of 1993. The largest category of net charge-offs was credit card loans ($34 million). For the fourth quarter of 1992, net charge-offs totaled $199 million, or 2.09 percent of average total loans (annualized). The largest categories of net charge-offs were real estate mortgage loans other than 1-4 family ($78 million), credit card loans ($41 million) and commercial loans ($38 million). Full-year 1993 net charge-offs totaled $495 million, or 1.44 percent of average total loans. The largest categories of net charge-offs were credit card loans ($156 million) and real estate mortgage loans other than 1-4 family ($150 million). For all of 1992, net charge-offs totaled $798 million, or 1.97 percent of average total loans. The largest categories of net charge-offs were real estate mortgage loans other than 1-4 family ($281 million), commercial loans ($179 million) and credit card loans ($168 million). At Dec. 31, 1993, the allowance for loan losses equaled 6.41 percent of total loans, compared with 6.32 percent at Sept. 30, 1993 and 5.60 percent at Dec. 31, 1992. At Dec. 31, 1993, total nonaccrual and restructured loans decreased to $1.200 billion, or 3.6 percent of total loans, compared with $1.702 billion, or 5.1 percent of total loans, at Sept. 30, 1993, and $2.142 billion, or 5.8 percent of total loans, at Dec. 31, 1992. Foreclosed assets were $348 million at Dec. 31, 1993, compared with $357 million at Sept. 30, 1993 and $510 million at Dec. 31, 1992. At Dec. 31, 1993, an estimated $704 million, or 59 percent, of nonaccrual loans were less than 90 days past due, including an estimated $595 million that were current as to payment of principal and interest. This compares with an estimated $1.038 billion, or 61 percent, of nonaccrual loans that were less than 90 days past due at Sept. 30, 1993, including an estimated $871 million that were current. During the fourth quarter of 1993, an estimated $34 million of cash interest payments (including interest applied to principal) were received from all loans that were on nonaccrual during the quarter. The average nonaccrual book principal loan balance (net of charge-offs and interest applied to principal) was $1.498 billion for the quarter. The estimated average cash yield was 9.0 percent. During the third quarter of 1993, an estimated $38 million of cash interest payments (including interest applied to principal) was received from all loans that were on nonaccrual during the quarter. The average nonaccrual book principal loan balance (net of charge-offs and interest applied to principal) was $1.809 billion for the quarter. The estimated average cash yield was 8.3 percent. The company adopted Statement of Financial Accounting Standards No. 115 (FAS 115), - more - Wells Earnings -5- Accounting for Certain Investments in Debt and Equity Securities, on Dec. 31, 1993. FAS 115 establishes three classifications of securities, each of which receives different accounting treatment. "Held-to-maturity investment securities" are reported at cost. "Available-for-sale investment securities" are reported at fair value, with unrealized gains and losses (after applicable taxes) reported as a separate component of stockholders' equity. "Trading securities" are reported at fair value, with unrealized gains and losses included in earnings. At Dec. 31, 1993, the investment securities portfolio was comprised of $9.887 billion of held-to-maturity securities carried at cost and $3.171 billion of available-for-sale securities carried at fair value. There were no trading securities. At Dec. 31, 1993, the company's preliminary risk-based capital ratios were 15.10 percent for total risk-based capital and 10.45 percent for Tier 1 risk-based capital, exceeding the minimum regulatory guidelines of 8 percent and 4 percent, respectively. At Dec. 31, 1992, these risk-based capital ratios were 13.15 percent and 8.22 percent, respectively. The ratio of common equity to total assets at Dec. 31, 1993 was 7.00 percent, compared with 6.03 percent at Dec. 31, 1992. ### -6- Wells Earnings Wells Fargo & Company and Subsidiaries SUMMARY FINANCIAL DATA -- NEWS RELEASE
- --------------------------------------------------------------------------------------------------------------------------------- % Change Quarter ended Dec. 31, 1993 from Year ended ------------------------------ ------------------- ------------------- DEC. 31, Sept. 30, Dec. 31, Sept. 30, Dec. 31, DEC. 31, Dec. 31, % (in millions) 1993 1993 1992 1993 1992 1993 1992 Change - --------------------------------------------------------------------------------------------------------------------------------- FOR THE PERIOD Net income $ 190 $ 165 $ 58 15% 228% $ 612 $ 283 116% Per common share Net income $ 3.18 $ 2.74 $ .83 16 283 $ 10.10 $ 4.44 127 Dividends declared(1) .75 .50 -- 50 -- 2.25 1.50 50 Average common shares outstanding 56 56 54 -- 4 56 53 6 Profitability ratios (annualized) Net income to average total assets (ROA) 1.46% 1.29% .44% 13 232 1.20% .54% 122 Net income applicable to common stock to average common stockholders' equity (ROE) 19.85 17.75 5.85 12 239 16.74 7.93 111 Average loans $ 