-----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, NgFVUAZg0Tynmu70uSwVe2I27kS8JpUI0dlBHkRnQjXfaMCVGrfKQIx6QKgjXr6K 76NHM/WvmP+a5OSi1nPB2w== 0001047469-98-015894.txt : 19980422 0001047469-98-015894.hdr.sgml : 19980422 ACCESSION NUMBER: 0001047469-98-015894 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19980421 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980421 SROS: NYSE SROS: PCX 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: SEC FILE NUMBER: 001-06214 FILM NUMBER: 98597980 BUSINESS ADDRESS: STREET 1: 420 MONTGOMERY ST CITY: SAN FRANCISCO STATE: CA ZIP: 94104 BUSINESS PHONE: 8004114932 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): April 21, 1998 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: 1-800-411-4932 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 March 31, 1998. Final financial statements with additional analyses will be filed as part of the Company's Form 10-Q in May 1998. Item 7: FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits 27 Financial Data Schedules 99 Copy of the Press Release announcing Wells Fargo & Company's financial results for the quarter ended March 31, 1998. 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 April 21, 1998. WELLS FARGO & COMPANY By: FRANK A. MOESLEIN --------------------------------------- Frank A. Moeslein Executive Vice President and Controller EX-27 2 EXHIBIT 27
9 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE 8-K DATED APRIL 21, 1998 FOR THE PERIOD ENDED MARCH 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL INFORMATION. 1,000,000 3-MOS DEC-31-1998 JAN-01-1998 MAR-31-1998 8,303 0 111 0 8,676 0 0 64,504 1,830 94,820 72,316 1,392 2,673 5,559 0 275 426 12,102 94,820 1,512 145 27 1,684 410 557 1,127 180 5 1,092 581 315 0 0 315 3.62 3.58 6.01 503 0 9 0 1,828 241 63 1,830 0 0 0 Amount represents basic earnings per common share pursuant to FAS 128.
EX-27 3 EXHIBIT 27
9 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE 10-K FILINGS DATED 3/16/98, 3/14/97 AND 3/19/96 FOR THE YEARS ENDED 12/31/97, 12/31/96 AND 12/31/95, RESPECTIVELY, AND THE 10-Q FILINGS DATED 11/13/97 AND 8/13/97 FOR THE YEAR-TO-DATE PERIODS ENDED 9/30/97 AND 6/30/97, RESPECTIVELY, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL INFORMATION. 1,000,000 YEAR YEAR YEAR 9-MOS 6-MOS DEC-31-1997 DEC-31-1996 DEC-31-1995 DEC-31-1997 DEC-31-1997 JAN-01-1997 JAN-01-1996 JAN-01-1995 JAN-01-1997 JAN-01-1997 DEC-31-1997 DEC-31-1996 DEC-31-1995 SEP-30-1997 JUN-30-1997 8,169 11,736 3,375 7,823 8,037 0 0 0 0 0 82 187 177 188 224 815 404 0 0 0 9,888 13,505 8,920 10,737 11,530 0 0 0 0 0 0 0 0 0 0 65,734 67,389 35,582 65,104 65,689 1,828 2,018 1,794 1,823 1,850 97,456 108,888 50,316 97,655 100,180 72,199 81,821 38,982 70,922 73,748 3,825 2,430 2,976 4,726 4,445 2,578 4,118 1,156 2,819 3,065 5,867 6,210 3,049 6,164 5,719 0 0 0 0 0 275 600 489 275 275 431 457 235 434 440 12,183 13,055 3,331 12,211 12,391 97,456 108,888 50,316 97,655 100,180 6,094 5,688 3,403 4,570 3,057 732 779 599 573 398 78 56 83 54 35 6,904 6,523 4,085 5,197 3,490 1,703 1,586 997 1,280 851 2,290 2,002 1,431 1,710 1,131 4,614 4,521 2,654 3,487 2,359 615 105 0 420 245 20 10 (17) 6 7 4,549 4,637 2,201 3,450 2,363 2,154 1,979 1,777 1,613 1,070 1,155 1,071 1,032 857 568 0 0 0 0 0 0 0 0 0 0 1,155 1,071 1,032 857 568 12.77 12.21 20.37 9.38 6.12 12.64 12.05 20.06 9.28 6.06 5.99 6.11 5.80 6.00 6.03 528 714 538 565 602 243 333 144 241 259 9 10 14 9 10 0 0 0 0 0 2,018 1,794 2,082 2,018 2,018 1,078 860 422 816 545 273 220 134 201 132 1,828 2,018 1,794 1,823 1,850 0 0 0 0 0 0 0 0 0 0 608 798 939 0 0 Amounts for all periods presented represent basic earnings per common share pursuant to FAS 128.
