-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CUfuwNl5p75jK4ENtg7RRHjhwrpCP0pQhFNSvA04fOUKXbqlVkDcrQ5/U34Qqck3 AwMxjwFuI58xSMFO191pvA== 0000912057-96-014763.txt : 19960717 0000912057-96-014763.hdr.sgml : 19960717 ACCESSION NUMBER: 0000912057-96-014763 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960716 ITEM INFORMATION: Changes in control of registrant FILED AS OF DATE: 19960716 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: WELLS FARGO & CO CENTRAL INDEX KEY: 0000105598 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 132553920 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-06214 FILM NUMBER: 96595487 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): July 16, 1996 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 hereto as Exhibit 99 is a Press Release announcing Wells Fargo & Company's financial results for the quarter ended June 30, 1996. Final financial statements with additional analyses will be filed as part of the Company's Form 10-Q in August 1996. Item 7: FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits 27 Financial Data Schedule 99 Copy of the Press Release announcing Wells Fargo & Company's financial results for the quarter ended June 30, 1996. 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, thereunto duly authorized, on July 16, 1996. WELLS FARGO & COMPANY By: /s/FRANK A. MOESLEIN -------------------------------- Frank A. Moeslein Executive Vice President and Controller EX-27 2 FINANCIAL DATA SCHEDULE
9 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE 8-K DATED JULY 16, 1996 FOR THE PERIOD ENDED JUNE 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL INFORMATION. 1,000,000 6-MOS DEC-31-1996 JAN-01-1996 JUN-30-1996 8,882 0 1,344 0 13,692 0 0 70,541 2,273 108,586 83,868 1,206 3,042 5,230 0 839 475 13,716 108,586 2,494 353 7 2,864 695 888 1,976 0 2 1,844 1,125 627 0 0 627 8.39 0 6.08 731 0 11 0 1,794 380 89 2,273 0 0 0
EX-99 3 EXHIBIT 99 Cindy Koehn 415/396-3099 Investor Relations Exhibit 99 FOR IMMEDIATE RELEASE Tues., July 16, 1996 WELLS FARGO REPORTS SECOND QUARTER EARNINGS PER SHARE EARNINGS OF $3.61 FOR FIRST POST-MERGER QUARTER Wells Fargo & Co. (NYSE:WFC) today reported net income of $363 million for the second quarter of 1996. Per share earnings for the quarter were $3.61. Return on average assets (ROA) was 1.35 percent and return on average common equity (ROE) was 9.77 percent. Earnings before the amortization of goodwill and nonqualifying core deposit intangibles ("cash earnings") were $4.89 per share. Cash ROA was 1.96 percent; cash ROE was 33.43 percent. "Following our merger with First Interstate, cash earnings, as well as cash ROA and ROE, are the measures of performance which will be most comparable with prior quarters. They are also the most relevant measures of financial performance for shareholders because they measure Wells Fargo's ability to repurchase stock, pay dividends and support growth," said Chairman Paul Hazen. "Cash EPS of $4.89 is down from cash EPS of $5.58 for the first quarter of 1996 given merger-related expenses and because we are just beginning to realize the economic benefits of the merger. We are confident that we will meet our original merger targets within the first 18 months." Since the Company's second quarter 1996 results reflect the effects of the merger beginning April 1, 1996, these results and the results for the first six months of 1996 are not comparable to the reported results for the corresponding prior periods. Because the merger was accounted for as a purchase, $7.2 billion of goodwill was recorded during the second quarter. Goodwill may change as certain estimates are finalized, although any adjustments are not expected to have a significant effect on the ultimate amount of goodwill. -more- 2/WF Earnings Net interest income on a taxable-equivalent basis was $1,304 million in the second quarter. The Company's net interest margin for the quarter was 6.03 percent. Noninterest income (NII) for the quarter was $639 million. Noninterest expense (NIE) for the quarter was $1,277 million, reflecting severance and other merger-related expenses. Net charge-offs in the second quarter totaled $178 million, or 1.01 percent of average loans (annualized). The largest category of net charge-offs was credit card loans ($90 million). At June 30, 1996, the allowance for loan losses equaled 3.22 percent of total loans. Total nonaccrual and restructured loans were $742 million at June 30, 1996. Foreclosed assets were $238 million. The Company's effective tax rate for the second quarter of 1996 was 45%. At June 30, 1996, the Company's preliminary risk-based capital ratios were 11.20 percent for total risk-based capital and 7.45 percent for Tier 1 risk- based capital, exceeding the minimum regulatory guidelines of 8 percent and 4 percent, respectively. The leverage ratio was 6.35 percent. The ratio of common equity to total assets at the end of the quarter was 13.07 percent. ### - 3 -
