Wells Fargo Reports Preliminary First Quarter 2018 Net Income of $5.9 Billion; Diluted EPS of $1.12
Wells Fargo & Company (NYSE:WFC):
Final financial results and other disclosures will be reported in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, and may differ materially from the results and disclosures in this document due to, among other things, the completion of final review procedures, the occurrence of subsequent events, including developments with respect to the resolution of regulatory matters, which could cause us to take additional accruals in the first quarter, or the discovery of additional information.
Selected Financial Information |
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Quarter ended | ||||||||||||
Mar 31, | Dec 31, | Mar 31, | ||||||||||
2018 | 2017 | 2017 | ||||||||||
Earnings | ||||||||||||
Diluted earnings per common share | $ | 1.12 | 1.16 | 1.03 | ||||||||
Wells Fargo net income (in billions) | 5.94 | 6.15 | 5.63 | |||||||||
Return on assets (ROA) | 1.26 | % | 1.26 | 1.18 | ||||||||
Return on equity (ROE) | 12.37 | 12.47 | 11.96 | |||||||||
Return on average tangible common equity (ROTCE) (a) | 14.75 | 14.85 | 14.35 | |||||||||
Asset Quality | ||||||||||||
Net charge-offs (annualized) as a % of average total loans | 0.32 | % | 0.31 | 0.34 | ||||||||
Allowance for credit losses as a % of total loans | 1.19 | 1.25 | 1.28 | |||||||||
Allowance for credit losses as a % of annualized net charge-offs | 376 | 401 | 376 | |||||||||
Other | ||||||||||||
Revenue (in billions) | $ | 21.9 | 22.1 | 22.3 | ||||||||
Efficiency ratio (b) | 64.9 | % | 76.2 | 62.0 | ||||||||
Average loans (in billions) | $ | 951.0 | 951.8 | 963.6 | ||||||||
Average deposits (in billions) | 1,297.2 | 1,311.6 | 1,299.2 | |||||||||
Net interest margin | 2.84 | % | 2.84 | 2.87 | ||||||||
(a) Tangible common equity is a non-GAAP financial measure and represents total equity less preferred equity, noncontrolling interests, and goodwill and certain identifiable intangible assets (including goodwill and intangible assets associated with certain of our nonmarketable equity securities but excluding mortgage servicing rights), net of applicable deferred taxes. The methodology of determining tangible common equity may differ among companies. Management believes that return on average tangible common equity, which utilizes tangible common equity, is a useful financial measure because it enables investors and others to assess the Company's use of equity. For additional information, including a corresponding reconciliation to GAAP financial measures, see the "Tangible Common Equity" tables on page 36. |
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(b) The efficiency ratio is noninterest expense divided by total revenue (net interest income and noninterest income). |
Wells Fargo & Company (NYSE:WFC) reported preliminary results, including net income of $5.9 billion, or $1.12 per diluted common share, for first quarter 2018, compared with $5.6 billion, or $1.03 per share, for first quarter 2017, and $6.2 billion, or $1.16 per share, for fourth quarter 2017. These preliminary results are subject to change due to our ongoing discussions with the Consumer Financial Protection Bureau (CFPB) and Office of the Comptroller of the Currency (OCC) to resolve matters regarding our compliance risk management program and our past practices involving certain automobile collateral protection insurance policies and certain mortgage interest rate lock extensions (the “CFPB/OCC matter”), which the CFPB and OCC have collectively offered to resolve for an aggregate of $1 billion in civil money penalties. At this time, we are unable to predict final resolution of the CFPB/OCC matter and cannot reasonably estimate our related loss contingency. Accordingly, the preliminary financial results we report today may need to be revised to reflect additional accruals for the CFPB/OCC matter when we file our final financial statements in our Quarterly Report on Form 10-Q with the SEC.
Chief Executive Officer Tim Sloan said, “I’m confident that our outstanding team will continue to transform Wells Fargo into a better, stronger company; however, we recognize that it will take time to put all of our challenges behind us. During the first quarter our team members continued to focus on our vision of satisfying our customers’ financial needs and helping them succeed financially. We also made progress on our priority of rebuilding trust with our customers, team members, communities, regulators, and shareholders. The efforts to build a better Wells Fargo during the quarter included continuing to improve our compliance and operational risk management programs, investing in innovative products and services that enhance the customer experience including the roll-out of our digital mortgage application and predictive banking service, and increasing the minimum hourly pay rate for U.S.-based team members. We also began executing on our goal to increase donations to nonprofit and community organizations by approximately 40 percent in 2018, and we’re proud that Wells Fargo was recently named number one in U.S. workplace giving for the ninth consecutive year by United Way Worldwide. In addition, we continued to make progress on our expense savings initiatives and remain on track to achieve our target of $4 billion in expense reductions by the end of 2019.”
Chief Financial Officer John Shrewsberry said, “Wells Fargo preliminarily reported $5.9 billion of net income in the first quarter, subject to the resolution of the CFPB/OCC matter noted in today's earnings release. Our financial results included continued strong credit performance, liquidity and capital levels. We returned $4.0 billion to shareholders through common stock dividends and net share repurchases in the first quarter, up 30 percent from a year ago. Our capital remained well above our internal target, and returning more capital to shareholders remains a priority. Our expenses in the first quarter included typically higher personnel expense; however, our noninterest expense dollar target range for full year 2018 remains unchanged.”
Net Interest Income
Net interest income in first quarter 2018 was $12.2 billion, down $75 million, compared with fourth quarter 2017, driven primarily by two fewer days in the quarter, hedge ineffectiveness accounting, and lower loan swap income related to the unwind of the receive-fixed swap portfolio, partially offset by the net repricing impact of higher interest rates.
Net interest margin was 2.84 percent, flat compared with fourth quarter 2017. The negative impact to net interest margin from hedge ineffectiveness accounting and lower loan swap income was offset by the net repricing benefit of higher interest rates.
Noninterest Income
Noninterest income in first quarter was $9.7 billion, down $41 million, compared with fourth quarter 2017. First quarter noninterest income reflected lower deposit service charges, card fees, other fees and insurance income, partially offset by higher market sensitive revenue4. First quarter results include the impact of the adoption of new accounting standards for Recognition and Measurement of Financial Assets and Financial Liabilities (Financial Instruments) and Revenue from Contracts With Customers (Revenue Recognition). See pages 17 and 18 in this Report for more information.
Noninterest Expense
Noninterest expense in the first quarter was $14.2 billion, compared with $16.8 billion in the prior quarter. First quarter expenses included operating losses of $668 million, down from $3.5 billion in fourth quarter 2017, which were elevated due to litigation accruals for a variety of matters, including mortgage-related regulatory investigations, sales practices, and other consumer-related matters. First quarter expenses also included $781 million of seasonally higher employee benefits and incentive compensation expense. Other expense was higher primarily due to a reduction in other expense in fourth quarter 2017 as a result of a $117 million gain on the sale of a corporate property. Outside professional services and advertising and promotion expense, which typically decline in the first quarter, were lower compared with fourth quarter 2017. The efficiency ratio was 64.9 percent in first quarter 2018, down from 76.2 percent in the fourth quarter, driven primarily by lower operating losses.
Loans
Total average loans were $951.0 billion in the first quarter, down $798 million from the fourth quarter. Period-end loan balances were $947.3 billion at March 31, 2018, down $9.5 billion from December 31, 2017. Commercial loans were flat compared with December 31, 2017 with growth in commercial and industrial loans, largely offset by declines in commercial real estate loans. Consumer loans decreased $9.5 billion from the prior quarter, driven by:
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Period-End Loan Balances |
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Mar 31, | Dec 31, | Sep 30, | Jun 30, | Mar 31, | |||||||||||||||||
(in millions) | 2018 | 2017 | 2017 | 2017 | 2017 | ||||||||||||||||
Commercial | $ | 503,396 | 503,388 | 500,150 | 505,901 | 505,004 | |||||||||||||||
Consumer | 443,912 | 453,382 | 451,723 | 451,522 | 453,401 | ||||||||||||||||
Total loans | $ | 947,308 | 956,770 | 951,873 | 957,423 | 958,405 | |||||||||||||||
Change from prior quarter | $ | (9,462 | ) | 4,897 | (5,550 | ) | (982 | ) | (9,199 | ) | |||||||||||
Debt and Equity Securities
As a result of the adoption of the new accounting standard for Financial Instruments, the balance sheet now includes more detailed disclosure of debt and equity securities.
Debt securities include debt securities available for sale and held to maturity, as well as debt securities held for trading. Debt securities were $473.0 billion at March 31, 2018, down $398 million from the fourth quarter, as approximately $13.1 billion of purchases, primarily federal agency mortgage-backed securities (MBS) in the available-for-sale portfolio, were more than offset by run-off and sales.
Net unrealized losses on available-for-sale debt securities were $(1.9) billion at March 31, 2018, compared with net unrealized gains of $1.5 billion at December 31, 2017, primarily due to higher interest rates and wider MBS spreads during the quarter.
Equity securities include marketable and non-marketable equity securities, as well as equity securities held for trading. Equity securities were $58.9 billion at March 31, 2018, down $3.6 billion from the fourth quarter, predominantly due to a decline in equity securities held for trading.
Deposits
Total average deposits for first quarter 2018 were $1.3 trillion, down $14.4 billion from the prior quarter. The decline was driven by a decrease in commercial deposits primarily from financial institutions, including a modest impact from actions the Company took to comply with the asset cap included in the consent order issued by the Board of Governors of the Federal Reserve System on February 2, 2018. Average consumer and small business banking deposits of $755.5 billion for first quarter 2018 were down $2.1 billion from the prior quarter, as growth in Community Banking deposits was more than offset by lower Wealth and Investment Management deposits. The average deposit cost for first quarter 2018 was 34 basis points, up 6 basis points from the prior quarter and 17 basis points from a year ago, primarily driven by an increase in commercial and Wealth and Investment Management deposit rates.
Capital
Capital in the first quarter continued to exceed our internal target, with a Common Equity Tier 1 ratio (fully phased-in) of 12.0 percent3, flat compared with the prior quarter. In first quarter 2018, the Company repurchased 50.6 million shares of its common stock, which reduced period-end common shares outstanding by 17.7 million.
Credit Quality
Net Loan Charge-offs
The quarterly loss rate was 0.32 percent (annualized), compared with 0.31 percent in the prior quarter and 0.34 percent a year ago. Commercial and consumer losses were 0.06 percent and 0.60 percent, respectively. Total credit losses were $741 million in first quarter 2018, down $10 million from fourth quarter 2017. Commercial losses were down $37 million driven by lower oil and gas portfolio losses. Consumer losses increased $27 million driven by higher automobile loan losses.
Net Loan Charge-Offs |
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March 31, 2018 | December 31, 2017 | March 31, 2017 | |||||||||||||||||||||||||
Net loan | As a % of | Net loan | As a % of | Net loan | As a % of | ||||||||||||||||||||||
charge- | average | charge- | average | charge- | average | ||||||||||||||||||||||
($ in millions) | offs | loans (a) | offs | loans (a) | offs | loans (a) | |||||||||||||||||||||
Commercial: | |||||||||||||||||||||||||||
Commercial and industrial | $ | 85 | 0.10 | % | $ | 118 | 0.14 | % | $ | 171 | 0.21 | % | |||||||||||||||
Real estate mortgage | (15 | ) | (0.05 | ) | (10 | ) | (0.03 | ) | (25 | ) | (0.08 | ) | |||||||||||||||
Real estate construction | (4 | ) | (0.07 | ) | (3 | ) | (0.05 | ) | (8 | ) | (0.15 | ) | |||||||||||||||
Lease financing | 12 | 0.25 | 10 | 0.20 | 5 | 0.11 | |||||||||||||||||||||
Total commercial | 78 | 0.06 | 115 | 0.09 | 143 | 0.11 | |||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||
Real estate 1-4 family first mortgage | (18 | ) | (0.03 | ) | (23 | ) | (0.03 | ) | 7 | 0.01 | |||||||||||||||||
Real estate 1-4 family junior lien mortgage | (8 | ) | (0.09 | ) | (7 | ) | (0.06 | ) | 23 | 0.21 | |||||||||||||||||
Credit card | 332 | 3.69 | 336 | 3.66 | 309 | 3.54 | |||||||||||||||||||||
Automobile | 208 | 1.64 | 188 | 1.38 | 167 | 1.10 | |||||||||||||||||||||
Other revolving credit and installment | 149 | 1.60 | 142 | 1.46 | 156 | 1.60 | |||||||||||||||||||||
Total consumer | 663 | 0.60 | 636 | 0.56 | 662 | 0.59 | |||||||||||||||||||||
Total | $ | 741 | 0.32 | % | $ | 751 | 0.31 | % | $ | 805 | 0.34 | % | |||||||||||||||
(a) Quarterly net charge-offs (recoveries) as a percentage of average loans are annualized. See explanation on page 34 of the accounting for purchased credit-impaired (PCI) loans and the impact on selected financial ratios. |
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Nonperforming Assets
Nonperforming assets decreased $388 million, or 4 percent, from fourth quarter 2017 to $8.3 billion. Nonaccrual loans decreased $317 million from fourth quarter 2017 to $7.7 billion primarily driven by lower commercial and industrial nonaccruals reflecting continued improvement in the oil and gas portfolio, as well as continued declines in consumer real estate nonaccruals.