33,149 $ 33,682 $ 37,793 (2) (12) $ 34,304 $40,406 (15) Average assets 51,597 51,009 52,220 1 (1) 51,110 52,497 (3) Average core deposits 40,691 40,272 41,439 1 (2) 40,389 41,779 (3) Net interest margin 5.69% 5.65% 5.73% 1 (1) 5.74% 5.70% 1 AT PERIOD END Investment securities $ 13,058 $ 12,796 $ 9,338 2 40 $ 13,058 $ 9,338 40 Loans 33,099 33,606 36,903 (2) (10) 33,099 36,903 (10) Allowance for loan losses 2,122 2,123 2,067 -- 3 2,122 2,067 3 Assets 52,513 51,579 52,537 2 -- 52,513 52,537 -- Core deposits 41,291 40,532 41,879 2 (1) 41,291 41,879 (1) Common stockholders' equity 3,676 3,513 3,170 5 16 3,676 3,170 16 Stockholders' equity 4,315 4,152 3,809 4 13 4,315 3,809 13 Capital ratios Common stockholders' equity to assets 7.00% 6.81% 6.03% 3 16 7.00% 6.03% 16 Stockholders' equity to assets 8.22 8.05 7.25 2 13 8.22 7.25 13 Risk-based capital(2) Tier 1 capital 10.45 9.91 8.22 5 27 10.45 8.22 27 Total capital 15.10 14.60 13.15 3 15 15.10 13.15 15 Leverage(2) 7.40 7.21 6.36 3 16 7.40 6.36 16 Book value per common share $ 65.87 $ 62.98 $ 57.44 5 15 $ 65.87 $ 57.44 15 COMMON STOCK PRICE High $133 $ 127-3/8 $ 79 4 68 $133 $86-3/8 54 Low 105-7/8 107-1/4 61-5/8 (1) 72 75-1/2 59 28 Period end 129-3/8 126-3/8 76-3/8 2 69 129-3/8 76-3/8 69 - --------------------------------------------------------------------------------------------------------------------------------- (1) Beginning with the fourth quarter of 1992, the Company changed its dividend declaration policy whereby quarterly dividends are now considered at the Board of Directors' meeting following the quarter then ended. Accordingly, no dividend was declared (recorded) in the fourth quarter of 1992. (2) The December 31, 1993 ratios are preliminary. As currently required by the federal regulatory agencies, the risk-based capital and leverage ratios do not include unrealized net gains ($21 million, net of tax) on available-for-sale investment securities carried at fair value resulting from the adoption of FAS 115.
-7- Wells Fargo & Company and Subsidiaries CONSOLIDATED STATEMENT OF INCOME
------------------------------------------------------------------------------------------------------------- Quarter Year ended December 31, ended December 31, ----------------- % ----------------- % (in millions) 1993 1992 Change 1993 1992 Change ------------------------------------------------------------------------------------------------------------- INTEREST INCOME (1) Loans $ 744 $ 848 (12)% $3,066 $3,697 (17)% (2) Investment securities 178 135 32 672 415 62 Federal funds sold and securities purchased (3) under resale agreements 8 9 (11) 23 33 (30) ----- ----- ------ ------ (4) Total interest income 930 992 (6) 3,761 4,145 (9) ----- ----- ------ ------ INTEREST EXPENSE (5) Deposits 204 253 (19) 863 1,185 (27) Federal funds purchased and securities sold (6) under repurchase agreements 6 9 (33) 29 41 (29) (7) Commercial paper and other short-term borrowings 1 2 (50) 6 9 (33) (8) Senior and subordinated debt 53 52 2 206 219 (6) ----- ----- ------ ------ (9) Total interest expense 264 316 (16) 1,104 1,454 (24) ----- ----- ------ ------ (10) NET INTEREST INCOME 666 676 (1) 2,657 2,691 (1) (11) Provision for loan losses 80 300 (73) 550 1,215 (55) ----- ----- ------ ------ Net interest income after (12) provision for loan losses 586 376 56 2,107 1,476 43 ----- ----- ------ ------ NONINTEREST INCOME (13) Service charges on deposit accounts 112 102 10 423 394 7 (14) Fees and commissions 91 95 (4) 376 363 4 (15) Trust and investment services income 48 44 9 190 165 15 (16) Investment securities gains -- -- -- -- 45 (100) (17) Other 44 17 159 104 92 13 ----- ----- ------ ------ (18) Total noninterest income 295 258 14 1,093 1,059 3 ----- ----- ------ ------ NONINTEREST EXPENSE (19) Salaries 210 184 14 784 714 10 (20) Employee benefits 50 43 16 222 184 21 (21) Net occupancy 58 56 4 224 222 1 (22) Equipment 44 37 19 148 141 5 (23) Federal deposit insurance 28 26 8 114 106 8 (24) Other 167 181 (8) 670 668 -- ----- ----- ------ ------ (25) Total noninterest expense 557 527 6 2,162 2,035 6 ----- ----- ------ ------ INCOME BEFORE INCOME TAX (26) EXPENSE 324 107 203 1,038 500 108 (27) Income tax expense 134 49 173 426 217 96 ----- ----- ------ ------ (28) NET INCOME $ 190 $ 58 228% $ 612 $ 283 116% ===== ===== ===== ====== ====== ===== NET INCOME APPLICABLE TO (29) COMMON STOCK $ 178 $ 45 296% $ 562 $ 235 139% ===== ===== ===== ====== ====== ===== PER COMMON SHARE (30) Net income $3.18 $ .83 283% $10.10 $ 4.44 127% ===== ===== ===== ====== ====== ===== (31) Dividends declared (1) $ .75 $ -- --% $ 2.25 $ 1.50 50% ===== ===== ===== ====== ====== ===== (32) Average common shares outstanding 56 54 4% 56 53 6% ===== ===== ===== ====== ====== ===== -------------------------------------------------------------------------------------------------------------- (1) Beginning with the fourth quarter of 1992, the Company changed its dividends declaration policy whereby quarterly dividends are now considered at the Board of Directors' meeting following the quarter then ended. Accordingly, no dividend was declared (recorded) in the fourth quarter of 1992.