Wells Earnings Wells Fargo & Company and Subsidiaries SUMMARY FINANCIAL DATA -- NEWS RELEASE - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- % Change Quarter ended June 30, 1996 from Six months ended ------------------------------ ------------------ ------------------- JUNE 30, Mar. 31, June 30, Mar. 31, June 30, JUNE 30, June 30, % (in millions) 1996 1996 1995 1996 1995 1996 1995 Change - ----------------------------------------------------------------------------------------------------------------------------------- FOR THE PERIOD Net income $ 363 $ 264 $ 232 38% 56% $ 627 $ 465 35% Net income applicable to common stock 344 254 222 35 55 598 444 35 Per common share Net income $ 3.61 $ 5.39 $ 4.51 (33) (20) $ 8.39 $ 8.92 (6) Dividends declared 1.30 1.30 1.15 -- 13 2.60 2.30 13 Average common shares outstanding 95.6 47.0 49.1 103 95 71.3 49.8 43 Profitability ratios (annualized) Net income to average total assets (ROA) 1.35% 2.16% 1.81% (38) (25) 1.60% 1.80% (11) Net income applicable to common stock to average common stockholders' equity (ROE) 9.77 28.34 26.71 (66) (63) 13.52 26.80 (50) Efficiency ratio (1) 65.8% 55.1% 57.8% 19 14 62.1% 58.5% 6 Average loans $ 70,734 $ 35,025 $ 33,202 102 113 $ 52,880 $ 34,759 52 Average assets 108,430 49,134 51,491 121 111 78,782 51,938 52 Average core deposits 83,356 36,819 36,226 126 130 60,087 36,462 65 Net interest margin 6.03% 6.18% 5.66% (2) 7 6.08% 5.63% 8 AT PERIOD END Investment securities $ 13,692 $ 8,435 $ 10,135 62 35 $ 13,692 $ 10,135 35 Loans 70,541 35,167 33,896 101 108 70,541 33,896 108 Allowance for loan losses 2,273 1,681 1,947 35 17 2,273 1,947 17 Goodwill 7,479 373 399 -- -- 7,479 399 -- Assets 108,586 48,978 50,931 122 113 108,586 50,931 113 Core deposits 83,331 37,414 37,026 123 125 83,331 37,026 125 Common stockholders' equity 14,191 3,713 3,373 282 321 14,191 3,373 321 Stockholders' equity 15,030 4,202 3,862 258 289 15,030 3,862 289 Capital ratios Common stockholders' equity to assets 13.07% 7.58% 6.62% 72 97 13.07% 6.62% 97 Stockholders' equity to assets 13.84 8.58 7.58 61 83 13.84 7.58 83 Risk-based capital (2) Tier 1 capital 7.45 9.40 8.60 (21) (13) 7.45 8.60 (13) Total capital 11.20 13.04 12.48 (14) (10) 11.20 12.48 (10) Leverage (2) 6.35 7.91 6.69 (20) (5) 6.35 6.69 (5) Book value per common share $ 149.52 $ 79.01 $ 69.59 89 115 $ 149.52 $ 69.59 115 Staff (active, full-time equivalent) 41,548 18,748 18,977 122 119 41,548 18,977 119 NET INCOME AND RATIOS EXCLUDING GOODWILL AND NONQUALIFYING CORE DEPOSIT INTANGIBLE AMORTIZATION AND BALANCES ("CASH" OR "TANGIBLE") (3) Net income applicable to common stock $ 468 $ 262 $ 230 79 103 $ 730 $ 461 58 Net income per common share 4.89 5.58 4.69 (12) 4 10.24 9.27 10 ROA 1.96% 2.25% 1.89% (13) 4 2.05% 1.89% 8 ROE 33.43 32.74 31.58 2 6 33.18 31.67 5 Efficiency ratio 58.0 54.3 56.9 7 2 56.7 57.5 (1) COMMON STOCK PRICE High $264-1/2 $261-1/4 $ 185-7/8 1 42 $264-1/2 $185-7/8 42 Low 232-1/8 203-1/8 157 14 48 203-1/8 143-3/8 42 Period end 239-1/8 261-1/4 180-1/4 (8) 33 239-1/8 180-1/4 33 - ----------------------------------------------------------------------------------------------------------------------------------- - -----------------------------------------------------------------------------------------------------------------------------------
(1) The efficiency ratio is defined as noninterest expense divided by the total of net interest income and noninterest income. (2) The June 30, 1996 ratios are preliminary. (3) Nonqualifying core deposit intangible (CDI) amortization and average balance excluded from these calculations are, with the exception of the efficiency ratio, net of applicable taxes. The after-tax amounts for the amortization and average balance of nonqualifying CDI were $43 million and $1,334 million for the quarter ended June 30, 1996, respectively, and $43 million and $667 million for the six months ended June 30, 1996, respectively. Goodwill amortization and average balance (which are not tax effected) were $81 million and $7,238 million for the quarter ended June 30, 1996, respectively, and $89 million and $3,808 million for the six months ended June 30, 1996, respectively. - 4 -