EX-99 4 EXHIBIT 99 Cindy Koehn 415/396-3099 Investor Relations FOR IMMEDIATE RELEASE Tues., April 21, 1998 WELLS FARGO REPORTS INCREASE IN FIRST QUARTER EARNINGS EARNINGS PER SHARE OF $3.62 VS. $3.40 IN FOURTH QUARTER 1997 CASH EARNINGS PER SHARE OF $4.92 VS. $4.71 IN FOURTH QUARTER 1997 SAN FRANCISCO -- Wells Fargo & Co. (NYSE:WFC) today reported earnings per share for the quarter of $3.62, compared with $3.40 for the fourth quarter of 1997 and $3.62 for the first quarter of 1997. Return on average assets (ROA) was 1.34 percent and return on average common equity (ROE) was 10.07 percent for the quarter, compared with 1.23 percent and 9.29 percent, respectively, for the fourth quarter of 1997. In the year-ago period, ROA was 1.31 percent and ROE was 10.02 percent. Cash earnings per share were $4.92 for the first quarter of 1998, compared with $4.71 for the fourth quarter of 1997 and $4.88 for the first quarter of 1997. Cash ROA was 1.98 percent and cash ROE was 37.46 percent for the first quarter of 1998, compared with 1.85 percent and 36.15 percent, respectively, for the fourth quarter of 1997. In the year-ago period, cash ROA was 1.90 percent and cash ROE was 36.67 percent. Cash earnings are earnings before the amortization of goodwill and nonqualifying core deposit intangible. Management believes that cash earnings are the more relevant measure of financial performance for shareholders because they measure Wells Fargo's ability to support growth, pay dividends and repurchase stock. "This is a good beginning to what we believe will be an excellent year for Wells Fargo," said Chairman Paul Hazen. "Most of our core businesses are making progress in acquiring new customers. Revenue growth this quarter is encouraging, and our business groups continue to build momentum for future growth." Net income was $315 million for the first quarter of 1998, compared with $298 million for the fourth quarter of 1997 and $339 million for the first quarter of 1997. Net interest income on a taxable-equivalent basis was $1.130 billion in the first quarter of 1998, compared with $1.130 billion in the fourth quarter of 1997 and $1.216 billion in the first quarter of 1997. The decrease from a year ago was primarily due to a decline in earning assets. The Company's net interest margin for the first quarter of 1998 was 6.01 percent, compared with 5.94 percent in the fourth quarter of 1997 and 6.14 percent in the first quarter of 1997. -more- 2/WF Earnings Noninterest income (NII) in the first quarter of 1998 was $726 million, compared with $708 million in the fourth quarter of 1997 and $640 million in the first quarter of 1997. The increase from a year ago was primarily due to gains on sales of loans, higher credit card fees and lower losses on dispositions of premises and equipment. Noninterest expense (NIE) in the first quarter of 1998 was $1.092 billion, compared with $1.098 billion in the fourth quarter of 1997 and $1.117 billion in the first quarter of 1997. The loan loss provision was $180 million for the first quarter of 1998, compared with $195 million for the fourth quarter of 1997 and $105 million for the first quarter of 1997. Net charge-offs in the first quarter of 1998 totaled $178 million, or 1.11 percent of average loans (annualized). In the fourth quarter of 1997, net charge-offs totaled $190 million, or 1.17 percent of average loans (annualized). In the first quarter of 1997, net charge-offs totaled $201 million, or 1.23 percent of average loans (annualized). The largest category of net charge-offs was credit card loans for all periods presented. At March 31, 1998, the allowance for loan losses of $1.830 billion