-8- Wells Fargo & Company and Subsidiaries CONSOLIDATED BALANCE SHEET
----------------------------------------------------------------------------------------------- December 31, ---------------------- % (in millions) 1993 1992 Change ---------------------------------------------------------------------------------------------- ASSETS (1) Cash and due from banks $ 2,644 $ 2,690 (2)% Investment securities: (2) At cost (estimated fair value $9,978 and $9,428) 9,887 9,338 6 (3) At fair value 3,171 -- -- ------- ------- (4) Total investment securities 13,058 9,338 40 Federal funds sold and securities (5) purchased under resale agreements 1,668 1,183 41 (6) Loans 33,099 36,903 (10) (7) Allowance for loan losses 2,122 2,067 3 ------- ------- (8) Net loans 30,977 34,836 (11) ------- ------- (9) Due from customers on acceptances 70 97 (28) (10) Accrued interest receivable 297 301 (1) (11) Premises and equipment, net 898 876 3 (12) Goodwill 477 523 (9) (13) Other assets 2,424 2,693 (10) ------- ------- (14) Total assets $52,513 $52,537 -- % ======= ======= === LIABILITIES (15) Noninterest-bearing deposits $ 9,719 $ 9,190 6% (16) Interest-bearing deposits 31,925 33,054 (3) ------- ------- (17) Total deposits 41,644 42,244 (1) Federal funds purchased and securities (18) sold under repurchase agreements 1,079 1,311 (18) (19) Commercial paper and other short-term borrowings 188 202 (7) (20) Acceptances outstanding 70 97 (28) (21) Accrued interest payable 63 88 (28) (22) Other liabilities 933 746 25 (23) Senior debt 2,256 2,159 4 (24) Subordinated debt 1,965 1,881 4 ------- ------- (25) Total liabilities 48,198 48,728 (1) ------- ------- STOCKHOLDERS' EQUITY (26) Preferred stock 639 639 -- Common stock - $5 par value, authorized 150,000,000 shares; issued and outstanding 55,812,592 shares (27) and 55,191,173 shares 279 276 1 (28) Additional paid-in capital 551 506 9 (29) Retained earnings 2,829 2,392 18 (30) Cumulative foreign currency translation adjustments (4) (4) -- (31) Investment securities valuation allowance 21 -- -- ------- ------- (32) Total stockholders' equity 4,315 3,809 13 ------- ------- (33) Total liabilities and stockholders' equity $52,513 $52,537 -- % ======= ======= === ----------------------------------------------------------------------------------------------
-9- Wells Fargo & Company and Subsidiaries CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
- ------------------------------------------------------------------------ Year ended December 31, ---------------------- (in millions) 1993 1992 - ------------------------------------------------------------------------ BALANCE, BEGINNING OF YEAR $3,809 $3,271 Net income 612 283 Common stock issued under employee benefit and dividend reinvestment plans 53 213 Preferred stock issued, net of issuance costs -- 169 Cumulative unrealized net gains, after applicable taxes, at December 31, 1993(1) 21 -- Common stock repurchased (5) -- Preferred stock dividends (50) (48) Common stock dividends (125) (79) ------ ------ BALANCE, END OF YEAR $4,315 $3,809 ====== ====== - ------------------------------------------------------------------------ (1) Represents valuation allowance for available-for-sale investment securities carried at fair value resulting from the adoption of Financial Accounting Standard No. 115 at December 31, 1993.
LOANS - -------------------------------------------------------------------------
December 31, ---------------- (in millions) 1993 1992 - ------------------------------------------------------------------------ Commercial (1)(2) $ 6,912 $ 8,214 Real estate 1-4 family first mortgage 7,458 6,836 Other real estate mortgage 8,286 10,128 Real estate construction 1,110 1,600 Consumer: Real estate 1-4 family junior lien mortgage 3,583 4,157 Credit card 2,600 2,807 Other revolving credit and monthly payment 1,920 1,979 ------- ------- Total consumer 8,103 8,943 Lease financing 1,212 1,177 Foreign 18 5 ------- ------- Total loans $33,099 $36,903 ======= ======= - ------------------------------------------------------------------------ (1) Includes senior highly leveraged transaction (HLT) loans of approximately $504 million and $1,058 million at December 31, 1993 and 1992, respectively, and subordinated HLT loans of approximately $9 million and $31 million for the same periods, respectively. (2) Includes loans to real estate developers of $505 million and $731 million at December 31, 1993 and 1992, respectively.