Wells Fargo & Company and Subsidiaries CONSOLIDATED STATEMENT OF INCOME ------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------- Quarter Six months ended June 30, ended June 30, ---------------- % ----------------- % (in millions) 1996 1995 Change 1996 1995 Change ------------------------------------------------------------------------------------------------------------- INTEREST INCOME Federal funds sold and securities purchased (1) under resale agreements $ 8 $ 1 700% $ 10 $ 2 400% (2) Investment securities 225 152 48 353 317 11 (3) Mortgage loans held for sale -- 54 (100) -- 54 (100) (4) Loans 1,618 823 97 2,494 1,681 48 (5) Other 7 1 600 7 2 250 ------ ------ ------ ------ (6) Total interest income 1,858 1,031 80 2,864 2,056 39 ------ ------ ------ ------ INTEREST EXPENSE (7) Deposits 454 254 79 695 496 40 Federal funds purchased and securities sold (8) under repurchase agreements 21 59 (64) 57 115 (50) (9) Commercial paper and other short-term borrowings 3 9 (67) 8 19 (58) (10) Senior and subordinated debt 80 50 60 128 102 25 ------ ------ ------ ------ (11) Total interest expense 558 372 50 888 732 21 ------ ------ ------ ------ (12) NET INTEREST INCOME 1,300 659 97 1,976 1,324 49 (13) Provision for loan losses -- -- -- -- -- -- ------ ------ ------ ------ Net interest income after (14) provision for loan losses 1,300 659 97 1,976 1,324 49 ------ ------ ------ ------ NONINTEREST INCOME (15) Service charges on deposit accounts 258 119 117 380 236 61 (16) Fees and commissions 211 103 105 329 204 61 (17) Trust and investment services income 104 57 82 164 112 46 (18) Investment securities gains (losses) 3 -- -- 2 (15) -- (19) Other 63 31 103 118 14 743 ------ ------ ------ ------ (20) Total noninterest income 639 310 106 993 551 80 ------ ------ ------ ------ NONINTEREST EXPENSE (21) Salaries 400 177 126 581 349 66 (22) Incentive compensation 61 33 85 93 60 55 (23) Employee benefits 102 48 113 157 101 55 (24) Equipment 111 45 147 167 92 82 (25) Net occupancy 108 53 104 161 106 52 (26) Core deposit intangible 82 11 645 91 22 314 (27) Goodwill 81 9 800 89 17 424 (28) Other 332 184 80 505 349 45 ------ ------ ------ ------ (29) Total noninterest expense 1,277 560 128 1,844 1,096 68 ------ ------ ------ ------ INCOME BEFORE INCOME TAX (30) EXPENSE 662 409 62 1,125 779 44 (31) Income tax expense 299 177 69 498 314 59 ------ ------ ------ ------ (32) NET INCOME $ 363 $ 232 56% $ 627 $ 465 35% ------ ------ ----- ------ ------- ----- NET INCOME APPLICABLE TO (33) COMMON STOCK $ 344 $ 222 55% $ 598 $ 444 35% ------ ------ ----- ------ ------- ----- PER COMMON SHARE (34) Net income $ 3.61 $ 4.51 (20)% $ 8.39 $ 8.92 (6)% ------ ------ ----- ------ ------- ----- (35) Dividends declared $ 1.30 $ 1.15 13% $ 2.60 $ 2.30 13% ------ ------ ----- ------ ------- ----- (36) Average common shares outstanding 95.6 49.1 95% 71.3 49.8 43% ------ ------ ----- ------ ------- ----- ------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------
- 5 -
Wells Fargo & Company and Subsidiaries CONSOLIDATED BALANCE SHEET - ------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------ % Change June 30, 1996 from ------------------ JUNE 30, Dec. 31, June 30, Dec. 31, June 30, (in millions) 1996 1995 1995 1995 1995 - ------------------------------------------------------------------------------------------------------------------------ ASSETS (1) Cash and due from banks $ 8,882 $ 3,375 $ 2,848 163% 212% Federal funds sold and securities (2) purchased under resale agreements 1,344 177 375 659 258 Investment securities: (3) At fair value 13,692 8,920 2,473 53 454 (4) At cost (estimated fair value $7,602) -- -- 7,662 -- (100) -------- -------- -------- (5) Total investment securities 13,692 8,920 10,135 53 35 (6) Mortgage loans held for sale -- -- 1,336 -- (100) (7) Loans 70,541 35,582 33,896 98 108 (8) Allowance for loan losses 2,273 1,794 1,947 27 17 -------- -------- -------- (9) Net loans 68,268 33,788 