equaled 2.84 percent of total loans, compared with 2.78 percent at December 31, 1997 and 2.94 percent at March 31, 1997. Total nonaccrual and restructured loans were $512 million at March 31, 1998, compared with $537 million at December 31, 1997 and $655 million at March 31, 1997. Foreclosed assets were $155 million at March 31, 1998, compared with $158 million at December 31, 1997 and $207 million at March 31, 1997. At March 31, 1998, the Company's preliminary risk-based capital ratios were 11.60 percent for total risk-based capital and 7.75 percent for Tier 1 risk-based capital, exceeding the minimum regulatory guidelines of 8 percent and 4 percent, respectively. The leverage ratio at March 31, 1998 was 7.05 percent. The ratio of common equity to total assets at March 31, 1998 was 13.21 percent. ________________ The following appears in accordance with the Securities Litigation Reform Act: This press release includes forward-looking statements that involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those in the forward-looking statements. Those factors include fluctuations in interest rates, inflation, government regulations, the completion of the First Interstate Bancorp integration, customer disintermediation, technology changes and economic conditions and competition in the geographic and business areas in which the Company conducts its operations. ### Founded in 1852, Wells Fargo & Company has operations in Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah and Washington. VISIT WELLS FARGO ON THE WORLD WIDE WEB AT HTTP://WWW.WELLSFARGO.COM -3- Wells Earnings Wells Fargo & Company and Subsidiaries SUMMARY FINANCIAL DATA--NEWS RELEASE
- --------------------------------------------------------------------------------------------------------------- % Change Quarter ended March 31, 1998 from -------------------------------- ------------------- March 31, Dec. 31, March 31, Dec. 31, March 31, (in millions) 1998 1997 1997 1997 1997 - --------------------------------------------------------------------------------------------------------------- FOR THE QUARTER Net income $ 315 $ 298 $ 339 6% (7)% Net income applicable to common stock 311 294 329 6 (5) Earnings per common share $ 3.62 $ 3.40 $ 3.62 6 -- Diluted earnings per common share 3.58 3.36 3.58 7 -- Dividends declared per common share 1.30 1.30 1.30 -- -- Average common shares outstanding 85.8 86.5 90.8 (1) (6) Diluted average common shares outstanding 86.6 87.3 91.9 (1) (6) Profitability ratios (annualized) Net income to average total assets (ROA) 1.34% 1.23% 1.31% 9 2 Net income applicable to common stock to average common stockholders' equity (ROE) 10.07 9.29 10.02 8 -- Efficiency ratio (1) 58.9% 59.9% 60.3% (2) (2) Average loans $65,067 $64,545 $ 65,493 1 (1) Average assets 95,258 96,170 105,430 (1) (10) Average core deposits 69,858 70,198 77,622 -- (10) Net interest margin 6.01% 5.94% 6.14% 1 (2) NET INCOME AND RATIOS EXCLUDING GOODWILL AND NONQUALIFYING CORE DEPOSIT INTANGIBLE AMORTIZATION AND BALANCES ("CASH" OR "TANGIBLE") (2) Net income applicable to common stock $ 423 $ 407 $ 443 4 (5) Earnings per common share 4.92 4.71 4.88 4 1 Diluted earnings per common share 4.88 4.66 4.83 5 1 ROA 1.98% 1.85% 1.90% 7 4 ROE 37.46 36.15 36.67 4 2 Efficiency ratio 51.7 52.5 52.9 (2) (2) AT QUARTER END Investment securities $ 8,676 $ 9,888 $ 12,634 (12) (31) Loans 64,504 65,734 65,436 (2) (1) Allowance for loan losses 1,830 1,828 1,922 -- (5) Goodwill 6,943 7,031 7,312 (1) (5) Assets 94,820 97,456 101,863 (3) (7) Core deposits 72,041 71,397 76,156 1 (5) Common stockholders' equity 12,528 12,614 13,170 (1) (5) Stockholders' equity 12,803 12,889 13,595 (1) (6) Capital ratios Common stockholders' equity to assets 13.21% 12.94% 12.93% 2 2 Stockholders' equity to assets 13.50 13.22 13.35 2 1 Risk-based capital (3) Tier 1 capital 7.75 7.61 7.80 2 (1) Total capital 11.60 11.49 12.05 1 (4) Leverage (3) 7.05 6.95 6.61 1 7 Book value per common share $146.90 $146.41 $ 146.37 -- -- Staff (active, full-time equivalent) 32,414 33,100 34,486 (2) (6) COMMON STOCK PRICE High $337.88 $339.44 $ 319.25 -- 6 Low 295.00 275.75 271.00 7 9 Quarter end 331.25 339.44 284.13 (2) 17 - ---------------------------------------------------------------------------------------------------------------
(1) The efficiency ratio is defined as noninterest expense divided by the total of net interest income and noninterest income. (2) 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 $31 million and $944 million, respectively, for the quarter ended March 31, 1998. Goodwill amortization and average balance (which are not tax effected) were $81 million and $6,990 million, respectively, for the quarter ended March 31, 1998. (3) The March 31, 1998 ratios are preliminary. -4- Wells Fargo & Company and Subsidiaries CONSOLIDATED STATEMENT OF INCOME
- --------------------------------------------------------------------------------------------------- Quarter ended March 31, ------------------- % (in millions) 1998 1997 Change - --------------------------------------------------------------------------------------------------- INTEREST INCOME Federal funds sold and securities purchased (1) under resale agreements $ 6 $ 5 20% (2) Investment securities 145 208 (30) (3) Loans 1,512 1,549 (2) (4) Other 21 11 91 ------ ------ (5) Total interest income 1,684 1,773 (5) ------ ------ INTEREST EXPENSE (6) Deposits 410 422 (3) Federal funds purchased and securities sold (7) under repurchase agreements 40 31 29 (8) Commercial paper and other short-term borrowings 7 2 250 (9) Senior and subordinated debt 75 81 (7) Guaranteed preferred beneficial interests in (10) Company's subordinated debentures 25 25 -- ------ ------ (11) Total interest expense 557 561 (1) ------ ------ (12) NET INTEREST INCOME 1,127 1,212 (7) (13) Provision for loan losses 180 105 71 ------ ------ Net interest income after (14) provision for loan losses 947 1,107 (14) ------ ------ NONINTEREST INCOME (15) Fees and commissions 255 214 19 (16) Service charges on deposit accounts 208 221 (6) (17) Trust and investment services income 114 109 5 (18) Investment securities gains 5 4 25 (19) Other 144 92 57 ------ ------ (20) Total noninterest income 726 640 13 ------ ------ NONINTEREST EXPENSE (21) Salaries 305 341 (11) (22) Incentive compensation 53 41 29 (23) Employee benefits 91 95 (4) (24) Equipment 98 94 4 (25) Net occupancy 101 102 (1) (26) Goodwill 81 83 (2) (27) Core deposit intangible 60 62 (3) (28) Operating losses 31 42 (26) (29) Other 272 257 6 ------ ------ (30) Total noninterest expense 1,092 1,117 (2) ------ ------ INCOME BEFORE INCOME TAX (31) EXPENSE 581 630 (8) (32) Income tax expense 266 291 (9) ------ ------ (33) NET INCOME $ 315 $ 339 (7)% ------ ------ ---- ------ ------ ---- NET INCOME APPLICABLE TO (34) COMMON STOCK $ 311 $ 329 (5)% ------ ------ ---- ------ ------ ---- (35) EARNINGS PER COMMON SHARE $ 3.62 $ 3.62 --% ------ ------ ---- ------ ------ ---- (36) DILUTED EARNINGS PER COMMON SHARE $ 3.58 $ 3.58 --% ------ ------ ---- ------ ------ ---- DIVIDENDS DECLARED (37) PER COMMON SHARE $ 1.30 $ 1.30 --% ------ ------ ---- ------ ------ ---- (38) Average common shares outstanding 85.8 90.8 (6)% ------ ------ ---- ------ ------ ---- (39) Diluted average common shares outstanding 86.6 91.9 (6)% ------ ------ ---- ------ ------ ---- - ---------------------------------------------------------------------------------------------------