-10- Wells Fargo & Company and Subsidiaries CHANGES IN THE ALLOWANCE FOR LOAN LOSSES
- --------------------------------------------------------------------------------------------------------------------- Quarter ended Year ended ------------------------------------- ---------------------- DEC. 31, Sept. 30, Dec. 31, DEC. 31, Dec. 31, (in millions) 1993 1993 1992 1993 1992 - --------------------------------------------------------------------------------------------------------------------- BALANCE, BEGINNING OF PERIOD $2,123 $2,124 $1,966 $2,067 $1,646 Provision for loan losses 80 120 300 550 1,215 Loan charge-offs: Commercial (1)(2) (29) (22) (55) (110) (238) Real estate 1-4 family first mortgage (8) (5) (6) (25) (17) Other real estate mortgage (21) (61) (81) (197) (290) Real estate construction (13) (16) (14) (68) (93) Consumer: Real estate 1-4 family junior lien mortgage (9) (5) (12) (28) (28) Credit card (40) (43) (46) (177) (189) Other revolving credit and monthly payment (9) (9) (12) (41) (41) ------ ------ ------ ------ ------ Total consumer (58) (57) (70) (246) (258) Lease financing (5) (4) (5) (18) (19) ------ ------ ------ ------ ------ Total loan charge-offs (134) (165) (231) (664) (915) ------ ------ ------ ------ ------ Loan recoveries: Commercial (3)(4) 22 11 17 71 59 Real estate 1-4 family first mortgage -- 1 -- 2 2 Other real estate mortgage 16 19 3 47 9 Real estate construction 3 1 1 4 3 Consumer: Real estate 1-4 family junior lien mortgage 1 1 1 3 1 Credit card 6 5 5 21 21 Other revolving credit and monthly payment 3 3 3 12 12 ------ ------ ------ ------ ------ Total consumer 10 9 9 36 34 Lease financing 2 3 2 9 9 Foreign -- -- -- -- 1 ------ ------ ------ ------ ------ Total loan recoveries 53 44 32 169 117 ------ ------ ------ ------ ------ Total net loan charge-offs (81) (121) (199) (495) (798) Recoveries on the sale of developing country loans -- -- -- -- 4 ------ ------ ------ ------ ------ BALANCE, END OF PERIOD $2,122 $2,123 $2,067 $2,122 $2,067 ====== ====== ====== ====== ====== Total net loan charge-offs as a percentage of average total loans (annualized) .97% 1.42% 2.09% 1.44% 1.97% ====== ----- ------ ------ ------ Allowance as a percentage of total loans 6.41% 6.32% 5.60% 6.41% 5.60% ====== ====== ====== ====== ====== - --------------------------------------------------------------------------------------------------------------------- (1) Includes charge-offs of senior highly leveraged transaction (HLT) loans of none, none and $13 million in the quarters ended December 31, 1993, September 30, 1993 and December 31, 1992, respectively, and $21 million and $64 million in the years ended December 31, 1993 and 1992, respectively. There were no charge-offs of subordinated HLT loans for the periods presented. (2) Includes charge-offs of loans to real estate developers of $15 million, $1 million and $5 million in the quarters ended December 31, 1993, September 30, 1993 and December 31, 1992, respectively, and $21 million and $41 million in the years ended December 31, 1993 and 1992, respectively. (3) Includes recoveries from senior highly leveraged transaction (HLT) loans of $13 million, $4 million and $3 million in the quarters ended December 31, 1993, September 30, 1993 and December 31, 1992, respectively, and $30 million and $6 million in the years ended December 31, 1993 and 1992, respectively. There were no recoveries from subordinated HLT loans for the periods presented. (4) Includes recoveries from real estate developers of $1 million in the quarters ended December 31, 1993, September 30, 1993 and December 31, 1992, and $3 million and $6 million in the years ended December 31, 1993 and 1992, respectively.
-11- Wells Fargo & Company and Subsidiaries NONACCRUAL AND RESTRUCTURED LOANS AND OTHER ASSETS
- --------------------------------------------------------------------------------------------------------------------- DEC. 31, Sept. 30, June 30, Mar. 31, Dec. 31, (in millions) 1993 1993 1993 1993 1992 - --------------------------------------------------------------------------------------------------------------------- Nonaccrual loans: Commercial (1)(2) $ 252 $ 441 $ 486 $ 558 $ 560 Real estate 1-4 family first mortgage 99 96 95 97 96 Other real estate mortgage 578 850 1,035 1,071 1,207 Real estate construction 235 278 241 204 235 Consumer: Real estate 1-4 family junior lien mortgage 27 25 28 30 29 Other revolving credit and monthly payment 3 6 13 6 7 ------ ------ ------ ------ ------ Total consumer 30 31 41 36 36 ------ ------ ------ ------ ------ Total nonaccrual loans 1,194 1,696 1,898 1,966 2,134 Restructured loans 6 6 7 8 8 ------ ------ ------ ------ ------ Nonaccrual and restructured loans 1,200 1,702 1,905 1,974 2,142 As a percentage of total loans 3.6% 5.1% 5.5% 5.6% 5.8% Foreclosed assets (3) 348 357 391 510 510 Real estate investments (4) 15 15 23 26 40 ------ ------ ------ ------ ------ Total nonaccrual and restructured loans and other assets $1,563 $2,074 $2,319 $2,510 $2,692 ====== ====== ====== ====== ====== - --------------------------------------------------------------------------------------------------------------------- (1) Includes senior highly leveraged transaction (HLT) loans of $53 million, $94 million, $104 million, $157 million and $152 million at December 31, 1993, September 30, 1993, June 30, 1993, March 31, 1993 and December 31, 1992, respectively, and subordinated HLT loans of none, $13 million, $13 million, $13 million and $22 million for the same periods, respectively. (2) Includes loans to real estate developers of $91 million, $116 million, $115 million, $64 million and $86 million at December 31, 1993, September 30, 1993, June 30, 1993, March 31, 1993 and December 31, 1992, respectively. (3) Excludes in-substance foreclosures (ISFs) of $99 million reclassified to nonaccrual loans at June 30, 1993 due to clarification of criteria used in determining when a loan is in-substance foreclosed. Complete information is not available for prior periods; however, any ISFs that would be reclassified in prior periods would not be materially higher than $99 million. (4) Represents the amount of real estate investments (contingent interest loans accounted for as investments) that would be classified as nonaccrual if such assets were loans. Real estate investments totaled $34 million, $39 million, $51 million, $56 million and $93 million at December 31, 1993, September 30, 1993, June 30, 1993, March 31, 1993 and December 31, 1992, respectively.