31,949 102 114 -------- -------- -------- (10) Due from customers on acceptances 210 98 71 114 196 (11) Accrued interest receivable 591 308 300 92 97 (12) Premises and equipment, net 2,400 862 863 178 178 (13) Core deposit intangible 2,208 166 186 -- -- (14) Goodwill 7,479 382 399 -- -- (15) Other assets 3,512 2,240 2,469 57 42 -------- -------- -------- (16) Total assets $108,586 $ 50,316 $ 50,931 116% 113% -------- -------- -------- --- --- -------- -------- -------- --- --- LIABILITIES (17) Noninterest-bearing deposits $ 27,535 $ 10,391 $ 9,600 165% 187% (18) Interest-bearing deposits 56,333 28,591 29,184 97 93 -------- -------- -------- (19) Total deposits 83,868 38,982 38,784 115 116 Federal funds purchased and securities (20) sold under repurchase agreements 944 2,781 3,693 (66) (74) (21) Commercial paper and other short-term borrowings 262 195 532 34 (51) (22) Acceptances outstanding 210 98 71 114 196 (23) Accrued interest payable 177 85 89 108 99 (24) Other liabilities 2,865 1,071 933 168 207 (25) Senior debt 2,586 1,783 1,485 45 74 (26) Subordinated debt 2,644 1,266 1,482 109 78 -------- -------- -------- (27) Total liabilities 93,556 46,261 47,069 102 99 -------- -------- -------- STOCKHOLDERS' EQUITY (28) Preferred stock 839 489 489 72 72 Common stock - $5 par value, authorized 150,000,000 shares; issued and outstanding 94,912,532 shares, (29) 46,973,319 shares and 48,473,804 shares 475 235 242 102 96 (30) Additional paid-in capital 11,207 1,135 407 887 -- (31) Retained earnings 2,586 2,174 2,737 19 (6) (32) Cumulative foreign currency translation adjustments (4) (4) (4) -- -- (33) Investment securities valuation allowance (73) 26 (9) -- 711 -------- -------- -------- (34) Total stockholders' equity 15,030 4,055 3,862 271 289 -------- -------- -------- (35) Total liabilities and stockholders' equity $108,586 $ 50,316 $ 50,931 116% 113% -------- -------- -------- --- --- -------- -------- -------- --- --- - ------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------
- 6 -
Wells Fargo & Company and Subsidiaries CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - --------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------- Six months ended June 30, ------------------------ (in millions) 1996 1995 - --------------------------------------------------------------------------------------------- BALANCE, BEGINNING OF PERIOD $ 4,055 $ 3,911 Net income 627 465 Common stock issued to First Interstate stockholders 11,299 -- Common stock issued under employee benefit and dividend reinvestment plans 55 61 Preferred stock issued to First Interstate stockholders 360 -- Common stock repurchased (1,163) (539) Preferred stock dividends (29) (21) Common stock dividends (186) (116) Change in investment securities valuation allowance (99) 101 Fair value adjustment related to First Interstate stock options 111 -- --------- --------- BALANCE, END OF PERIOD $ 15,030 $ 3,862 --------- --------- --------- --------- - --------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------
LOANS - ------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------- June 30, December 31, June 30, (in millions) 1996 1995 1995 - ------------------------------------------------------------------------------------------- Commercial $ 19,575 $ 9,750 $ 8,872 Real estate 1-4 family first mortgage (1) 11,811 4,448 5,051 Other real estate mortgage 12,920 8,263 7,973 Real estate construction 2,401 1,366 1,110 Consumer: Real estate 1-4 family junior lien mortgage 6,736 3,358 3,373 Credit card 5,276 4,001 3,628 Other revolving credit and monthly payment 9,075 2,576 2,409 ---------- --------- --------- Total consumer 21,087 9,935 9,410 Lease financing 2,689 1,789 1,451 Foreign 58 31 29 ---------- --------- --------- Total loans $ 70,541 $ 35,582 $ 33,896 ---------- --------- --------- ---------- --------- --------- - ------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------
(1) Excludes mortgage loans held for sale of $1,336 million at June 30, 1995. -7-