Nonperforming Assets (Nonaccrual Loans and Foreclosed Assets) |
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March 31, 2018 | December 31, 2017 | March 31, 2017 | |||||||||||||||||||||||||
As a % | As a | As a | |||||||||||||||||||||||||
of | % of | % of | |||||||||||||||||||||||||
Total | total | Total | total | Total | total | ||||||||||||||||||||||
($ in millions) | balances | loans | balances | loans | balances | loans | |||||||||||||||||||||
Commercial: | |||||||||||||||||||||||||||
Commercial and industrial | $ | 1,516 | 0.45 | % | $ | 1,899 | 0.57 | % | $ | 2,898 | 0.88 | % | |||||||||||||||
Real estate mortgage | 755 | 0.60 | 628 | 0.50 | 672 | 0.51 | |||||||||||||||||||||
Real estate construction | 45 | 0.19 | 37 | 0.15 | 40 | 0.16 | |||||||||||||||||||||
Lease financing | 93 | 0.48 | 76 | 0.39 | 96 | 0.50 | |||||||||||||||||||||
Total commercial | 2,409 | 0.48 | 2,640 | 0.52 | 3,706 | 0.73 | |||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||
Real estate 1-4 family first mortgage | 4,053 | 1.43 | 4,122 | 1.45 | 4,743 | 1.73 | |||||||||||||||||||||
Real estate 1-4 family junior lien mortgage | 1,087 | 2.87 | 1,086 | 2.73 | 1,153 | 2.60 | |||||||||||||||||||||
Automobile | 117 | 0.24 | 130 | 0.24 | 101 | 0.17 | |||||||||||||||||||||
Other revolving credit and installment | 53 | 0.14 | 58 | 0.15 | 56 | 0.14 | |||||||||||||||||||||
Total consumer | 5,310 | 1.20 | 5,396 | 1.19 | 6,053 | 1.34 | |||||||||||||||||||||
Total nonaccrual loans | 7,719 | 0.81 | 8,036 | 0.84 | 9,759 | 1.02 | |||||||||||||||||||||
Foreclosed assets: | |||||||||||||||||||||||||||
Government insured/guaranteed | 103 | 120 | 179 | ||||||||||||||||||||||||
Non-government insured/guaranteed | 468 | 522 | 726 | ||||||||||||||||||||||||
Total foreclosed assets | 571 | 642 | 905 | ||||||||||||||||||||||||
Total nonperforming assets | $ | 8,290 | 0.88 | % | $ | 8,678 | 0.91 | % | $ | 10,664 | 1.11 | % | |||||||||||||||
Change from prior quarter: | |||||||||||||||||||||||||||
Total nonaccrual loans | $ | (317 | ) | $ | (583 | ) | $ | (625 | ) | ||||||||||||||||||
Total nonperforming assets | (388 | ) | (647 | ) | (698 | ) | |||||||||||||||||||||
Allowance for Credit Losses
The allowance for credit losses, including the allowance for unfunded commitments, totaled $11.3 billion at March 31, 2018, down $647 million from December 31, 2017. “Credit performance remained strong in the first quarter,” said Chief Risk Officer Mike Loughlin. “We released $550 million from the allowance for credit losses. Approximately $400 million of the release was driven by a reduction in allowance previously held for hurricane-related losses. The remainder of the release was due to continued improvement in residential real estate, both in first and junior lien mortgage loan portfolios, and lower loan balances.” The allowance coverage for total loans was 1.19 percent, compared with 1.25 percent in fourth quarter 2017. The allowance covered 3.8 times annualized first quarter net charge-offs, compared with 4.0 times in the prior quarter. The allowance coverage for nonaccrual loans was 147 percent at March 31, 2018, compared with 149 percent at December 31, 2017. The Company believes the allowance was appropriate for losses inherent in the loan portfolio at March 31, 2018.
Business Segment Performance
Financial information for our operating segments reflect revisions to our previously reported amounts to reflect a change, adopted in first quarter 2018, in our methodology for assigning funding charges and credits to our lines of business and for reclassifications made in connection with the adoption of a new accounting standard for Financial Instruments. See pages 17 and 18 in this Report for more information.
Wells Fargo defines its operating segments by product type and customer segment. Segment net income for each of the three business segments was:
Quarter ended | ||||||||||||
Mar 31, | Dec 31, | Mar 31, | ||||||||||
(in millions) | 2018 | 2017 | 2017 | |||||||||
Community Banking | $ | 2,713 | 3,472 | 2,824 | ||||||||
Wholesale Banking | 2,875 | 2,373 | 2,485 | |||||||||
Wealth and Investment Management | 714 | 675 | 665 | |||||||||
Community Banking offers a complete line of diversified financial products and services for consumers and small businesses including checking and savings accounts, credit and debit cards, and automobile, student, mortgage, home equity and small business lending, as well as referrals to Wholesale Banking and Wealth and Investment Management business partners. The Community Banking segment also includes the results of our Corporate Treasury activities net of allocations in support of the other operating segments and results of investments in our affiliated venture capital partnerships.
Selected Financial Information |
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Quarter ended | ||||||||||||
Mar 31, | Dec 31, | Mar 31, | ||||||||||
(in millions) | 2018 | 2017 | 2017 | |||||||||
Total revenue | $ | 11,830 | 11,720 | 11,823 | ||||||||
Provision for credit losses | 218 | 636 | 646 | |||||||||
Noninterest expense | 7,902 | 10,216 | 7,281 | |||||||||
Segment net income | 2,713 | 3,472 | 2,824 | |||||||||
(in billions) | ||||||||||||
Average loans | 470.5 | 473.2 | 480.7 | |||||||||
Average assets | 1,061.9 | 1,073.2 | 1,095.8 | |||||||||
Average deposits | 747.5 | 738.3 | 717.8 | |||||||||
Community Banking reported net income of $2.7 billion, down $759 million, or 22 percent, from fourth quarter 2017. The decline in net income from fourth quarter 2017 was primarily driven by the inclusion in the fourth quarter of the benefit of the estimated impact of the Tax Act to the Company. Revenue in the first quarter was $11.8 billion, up $110 million, or 1 percent, from fourth quarter 2017, and included a gain on sales of Pick-a-Pay loans and higher market sensitive revenue, partially offset by lower net interest income, card fees, and service charges on deposit accounts. Noninterest expense decreased $2.3 billion, or 23 percent, compared with fourth quarter 2017, driven primarily by a decline in litigation accruals, partially offset by seasonally higher personnel expense. The provision for credit losses decreased $418 million from the prior quarter.
Net income was down $111 million, or 4 percent, from first quarter 2017 due to higher expenses, partially offset by a lower provision for credit losses and the lower income tax rate. Revenue was flat compared with a year ago due to higher net interest income, a gain on sales of Pick-a-Pay loans, higher market sensitive revenue, and higher trust and investment fees, offset by lower mortgage banking revenue and service charges on deposit accounts. Noninterest expense increased $621 million, or 9 percent, from a year ago primarily driven by higher operating losses and personnel expense. The provision for credit losses decreased $428 million from a year ago.
Retail Banking and Consumer Payments, Virtual Solutions and Innovation
Consumer Lending
Wholesale Banking provides financial solutions to businesses across the United States and globally with annual sales generally in excess of $5 million. Products and businesses include Business Banking, Commercial Real Estate, Corporate Banking, Financial Institutions Group, Government and Institutional Banking, Middle Market Banking, Principal Investments, Treasury Management, Wells Fargo Commercial Capital, and Wells Fargo Securities.
Selected Financial Information |
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Quarter ended | ||||||||||||
Mar 31, | Dec 31, | Mar 31, | ||||||||||
(in millions) | 2018 | 2017 | 2017 | |||||||||
Total revenue | $ | 7,279 | 7,440 | 7,577 | ||||||||
Provision (reversal of provision) for credit losses | (20 | ) | 20 | (43 | ) | |||||||
Noninterest expense | 3,978 | 4,187 | 4,167 | |||||||||
Segment net income | 2,875 | 2,373 | 2,485 | |||||||||
(in billions) | ||||||||||||
Average loans | 465.1 | 463.5 | 468.3 | |||||||||
Average assets | 829.2 | 837.2 | 810.5 | |||||||||
Average deposits | 446.0 | 465.7 | 465.3 |
Wholesale Banking reported net income of $2.9 billion, up $502 million, or 21 percent, from fourth quarter 2017. First quarter results benefited from the reduced income tax rate. Revenue of $7.3 billion decreased $161 million, or 2 percent, compared with the prior quarter, due to lower net interest income, lower commercial real estate brokerage fees, lower insurance income related to the sale of Wells Fargo Insurance Services USA (WFIS), and the gain on the sale of WFIS recognized in fourth quarter 2017, partially offset by the gain on the sale of Wells Fargo Shareowner Services recognized in the first quarter and higher market sensitive revenue. Fourth quarter 2017 also included impairments on low income housing and tax-advantaged renewable energy investments due to the Tax Act. Noninterest expense decreased $209 million, or 5 percent, from the prior quarter reflecting two less months of WFIS operating expenses and lower operating losses, partially offset by seasonally higher personnel expenses. The provision for credit losses decreased $40 million from the prior quarter.
Net income increased $390 million, or 16 percent, from first quarter 2017 and benefited from the lower income tax rate. Revenue decreased $298 million, or 4 percent, from first quarter 2017, on lower net interest income, the impact of the sale of WFIS in fourth quarter 2017, lower mortgage banking fees, and lower operating lease income, partially offset by the gain related to the sale of Wells Fargo Shareowner Services. Noninterest expense decreased $189 million, or 5 percent, from a year ago reflecting the sale of WFIS, partially offset by higher regulatory, risk, cyber and technology expenses. The provision for credit losses increased $23 million from a year ago.
Wealth and Investment Management (WIM) provides a full range of personalized wealth management, investment and retirement products and services to clients across U.S. based businesses including Wells Fargo Advisors, The Private Bank, Abbot Downing, Wells Fargo Institutional Retirement and Trust, and Wells Fargo Asset Management. We deliver financial planning, private banking, credit, investment management and fiduciary services to high-net worth and ultra-high-net worth individuals and families. We also serve customers’ brokerage needs, supply retirement and trust services to institutional clients and provide investment management capabilities delivered to global institutional clients through separate accounts and the Wells Fargo Funds.
Selected Financial Information |
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Quarter ended | |||||||||||||
Mar 31, | Dec 31, | Mar 31, | |||||||||||
(in millions) | 2018 | 2017 | 2017 | ||||||||||
Total revenue | $ | 4,242 | 4,333 | 4,257 | |||||||||
Reversal of provision for credit losses | (6 | ) | (7 | ) | (4 | ) | |||||||
Noninterest expense | 3,290 | 3,246 | 3,204 | ||||||||||
Segment net income | 714 | 675 | 665 | ||||||||||
(in billions) | |||||||||||||
Average loans | 73.9 | 72.9 | 70.7 | ||||||||||
Average assets | 84.2 | 83.7 | 81.8 | ||||||||||
Average deposits | 177.9 | 184.1 | 197.5 | ||||||||||
Wealth and Investment Management reported net income of $714 million, up $39 million, or 6 percent, from fourth quarter 2017. First quarter results benefited from the reduced income tax rate. Revenue of $4.2 billion decreased $91 million, or 2 percent, from the prior quarter, primarily due to lower gains on deferred compensation plan investments (offset in employee benefits expense), lower net interest income, and lower transaction revenue, partially offset by higher asset-based fees. Noninterest expense increased $44 million, or 1 percent, from the prior quarter, primarily driven by seasonally higher personnel expenses, partially offset by lower non-personnel expense and lower deferred compensation plan expense (offset in gains on equity securities).
Net income was up $49 million, or 7 percent, from first quarter 2017 and benefited from the lower income tax rate. Revenue decreased $15 million from a year ago primarily driven by lower gains on deferred compensation plan investments (offset in employee benefits expense), lower transaction revenue, lower net interest income, and lower other revenue, partially offset by higher asset-based fees. Noninterest expense increased $86 million, or 3 percent, from a year ago, primarily due to higher broker commissions, higher regulatory, risk, cyber and technology expenses, and higher other personnel expense, partially offset by lower deferred compensation plan expense (offset in gains on equity securities).