QUARTERLY TREND OF CHANGES IN NONACCRUAL LOANS (1)
- ------------------------------------------------------------------------------------------------------------------------------ DEC. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, (in millions) 1993 1993 1993 1993 1992 1992 1992 1992 - ----------------------------------------------------------------------------------------------------------------------------- BALANCE, BEGINNING OF QUARTER $1,696 $1,898 $1,966 $2,134 $2,399 $2,326 $2,051 $1,977 New loans placed on nonaccrual 113 195 264 249 328 649 756 433 Charge-offs (55) (90) (71) (109) (127) (171) (115) (80) Payments (309) (188) (144) (156) (225) (166) (124) (132) Transfers to foreclosed assets (64) (32) (104) (41) (114) (89) (189) (90) Transfers from foreclosed assets (2) -- -- 99 -- -- -- -- -- Loans returned to accrual (188) (81) (107) (82) (120) (146) (50) (59) Loans sold -- (2) (5) (26) -- -- -- -- Other additions (deductions) 1 (4) -- (3) (7) (4) (3) 2 ------ ------ ------ ------ ------ ------ ------ ------ BALANCE, END OF QUARTER $1,194 $1,696 $1,898 $1,966 $2,134 $2,399 $2,326 $2,051 ====== ====== ====== ====== ====== ====== ====== ====== - -------------------------------------------------------------------------------------------------------------------------------- (1) The December 31, 1993 amounts are preliminary. (2) Reclassification due to clarification of criteria used in determining when a loan is in-substance foreclosed.
-12- Wells Fargo & Company and Subsidiaries NONACCRUAL LOANS BY PERFORMANCE CATEGORY (1)
- ----------------------------------------------------------------------------------------------------------------------------- Cash interest Cumulative payments applied as: cash -------------------- Book interest Contractual Reduction principal Cumulative applied to principal Interest of (in millions) balance charge-offs(6) principal(6) balance income(7) principal(7) - ------------------------------------------------------------------------------------------------------------------------------ DECEMBER 31, 1993 FOURTH QUARTER 1993 ------------------------------------------------------ ---------------------- Contractually past due (2): Payments not made (3): 90 days or more past due $ 161 $ 22 $ -- $ 183 $ -- $-- Less than 90 days past due 23 -- -- 23 -- -- ------ ---- ---- ------ ---- --- 184 22 -- 206 -- -- ------ ---- ---- ------ ---- --- Payments made (4): 90 days or more past due 329 171 41 541 -- 6 Less than 90 days past due 86 29 16 131 -- 2 ------ ---- ---- ------ ---- --- 415 200 57 672 -- 8 ------ ---- ---- ------ ---- --- Total past due 599 222 57 878 -- 8 Contractually current (5) 595 214 120 929 1 14 ------ ---- ---- ------ ---- --- Total nonaccrual loans $1,194 $436 $177 $1,807 $ 1 $22 ====== ==== ==== ====== ==== === - ------------------------------------------------------------------------------------------------------------------------------ September 30, 1993 Third quarter 1993 ----------------------------------------------------- ------------------ Contractually past due (2): Payments not made (3): 90 days or more past due $ 152 $ 27 $ -- $ 179 $ -- $ -- Less than 90 days past due 1 -- -- 1 -- -- ------ ---- ---- ------ ---- --- 153 27 -- 180 -- -- ------ ---- ---- ------ ---- --- Payments made (4): 90 days or more past due 506 195 40 741 -- 10 Less than 90 days past due 166 33 42 241 -- 5 ------ ---- ---- ------ ---- --- 672 228 82 982 -- 15 ------ ---- ---- ------ ---- --- Total past due 825 255 82 1,162 -- 15 Contractually current (5) 871 260 142 1,273 -- 19 ------ ---- ---- ------ ---- --- Total nonaccrual loans $1,696 $515 $224 $2,435 $ -- $34 ====== ==== ==== ====== ==== === - ------------------------------------------------------------------------------------------------------------------------------ (1) There can be no assurance that individual borrowers will continue to perform at the level indicated or that the performance characteristics will not change significantly. The December 31, 1993 amounts are preliminary. (2) Contractually past due is defined as a borrower whose loan principal or interest payment is 30 days or more past due. (3) Borrower has made no payments since being placed on nonaccrual. (4) Borrower has made some payments since being placed on nonaccrual. Approximately $314 million and $498 million of these loans had some payments made on them during the fourth and third quarters of 1993, respectively. (5) Contractually current is defined as a loan for which principal and interest are being paid in accordance with the terms of the loan. Approximately $113 million and $195 million of loans, both current and past due, were placed on nonaccrual in the fourth and third quarters of 1993, respectively, of which approximately $15 million and $84 million were contractually current at December 31, 1993 and September 30, 1993, respectively. All of the contractually current loans were placed on nonaccrual due to uncertainty of receiving full timely collection of interest or principal. (6) Cumulative amounts recorded since inception of the loan. (7) Includes only those interest payments received subsequent to a borrower being placed on nonaccrual. Therefore, these amounts do not include interest received before these loans were placed on nonaccrual. There were no interest payments received that were recorded as recoveries on partially charged-off loans because payments on such loans were applied as a reduction of loan principal or recognized as interest income.