Wells Fargo & Company and Subsidiaries CHANGES IN THE ALLOWANCE FOR LOAN LOSSES - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- Quarter ended Six months ended -------------------------------------- ----------------------- JUNE 30, March 31, June 30, JUNE 30, June 30, (in millions) 1996 1996 1995 1996 1995 - ---------------------------------------------------------------------------------------------------------------------------------- BALANCE, BEGINNING OF PERIOD $ 1,681 $ 1,794 $ 2,017 $ 1,794 $ 2,082 Allowance of First Interstate 770 -- -- 770 -- Loan charge-offs: Commercial (48) (13) (10) (61) (17) Real estate 1-4 family first mortgage (5) (4) (3) (9) (6) Other real estate mortgage (13) (3) (12) (16) (34) Real estate construction (4) (1) (1) (5) (4) Consumer: Real estate 1-4 family junior lien mortgage (13) (4) (4) (17) (7) Credit card (101) (86) (46) (187) (83) Other revolving credit and monthly payment (51) (20) (13) (71) (23) -------- -------- -------- -------- -------- Total consumer (165) (110) (63) (275) (113) Lease financing (8) (6) (3) (14) (7) -------- -------- -------- -------- -------- Total loan charge-offs (243) (137) (92) (380) (181) -------- -------- -------- -------- -------- Loan recoveries: Commercial 8 5 6 13 14 Real estate 1-4 family first mortgage 2 3 1 5 2 Other real estate mortgage 19 4 7 23 13 Real estate construction 4 1 -- 5 1 Consumer: Real estate 1-4 family junior lien mortgage 4 1 1 5 2 Credit card 11 5 3 16 6 Other revolving credit and monthly payment 15 3 3 18 5 -------- -------- -------- -------- -------- Total consumer 30 9 7 39 13 Lease financing 2 2 1 4 3 -------- -------- -------- -------- -------- Total loan recoveries 65 24 22 89 46 -------- -------- -------- -------- -------- Total net loan charge-offs (178) (113) (70) (291) (135) -------- -------- -------- -------- -------- BALANCE, END OF PERIOD $ 2,273 $ 1,681 $ 1,947 $ 2,273 $ 1,947 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total net loan charge-offs as a percentage of average loans (annualized) (1) 1.01% 1.30% .84% 1.10% .78% -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Allowance as a percentage of total loans (1) 3.22% 4.78% 5.74% 3.22% 5.74% -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- - ---------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------
(1) Average and total loans exclude first mortgage loans held for sale at June 30, 1995. -8-
Wells Fargo & Company and Subsidiaries NONACCRUAL AND RESTRUCTURED LOANS AND OTHER ASSETS - ------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------ JUNE 30, December 31, June 30, (in millions) 1996 1995 1995 - ------------------------------------------------------------------------------------------------------------------------ Nonaccrual loans: Commercial $ 208 $ 112 $ 121 Real estate 1-4 family first mortgage 87 64 64 Other real estate mortgage 363 307 373 Real estate construction 47 46 58 Consumer: Real estate 1-4 family junior lien mortgage 22 8 12 Other revolving credit and monthly payment 1 1 3 Lease financing 3 -- -- ----- ----- ----- Total nonaccrual loans 731 538 631 Restructured loans 11 14 13 ----- ----- ----- Nonaccrual and restructured loans 742 552 644 As a percentage of total loans (1) 1.1% 1.6% 1.9% Foreclosed assets 238 186 224 Real estate investments (2) 7 12 14 ----- ----- ----- Total nonaccrual and restructured loans and other assets $ 987 $ 750 $ 882 ----- ----- ----- ----- ----- ----- - ------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------
(1) Total loans exclude mortgage loans held for sale at June 30, 1995. (2) 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 $124 million, $95 million and $75 million at June 30, 1996, December 31, 1995 and June 30, 1995, respectively. -9-
Wells Fargo & Company and Subsidiaries NONINTEREST INCOME - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- Quarter Six months ended June 30, ended June 30, --------------------- % ---------------------- % (in millions) 1996 1995 Change 1996 1995 Change - ---------------------------------------------------------------------------------------------------------------------------------- Service charges on deposit accounts $ 258 $ 119 117% $ 380 $ 236 61% Fees and commissions: Credit card membership and other credit card fees 26 23 13 53 42 26 Debit and credit card merchant fees 37 17 118 52 30 73 Charges and fees on loans 32 12 167 50 23 117 Shared ATM network fees 27 13 108 39 24 63 Mutual fund and annuity sales fees 18 8 125 27 18 50 All other 71 30 137 108 67 61 -------- -------- -------- -------- Total fees and commissions 211 103 105 329 204 61 Trust and investment services income: Asset management and custody fees 60 32 88 95 63 51 Mutual