Retail Brokerage
Wealth Management
Asset Management
Retirement
Conference Call
The Company will host a live conference call on Friday, April 13, at 7:00 a.m. PT (10:00 a.m. ET). You may participate by dialing 866-872-5161 (U.S. and Canada) or 440-424-4922 (International). The call will also be available online at https://www.wellsfargo.com/about/investor-relations/quarterly-earnings/ and https://engage.vevent.com/rt/wells_fargo_ao~1293006.
A replay of the conference call will be available beginning at 10:00 a.m. PT (1:00 p.m. ET) on Friday, April 13 through Friday, April 27. Please dial 855-859-2056 (U.S. and Canada) or 404-537-3406 (International) and enter Conference ID #1293006. The replay will also be available online at https://www.wellsfargo.com/about/investor-relations/quarterly-earnings/ and https://engage.vevent.com/rt/wells_fargo_ao~1293006.
End Notes
1 Tangible common equity is a non-GAAP financial measure and represents total equity less preferred equity, noncontrolling interests, and goodwill and certain identifiable intangible assets (including goodwill and intangible assets associated with certain of our nonmarketable equity securities but excluding mortgage servicing rights), net of applicable deferred taxes. The methodology of determining tangible common equity may differ among companies. Management believes that return on average tangible common equity, which utilizes tangible common equity, is a useful financial measure because it enables investors and others to assess the Company's use of equity. For additional information, including a corresponding reconciliation to GAAP financial measures, see the "Tangible Common Equity" tables on page 36.
2 Reserve build represents the amount by which the provision for credit losses exceeds net charge-offs, while reserve release represents the amount by which net charge-offs exceed the provision for credit losses.
3 See table on page 37 for more information on Common Equity Tier 1. Common Equity Tier 1 (fully phased-in) is a preliminary estimate and is calculated assuming the full phase-in of the Basel III capital rules.
4 Market sensitive revenue represents net gains from trading activities, debt securities, and equity securities.
5 Production margin represents net gains on residential mortgage loan origination/sales activities divided by total residential held-for-sale mortgage originations. See the Selected Five Quarter Residential Mortgage Production Data table on page 42 for more information.
6 Customers who actively use their checking account with transactions such as debit card purchases, online bill payments, and direct deposit.
7 Data as of February 2018, comparisons with February 2017.
8 Combined consumer and business debit card purchase volume dollars.
9 Primarily includes retail banking, consumer lending, small business and business banking customers.
Forward-Looking Statements
This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. In addition, we may make forward-looking statements in our other documents filed or furnished with the SEC, and our management may make forward-looking statements orally to analysts, investors, representatives of the media and others. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “target,” “projects,” “outlook,” “forecast,” “will,” “may,” “could,” “should,” “can” and similar references to future periods. In particular, forward-looking statements include, but are not limited to, statements we make about: (i) the future operating or financial performance of the Company, including our outlook for future growth; (ii) our noninterest expense and efficiency ratio; (iii) future credit quality and performance, including our expectations regarding future loan losses and allowance levels; (iv) the appropriateness of the allowance for credit losses; (v) our expectations regarding net interest income and net interest margin; (vi) loan growth or the reduction or mitigation of risk in our loan portfolios; (vii) future capital or liquidity levels or targets and our estimated Common Equity Tier 1 ratio under Basel III capital standards; (viii) the performance of our mortgage business and any related exposures; (ix) the expected outcome and impact of legal, regulatory and legislative developments, as well as our expectations regarding compliance therewith; (x) future common stock dividends, common share repurchases and other uses of capital; (xi) our targeted range for return on assets and return on equity; (xii) the outcome of contingencies, such as legal proceedings; and (xiii) the Company’s plans, objectives and strategies.
Forward-looking statements are not based on historical facts but instead represent our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. We caution you, therefore, against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. While there is no assurance that any list of risks and uncertainties or risk factors is complete, important factors that could cause actual results to differ materially from those in the forward-looking statements include the following, without limitation:
In addition to the above factors, we also caution that the amount and timing of any future common stock dividends or repurchases will depend on the earnings, cash requirements and financial condition of the Company, market conditions, capital requirements (including under Basel capital standards), common stock issuance requirements, applicable law and regulations (including federal securities laws and federal banking regulations), and other factors deemed relevant by the Company’s Board of Directors, and may be subject to regulatory approval or conditions.
For more information about factors that could cause actual results to differ materially from our expectations, refer to our reports filed with the Securities and Exchange Commission, including the discussion under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2017, as filed with the Securities and Exchange Commission and available on its website at www.sec.gov.
Any forward-looking statement made by us speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.
About Wells Fargo
Wells Fargo & Company (NYSE: WFC) is a diversified, community-based financial services company with $1.9 trillion in assets. Wells Fargo’s vision is to satisfy our customers’ financial needs and help them succeed financially. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, investments, mortgage, and consumer and commercial finance through 8,200 locations, 13,000 ATMs, the internet (wellsfargo.com) and mobile banking, and has offices in 42 countries and territories to support customers who conduct business in the global economy. With approximately 265,000 team members, Wells Fargo serves one in three households in the United States. Wells Fargo & Company was ranked No. 25 on Fortune’s 2017 rankings of America’s largest corporations.
Wells Fargo & Company and Subsidiaries | |||
QUARTERLY FINANCIAL DATA | |||
TABLE OF CONTENTS | |||
Pages | |||
Summary Information |
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Significant Accounting and Presentation Changes |
17 |
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Summary Financial Data | 19 | ||
Income |
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Consolidated Statement of Income | 21 | ||
Consolidated Statement of Comprehensive Income | 23 | ||
Condensed Consolidated Statement of Changes in Total Equity | 23 | ||
Average Balances, Yields and Rates Paid (Taxable-Equivalent Basis) | 24 | ||
Five Quarter Average Balances, Yields and Rates Paid (Taxable-Equivalent Basis) | 25 | ||
Noninterest Income and Noninterest Expense | 26 | ||
Balance Sheet |
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Consolidated Balance Sheet | 28 | ||
Trading Activities | 30 | ||
Debt Securities | 30 | ||
Equity Securities | 31 | ||
Loans |
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Loans | 32 | ||
Nonperforming Assets | 33 | ||
Loans 90 Days or More Past Due and Still Accruing | 33 | ||
Purchased Credit-Impaired Loans | 34 | ||
Changes in Allowance for Credit Losses | 35 | ||
Equity |
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Tangible Common Equity | 36 | ||
Common Equity Tier 1 Under Basel III | 37 | ||
Operating Segments |
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Operating Segment Results | 38 | ||
Other |
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Mortgage Servicing and other related data | 40 | ||
SIGNIFICANT ACCOUNTING AND PRESENTATION CHANGES
Following is a discussion of key accounting and presentation changes in first quarter 2018 that resulted from adoption of new accounting standards and a change in our methodology for measuring operating segment results. Prior periods have been revised as appropriate for these changes to maintain comparability.
Accounting Standards Adopted in 2018
In first quarter 2018, we adopted the following new accounting guidance:
In connection with the adoption of ASU 2016-18 we have changed the presentation of our cash and cash equivalents to include both cash and due from banks as well as interest-earning deposits with banks, which are inclusive of any restricted cash.
ASU 2016-04 modifies the accounting for certain prepaid card products to require the recognition of breakage. Breakage represents the estimated amount that will not be redeemed by the cardholder for goods or services. Upon adoption, we recorded a cumulative-effect adjustment that increased retained earnings, given estimated breakage, by $26 million.
ASU 2016-01 changes the accounting for certain equity investments to record at fair value with unrealized gains or losses reflected in earnings, as well as improve the disclosures of equity investments and the fair value of financial instruments.
We adopted the Update in first quarter 2018 and recorded a cumulative-effect adjustment as of January 1, 2018, that increased retained earnings by $106 million as a result of a transition adjustment to reclassify $118 million in net unrealized gains from other comprehensive income to retained earnings, partially offset by a transition adjustment to decrease retained earnings by $12 million to adjust the carrying value of our auction rate securities from cost to fair value. No transition adjustment was recorded for investments changed to the measurement alternative (described below), which was applied prospectively.
As a result of adopting this ASU, our investments in marketable equity securities, including those previously classified as available-for-sale, are now accounted for at fair value with unrealized gains or losses reflected in earnings. Additionally, our share of unrealized gains or losses of marketable equity securities held by investees in our nonmarketable equity securities accounted for using the equity method are now reflected in earnings. Prior to adoption, such unrealized gains and losses were reflected in other comprehensive income. Our investments in nonmarketable equity securities previously accounted for under the cost method of accounting, except for federal bank stock, are now accounted for either at fair value with unrealized gains and losses reflected in earnings or using the measurement alternative. The measurement alternative is similar to the cost method of accounting, except the carrying value is adjusted through earnings for impairment, if any, and changes in observable and orderly transactions in the same or similar investment. We now account for substantially all of our private equity investments using the measurement alternative, except for those accounted for using the equity method of accounting. Our auction rate securities portfolio is now accounted for at fair value with unrealized gains or losses reflected in earnings.
In connection with our adoption of this Update, we have modified our balance sheet and income statement presentation to report marketable and nonmarketable equity securities and their results separately from debt securities by now reporting all equity securities in a new line labeled “Equity securities” in both the balance sheet and income statement. Additionally we now report loans held for trading purposes in loans held for sale and have reclassified net gains and losses on marketable equity securities used as economic hedges of deferred compensation obligations from “Net gains for trading activities” to “Net gains from equity securities”. All prior periods have been revised to conform to these changes in reporting.
The following table provides a summary of our reporting changes implemented in connection with our adoption of ASU 2016-01.
Financial instrument or | ||||||
transaction type | As previously reported | Revised reporting | ||||
Balance Sheet | ||||||
Marketable equity securities | Trading assets and available for sale investment securities | Equity securities (new caption) | ||||
Nonmarketable equity securities | Other assets | Equity securities (new caption) | ||||
Loans held for trading | Trading assets | Loans held for sale | ||||
Debt securities held for trading | Trading assets | Debt securities (formerly “Investment securities”) | ||||
Income Statement | ||||||
Interest income: | ||||||
Marketable equity securities | Trading assets and investment securities | Equity securities (new caption) | ||||
Nonmarketable equity securities | Other | Equity securities (new caption) | ||||
Loans held for trading | Trading assets | Loans held for sale | ||||
Debt securities held for trading | Trading assets | Debt securities (formerly “Investment securities”) | ||||
Noninterest income: | ||||||
Deferred compensation gains (1) | Net gains from trading activities | Net gains from equity securities | ||||
(1) Reclassification of net gains and losses on marketable equity securities economically hedging our deferred compensation obligations. |
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The following table illustrates the changes to the balance sheet as of December 31, 2017, and related consolidated statement of income for the year ended December 31, 2017, in connection with our adoption of ASU 2016-01.
Reclassification adjustments | |||||||||||||||||||||||||||||
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Marketable |
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As previously |
Debt | equity |
Nonmarketable |
Loans held for |
Revised | Change in | |||||||||||||||||||||||
(in millions) | reported | securities | securities |
equity securities |
trading | reporting | balance | ||||||||||||||||||||||
Balance sheet as of December 31, 2017: | |||||||||||||||||||||||||||||
Trading assets | $ | 92,329 | (57,624 | ) | (33,682 | ) | — | (1,023 | ) | — | (92,329 | ) | |||||||||||||||||
Debt securities: | |||||||||||||||||||||||||||||
Trading | — | 57,624 | — | — | — | 57,624 | 57,624 | ||||||||||||||||||||||
Available for sale | 277,085 | — | (678 | ) | — | — | 276,407 | (678 | ) | ||||||||||||||||||||
Loans held for sale | 108 | — | — | — | 1,023 | 1,131 | 1,023 | ||||||||||||||||||||||
Equity securities | — | — | 34,360 | 28,137 | — | 62,497 | 62,497 | ||||||||||||||||||||||
Other assets | 118,381 | — | — | (28,137 | ) | — | 90,244 | (28,137 | ) | ||||||||||||||||||||
Total impact to assets | — | — | — | — | — | ||||||||||||||||||||||||
Income statement for the year ended December 31, 2017: | |||||||||||||||||||||||||||||
Interest income: | |||||||||||||||||||||||||||||
Trading assets | 2,928 | (2,313 | ) | (577 | ) | — | (38 | ) | — | (2,928 | ) | ||||||||||||||||||
Debt securities | 10,664 | 2,313 | (31 | ) | — | — | 12,946 | 2,282 | |||||||||||||||||||||
Loans held for sale | 12 | — | — | — | 38 | 50 | 38 | ||||||||||||||||||||||
Equity securities | — | — | 608 | 191 | — | 799 | 799 | ||||||||||||||||||||||
Other | 3,131 | — | — | (191 | ) | — | 2,940 | (191 | ) | ||||||||||||||||||||
Total impact to interest income | — | — | — | — | — | ||||||||||||||||||||||||
Noninterest income: | |||||||||||||||||||||||||||||
Net gains from trading activities | 1,053 | — | (511 | ) | — | — | 542 | (511 | ) | ||||||||||||||||||||
Net gains from equity securities | 1,268 | — | 511 | — | — | 1,779 | 511 | ||||||||||||||||||||||
Total impact to noninterest income | — | — | — | — | — | ||||||||||||||||||||||||
ASU 2014-09 modifies the guidance used to recognize revenue from contracts with customers for transfers of goods or services and transfers of non-financial assets, unless those contracts are within the scope of other guidance. Upon adoption, we recorded a cumulative-effect adjustment that decreased retained earnings by $44 million, due to changes in the timing of revenue for corporate trust services that are provided over the life of the associated trust. In addition, we changed the presentation of some costs such that underwriting expenses of our broker-dealer business that were previously netted against revenue are now included in noninterest expense, and card payment network charges that were previously included in noninterest expense are now netted against card fee revenue.