-13- Wells Fargo & Company and Subsidiaries NONINTEREST INCOME
- ----------------------------------------------------------------------------------------------------------- Quarter ended Year ended December 31, December 31, ---------------- % -------------- % (in millions) 1993 1992 Change 1993 1992 Change - ----------------------------------------------------------------------------------------------------------- Service charges on deposit accounts $112 $102 10% $423 $394 7% Fees and commissions: Debit and credit card merchant fees 17 23 (26) 80 87 (8) Credit card membership and other credit card fees 17 18 (6) 68 72 (6) Charges and fees on loans 12 12 -- 48 49 (2) Mutual fund and annuity sales fees 9 12 (25) 43 29 48 Shared ATM network fees 10 9 11 38 32 19 All other 26 21 24 99 94 5 ---- ---- ----- ----- Total fees and commissions 91 95 (4) 376 363 4 Trust and investment services income: Asset management and custody fees 31 31 -- 125 124 1 Mutual fund management fees 10 7 43 37 19 95 All other 7 6 17 28 22 27 ---- ---- ----- ----- Total trust and investment services income 48 44 9 190 165 15 Investment securities gains -- -- -- -- 45 (100) Income from equity investments accounted for by the: Cost method 20 5 300 42 17 147 Equity method 4 4 -- 24 24 -- Check printing charges 10 9 11 38 36 6 Gains on sales of loans 2 3 (33) 12 20 (40) Gains (losses) from dispositions of operations 7 (9) 178 (28) (8) 250 Real estate investment gains (losses) 1 -- -- (6) (19) (68) All other -- 5 (100) 22 22 -- ---- ---- ----- ----- Total $295 $258 14% $1,093 $1,059 3% ==== ==== ==== ====== ====== ==== - -----------------------------------------------------------------------------------------------------------
NONINTEREST EXPENSE
- ----------------------------------------------------------------------------------------------------------- Quarter ended Year ended December 31, December 31, --------------- % -------------- % (in millions) 1993 1992 Change 1993 1992 Change - ----------------------------------------------------------------------------------------------------------- Salaries $210 $184 14% $ 784 $ 714 10% Employee benefits 50 43 16 222 184 21 Net occupancy 58 56 4 224 222 1 Equipment 44 37 19 148 141 5 Federal deposit insurance 28 26 8 114 106 8 Certain identifiable intangibles 17 16 6 77 71 8 Contract services 20 15 33 61 48 27 Foreclosed assets 10 26 (62) 60 93 (35) Advertising and promotion 15 14 7 59 47 26 Operating losses 16 12 33 52 45 16 Telecommunications 11 11 -- 44 44 -- Postage 10 11 (9) 43 42 2 Outside professional services 11 14 (21) 42 45 (7) Goodwill 9 10 (10) 37 37 -- Check printing 9 8 13 34 33 3 Stationery and supplies 8 8 -- 31 31 -- Travel and entertainment 8 7 14 28 24 17 Escrow and collection agency fees 5 7 (29) 24 26 (8) Security 5 5 -- 19 18 6 Outside data processing 3 4 (25) 16 18 (11) All other 10 13 (23) 43 46 (7) ---- ---- ------ ------ Total $557 $527 6% $2,162 $2,035 6% ==== ==== === ====== ====== === - --------------------------------------------------------------------------------------------------------------
-14- Wells Fargo & Company and Subsidiaries AVERAGE BALANCES, YIELDS AND RATES PAID (TAXABLE-EQUIVALENT BASIS)
-------------------------------------------------------------------------------------------------------------------- Quarter ended, --------------------------------------------------------- DECEMBER 31, 1993 December 31, 1992 --------------------------- --------------------------- INTEREST Interest AVERAGE YIELDS/ INCOME/ Average Yields/ income/ (in millions) BALANCE RATES EXPENSE balance rates expense -------------------------------------------------------------------------------------------------------------------- EARNING ASSETS Investment securities at cost: (1) U.S. Treasury