fund management fees 34 17 100 55 31 77 All other 10 8 25 14 18 (22) -------- -------- -------- -------- Total trust and investment services income 104 57 82 164 112 46 Investment securities gains (losses) 3 -- -- 2 (15) -- Income from equity investments accounted for by the: Cost method 20 13 54 55 32 72 Equity method 8 12 (33) 10 20 (50) Check printing charges 15 9 67 24 20 20 Gains (losses) from dispositions of operations 1 (9) -- 5 (9) -- Gains (losses) on sales of loans 1 1 -- 5 (66) -- Losses on dispositions of premises and equipment (5) (5) -- (17) (8) (113) All other 23 10 130 36 25 44 -------- -------- -------- -------- Total $ 639 $ 310 106% $ 993 $ 551 80% -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- - ---------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------
NONINTEREST EXPENSE - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- Quarter Six months ended June 30, ended June 30, --------------------- % ---------------------- % (in millions) 1996 1995 Change 1996 1995 Change - ---------------------------------------------------------------------------------------------------------------------------------- Salaries $ 400 $ 177 126% $ 581 $ 349 66% Incentive compensation 61 33 85 93 60 55 Employee benefits 102 48 113 157 101 55 Equipment 111 45 147 167 92 82 Net occupancy 108 53 104 161 106 52 Contract services 66 38 74 108 64 69 Core deposit intangible: Nonqualifying (1) 72 -- -- 72 -- -- Qualifying 10 11 (9) 19 22 (14) Goodwill 81 9 800 89 17 424 Outside professional services 31 11 182 44 20 120 Telecommunications 28 15 87 44 28 57 Operating losses 27 11 145 42 27 56 Postage 26 14 86 41 26 58 Advertising and promotion 21 17 24 34 31 10 Stationery and supplies 21 9 133 31 18 72 Travel and entertainment 16 10 60 26 17 53 Security 17 5 240 23 10 130 Outside data processing 15 3 400 18 5 260 Check printing 10 6 67 16 12 33 Escrow and collection agency fees 9 4 125 13 8 63 Federal deposit insurance 3 24 (88) 4 47 (91) Foreclosed assets 1 2 (50) 3 (2) -- All other 41 15 173 58 38 53 -------- -------- -------- -------- Total $ 1,277 $ 560 128% $ 1,844 $ 1,096 68% -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- - ---------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------
(1) Amortization of core deposit intangibles acquired after February 1992 that are subtracted from stockholders' equity in computing regulatory capital for bank holding companies. -10-
Wells Fargo & Company and Subsidiaries AVERAGE BALANCES, YIELDS AND RATES PAID (TAXABLE-EQUIVALENT BASIS) (1) ----------------------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------------------------------- Quarter ended June 30, -------------------------------------------------------------------- 1996 1995 -------------------------------------------------------------------- INTEREST Interest AVERAGE YIELDS/ INCOME/ Average Yields/ income/ (in millions) BALANCE RATES EXPENSE balance rates expense ----------------------------------------------------------------------------------------------------------------------------- EARNING ASSETS Federal funds sold and securities purchased (1) under resale agreements $ 588 5.36% $ 8 $ 66 6.18% $ 1 Investment securities: At fair value (2): (2) U.S. Treasury securities 3,177 5.52 44 426 6.70 7 Securities of U.S. government agencies (3) and corporations 8,434 6.07 129 998 5.38 14 (4) Private collateralized mortgage obligations 2,653 6.23 42 956 6.41 16 (5) Other securities 668 6.83 10 62 14.42 1 -------- -------- -------- -------- (6) Total investment securities at fair value 14,932 6.01 225 2,442 6.16 38 At cost: (7) U.S. Treasury securities -- -- -- 1,469 4.85 18 Securities of U.S. government agencies (8) and corporations -- -- -- 4,996 6.04 75 (9) Private collateralized mortgage obligations -- -- -- 1,249 5.85 18 (10) Other securities -- -- -- 156 6.85 3 -------- -------- -------- -------- (11) Total investment securities at cost -- -- -- 7,870 5.80 114 -------- -------- -------- -------- (12) Total investment securities 14,932 6.01 225 10,312 5.89 152 (13) Mortgage loans held for sale (2) -- -- -- 2,884 7.33 54 Loans: (14) Commercial 19,460 8.75 424 8,436 10.01 211 (15) Real estate 1-4 family first mortgage 11,924 7.50 224 5,063 7.42 94 (16) Other real estate mortgage 13,006 9.32 300 8,058 9.49 190 (17) Real estate construction 2,385 10.07 60 1,070 10.20 27 