Operating Segment Financial Information Changes
Financial information for our operating segments presented in this Report reflect revisions to our previously reported amounts to reflect a change, adopted in first quarter 2018, in our methodology for assigning funding charges and credits to our lines of business and for the reclassifications made in connection with the adoption of ASU 2016-01. Effective first quarter 2018, assets and liabilities will receive a funding charge or credit that considers interest rate risk, liquidity risk, and other product characteristics on a more granular level. This methodology change affects results across all three of our reportable operating segments. Our previously reported consolidated financial results were not impacted by the methodology change; however, in connection with the adoption of ASU 2016-01, certain reclassifications will occur within noninterest income.
Wells Fargo & Company and Subsidiaries |
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SUMMARY FINANCIAL DATA |
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% Change | |||||||||||||||||||||
Quarter ended | Mar 31, 2018 from | ||||||||||||||||||||
Mar 31, | Dec 31, | Mar 31, | Dec 31, | Mar 31, | |||||||||||||||||
($ in millions, except per share amounts) | 2018 | 2017 | 2017 | 2017 | 2017 | ||||||||||||||||
For the Period | |||||||||||||||||||||
Wells Fargo net income | $ | 5,936 | 6,151 | 5,634 | (3 | )% | 5 | ||||||||||||||
Wells Fargo net income applicable to common stock | 5,533 | 5,740 | 5,233 | (4 | ) | 6 | |||||||||||||||
Diluted earnings per common share | 1.12 | 1.16 | 1.03 | (3 | ) | 9 | |||||||||||||||
Profitability ratios (annualized): | |||||||||||||||||||||
Wells Fargo net income to average assets (ROA) | 1.26 | % | 1.26 | 1.18 | — | 7 | |||||||||||||||
Wells Fargo net income applicable to common stock to average Wells Fargo common stockholders’ equity (ROE) | 12.37 | 12.47 | 11.96 | (1 | ) | 3 | |||||||||||||||
Return on average tangible common equity (ROTCE)(1) | 14.75 | 14.85 | 14.35 | (1 | ) | 3 | |||||||||||||||
Efficiency ratio (2) | 64.9 | 76.2 | 62.0 | (15 | ) | 5 | |||||||||||||||
Total revenue | $ | 21,934 | 22,050 | 22,255 | (1 | ) | (1 | ) | |||||||||||||
Pre-tax pre-provision profit (PTPP) (3) | 7,692 | 5,250 | 8,463 | 47 | (9 | ) | |||||||||||||||
Dividends declared per common share | 0.39 | 0.39 | 0.38 | — | 3 | ||||||||||||||||
Average common shares outstanding | 4,885.7 | 4,912.5 | 5,008.6 | (1 | ) | (2 | ) | ||||||||||||||
Diluted average common shares outstanding | 4,930.7 | 4,963.1 | 5,070.4 | (1 | ) | (3 | ) | ||||||||||||||
Average loans | $ | 951,024 | 951,822 | 963,645 | — | (1 | ) | ||||||||||||||
Average assets | 1,915,896 | 1,935,318 | 1,931,040 | (1 | ) | (1 | ) | ||||||||||||||
Average total deposits | 1,297,178 | 1,311,592 | 1,299,191 | (1 | ) | — | |||||||||||||||
Average consumer and small business banking deposits (4) | 755,483 | 757,541 | 758,754 | — | — | ||||||||||||||||
Net interest margin | 2.84 | % | 2.84 | 2.87 | — | (1 | ) | ||||||||||||||
At Period End | |||||||||||||||||||||
Debt securities (5) | $ | 472,968 | 473,366 | 456,969 | — | 4 | |||||||||||||||
Loans | 947,308 | 956,770 | 958,405 | (1 | ) | (1 | ) | ||||||||||||||
Allowance for loan losses | 10,373 | 11,004 | 11,168 | (6 | ) | (7 | ) | ||||||||||||||
Goodwill | 26,445 | 26,587 | 26,666 | (1 | ) | (1 | ) | ||||||||||||||
Equity securities (5) | 58,935 | 62,497 | 56,991 | (6 | ) | 3 | |||||||||||||||
Assets | 1,915,388 | 1,951,757 | 1,951,501 | (2 | ) | (2 | ) | ||||||||||||||
Deposits | 1,303,689 | 1,335,991 | 1,325,444 | (2 | ) | (2 | ) | ||||||||||||||
Common stockholders' equity | 181,950 | 183,134 | 178,209 | (1 | ) | 2 | |||||||||||||||
Wells Fargo stockholders’ equity | 205,752 | 206,936 | 201,321 | (1 | ) | 2 | |||||||||||||||
Total equity | 206,710 | 208,079 | 202,310 | (1 | ) | 2 | |||||||||||||||
Tangible common equity (1) | 152,678 | 153,730 | 148,671 | (1 | ) | 3 | |||||||||||||||
Common shares outstanding | 4,873.9 | 4,891.6 | 4,996.7 | — | (2 | ) | |||||||||||||||
Book value per common share (6) | $ | 37.33 | 37.44 | 35.67 | — | 5 | |||||||||||||||
Tangible book value per common share (1)(6) | 31.33 | 31.43 | 29.75 | — | 5 | ||||||||||||||||
Common stock price: | |||||||||||||||||||||
High | 66.31 | 62.24 | 59.99 | 7 | 11 | ||||||||||||||||
Low | 50.70 | 52.84 | 53.35 | (4 | ) | (5 | ) | ||||||||||||||
Period end | 52.41 | 60.67 | 55.66 | (14 | ) | (6 | ) | ||||||||||||||
Team members (active, full-time equivalent) | 265,700 | 262,700 | 272,800 | 1 | (3 | ) | |||||||||||||||
(1) Tangible common equity is a non-GAAP financial measure and represents total equity less preferred equity, noncontrolling interests, and goodwill and certain identifiable intangible assets (including goodwill and intangible assets associated with certain of our nonmarketable equity securities but excluding mortgage servicing rights), net of applicable deferred taxes. The methodology of determining tangible common equity may differ among companies. Management believes that return on average tangible common equity and tangible book value per common share, which utilize tangible common equity, are useful financial measures because they enable investors and others to assess the Company's use of equity. For additional information, including a corresponding reconciliation to GAAP financial measures, see the "Tangible Common Equity" tables on page 36. |
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(2) The efficiency ratio is noninterest expense divided by total revenue (net interest income and noninterest income). |
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(3) Pre-tax pre-provision profit (PTPP) is total revenue less noninterest expense. Management believes that PTPP is a useful financial measure because it enables investors and others to assess the Company’s ability to generate capital to cover credit losses through a credit cycle. |
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(4) Consumer and small business banking deposits are total deposits excluding mortgage escrow and wholesale deposits. |
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(5) Financial information for prior quarters has been revised to reflect the impact of the adoption of Accounting Standards Update (ASU) 2016-01 – Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. See pages 17 and 18 for more information. |
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(6) Book value per common share is common stockholders' equity divided by common shares outstanding. Tangible book value per common share is tangible common equity divided by common shares outstanding. |
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Wells Fargo & Company and Subsidiaries |
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FIVE QUARTER SUMMARY FINANCIAL DATA | ||||||||||||||||||||
Quarter ended | ||||||||||||||||||||
Mar 31, | Dec 31, | Sep 30, | Jun 30, | Mar 31, | ||||||||||||||||
($ in millions, except per share amounts) | 2018 | 2017 | 2017 | 2017 | 2017 | |||||||||||||||
For the Quarter | ||||||||||||||||||||
Wells Fargo net income | $ | 5,936 | 6,151 | 4,542 | 5,856 | 5,634 | ||||||||||||||
Wells Fargo net income applicable to common stock | 5,533 | 5,740 | 4,131 | 5,450 | 5,233 | |||||||||||||||
Diluted earnings per common share | 1.12 | 1.16 | 0.83 | 1.08 | 1.03 | |||||||||||||||
Profitability ratios (annualized) : | ||||||||||||||||||||
Wells Fargo net income to average assets (ROA) | 1.26 | % | 1.26 | 0.93 | 1.22 | 1.18 | ||||||||||||||
Wells Fargo net income applicable to common stock to average Wells Fargo common stockholders’ equity (ROE) | 12.37 | 12.47 | 8.96 | 12.06 | 11.96 | |||||||||||||||
Return on average tangible common equity (ROTCE)(1) | 14.75 | 14.85 | 10.66 | 14.41 | 14.35 | |||||||||||||||
Efficiency ratio (2) | 64.9 | 76.2 | 65.7 | 60.9 | 62.0 | |||||||||||||||
Total revenue | $ | 21,934 | 22,050 | 21,849 | 22,235 | 22,255 | ||||||||||||||
Pre-tax pre-provision profit (PTPP) (3) | 7,692 | 5,250 | 7,498 | 8,694 | 8,463 | |||||||||||||||
Dividends declared per common share | 0.39 | 0.39 | 0.39 | 0.38 | 0.38 | |||||||||||||||
Average common shares outstanding | 4,885.7 | 4,912.5 | 4,948.6 | 4,989.9 | 5,008.6 | |||||||||||||||
Diluted average common shares outstanding | 4,930.7 | 4,963.1 | 4,996.8 | 5,037.7 | 5,070.4 | |||||||||||||||
Average loans | $ | 951,024 | 951,822 | 952,343 | 956,879 | 963,645 | ||||||||||||||
Average assets | 1,915,896 | 1,935,318 | 1,938,461 | 1,927,021 | 1,931,040 | |||||||||||||||
Average total deposits | 1,297,178 | 1,311,592 | 1,306,356 | 1,301,195 | 1,299,191 | |||||||||||||||
Average consumer and small business banking deposits (4) | 755,483 | 757,541 | 755,094 | 760,149 | 758,754 | |||||||||||||||
Net interest margin | 2.84 | % | 2.84 | 2.86 | 2.90 | 2.87 | ||||||||||||||
At Quarter End | ||||||||||||||||||||
Debt securities (5) | $ | 472,968 | 473,366 | 474,710 | 462,890 | 456,969 | ||||||||||||||
Loans | 947,308 | 956,770 | 951,873 | 957,423 | 958,405 | |||||||||||||||
Allowance for loan losses | 10,373 | 11,004 | 11,078 | 11,073 | 11,168 | |||||||||||||||
Goodwill | 26,445 | 26,587 | 26,581 | 26,573 | 26,666 | |||||||||||||||
Equity securities (5) | 58,935 | 62,497 | 54,981 | 55,742 | 56,991 | |||||||||||||||
Assets | 1,915,388 | 1,951,757 | 1,934,880 | 1,930,792 | 1,951,501 | |||||||||||||||
Deposits | 1,303,689 | 1,335,991 | 1,306,706 | 1,305,830 | 1,325,444 | |||||||||||||||
Common stockholders' equity | 181,950 | 183,134 | 181,920 | 181,233 | 178,209 | |||||||||||||||
Wells Fargo stockholders’ equity | 205,752 | 206,936 | 205,722 | 205,034 | 201,321 | |||||||||||||||
Total equity | 206,710 | 208,079 | 206,617 | 205,949 | 202,310 | |||||||||||||||
Tangible common equity (1) | 152,678 | 153,730 | 152,694 | 151,868 | 148,671 | |||||||||||||||
Common shares outstanding | 4,873.9 | 4,891.6 | 4,927.9 | 4,966.8 | 4,996.7 | |||||||||||||||
Book value per common share (6) | $ | 37.33 | 37.44 | 36.92 | 36.49 | 35.67 | ||||||||||||||
Tangible book value per common share (1)(6) | 31.33 | 31.43 | 30.99 | 30.58 | 29.75 | |||||||||||||||
Common stock price: | ||||||||||||||||||||
High | 66.31 | 62.24 | 56.45 | 56.60 | 59.99 | |||||||||||||||
Low | 50.70 | 52.84 | 49.28 | 50.84 | 53.35 | |||||||||||||||
Period end | 52.41 | 60.67 | 55.15 | 55.41 | 55.66 | |||||||||||||||
Team members (active, full-time equivalent) | 265,700 | 262,700 | 268,000 | 270,600 | 272,800 | |||||||||||||||