securities $ 2,366 4.84% $ 29 $ 1,979 5.33% $ 27 Securities of U.S. government agencies (2) and corporations 8,306 6.38 132 6,191 6.85 106 (3) Obligations of states and political subdivisions 18 7.06 1 24 -- -- (4) Private collateralized mortgage obligations 1,737 3.25 14 -- -- -- (5) Other securities 175 5.56 2 144 5.51 2 ------- ---- ------- ---- (6) Total investment securities at cost 12,602 5.65 178 8,338 6.47 135 Federal funds sold and securities purchased (7) under resale agreements 1,009 3.13 8 1,062 3.25 9 Loans: (8) Commercial 6,701 9.60 162 8,535 8.64 185 (9) Real estate 1-4 family first mortgage 7,150 7.36 132 6,972 8.67 151 (10) Other real estate mortgage 8,829 8.70 193 10,419 7.93 207 (11) Real estate construction 1,173 8.11 24 1,715 8.49 37 Consumer: (12) Real estate 1-4 family junior lien mortgage 3,686 6.76 62 4,265 7.72 82 (13) Credit card 2,509 15.52 98 2,746 15.68 108 (14) Other revolving credit and monthly payment 1,867 9.49 45 1,965 9.72 48 ------- ---- ------- ---- (15) Total consumer 8,062 10.12 205 8,976 10.59 238 (16) Lease financing 1,208 9.59 29 1,174 10.26 30 (17) Foreign 26 -- -- 2 -- -- ------- ---- ------- ---- (18) Total loans 33,149 8.95 745 37,793 8.96 848 ------- ---- ------- ---- (19) Total earning assets $46,760 7.93 931 $47,193 8.39 992 ======= ---- ======= ---- FUNDING SOURCES Interest-bearing liabilities: Deposits: (20) Interest-bearing checking $ 4,678 .99 12 $ 4,613 1.47 17 (21) Savings deposits 2,589 1.99 13 3,013 2.49 19 (22) Market rate savings 17,115 2.19 95 15,969 2.54 102 (23) Savings certificates 7,307 4.29 79 9,457 4.55 109 (24) Certificates of deposit 211 7.91 5 258 8.08 5 (25) Other time deposits 106 6.61 1 125 -- -- (26) Deposits in foreign offices 5 -- -- 6 -- -- ------- ---- ------- ----- ---- (27) Total interest-bearing deposits 32,011 2.53 205 33,441 2.99 252 Federal funds purchased and securities sold (28) under repurchase agreements 927 2.76 6 1,449 2.66 10 (29) Commercial paper and other short-term borrowings 201 2.92 1 226 2.99 1 (30) Senior debt 2,180 4.48 25 2,099 5.20 27 (31) Subordinated debt 2,058 5.39 28 1,928 5.15 25 ------- ---- ------- ----- ---- (32) Total interest-bearing liabilities 37,377 2.81 265 39,143 3.20 315 (33) Portion of noninterest-bearing funding sources 9,383 -- -- 8,050 -- -- ------- ---- ------- ----- ---- (34) Total funding sources $46,760 2.24 265 $47,193 2.66 315 ======= ---- ======= ===== ---- NET INTEREST MARGIN AND NET INTEREST INCOME ON (35) A TAXABLE-EQUIVALENT BASIS (1) 5.69% $666 5.73% $677 ===== ==== ===== ==== NONINTEREST-EARNING ASSETS (36) Cash and due from banks $ 2,546 $ 2,545 (37) Other 2,291 2,482 ------- ------- (38) Total noninterest-earning assets $ 4,837 $ 5,027 ======= ======= NONINTEREST-BEARING FUNDING SOURCES (39) Deposits $ 9,002 $ 8,387 (40) Other liabilities 1,034 970 (41) Preferred stockholders' equity 639 639 (42) Common stockholders' equity 3,545 3,081 Noninterest-bearing funding sources used to (43) fund earning assets (9,383) (8,050) ------- ------- (44) Net noninterest-bearing funding sources $ 4,837 $ 5,027 ======= ======= (45)TOTAL ASSETS $51,597 $52,220 ======= ======= ------------------------------------------------------------------------------------------------------------------- The average prime rate of Wells Fargo Bank was 6.00% for the quarters ended December 31, 1993 and 1992. The average three-month London Interbank Offered Rate (LIBOR) was 3.42% and 3.60% for the quarters ended December 31 1993 and 1992, respectively. (1) Includes taxable-equivalent adjustments that primarily relate to income on certain loans and securities that is exempt from federal and applicable state income taxes. The federal statutory tax rate was 35% and 34% for the quarters ended December 31, 1993 and 1992, respectively.