-5- Wells Fargo & Company and Subsidiaries CONSOLIDATED BALANCE SHEET
- --------------------------------------------------------------------------------------------------------------------------- % Change March 31, 1998 from ------------------- MAR. 31, Dec. 31, Mar. 31, Dec. 31, Mar. 31, (in millions) 1998 1997 1997 1997 1997 - --------------------------------------------------------------------------------------------------------------------------- ASSETS (1) Cash and due from banks $ 8,303 $ 8,169 $ 8,530 2% (3)% Federal funds sold and securities (2) purchased under resale agreements 111 82 209 35 (47) (3) Investment securities at fair value 8,676 9,888 12,634 (12) (31) (4) Loans 64,504 65,734 65,436 (2) (1) (5) Allowance for loan losses 1,830 1,828 1,922 -- (5) ------- ------- -------- (6) Net loans 62,674 63,906 63,514 (2) (1) ------- ------- -------- (7) Due from customers on acceptances 77 98 96 (21) (20) (8) Accrued interest receivable 504 507 611 (1) (18) (9) Premises and equipment, net 2,081 2,117 2,310 (2) (10) (10) Core deposit intangible 1,649 1,709 1,901 (4) (13) (11) Goodwill 6,943 7,031 7,312 (1) (5) (12) Other assets 3,802 3,949 4,746 (4) (20) ------- ------- -------- (13) Total assets $94,820 $97,456 $101,863 (3) (7)% ------- ------- -------- ---- ---- ------- ------- -------- ---- ---- LIABILITIES (14) Noninterest-bearing deposits $24,421 $23,953 $ 25,337 2% (4)% (15) Interest-bearing deposits 47,895 48,246 51,090 (1) (6) ------- ------- -------- (16) Total deposits 72,316 72,199 76,427 -- (5) Federal funds purchased and securities (17) sold under repurchase agreements 1,068 3,576 1,685 (70) (37) (18) Commercial paper and other short-term borrowings 324 249 241 30 34 (19) Acceptances outstanding 77 98 96 (21) (20) (20) Accrued interest payable 235 175 242 34 (3) (21) Other liabilities 2,438 2,403 3,400 1 (28) (22) Senior debt 1,751 1,983 1,940 (12) (10) (23) Subordinated debt 2,509 2,585 2,938 (3) (15) Guaranteed preferred beneficial interests in (24) Company's subordinated debentures 1,299 1,299 1,299 -- -- STOCKHOLDERS' EQUITY (25) Preferred stock 275 275 425 -- (35) Common stock - $5 par value, authorized 150,000,000 shares; issued and outstanding 85,284,480 shares, (26) 86,152,779 shares and 89,977,610 shares 426 431 450 (1) (5) (27) Additional paid-in capital 8,431 8,712 9,801 (3) (14) (28) Retained earnings 3,615 3,416 2,959 6 22 (29) Cumulative other comprehensive income (loss) 56 55 (40) 2 -- ------- ------- -------- (30) Total stockholders' equity 12,803 12,889 13,595 (1) (6) ------- ------- -------- (31) Total liabilities and stockholders' equity $94,820 $97,456 $101,863 (3)% (7)% ------- ------- -------- ---- ---- ------- ------- -------- ---- ---- - ---------------------------------------------------------------------------------------------------------------------------
-6- Wells Fargo & Company and Subsidiaries CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
- -------------------------------------------------------------------------------------- Quarter ended March 31, ---------------------- (in millions) 1998 1997 - -------------------------------------------------------------------------------------- BALANCE, BEGINNING OF QUARTER $12,889 $14,112 Net income 315 339 Other comprehensive income (loss), net of tax: Change in foreign currency translation adjustments -- 4 Change in investment securities valuation allowance 1 (63) Common stock issued under employee benefit and dividend reinvestment plans 26 24 Preferred stock redeemed -- (175) Common stock repurchased (312) (517) Preferred stock dividends (4) (10) Common stock dividends (112) (119) ------- ------- BALANCE, END OF QUARTER $12,803 $13,595 ------- ------- ------- ------- - --------------------------------------------------------------------------------------