(1) Tangible common equity is a non-GAAP financial measure and represents total equity less preferred equity, noncontrolling interests, and goodwill and certain identifiable intangible assets (including goodwill and intangible assets associated with certain of our nonmarketable equity securities but excluding mortgage servicing rights), net of applicable deferred taxes. The methodology of determining tangible common equity may differ among companies. Management believes that return on average tangible common equity and tangible book value per common share, which utilize tangible common equity, are useful financial measures because they enable investors and others to assess the Company's use of equity. For additional information, including a corresponding reconciliation to GAAP financial measures, see the "Tangible Common Equity" tables on page 36. |
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(2) The efficiency ratio is noninterest expense divided by total revenue (net interest income and noninterest income). |
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(3) Pre-tax pre-provision profit (PTPP) is total revenue less noninterest expense. Management believes that PTPP is a useful financial measure because it enables investors and others to assess the Company’s ability to generate capital to cover credit losses through a credit cycle. |
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(4) Consumer and small business banking deposits are total deposits excluding mortgage escrow and wholesale deposits. |
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(5) Financial information for prior quarters has been revised to reflect the impact of the adoption of ASU 2016-01 – Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. See pages 17 and 18 for more information. |
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(6) Book value per common share is common stockholders' equity divided by common shares outstanding. Tangible book value per common share is tangible common equity divided by common shares outstanding. |
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Wells Fargo & Company and Subsidiaries |
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CONSOLIDATED STATEMENT OF INCOME | |||||||||||||
Quarter ended March 31, | % | ||||||||||||
(in millions, except per share amounts) | 2018 | 2017 | Change | ||||||||||
Interest income | |||||||||||||
Debt securities (1) | $ | 3,414 | 3,173 | 8 | % | ||||||||
Mortgages held for sale | 179 | 182 | (2 | ) | |||||||||
Loans held for sale (1) | 24 | 10 | 140 | ||||||||||
Loans | 10,579 | 10,141 | 4 | ||||||||||
Equity securities (1) | 231 | 175 | 32 | ||||||||||
Other interest income | 920 | 532 | 73 | ||||||||||
Total interest income | 15,347 | 14,213 | 8 | ||||||||||
Interest expense | |||||||||||||
Deposits | 1,090 | 536 | 103 | ||||||||||
Short-term borrowings | 311 | 114 | 173 | ||||||||||
Long-term debt | 1,576 | 1,147 | 37 | ||||||||||
Other interest expense | 132 | 92 | 43 | ||||||||||
Total interest expense | 3,109 | 1,889 | 65 | ||||||||||
Net interest income | 12,238 | 12,324 | (1 | ) | |||||||||
Provision for credit losses | 191 | 605 | (68 | ) | |||||||||
Net interest income after provision for credit losses | 12,047 | 11,719 | 3 | ||||||||||
Noninterest income | |||||||||||||
Service charges on deposit accounts | 1,173 | 1,313 | (11 | ) | |||||||||
Trust and investment fees | 3,683 | 3,570 | 3 | ||||||||||
Card fees | 908 | 945 | (4 | ) | |||||||||
Other fees | 800 | 865 | (8 | ) | |||||||||
Mortgage banking | 934 | 1,228 | (24 | ) | |||||||||
Insurance | 114 | 277 | (59 | ) | |||||||||
Net gains from trading activities (1) | 243 | 272 | (11 | ) | |||||||||
Net gains on debt securities | 1 | 36 | (97 | ) | |||||||||
Net gains from equity securities (1) | 783 | 570 | 37 | ||||||||||
Lease income | 455 | 481 | (5 | ) | |||||||||
Other | 602 | 374 | 61 | ||||||||||
Total noninterest income | 9,696 | 9,931 | (2 | ) | |||||||||
Noninterest expense | |||||||||||||
Salaries | 4,363 | 4,261 | 2 | ||||||||||
Commission and incentive compensation | 2,768 | 2,725 | 2 | ||||||||||
Employee benefits | 1,598 | 1,686 | (5 | ) | |||||||||
Equipment | 617 | 577 | 7 | ||||||||||
Net occupancy | 713 | 712 | — | ||||||||||
Core deposit and other intangibles | 265 | 289 | (8 | ) | |||||||||
FDIC and other deposit assessments | 324 | 333 | (3 | ) | |||||||||
Other | 3,594 | 3,209 | 12 | ||||||||||
Total noninterest expense | 14,242 | 13,792 | 3 | ||||||||||
Income before income tax expense | 7,501 | 7,858 | (5 | ) | |||||||||
Income tax expense | 1,374 | 2,133 | (36 | ) | |||||||||
Net income before noncontrolling interests | 6,127 | 5,725 | 7 | ||||||||||
Less: Net income from noncontrolling interests | 191 | 91 | 110 | ||||||||||
Wells Fargo net income | $ | 5,936 | 5,634 | 5 | |||||||||
Less: Preferred stock dividends and other | 403 | 401 | — | ||||||||||
Wells Fargo net income applicable to common stock | $ | 5,533 | 5,233 | 6 | |||||||||
Per share information | |||||||||||||
Earnings per common share | $ | 1.13 | 1.05 | 8 | |||||||||
Diluted earnings per common share | 1.12 | 1.03 | 9 | ||||||||||
Dividends declared per common share | 0.390 | 0.380 | 3 | ||||||||||
Average common shares outstanding | 4,885.7 | 5,008.6 | (2 | ) | |||||||||
Diluted average common shares outstanding | 4,930.7 | 5,070.4 | (3 | ) | |||||||||
(1) Financial information for the prior quarter has been revised to reflect the impact of the adoption of ASU 2016-01 – Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. See pages 17 and 18 for more information. |
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Wells Fargo & Company and Subsidiaries |
||||||||||||||||||||
FIVE QUARTER CONSOLIDATED STATEMENT OF INCOME | ||||||||||||||||||||
Quarter ended | ||||||||||||||||||||
Mar 31, | Dec 31, | Sep 30, | Jun 30, | Mar 31, | ||||||||||||||||
(in millions, except per share amounts) | 2018 | 2017 | 2017 | 2017 | 2017 | |||||||||||||||
Interest income | ||||||||||||||||||||
Debt securities (1) | $ | 3,414 | 3,294 | 3,253 | 3,226 | 3,173 | ||||||||||||||
Mortgages held for sale | 179 | 196 | 217 | 191 | 182 | |||||||||||||||
Loans held for sale (1) | 24 | 12 | 15 | 13 | 10 | |||||||||||||||
Loans | 10,579 | 10,367 | 10,522 | 10,358 | 10,141 | |||||||||||||||
Equity securities (1) | 231 | 239 | 186 | 199 | 175 | |||||||||||||||
Other interest income | 920 | 850 | 851 | 707 | 532 | |||||||||||||||
Total interest income | 15,347 | 14,958 | 15,044 | 14,694 | 14,213 | |||||||||||||||
Interest expense | ||||||||||||||||||||
Deposits | 1,090 | 931 | 869 | 677 | 536 | |||||||||||||||
Short-term borrowings | 311 | 255 | 226 | 163 | 114 | |||||||||||||||
Long-term debt | 1,576 | 1,344 | 1,391 | 1,275 | 1,147 | |||||||||||||||
Other interest expense | 132 | 115 | 109 | 108 | 92 | |||||||||||||||
Total interest expense | 3,109 | 2,645 | 2,595 | 2,223 | 1,889 | |||||||||||||||
Net interest income | 12,238 | 12,313 | 12,449 | 12,471 | 12,324 | |||||||||||||||
Provision for credit losses | 191 | 651 | 717 | 555 | 605 | |||||||||||||||
Net interest income after provision for credit losses | 12,047 | 11,662 | 11,732 | 11,916 | 11,719 | |||||||||||||||
Noninterest income | ||||||||||||||||||||
Service charges on deposit accounts | 1,173 | 1,246 | 1,276 | 1,276 | 1,313 | |||||||||||||||
Trust and investment fees | 3,683 | 3,687 | 3,609 | 3,629 | 3,570 | |||||||||||||||
Card fees | 908 | 996 | 1,000 | 1,019 | 945 | |||||||||||||||
Other fees | 800 | 913 | 877 | 902 | 865 | |||||||||||||||
Mortgage banking | 934 | 928 | 1,046 | 1,148 | 1,228 | |||||||||||||||
Insurance | 114 | 223 | 269 | 280 | 277 | |||||||||||||||
Net gains (losses) from trading activities (1) | 243 | (1 | ) | 120 | 151 | 272 | ||||||||||||||
Net gains on debt securities | 1 | 157 | 166 | 120 | 36 | |||||||||||||||
Net gains from equity securities (1) | 783 | 572 | 363 | 274 | 570 | |||||||||||||||
Lease income | 455 | 458 | 475 | 493 | 481 | |||||||||||||||
Other | 602 | 558 | 199 | 472 | 374 | |||||||||||||||
Total noninterest income | 9,696 | 9,737 | 9,400 | 9,764 | 9,931 | |||||||||||||||
Noninterest expense | ||||||||||||||||||||
Salaries | 4,363 | 4,403 | 4,356 | 4,343 | 4,261 | |||||||||||||||
Commission and incentive compensation | 2,768 | 2,665 | 2,553 | 2,499 | 2,725 | |||||||||||||||
Employee benefits | 1,598 | 1,293 | 1,279 | 1,308 | 1,686 | |||||||||||||||
Equipment | 617 | 608 | 523 | 529 | 577 | |||||||||||||||
Net occupancy | 713 | 715 | 716 | 706 | 712 | |||||||||||||||
Core deposit and other intangibles | 265 | 288 | 288 | 287 | 289 | |||||||||||||||
FDIC and other deposit assessments | 324 | 312 | 314 | 328 | 333 | |||||||||||||||
Other | 3,594 | 6,516 | 4,322 | 3,541 | 3,209 | |||||||||||||||
Total noninterest expense | 14,242 | 16,800 | 14,351 | 13,541 | 13,792 | |||||||||||||||
Income before income tax expense | 7,501 | 4,599 | 6,781 | 8,139 | 7,858 | |||||||||||||||
Income tax expense (benefit) | 1,374 | (1,642 | ) | 2,181 | 2,245 | 2,133 | ||||||||||||||
Net income before noncontrolling interests | 6,127 | 6,241 | 4,600 | 5,894 | 5,725 | |||||||||||||||
Less: Net income from noncontrolling interests | 191 | 90 | 58 | 38 | 91 | |||||||||||||||
Wells Fargo net income | $ | 5,936 | 6,151 | 4,542 | 5,856 | 5,634 | ||||||||||||||
Less: Preferred stock dividends and other | 403 | 411 | 411 | 406 | 401 | |||||||||||||||
Wells Fargo net income applicable to common stock | $ | 5,533 | 5,740 | 4,131 | 5,450 | 5,233 | ||||||||||||||
Per share information | ||||||||||||||||||||
Earnings per common share | $ | 1.13 | 1.17 | 0.83 | 1.09 | 1.05 | ||||||||||||||
Diluted earnings per common share | 1.12 | 1.16 | 0.83 | 1.08 | 1.03 | |||||||||||||||
Dividends declared per common share | 0.390 | 0.390 | 0.390 | 0.380 | 0.380 | |||||||||||||||
Average common shares outstanding | 4,885.7 | 4,912.5 | 4,948.6 | 4,989.9 | 5,008.6 | |||||||||||||||
Diluted average common shares outstanding | 4,930.7 | 4,963.1 | 4,996.8 | 5,037.7 | 5,070.4 | |||||||||||||||
(1) Financial information for prior quarters has been revised to reflect the impact of the adoption of ASU 2016-01 – Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. See pages 17 and 18 for more information. |
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Wells Fargo & Company and Subsidiaries |
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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | |||||||||||||
Quarter ended Mar 31, | % | ||||||||||||
(in millions) | 2018 | 2017 | Change | ||||||||||
Wells Fargo net income | $ | 5,936 | 5,634 | 5 | % | ||||||||
Other comprehensive income (loss), before tax: | |||||||||||||
Debt securities (1): | |||||||||||||
Net unrealized gains (losses) arising during the period | (3,443 | ) | 369 | NM | |||||||||
Reclassification of net (gains) losses to net income | 68 | (145 | ) | NM | |||||||||