Consumer: (18) Real estate 1-4 family junior lien mortgage 6,790 8.96 152 3,356 8.55 72 (19) Credit card 5,183 14.61 189 3,433 15.62 134 (20) Other revolving credit and monthly payment 9,151 9.35 213 2,353 10.56 62 -------- -------- -------- -------- (21) Total consumer 21,124 10.51 554 9,142 11.73 268 (22) Lease financing 2,599 8.76 57 1,405 9.22 32 (23) Foreign 236 4.72 3 28 7.98 1 -------- -------- -------- -------- (24) Total loans 70,734 9.20 1,622 33,202 9.93 823 (25) Other 396 6.62 7 61 5.30 1 -------- -------- -------- -------- (26) Total earning assets $ 86,650 8.62 1,862 $ 46,525 8.86 1,031 -------- -------- -------- -------- -------- -------- FUNDING SOURCES Interest-bearing liabilities: Deposits: (27) Interest-bearing checking $ 7,060 1.24 22 $ 4,210 1.00 11 (28) Market rate and other savings 32,921 2.68 220 15,170 2.54 96 (29) Savings certificates 16,779 4.84 201 7,948 5.27 104 (30) Other time deposits 483 5.89 7 442 7.21 8 (31) Deposits in foreign offices 303 5.17 4 2,309 6.06 35 -------- -------- -------- -------- (32) Total interest-bearing deposits 57,546 3.17 454 30,079 3.38 254 Federal funds purchased and securities sold (33) under repurchase agreements 1,667 5.08 21 3,924 6.02 59 (34) Commercial paper and other short-term borrowings 296 4.19 3 621 5.95 9 (35) Senior debt 2,289 6.07 35 1,511 6.85 26 (36) Subordinated debt 2,580 7.03 45 1,484 6.54 24 -------- -------- -------- -------- (37) Total interest-bearing liabilities 64,378 3.49 558 37,619 3.96 372 (38) Portion of noninterest-bearing funding sources 22,272 -- -- 8,906 -- -- -------- -------- -------- -------- (39) Total funding sources $ 86,650 2.59 558 $ 46,525 3.20 372 -------- -------- -------- -------- -------- -------- NET INTEREST MARGIN AND NET INTEREST INCOME ON (40) A TAXABLE-EQUIVALENT BASIS (3) 6.03% $ 1,304 5.66% $ 659 ----- -------- ----- -------- ----- -------- ----- -------- NONINTEREST-EARNING ASSETS (41) Cash and due from banks $ 8,569 $ 2,602 (42) Other 13,211 2,364 -------- -------- Total noninterest-earning assets $ 21,780 $ 4,966 -------- -------- -------- -------- NONINTEREST-BEARING FUNDING SOURCES (43) Deposits $ 26,596 $ 8,898 (44) Other liabilities 2,414 1,157 (45) Preferred stockholders' equity 839 489 (46) Common stockholders' equity 14,203 3,328 Noninterest-bearing funding sources used to (47) fund earning assets (22,272) (8,906) -------- -------- (48) Net noninterest-bearing funding sources $ 21,780 $ 4,966 -------- -------- -------- -------- (49) TOTAL ASSETS $108,430 $ 51,491 -------- -------- -------- -------- ----------------------------------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------------------------------
(1) The average prime rate of Wells Fargo Bank was 8.25% and 9.00% for the quarters ended June 30, 1996 and 1995, respectively. The average three-month London Interbank Offered Rate (LIBOR) was 5.52% and 6.12% for the same quarters, respectively. (2) Yields are based on amortized cost balances. The average amortized cost balances for investment securities at fair value totaled $15,012 million and $2,492 million for the quarters ended June 30, 1996 and 1995, respectively. The average amortized cost balance for mortgage loans held for sale totaled $2,925 million for the quarter ended June 30, 1995. (3) 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% for all periods presented. -11-
Wells Fargo & Company and Subsidiaries AVERAGE BALANCES, YIELDS AND RATES PAID (TAXABLE-EQUIVALENT BASIS) (1) ----------------------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------------------------------- Quarter ended June 30, -------------------------------------------------------------------- 1996 1995 -------------------------------------------------------------------- INTEREST Interest AVERAGE YIELDS/ INCOME/ Average Yields/ income/ (in millions) BALANCE RATES EXPENSE balance rates expense ----------------------------------------------------------------------------------------------------------------------------- EARNING ASSETS Federal funds sold and securities purchased (1) under resale agreements $ 357 5.42% $ 10 $ 57 5.93% $ 2 Investment securities: At fair value (2): (2) U.S. Treasury securities 2,266 5.52 62 406 6.70 14 Securities of U.S. government agencies (3) and corporations 6,712 6.02 203 1,104 5.59 32 (4) Private collateralized mortgage obligations 2,366 6.15 