LOANS
- -------------------------------------------------------------------------------------- MARCH 31, December 31, March 31, (in millions) 1998 1997 1997 - -------------------------------------------------------------------------------------- Commercial $20,424 $20,144 $19,025 Real estate 1-4 family first mortgage 8,349 8,869 10,032 Other real estate mortgage 11,722 12,186 11,497 Real estate construction 2,383 2,320 2,243 Consumer: Real estate 1-4 family junior lien mortgage 5,588 5,865 6,112 Credit card 4,675 5,039 5,232 Other revolving credit and monthly payment 6,982 7,185 7,984 ------- ------- ------- Total consumer 17,245 18,089 19,328 Lease financing 4,274 4,047 3,152 Foreign 107 79 159 ------- ------- ------- Total loans $64,504 $65,734 $65,436 ------- ------- ------- ------- ------- ------- - --------------------------------------------------------------------------------------
-7- Wells Fargo & Company and Subsidiaries CHANGES IN THE ALLOWANCE FOR LOAN LOSSES
- --------------------------------------------------------------------------------------------------- Quarter ended ----------------------------------- MARCH 31, December 31, March 31, (in millions) 1998 1997 1997 - --------------------------------------------------------------------------------------------------- BALANCE, BEGINNING OF QUARTER $1,828 $1,823 $2,018 Provision for loan losses 180 195 105 Loan charge-offs: Commercial (49) (71) (69) Real estate 1-4 family first mortgage (4) (4) (5) Other real estate mortgage -- (5) (8) Real estate construction (1) -- (1) Consumer: Real estate 1-4 family junior lien mortgage (3) (5) (6) Credit card (118) (114) (115) Other revolving credit and monthly payment (55) (51) (56) ------ ------ ------ Total consumer (176) (170) (177) Lease financing (11) (12) (10) ------ ------ ------ Total loan charge-offs (241) (262) (270) ------ ------ ------ Loan recoveries: Commercial 19 17 13 Real estate 1-4 family first mortgage 3 1 1 Other real estate mortgage 9 11 22 Real estate construction -- 8 1 Consumer: Real estate 1-4 family junior lien mortgage 2 2 2 Credit card 11 14 11 Other revolving credit and monthly payment 16 16 16 ------ ------ ------ Total consumer 29 32 29 Lease financing 3 3 3 ------ ------ ------ Total loan recoveries 63 72 69 ------ ------ ------ Total net loan charge-offs (178) (190) (201) ------ ------ ------ BALANCE, END OF QUARTER $1,830 $1,828 $1,922 ------ ------ ------ ------ ------ ------ Total net loan charge-offs as a percentage of average loans (annualized) 1.11% 1.17% 1.23% ------ ------ ------ ------ ------ ------ Allowance as a percentage of total loans 2.84% 2.78% 2.94% ------ ------ ------ ------ ------ ------ - ---------------------------------------------------------------------------------------------------
-8- Wells Fargo & Company and Subsidiaries NONACCRUAL AND RESTRUCTURED LOANS AND OTHER ASSETS
- --------------------------------------------------------------------------------------------------- MARCH 31, December 31, March 31, (in millions) 1998 1997 1997 - --------------------------------------------------------------------------------------------------- Nonaccrual loans: Commercial $163 $155 $199 Real estate 1-4 family first mortgage 89 104 97 Other real estate mortgage 208 228 306 Real estate construction 28 23 24 Consumer: Real estate 1-4 family junior lien mortgage 12 17 16 Other revolving credit and monthly payment 3 1 1 Lease financing -- -- 2 ---- ---- ---- Total nonaccrual loans 503 528 645 Restructured loans 9 9 10 ---- ---- ---- Nonaccrual and restructured loans 512 537 655 As a percentage of total loans .8% .8% 1.0% Foreclosed assets 155 158 207 Real estate investments (1) 4 4 5 ---- ---- ---- Total nonaccrual and restructured loans and other assets $671 $699 $867 ---- ---- ---- ---- ---- ---- - ---------------------------------------------------------------------------------------------------