Derivatives and hedging activities: | |||||||||||||
Net unrealized losses arising during the period | (242 | ) | (362 | ) | (33 | ) | |||||||
Reclassification of net (gains) losses to net income | 60 | (202 | ) | NM | |||||||||
Defined benefit plans adjustments: | |||||||||||||
Net actuarial and prior service gains (losses) arising during the period | 6 | (7 | ) | NM | |||||||||
Amortization of net actuarial loss, settlements and other to net income | 32 | 38 | (16 | ) | |||||||||
Foreign currency translation adjustments: | |||||||||||||
Net unrealized gains (losses) arising during the period | (2 | ) | 16 | NM | |||||||||
Other comprehensive loss, before tax | (3,521 | ) | (293 | ) | NM | ||||||||
Income tax benefit related to other comprehensive income | 862 | 123 | 601 | ||||||||||
Other comprehensive loss, net of tax | (2,659 | ) | (170 | ) | NM | ||||||||
Less: Other comprehensive income from noncontrolling interests | — | 14 | (100 | ) | |||||||||
Wells Fargo other comprehensive loss, net of tax | (2,659 | ) | (184 | ) | NM | ||||||||
Wells Fargo comprehensive income | 3,277 | 5,450 | (40 | ) | |||||||||
Comprehensive income from noncontrolling interests | 191 | 105 | 82 | ||||||||||
Total comprehensive income | $ | 3,468 | 5,555 | (38 | ) | ||||||||
NM – Not meaningful
|
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(1) The quarter ended March 31, 2017, includes net unrealized gains from equity securities of $61 million and reclassification of gains to net income related to equity securities of ($116) million. Per the adoption of ASU 2016-01, the quarter ended March 31, 2018, reflects only net unrealized gains and reclassification of net gains to net income from debt securities. |
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FIVE QUARTER CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN TOTAL EQUITY |
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Quarter ended | |||||||||||||||||||||
Mar 31, | Dec 31, | Sep 30, | Jun 30, | Mar 31, | |||||||||||||||||
(in millions) | 2018 | 2017 | 2017 | 2017 | 2017 | ||||||||||||||||
Balance, beginning of period | $ | 208,079 | 206,617 | 205,949 | 202,310 | 200,497 | |||||||||||||||
Cumulative effect from change in accounting policy (1) | (24 | ) | — | — | — | (213 | ) | ||||||||||||||
Wells Fargo net income | 5,936 | 6,151 | 4,542 | 5,856 | 5,634 | ||||||||||||||||
Wells Fargo other comprehensive income (loss), net of tax | (2,659 | ) | (522 | ) | 526 | 1,005 | (184 | ) | |||||||||||||
Noncontrolling interests | (178 | ) | 247 | (20 | ) | (75 | ) | 75 | |||||||||||||
Common stock issued | 1,208 | 436 | 254 | 252 | 1,406 | ||||||||||||||||
Common stock repurchased | (3,029 | ) | (2,845 | ) | (2,601 | ) | (2,287 | ) | (2,175 | ) | |||||||||||
Preferred stock released by ESOP | 231 | 218 | 209 | 406 | — | ||||||||||||||||
Common stock warrants repurchased/exercised | (157 | ) | (46 | ) | (19 | ) | (24 | ) | (44 | ) | |||||||||||
Preferred stock issued | — | — | — | 677 | — | ||||||||||||||||
Common stock dividends | (1,911 | ) | (1,920 | ) | (1,936 | ) | (1,899 | ) | (1,903 | ) | |||||||||||
Preferred stock dividends | (410 | ) | (411 | ) | (411 | ) | (406 | ) | (401 | ) | |||||||||||
Stock incentive compensation expense | 437 | 206 | 135 | 145 | 389 | ||||||||||||||||
Net change in deferred compensation and related plans | (813 | ) | (52 | ) | (11 | ) | (11 | ) | (771 | ) | |||||||||||
Balance, end of period | $ | 206,710 | 208,079 | 206,617 | 205,949 | 202,310 | |||||||||||||||
(1) The cumulative effect for the quarter ended March 31, 2018, reflects the impact of the adoption in first quarter 2018 of ASU 2016-04, ASU 2016-01 and ASU 2014-09. See pages 17 and 18 for more information. The cumulative effect for the quarter ended March 31, 2017, reflects the impact of the adoption in fourth quarter 2017 of ASU 2017-12 – Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. |
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Wells Fargo & Company and Subsidiaries |
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AVERAGE BALANCES, YIELDS AND RATES PAID (TAXABLE-EQUIVALENT BASIS) (1)(2) | ||||||||||||||||||||||||||
Quarter ended March 31, | ||||||||||||||||||||||||||
2018 | 2017 | |||||||||||||||||||||||||
Interest | Interest | |||||||||||||||||||||||||
Average | Yields/ | income/ | Average | Yields/ | income/ | |||||||||||||||||||||
(in millions) | balance | rates | expense | balance | rates | expense | ||||||||||||||||||||
Earning assets | ||||||||||||||||||||||||||
Interest-earning deposits with banks (3) | $ | 172,291 | 1.49 | % | $ | 632 | 208,486 | 0.79 | % | $ | 405 | |||||||||||||||
Federal funds sold, securities purchased under resale agreements and other short-term investments (3) | 78,135 | 1.40 | 271 | 75,281 | 0.68 | 127 | ||||||||||||||||||||
Debt securities (4): | ||||||||||||||||||||||||||
Trading debt securities (7) | 78,715 | 3.24 | 637 | 69,120 | 3.03 | 523 | ||||||||||||||||||||
Available-for-sale debt securities: | ||||||||||||||||||||||||||
Securities of U.S. Treasury and federal agencies | 6,426 | 1.66 | 26 | 25,034 | 1.54 | 95 | ||||||||||||||||||||
Securities of U.S. states and political subdivisions (7) | 49,956 | 3.37 | 421 | 52,248 | 3.93 | 513 | ||||||||||||||||||||
Mortgage-backed securities: | ||||||||||||||||||||||||||
Federal agencies | 158,472 | 2.72 | 1,076 | 156,617 | 2.58 | 1,011 | ||||||||||||||||||||
Residential and commercial (7) | 8,871 | 4.12 | 91 | 14,452 | 5.34 | 193 | ||||||||||||||||||||
Total mortgage-backed securities (7) | 167,343 | 2.79 | 1,167 | 171,069 | 2.81 | 1,204 | ||||||||||||||||||||
Other debt securities (7)(8) | 48,094 | 3.73 | 444 | 50,149 | 3.61 | 447 | ||||||||||||||||||||
Total available-for-sale debt securities (7)(8) | 271,819 | 3.04 | 2,058 | 298,500 | 3.04 | 2,259 | ||||||||||||||||||||
Held-to-maturity debt securities: | ||||||||||||||||||||||||||
Securities of U.S. Treasury and federal agencies | 44,723 | 2.20 | 243 | 44,693 | 2.20 | 243 | ||||||||||||||||||||
Securities of U.S. states and political subdivisions | 6,259 | 4.34 | 68 | 6,273 | 5.30 | 83 | ||||||||||||||||||||
Federal agency and other mortgage-backed securities | 90,789 | 2.38 | 541 | 51,786 | 2.51 | 324 | ||||||||||||||||||||
Other debt securities | 695 | 3.23 | 5 | 3,329 | 2.34 | 19 | ||||||||||||||||||||
Total held-to-maturity debt securities | 142,466 | 2.42 | 857 | 106,081 | 2.54 | 669 | ||||||||||||||||||||
Total debt securities (7)(8) | 493,000 | 2.89 | 3,552 | 473,701 | 2.92 | 3,451 | ||||||||||||||||||||
Mortgages held for sale (5)(7) | 18,406 | 3.89 | 179 | 19,893 | 3.67 | 182 | ||||||||||||||||||||
Loans held for sale (5)(8) | 2,011 | 4.92 | 24 | 1,600 | 2.50 | 10 | ||||||||||||||||||||
Commercial loans: | ||||||||||||||||||||||||||
Commercial and industrial - U.S. | 272,040 | 3.85 | 2,584 | 274,749 | 3.59 | 2,436 | ||||||||||||||||||||
Commercial and industrial - Non U.S. | 60,216 | 3.23 | 479 | 55,347 | 2.73 | 373 | ||||||||||||||||||||
Real estate mortgage | 126,200 | 4.05 | 1,262 | 132,449 | 3.56 | 1,164 | ||||||||||||||||||||
Real estate construction | 24,449 | 4.54 | 274 | 24,591 | 3.72 | 225 | ||||||||||||||||||||
Lease financing | 19,265 | 5.30 | 255 | 19,070 | 4.94 | 235 | ||||||||||||||||||||
Total commercial loans | 502,170 | 3.91 | 4,854 | 506,206 | 3.54 | 4,433 | ||||||||||||||||||||
Consumer loans: | ||||||||||||||||||||||||||
Real estate 1-4 family first mortgage | 284,207 | 4.02 | 2,852 | 275,480 | 4.02 | 2,766 | ||||||||||||||||||||
Real estate 1-4 family junior lien mortgage | 38,844 | 5.13 | 493 | 45,285 | 4.60 | 515 | ||||||||||||||||||||
Credit card | 36,468 | 12.75 | 1,147 | 35,437 | 11.97 | 1,046 | ||||||||||||||||||||
Automobile | 51,469 | 5.16 | 655 | 61,510 | 5.46 | 828 | ||||||||||||||||||||
Other revolving credit and installment | 37,866 | 6.46 | 604 | 39,727 | 6.02 | 590 | ||||||||||||||||||||
Total consumer loans | 448,854 | 5.16 | 5,751 | 457,439 | 5.06 | 5,745 | ||||||||||||||||||||
Total loans (5) | 951,024 | 4.50 | 10,605 | 963,645 | 4.26 | 10,178 | ||||||||||||||||||||
Equity securities (8) | 39,754 | 2.35 | 233 | 33,926 | 2.11 | 179 | ||||||||||||||||||||
Other (8) | 6,015 | 1.21 | 19 | — | — | — | ||||||||||||||||||||
Total earning assets (7)(8) | $ | 1,760,636 | 3.55 | % | $ | 15,515 | 1,776,532 | 3.30 | % | $ | 14,532 | |||||||||||||||
Funding sources | ||||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||||
Interest-bearing checking | $ | 67,774 | 0.77 | % | $ | 129 | 50,686 | 0.29 | % | $ | 37 | |||||||||||||||
Market rate and other savings | 679,068 | 0.22 | 368 | 684,175 | 0.09 | 157 | ||||||||||||||||||||
Savings certificates | 20,018 | 0.34 | 17 | 23,466 | 0.29 | 17 | ||||||||||||||||||||
Other time deposits (7) | 76,589 | 1.84 | 347 | 54,915 | 1.30 | 177 | ||||||||||||||||||||
Deposits in foreign offices | 94,810 | 0.98 | 229 | 122,200 | 0.49 | 148 | ||||||||||||||||||||
Total interest-bearing deposits (7) | 938,259 | 0.47 | 1,090 | 935,442 | 0.23 | 536 | ||||||||||||||||||||
Short-term borrowings | 101,779 | 1.24 | 312 | 98,549 | 0.47 | 115 | ||||||||||||||||||||
Long-term debt (7) | 226,062 | 2.80 | 1,576 | 260,130 | 1.77 | 1,147 | ||||||||||||||||||||
Other liabilities | 27,927 | 1.92 | 132 | 16,806 | 2.22 | 92 | ||||||||||||||||||||
Total interest-bearing liabilities (7) | 1,294,027 | 0.97 | 3,110 | 1,310,927 | 0.58 | 1,890 | ||||||||||||||||||||
Portion of noninterest-bearing funding sources (7)(8) | 466,609 | — | — | 465,605 | — | — | ||||||||||||||||||||
Total funding sources (7)(8) | $ | 1,760,636 | 0.71 | 3,110 | 1,776,532 | 0.43 | 1,890 | |||||||||||||||||||
Net interest margin and net interest income on a taxable-equivalent basis (6)(7) | 2.84 | % | $ | 12,405 | 2.87 | % | $ | 12,642 | ||||||||||||||||||
Noninterest-earning assets | ||||||||||||||||||||||||||
Cash and due from banks | $ | 18,853 | 18,706 | |||||||||||||||||||||||
Goodwill | 26,516 | 26,673 | ||||||||||||||||||||||||
Other (7)(8) | 109,891 | 109,129 | ||||||||||||||||||||||||
Total noninterest-earning assets (7)(8) | $ | 155,260 | 154,508 | |||||||||||||||||||||||
Noninterest-bearing funding sources | ||||||||||||||||||||||||||
Deposits | $ | 358,919 | 363,749 | |||||||||||||||||||||||
Other liabilities (7) | 56,761 | 54,805 | ||||||||||||||||||||||||
Total equity (7) | 206,189 | 201,559 | ||||||||||||||||||||||||
Noninterest-bearing funding sources used to fund earning assets (7)(8) | (466,609 | ) | (465,605 | ) | ||||||||||||||||||||||
Net noninterest-bearing funding sources (7)(8) | $ | 155,260 | 154,508 | |||||||||||||||||||||||
Total assets (7) | $ | 1,915,896 | 1,931,040 | |||||||||||||||||||||||