-15- Wells Fargo & Company and Subsidiaries AVERAGE BALANCES, YIELDS AND RATES PAID (TAXABLE-EQUIVALENT BASIS)
-------------------------------------------------------------------------------------------------------------------- Year End December 31, --------------------------------------------------------- 1993 1992 --------------------------- --------------------------- Interest Interest Average Yields/ Income/ Average Yields/ income/ (in millions) Balance Rates Expense balance rates expense -------------------------------------------------------------------------------------------------------------------- EARNING ASSETS Investment securities: At cost: (1) U.S. Treasury securities $ 2,283 5.03% $ 115 $ 1,562 5.80% $ 91 Securities of U.S. government agencies (2) and corporations 7,974 6.41 511 4,197 7.38 309 (3) Obligations of states and political subdivisions 22 7.36 2 32 7.15 2 (4) Private collateralized mortgage obligations 864 4.16 36 -- -- -- (5) Other securities 167 5.45 9 78 5.76 5 ------- ------ ------- ------ (6) Total investments securities at cost 11,310 5.95 673 5,869 6.93 407 (7) At lower of cost or market -- -- -- 108 8.73 9 ------- ------ ------- ------ (8) Total investment securities 11,310 5.95 673 5,977 6.97 416 Federal funds sold and securities purchased (9) under resale agreements 734 3.17 23 919 3.62 33 Loans: (10) Commercial 7,154 9.36 670 9,702 8.50 825 (11) Real estate 1-4 family first mortgage 6,787 7.92 538 7,628 9.27 707 (12) Other real estate mortgage 9,467 8.20 776 10,634 8.21 873 (13) Real estate construction 1,303 8.50 111 1,837 8.47 156 Consumer: (14) Real estate 1-4 family junior lien mortgage 3,916 6.97 273 4,585 8.14 373 (15) Credit card 2,587 15.62 404 2,771 15.93 441 (16) Other revolving credit and monthly payment 1,893 9.45 179 2,083 9.85 205 ------- ------ ------- ------ (17) Total consumer 8,396 10.19 856 9,439 10.81 1,019 (18) Lease financing 1,190 9.83 117 1,165 10.36 121 (19) Foreign 7 -- -- 1 -- -- ------- ------ ------- ------ (20) Total loans 34,304 8.94 3,068 40,406 9.16 3,701 (21) Other -- -- -- 1 -- -- ------- ------ ------- ------ (22) Total earning assets $46,348 8.12 3,764 $47,303 8.77 4,150 ======= ------ ======= ------ FUNDING SOURCES Interest-bearing liabilities: Deposits: (23) Interest-bearing checking $ 4,626 1.18 55 $ 4,597 1.77 81 (24) Savings deposits 2,741 2.19 60 3,250 2.81 91 (25) Market rate savings 16,592 2.28 378 15,284 2.89 442 (26) Savings certificates 7,948 4.37 347 10,763 4.94 532 (27) Certificates of deposit 219 7.99 18 316 8.41 27 (28) Other time deposits 112 5.62 6 128 5.32 7 (29) Deposits in foreign offices 7 -- -- 43 7.89 3 ------- ------ ------- ------ (30) Total interest-bearing deposits 32,245 2.68 864 34,381 3.44 1,183 Federal funds purchased and securities sold (31) under repurchase agreements 1,051 2.79 29 1,299 3.16 41 (32) Commercial paper and other short-term borrowings 207 2.90 6 252 3.54 9 (33) Senior debt 2,174 4.75 103 2,175 5.77 126 (34) Subordinated debt 1,958 5.23 103 1,872 4.99 93 ------- ------ ------- ------ (35) Total interest-bearing liabilities 37,635 2.93 1,105 39,979 3.63 1,452 (36) Portion of noninterest-bearing funding sources 8,713 -- -- 7,324 -- -- ------- ------ ------- ------ (37) Total funding sources $46,348 2.38 1,105 $47,303 3.07 1,452 ======= ------ ======= ------ NET INTEREST MARGIN AND NET INTEREST INCOME ON (38) A TAXABLE-EQUIVALENT BASIS (1) 5.74% $2,659 5.70% $2,698 ===== ====== ===== ====== NONINTEREST-EARNING ASSETS (39) Cash and due from banks $ 2,456 $ 2,536 (40) Other 2,306 2,658 ------- ------- (41) Total noninterest-earning assets $ 4,762 $ 5,194 ======= ======= NONINTEREST-BEARING FUNDING SOURCES (42) Deposits $ 8,482 $ 7,885 (43) Other liabilities 997 1,060 (44) Preferred stockholders' equity 639 608 (45) Common stockholders' equity 3,357 2,965 Noninterest-bearing funding sources used to (46) fund earning assets (8,713) (7,324) ------- ------- (47) Net noninterest-bearing funding sources $ 4,762 $ 5,194 ======= ======= (48) TOTAL ASSETS $51,110 $52,497 ======= ======= -------------------------------------------------------------------------------------------------------------------- The average prime rate of the Bank was 6.00% and 6.25% for the years ended December 31, 1993 and 1992, respectively. The average three-month London Interbank Offered Rate (LIBOR) was 3.29% and 3.83% for the years ended December 31, 1993 and 1992, respectively. (1) Includes taxable-equivalent adjustments that primarily relate to income on certain loans and securities that is exempt from federal and applicable state income taxes. The federal statutory tax rate was 35% and 34% for the years ended December 31, 1993 and 1992, respectively.
-16- FOR IMMEDIATE RELEASE Tues., Jan. 18, 1994 WELLS FARGO INCREASES DIVIDEND ON COMMON STOCK TO $1 Up from 75 cents The Board of Directors of Wells Fargo & Co. (NYSE: WFC) declared a regular quarterly dividend on common stock of $1.00 per share. This dividend represents a 25 cent increase from the previous dividend of 75 cents per share that was announced Oct. 19, 1993. The dividend will be payable Feb. 22, 1994, to shareholders of record at the close of business Jan. 31, 1994. -----END PRIVACY-ENHANCED MESSAGE-----