(1) 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 $162 million, $172 million and $158 million at March 31, 1998, December 31, 1997 and March 31, 1997, respectively. -9- Wells Fargo & Company and Subsidiaries NONINTEREST INCOME
- --------------------------------------------------------------------------------------------------- Quarter ended March 31, ----------------- % (in millions) 1998 1997 Change - --------------------------------------------------------------------------------------------------- Fees and commissions: Credit card membership and other credit card fees $ 66 $ 45 47% ATM network fees 44 39 13 Charges and fees on loans 41 31 32 Debit and credit card merchant fees 21 22 (5) Mutual fund and annuity sales fees 21 16 31 All other 62 61 2 ---- ---- Total fees and commissions 255 214 19 Service charges on deposit accounts 208 221 (6) Trust and investment services income: Asset management and custody fees 63 61 3 Mutual fund management fees 45 40 13 All other 6 8 (25) ---- ---- Total trust and investment services income 114 109 5 Investment securities gains 5 4 25 Income from equity investments accounted for by the: Cost method 50 51 (2) Equity method 15 16 (6) Check printing charges 18 17 6 Gains on sales of loans 36 6 500 Gains (losses) from dispositions of operations (3) 7 -- Losses on dispositions of premises and equipment (9) (30) (70) All other 37 25 48 ---- ---- Total $726 $640 13% ---- ---- --- ---- ---- --- - ---------------------------------------------------------------------------------------------------
NONINTEREST EXPENSE
- --------------------------------------------------------------------------------------------------- Quarter ended March 31, ----------------- % (in millions) 1998 1997 Change - --------------------------------------------------------------------------------------------------- Salaries $ 305 $ 341 (11)% Incentive compensation 53 41 29 Employee benefits 91 95 (4) Equipment 98 94 4 Net occupancy 101 102 (1) Goodwill 81 83 (2) Core deposit intangible: Nonqualifying (1) 52 54 (4) Qualifying 8 8 -- Operating losses 31 42 (26) Contract services 65 56 16 Telecommunications 31 38 (18) Security 22 22 -- Postage 19 23 (17) Outside professional services 20 15 33 Advertising and promotion 21 13 62 Stationery and supplies 14 21 (33) Travel and entertainment 16 14 14 Check printing 12 15 (20) Outside data processing 13 13 -- Foreclosed assets 5 (9) -- All other 34 36 (6) ------ ------ Total $1,092 $1,117 (2)% ------ ------ --- ------ ------ --- - ---------------------------------------------------------------------------------------------------