(1) Our average prime rate was 4.52% and 3.80% for the quarters ended March 31, 2018 and 2017, respectively. The average three-month London Interbank Offered Rate (LIBOR) was 1.93% and 1.07% for the same quarters, respectively. |
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(2) Yields/rates and amounts include the effects of hedge and risk management activities associated with the respective asset and liability categories. |
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(3) Financial information has been revised to reflect the impact of the adoption of ASU 2016-18 – Statement of Cash Flows (Topic 230): Restricted Cash in which we changed the presentation of our cash and cash equivalents to include both cash and due from banks as well as interest-earning deposits with banks, which are inclusive of any restricted cash. |
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(4) Yields and rates are based on interest income/expense amounts for the period, annualized based on the accrual basis for the respective accounts. The average balance amounts represent amortized cost for the periods presented. |
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(5) Nonaccrual loans and related income are included in their respective loan categories. |
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(6) Includes taxable-equivalent adjustments of $167 million and $318 million for the quarters ended March 31, 2018 and 2017, respectively, predominantly related to tax-exempt income on certain loans and securities. The federal statutory tax rate was 21% and 35% for the quarters ended March 31, 2018 and 2017, respectively. |
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(7) Financial information for prior quarters in 2017 has been revised to reflect the impact of the adoption in fourth quarter 2017 of ASU 2017-12 – Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. |
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(8) Financial information for the prior quarter has been revised to reflect the impact of the adoption of ASU 2016-01 – Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. See pages 17 and 18 for more information. |
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Wells Fargo & Company and Subsidiaries |
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FIVE QUARTER AVERAGE BALANCES, YIELDS AND RATES PAID (TAXABLE-EQUIVALENT BASIS) (1)(2) | |||||||||||||||||||||||||||||||||||||||||||||
Quarter ended | |||||||||||||||||||||||||||||||||||||||||||||
Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | |||||||||||||||||||||||||||||||||||||||||
Average | Yields/ | Average | Yields/ | Average | Yields/ | Average | Yields/ | Average | Yields/ | ||||||||||||||||||||||||||||||||||||
($ in billions) | balance | rates | balance | rates | balance | rates | balance | rates | balance | rates | |||||||||||||||||||||||||||||||||||
Earning assets | |||||||||||||||||||||||||||||||||||||||||||||
Interest-earning deposits with banks (3) | $ | 172.3 | 1.49 | % | $ | 189.1 | 1.27 | % | $ | 205.5 | 1.21 | % | $ | 204.5 | 1.03 | % | $ | 208.5 | 0.79 | % | |||||||||||||||||||||||||
Federal funds sold, securities purchased under resale agreements and other short-term investments (3) | 78.1 | 1.40 | 75.8 | 1.20 | 70.6 | 1.14 | 77.1 | 0.91 | 75.3 | 0.68 | |||||||||||||||||||||||||||||||||||
Debt securities (4): | |||||||||||||||||||||||||||||||||||||||||||||
Trading debt securities (5) | 78.7 | 3.24 | 81.6 | 3.17 | 76.6 | 3.21 | 70.4 | 3.24 | 69.1 | 3.03 | |||||||||||||||||||||||||||||||||||
Available-for-sale debt securities: | |||||||||||||||||||||||||||||||||||||||||||||
Securities of U.S. Treasury and federal agencies | 6.4 | 1.66 | 6.4 | 1.66 | 14.5 | 1.31 | 18.1 | 1.53 | 25.0 | 1.54 | |||||||||||||||||||||||||||||||||||
Securities of U.S. states and political subdivisions | 50.0 | 3.37 | 52.4 | 3.91 | 52.5 | 4.08 | 53.5 | 3.89 | 52.2 | 3.93 | |||||||||||||||||||||||||||||||||||
Mortgage-backed securities: | |||||||||||||||||||||||||||||||||||||||||||||
Federal agencies | 158.4 | 2.72 | 152.9 | 2.62 | 139.8 | 2.58 | 132.0 | 2.63 | 156.6 | 2.58 | |||||||||||||||||||||||||||||||||||
Residential and commercial | 8.9 | 4.12 | 9.4 | 4.85 | 11.0 | 5.44 | 12.6 | 5.55 | 14.5 | 5.34 | |||||||||||||||||||||||||||||||||||
Total mortgage-backed securities | 167.3 | 2.79 | 162.3 | 2.75 | 150.8 | 2.79 | 144.6 | 2.89 | 171.1 | 2.81 | |||||||||||||||||||||||||||||||||||
Other debt securities (5) | 48.1 | 3.73 | 48.6 | 3.62 | 47.7 | 3.73 | 48.5 | 3.77 | 50.2 | 3.61 | |||||||||||||||||||||||||||||||||||
Total available-for-sale debt securities (5) | 271.8 | 3.04 | 269.7 | 3.10 | 265.5 | 3.13 | 264.7 | 3.16 | 298.5 | 3.04 | |||||||||||||||||||||||||||||||||||
Held-to-maturity debt securities: | |||||||||||||||||||||||||||||||||||||||||||||
Securities of U.S. Treasury and federal agencies | 44.7 | 2.20 | 44.7 | 2.19 | 44.7 | 2.18 | 44.7 | 2.19 | 44.7 | 2.20 | |||||||||||||||||||||||||||||||||||
Securities of U.S. states and political subdivisions | 6.3 | 4.34 | 6.3 | 5.26 | 6.3 | 5.44 | 6.3 | 5.29 | 6.3 | 5.30 | |||||||||||||||||||||||||||||||||||
Federal agency and other mortgage-backed securities | 90.8 | 2.38 | 89.6 | 2.25 | 88.3 | 2.26 | 83.1 | 2.44 | 51.8 | 2.51 | |||||||||||||||||||||||||||||||||||
Other debt securities | 0.7 | 3.23 | 1.2 | 2.64 | 1.4 | 3.05 | 2.8 | 2.34 | 3.3 | 2.34 | |||||||||||||||||||||||||||||||||||
Total held-to-maturity debt securities | 142.5 | 2.42 | 141.8 | 2.36 | 140.7 | 2.38 | 136.9 | 2.49 | 106.1 | 2.54 | |||||||||||||||||||||||||||||||||||
Total debt securities (5) | 493.0 | 2.89 | 493.1 | 2.90 | 482.8 | 2.93 | 472.0 | 2.98 | 473.7 | 2.92 | |||||||||||||||||||||||||||||||||||
Mortgages held for sale | 18.4 | 3.89 | 20.5 | 3.82 | 22.9 | 3.79 | 19.8 | 3.87 | 19.9 | 3.67 | |||||||||||||||||||||||||||||||||||
Loans held for sale (5) | 2.0 | 4.92 | 1.5 | 3.19 | 1.4 | 4.39 | 1.5 | 3.65 | 1.6 | 2.50 | |||||||||||||||||||||||||||||||||||
Commercial loans: | |||||||||||||||||||||||||||||||||||||||||||||
Commercial and industrial - U.S. | 272.0 | 3.85 | 270.3 | 3.89 | 270.1 | 3.81 | 273.1 | 3.70 | 274.8 | 3.59 | |||||||||||||||||||||||||||||||||||
Commercial and industrial - Non U.S. | 60.2 | 3.23 | 59.2 | 2.96 | 57.7 | 2.89 | 56.4 | 2.86 | 55.3 | 2.73 | |||||||||||||||||||||||||||||||||||
Real estate mortgage | 126.2 | 4.05 | 127.2 | 3.88 | 129.1 | 3.83 | 131.3 | 3.68 | 132.4 | 3.56 | |||||||||||||||||||||||||||||||||||
Real estate construction | 24.4 | 4.54 | 24.4 | 4.38 | 25.0 | 4.18 | 25.3 | 4.10 | 24.6 | 3.72 | |||||||||||||||||||||||||||||||||||
Lease financing | 19.4 | 5.30 | 19.3 | 0.62 | 19.2 | 4.59 | 19.0 | 4.82 | 19.1 | 4.94 | |||||||||||||||||||||||||||||||||||
Total commercial loans | 502.2 | 3.91 | 500.4 | 3.68 | 501.1 | 3.76 | 505.1 | 3.67 | 506.2 | 3.54 | |||||||||||||||||||||||||||||||||||
Consumer loans: | |||||||||||||||||||||||||||||||||||||||||||||
Real estate 1-4 family first mortgage | 284.2 | 4.02 | 282.0 | 4.01 | 278.4 | 4.03 | 275.1 | 4.08 | 275.5 | 4.02 | |||||||||||||||||||||||||||||||||||
Real estate 1-4 family junior lien mortgage | 38.8 | 5.13 | 40.4 | 4.96 | 41.9 | 4.95 | 43.6 | 4.78 | 45.3 | 4.60 | |||||||||||||||||||||||||||||||||||
Credit card | 36.4 | 12.75 | 36.4 | 12.37 | 35.6 | 12.41 | 34.9 | 12.18 | 35.4 | 11.97 | |||||||||||||||||||||||||||||||||||
Automobile | 51.5 | 5.16 | 54.3 | 5.13 | 56.7 | 5.34 | 59.1 | 5.43 | 61.5 | 5.46 | |||||||||||||||||||||||||||||||||||
Other revolving credit and installment | 37.9 | 6.46 | 38.3 | 6.28 | 38.6 | 6.31 | 39.1 | 6.13 | 39.7 | 6.02 | |||||||||||||||||||||||||||||||||||
Total consumer loans | 448.8 | 5.16 | 451.4 | 5.10 | 451.2 | 5.14 | 451.8 | 5.13 | 457.4 | 5.06 | |||||||||||||||||||||||||||||||||||
Total loans | 951.0 | 4.50 | 951.8 | 4.35 | 952.3 | 4.41 | 956.9 | 4.36 | 963.6 | 4.26 | |||||||||||||||||||||||||||||||||||
Equity securities (5) | 39.8 | 2.35 | 38.0 | 2.60 | 35.9 | 2.12 | 36.6 | 2.24 | 33.9 | 2.11 | |||||||||||||||||||||||||||||||||||
Other (5) | 6.0 | 1.21 | 7.2 | 0.88 | 8.7 | 0.90 | 4.3 | 0.70 | — | — | |||||||||||||||||||||||||||||||||||
Total earning assets (5) | $ | 1,760.6 | 3.55 | % | $ | 1,777.0 | 3.43 | % | $ | 1,780.1 | 3.44 | % | $ | 1,772.7 | 3.40 | % | $ | 1,776.5 | 3.30 | % | |||||||||||||||||||||||||
Funding sources | |||||||||||||||||||||||||||||||||||||||||||||
Deposits: | |||||||||||||||||||||||||||||||||||||||||||||
Interest-bearing checking | $ | 67.8 | 0.77 | % | $ | 50.5 | 0.68 | % | $ | 48.3 | 0.57 | % | $ | 48.5 | 0.41 | % | $ | 50.7 | 0.29 | % | |||||||||||||||||||||||||
Market rate and other savings | 679.1 | 0.22 | 679.9 | 0.19 | 681.2 | 0.17 | 683.0 | 0.13 | 684.2 | 0.09 | |||||||||||||||||||||||||||||||||||
Savings certificates | 20.0 | 0.34 | 20.9 | 0.31 | 21.8 | 0.31 | 22.6 | 0.30 | 23.5 | 0.29 | |||||||||||||||||||||||||||||||||||
Other time deposits | 76.6 | 1.84 | 68.2 | 1.49 | 66.1 | 1.51 | 57.1 | 1.39 | 54.9 | 1.30 | |||||||||||||||||||||||||||||||||||
Deposits in foreign offices | 94.8 | 0.98 | 124.6 | 0.81 | 124.7 | 0.76 | 123.7 | 0.65 | 122.2 | 0.49 | |||||||||||||||||||||||||||||||||||
Total interest-bearing deposits | 938.3 | 0.47 | 944.1 | 0.39 | 942.1 | 0.37 | 934.9 | 0.29 | 935.5 | 0.23 | |||||||||||||||||||||||||||||||||||
Short-term borrowings | 101.8 | 1.24 | 102.1 | 0.99 | 99.2 | 0.91 | 95.8 | 0.69 | 98.5 | 0.47 | |||||||||||||||||||||||||||||||||||
Long-term debt | 226.0 | 2.80 | 231.6 | 2.32 | 243.5 | 2.28 | 249.9 | 2.04 | 260.1 | 1.77 | |||||||||||||||||||||||||||||||||||
Other liabilities | 27.9 | 1.92 | 24.7 | 1.86 | 24.8 | 1.74 | 21.0 | 2.05 | 16.8 | 2.22 | |||||||||||||||||||||||||||||||||||
Total interest-bearing liabilities | 1,294.0 | 0.97 | 1,302.5 | 0.81 | 1,309.6 | 0.79 | 1,301.6 | 0.68 | 1,310.9 | 0.58 | |||||||||||||||||||||||||||||||||||
Portion of noninterest-bearing funding sources (5) | 466.6 | — | 474.5 | — | 470.5 | — | 471.1 | — | 465.6 | — | |||||||||||||||||||||||||||||||||||
Total funding sources (5) | $ | 1,760.6 | 0.71 | $ | 1,777.0 | 0.59 | $ | 1,780.1 | 0.58 | $ | 1,772.7 | 0.50 | $ | 1,776.5 | 0.43 | ||||||||||||||||||||||||||||||
Net interest margin on a taxable-equivalent basis | 2.84 | % | 2.84 | % | 2.86 | % | 2.90 | % | 2.87 | % | |||||||||||||||||||||||||||||||||||
Noninterest-earning assets | |||||||||||||||||||||||||||||||||||||||||||||
Cash and due from banks | $ | 18.9 | 19.2 | 18.5 | 18.2 | 18.7 | |||||||||||||||||||||||||||||||||||||||
Goodwill | 26.5 | 26.6 | 26.6 | 26.7 | 26.7 | ||||||||||||||||||||||||||||||||||||||||
Other (5) | 109.9 | 112.5 | 113.3 | 109.4 | 109.1 | ||||||||||||||||||||||||||||||||||||||||
Total noninterest-earnings assets (5) | $ | 155.3 | 158.3 | 158.4 | 154.3 | 154.5 | |||||||||||||||||||||||||||||||||||||||