73 1,022 6.38 34 (5) Other securities 447 7.03 15 64 14.49 3 -------- -------- -------- -------- (6) Total investment securities at fair value 11,791 5.99 353 2,596 6.21 83 At cost: (7) U.S. Treasury securities -- -- -- 1,557 4.84 38 Securities of U.S. government agencies (8) and corporations -- -- -- 5,114 6.03 154 (9) Private collateralized mortgage obligations -- -- -- 1,267 5.89 37 (10) Other securities -- -- -- 160 6.76 5 -------- -------- -------- -------- (11) Total investment securities at cost -- -- -- 8,098 5.79 234 -------- -------- -------- -------- (12) Total investment securities 11,791 5.99 353 10,694 5.90 317 (13) Mortgage loans held for sale (2) -- -- -- 1,450 7.29 54 Loans: (14) Commercial 14,384 9.15 655 8,246 9.89 405 (15) Real estate 1-4 family first mortgage 8,162 7.52 307 7,042 7.24 255 (16) Other real estate mortgage 10,602 9.28 489 8,090 9.54 383 (17) Real estate construction 1,856 10.04 93 1,045 10.18 53 Consumer: (18) Real estate 1-4 family junior lien mortgage 5,062 8.81 222 3,339 8.60 143 (19) Credit card 4,558 15.02 343 3,280 15.69 257 (20) Other revolving credit and monthly payment 5,875 9.76 285 2,311 10.49 121 -------- -------- -------- -------- (21) Total consumer 15,495 10.99 850 8,930 11.70 521 (22) Lease financing 2,248 8.95 101 1,378 9.19 63 (23) Foreign 133 4.98 3 28 7.46 1 -------- -------- -------- -------- (24) Total loans 52,880 9.48 2,498 34,759 9.72 1,681 (25) Other 231 6.57 7 60 5.44 2 -------- -------- -------- -------- (26) Total earning assets $ 65,259 8.82 2,868 $ 47,020 8.76 2,056 -------- -------- -------- -------- -------- -------- -------- FUNDING SOURCES Interest-bearing liabilities: Deposits: (27) Interest-bearing checking $ 3,958 1.21 24 $ 4,287 1.00 21 (28) Market rate and other savings 25,456 2.62 332 15,643 2.55 198 (29) Savings certificates 12,707 4.98 315 7,649 5.09 193 (30) Other time deposits 412 6.46 13 400 5.10 10 (31) Deposits in foreign offices 414 5.33 11 2,486 5.96 74 -------- -------- -------- -------- (32) Total interest-bearing deposits 42,947 3.25 695 30,465 3.28 496 Federal funds purchased and securities sold (33) under repurchase agreements 2,186 5.25 57 3,905 5.92 115 (34) Commercial paper and other short-term borrowings 350 4.81 8 654 5.92 19 (35) Senior debt 2,000 6.15 61 1,575 6.89 54 (36) Subordinated debt 1,923 6.97 67 1,477 6.57 48 -------- -------- -------- -------- (37) Total interest-bearing liabilities 49,406 3.61 888 38,076 3.87 732 (38) Portion of noninterest-bearing funding sources 15,853 -- -- 8,944 -- -- -------- -------- -------- -------- (39) Total funding sources $ 65,259 2.74 888 $ 47,020 3.13 732 -------- -------- -------- -------- -------- -------- NET INTEREST MARGIN AND NET INTEREST INCOME ON (40) A TAXABLE-EQUIVALENT BASIS (3) 6.08% $ 1,980 5.63% $ 1,324 ---- -------- ---- -------- ---- -------- ---- -------- NONINTEREST-EARNING ASSETS (41) Cash and due from banks $ 5,721 $ 2,595 (42) Other 7,802 2,323 -------- -------- Total noninterest-earning assets $ 13,523 $ 4,918 -------- -------- -------- -------- NONINTEREST-BEARING FUNDING SOURCES (43) Deposits $ 17,966 $ 8,883 (44) Other liabilities 1,846 1,149 (45) Preferred stockholders' equity 664 489 (46) Common stockholders' equity 8,900 3,341 Noninterest-bearing funding sources used to (47) fund earning assets (15,853) (8,944) -------- -------- (48) Net noninterest-bearing funding sources $ 13,523 $ 4,918 -------- -------- -------- -------- (49) TOTAL ASSETS $ 78,782 $ 51,938 -------- -------- -------- -------- ----------------------------------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------------------------------
(1) The average prime rate of Wells Fargo Bank was 8.29% and 8.91% for the six months ended June 30, 1996 and 1995, respectively. The average three-month London Interbank Offered Rate (LIBOR) was 5.46% and 6.21% for the same periods, respectively. (2) Yields are based on amortized cost balances. The average amortized cost balances for investment securities at fair value totaled $11,814 million and $2,685 million for the six months ended June 30, 1996 and 1995, respectively. The average amortized cost balance for mortgage loans held for sale totaled $1,470 million for the six months ended June 30, 1995. (3) 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% for all periods presented. -----END PRIVACY-ENHANCED MESSAGE-----