(1) Amortization of core deposit intangible acquired after February 1992 that is 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 March 31, ----------------------------------------------------------------- 1998 1997 --------------------------------- --------------------------- 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 $ 428 5.69% $ 6 $ 374 5.43% $ 5 Investment securities at fair value (2): (2) U.S. Treasury securities 2,466 6.08 37 2,916 6.04 43 Securities of U.S. government agencies (3) and corporations 3,991 6.61 65 6,703 6.41 107 (4) Private collateralized mortgage obligations 2,180 6.71 37 3,134 6.57 52 (5) Other securities 487 7.36 8 368 6.35 6 ------- ------ ------- ------ (6) Total investment securities at fair value 9,124 6.53 147 13,121 6.36 208 Loans: (7) Commercial 20,019 9.13 451 18,406 8.98 409 (8) Real estate 1-4 family first mortgage 8,668 7.50 162 10,236 7.41 189 (9) Other real estate mortgage 12,138 9.19 275 11,550 10.89 310 (10) Real estate construction 2,339 9.66 56 2,299 9.75 55 Consumer: (11) Real estate 1-4 family junior lien mortgage 5,720 9.53 135 6,170 9.30 142 (12) Credit card 4,835 14.98 181 5,330 14.07 188 (13) Other revolving credit and monthly payment 7,078 9.15 160 8,271 9.27 189 ------- ------ ------- ------ (14) Total consumer 17,633 10.87 476 19,771 10.57 519 (15) Lease financing 4,165 8.73 91 3,079 8.84 68 (16) Foreign 105 8.33 2 152 7.34 3 ------- ------ ------- ------ (17) Total loans 65,067 9.39 1,513 65,493 9.57 1,553 (18)Other 1,148 7.46 21 706 6.25 11 ------- ------ ------- ------ Total earning assets $ 75,767 8.99 1,687 $79,694 8.99 1,777 ------- ------ ------- ------ ------- ------- FUNDING SOURCES Deposits: (19) Interest-bearing checking $ 1,725 1.47 6 $ 1,913 1.14 5 (20) Market rate and other savings 30,476 2.68 202 34,103 2.55 214 (21) Savings certificates 15,182 5.16 193 15,518 5.05 193 (22) Other time deposits 281 4.90 3 180 3.94 2 (23) Deposits in foreign offices 379 5.22 5 559 5.13 7 ------- ------ ------- ------ (24) Total interest-bearing deposits 48,043 3.46 409 52,273 3.27 421 Federal funds purchased and securities sold (25) under repurchase agreements 2,984 5.45 40 2,425 5.18 31 (26)Commercial paper and other short-term borrowings 460 5.97 7 230 5.07 2 (27)Senior debt 1,912 6.31 30 2,001 6.19 31 (28)Subordinated debt 2,578 7.10 46 2,939 6.92 51 Guaranteed preferred beneficial interests in Company's (29) subordinated debentures 1,299 7.80 25 1,251 7.85 25 ------- ------ ------- ------ (30) Total interest-bearing liabilities 57,276 3.94 557 61,119 3.72 561 (31)Portion of noninterest-bearing funding sources 18,491 -- -- 18,575 -- -- ------- ------ ------- ------ (32) Total funding sources $ 75,767 2.98 557 $ 79,694 2.85 561 ------- ------ ------- ------ ------- ------- NET INTEREST MARGIN AND NET INTEREST INCOME ON (33) A TAXABLE-EQUIVALENT BASIS (3) 6.01% $1,130 6.14% $1,216 ---- ------ ---- ------ ---- ------ ---- ------ NONINTEREST-EARNING ASSETS (34) Cash and due from banks $ 6,808 $ 9,956 (35) Goodwill 6,990 7,306 (36) Other 5,693 8,474 -------- -------- Total noninterest-earning assets $ 19,491 $ 25,736 -------- -------- -------- -------- NONINTEREST-BEARING FUNDING SOURCES (37) Deposits $ 22,475 $ 26,088 (38) Other liabilities 2,724 4,370 (39) Preferred stockholders' equity 275 548 (40) Common stockholders' equity 12,508 13,305 Noninterest-bearing funding sources used to (41) fund earning assets (18,491) (18,575) -------- -------- (42) Net noninterest-bearing funding sources $ 19,491 $ 25,736 -------- -------- (43) TOTAL ASSETS $ 95,258 $105,430 -------- -------- -------- -------- - -----------------------------------------------------------------------------------------------------------
(1) The average prime rate of Wells Fargo Bank was 8.50% and 8.27% for the quarters ended March 31, 1998 and 1997, respectively. The average three-month London Interbank Offered Rate (LIBOR) was 5.66% and 5.57% 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 $9,022 million and $13,116 million for the quarters ended March 31, 1998 and 1997, respectively. (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 both quarters presented. -----END PRIVACY-ENHANCED MESSAGE-----