Noninterest-bearing funding sources | |||||||||||||||||||||||||||||||||||||||||||||
Deposits | $ | 358.9 | 367.5 | 364.3 | 366.3 | 363.7 | |||||||||||||||||||||||||||||||||||||||
Other liabilities (5) | 56.8 | 57.9 | 56.9 | 53.3 | 54.8 | ||||||||||||||||||||||||||||||||||||||||
Total equity | 206.2 | 207.4 | 207.7 | 205.8 | 201.6 | ||||||||||||||||||||||||||||||||||||||||
Noninterest-bearing funding sources used to fund earning assets (5) | (466.6 | ) | (474.5 | ) | (470.5 | ) | (471.1 | ) | (465.6 | ) | |||||||||||||||||||||||||||||||||||
Net noninterest-bearing funding sources (5) | $ | 155.3 | 158.3 | 158.4 | 154.3 | 154.5 | |||||||||||||||||||||||||||||||||||||||
Total assets | $ | 1,915.9 | 1,935.3 | 1,938.5 | 1,927.0 | 1,931.0 | |||||||||||||||||||||||||||||||||||||||
(1) Our average prime rate was 4.52% for the quarter ended March 31, 2018, 4.30% for the quarter ended December 31,2017, 4.25% for the quarter ended September 30, 2017, 4.05% for the quarter ended June 30, 2017 and 3.80% for the quarter ended March 31, 2017. The average three-month London Interbank Offered Rate (LIBOR) was 1.93%, 1.46%, 1.31%, 1.21% and 1.07% for the same quarters, respectively. |
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(2) Yields/rates include the effects of hedge and risk management activities associated with the respective asset and liability categories. |
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(3) Financial information has been revised to reflect the impact of the adoption of ASU 2016-18 – Statement of Cash Flows (Topic 230): Restricted Cash in which we changed the presentation of our cash and cash equivalents to include both cash and due from banks as well as interest-earning deposits with banks, which are inclusive of any restricted cash. |
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(4) Yields and rates are based on interest income/expense amounts for the period, annualized based on the accrual basis for the respective accounts. The average balance amounts represent amortized cost for the periods presented. |
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(5) Financial information for prior quarters has been revised to reflect the impact of the adoption of ASU 2016-01 – Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. See pages 17 and 18 for more information. |
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(1) | Our average prime rate was 4.52% for the quarter ended March 31, 2018, 4.30% for the quarter ended December 31,2017, 4.25% for the quarter ended September 30, 2017, 4.05% for the quarter ended June 30, 2017 and 3.80% for the quarter ended March 31, 2017. The average three-month London Interbank Offered Rate (LIBOR) was 1.93%, 1.46%, 1.31%, 1.21% and 1.07% for the same quarters, respectively. | ||
(2) | Yields/rates include the effects of hedge and risk management activities associated with the respective asset and liability categories. | ||
(3) | Financial information has been revised to reflect the impact of the adoption of ASU 2016-18 – Statement of Cash Flows (Topic 230): Restricted Cash in which we changed the presentation of our cash and cash equivalents to include both cash and due from banks as well as interest-earning deposits with banks, which are inclusive of any restricted cash. | ||
(4) | Yields and rates are based on interest income/expense amounts for the period, annualized based on the accrual basis for the respective accounts. The average balance amounts represent amortized cost for the periods presented. | ||
(5) | Financial information for prior quarters has been revised to reflect the impact of the adoption of ASU 2016-01 – Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. See pages 17 and 18 for more information. |
Wells Fargo & Company and Subsidiaries |
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NONINTEREST INCOME |
|||||||||||
Quarter ended March 31, | % | ||||||||||
(in millions) | 2018 | 2017 | Change | ||||||||
Service charges on deposit accounts | $ | 1,173 | 1,313 | (11 | )% | ||||||
Trust and investment fees: | |||||||||||
Brokerage advisory, commissions and other fees | 2,403 | 2,324 | 3 | ||||||||
Trust and investment management | 850 | 829 | 3 | ||||||||
Investment banking | 430 | 417 | 3 | ||||||||
Total trust and investment fees | 3,683 | 3,570 | 3 | ||||||||
Card fees | 908 | 945 | (4 | ) | |||||||
Other fees: | |||||||||||
Charges and fees on loans | 301 | 307 | (2 | ) | |||||||
Cash network fees | 126 | 126 | — | ||||||||
Commercial real estate brokerage commissions | 85 | 81 | 5 | ||||||||
Letters of credit fees | 79 | 74 | 7 | ||||||||
Wire transfer and other remittance fees | 116 | 107 | 8 | ||||||||
All other fees | 93 | 170 | (45 | ) | |||||||
Total other fees | 800 | 865 | (8 | ) | |||||||
Mortgage banking: | |||||||||||
Servicing income, net | 468 | 456 | 3 | ||||||||
Net gains on mortgage loan origination/sales activities | 466 | 772 | (40 | ) | |||||||
Total mortgage banking | 934 | 1,228 | (24 | ) | |||||||
Insurance | 114 | 277 | (59 | ) | |||||||
Net gains from trading activities (1) | 243 | 272 | (11 | ) | |||||||
Net gains on debt securities | 1 | 36 | (97 | ) | |||||||
Net gains from equity securities (1) | 783 | 570 | 37 | ||||||||
Lease income | 455 | 481 | (5 | ) | |||||||
Life insurance investment income | 164 | 144 | 14 | ||||||||
All other | 438 | 230 | 90 | ||||||||
Total | $ | 9,696 | 9,931 | (2 | ) | ||||||
(1) Financial information for the prior quarter has been revised to reflect the impact of the adoption of ASU 2016-01 – Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. See pages 17 and 18 for more information. |
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NONINTEREST EXPENSE |
|||||||||||
Quarter ended March 31, | % | ||||||||||
(in millions) | 2018 | 2017 | Change | ||||||||
Salaries | $ | 4,363 | 4,261 | 2 | % | ||||||
Commission and incentive compensation | 2,768 | 2,725 | 2 | ||||||||
Employee benefits | 1,598 | 1,686 | (5 | ) | |||||||
Equipment | 617 | 577 | 7 | ||||||||
Net occupancy | 713 | 712 | — | ||||||||
Core deposit and other intangibles | 265 | 289 | (8 | ) | |||||||
FDIC and other deposit assessments | 324 | 333 | (3 | ) | |||||||
Operating losses | 668 | 282 | 137 | ||||||||
Outside professional services | 821 | 804 | 2 | ||||||||
Contract services (1) | 447 | 397 | 13 | ||||||||
Operating leases | 320 | 345 | (7 | ) | |||||||
Outside data processing | 162 | 220 | (26 | ) | |||||||
Travel and entertainment | 152 | 179 | (15 | ) | |||||||
Advertising and promotion | 153 | 127 | 20 | ||||||||
Postage, stationery and supplies | 142 | 145 | (2 | ) | |||||||
Telecommunications | 92 | 91 | 1 | ||||||||
Foreclosed assets | 38 | 86 | (56 | ) | |||||||
Insurance | 26 | 24 | 8 | ||||||||
All other (1) | 573 | 509 | 13 | ||||||||
Total | $ | 14,242 | 13,792 | 3 | |||||||
(1) The prior period has been revised to conform with the current period presentation whereby temporary help is included in contract services rather than in all other noninterest expense. |
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Wells Fargo & Company and Subsidiaries |
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FIVE QUARTER NONINTEREST INCOME | |||||||||||||||||
Quarter ended | |||||||||||||||||
Mar 31, | Dec 31, | Sep 30, | Jun 30, | Mar 31, | |||||||||||||
(in millions) | 2018 | 2017 | 2017 | 2017 | 2017 | ||||||||||||
Service charges on deposit accounts | $ | 1,173 | 1,246 | 1,276 | 1,276 | 1,313 | |||||||||||
Trust and investment fees: | |||||||||||||||||
Brokerage advisory, commissions and other fees | 2,403 | 2,401 | 2,304 | 2,329 | 2,324 | ||||||||||||
Trust and investment management | 850 | 866 | 840 | 837 | 829 | ||||||||||||
Investment banking | 430 | 420 | 465 | 463 | 417 | ||||||||||||
Total trust and investment fees | 3,683 | 3,687 | 3,609 | 3,629 | 3,570 | ||||||||||||
Card fees | 908 | 996 | 1,000 | 1,019 | 945 | ||||||||||||
Other fees: | |||||||||||||||||
Charges and fees on loans | 301 | 313 | 318 | 325 | 307 | ||||||||||||
Cash network fees | 126 | 120 | 126 | 134 | 126 | ||||||||||||
Commercial real estate brokerage commissions | 85 | 159 | 120 | 102 | 81 | ||||||||||||
Letters of credit fees | 79 | 78 | 77 | 76 | 74 | ||||||||||||
Wire transfer and other remittance fees | 116 | 115 | 114 | 112 | 107 | ||||||||||||
All other fees | 93 | 128 | 122 | 153 | 170 | ||||||||||||
Total other fees | 800 | 913 | 877 | 902 | 865 | ||||||||||||
Mortgage banking: | |||||||||||||||||
Servicing income, net | 468 | 262 | 309 | 400 | 456 | ||||||||||||
Net gains on mortgage loan origination/sales activities | 466 | 666 | 737 | 748 | 772 | ||||||||||||
Total mortgage banking | 934 | 928 | 1,046 | 1,148 | 1,228 | ||||||||||||
Insurance | 114 | 223 | 269 | 280 | 277 | ||||||||||||
Net gains (losses) from trading activities (1) | 243 | (1 | ) | 120 | 151 | 272 | |||||||||||
Net gains on debt securities | 1 | 157 | 166 | 120 | 36 | ||||||||||||
Net gains from equity securities (1) | 783 | 572 | 363 | 274 | 570 | ||||||||||||
Lease income | 455 | 458 | 475 | 493 | 481 | ||||||||||||
Life insurance investment income | 164 | 153 | 152 | 145 | 144 | ||||||||||||
All other | 438 | 405 | 47 | 327 | 230 | ||||||||||||
Total | $ | 9,696 | 9,737 | 9,400 | 9,764 | 9,931 | |||||||||||
(1) Financial information for prior quarters has been revised to reflect the impact of the adoption of ASU 2016-01 – Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. See pages 17 and 18 for more information. |
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FIVE QUARTER NONINTEREST EXPENSE |
||||||||||||||||
Quarter ended | ||||||||||||||||
Mar 31, | Dec 31, | Sep 30, | Jun 30, | Mar 31, | ||||||||||||
(in millions) | 2018 | 2017 | 2017 | 2017 | 2017 | |||||||||||
Salaries | $ | 4,363 | 4,403 | 4,356 | 4,343 | 4,261 | ||||||||||
Commission and incentive compensation | 2,768 | 2,665 | 2,553 | 2,499 | 2,725 | |||||||||||
Employee benefits | 1,598 | 1,293 | 1,279 | 1,308 | 1,686 | |||||||||||
Equipment | 617 | 608 | 523 | 529 | 577 | |||||||||||
Net occupancy | 713 | 715 | 716 | 706 | 712 | |||||||||||
Core deposit and other intangibles | 265 | 288 | 288 | 287 | 289 | |||||||||||
FDIC and other deposit assessments | 324 | 312 | 314 | 328 | 333 | |||||||||||
Operating losses | 668 | 3,531 | 1,329 | 350 | 282 | |||||||||||
Outside professional services | 821 | 1,025 | 955 | 1,029 | 804 | |||||||||||
Contract services (1) | 447 | 410 | 415 | 416 | 397 | |||||||||||
Operating leases | 320 | 325 | 347 | 334 | 345 | |||||||||||
Outside data processing | 162 | 208 | 227 | 236 | 220 | |||||||||||
Travel and entertainment | 152 | 183 | 154 | 171 | 179 | |||||||||||
Advertising and promotion | 153 | 200 | 137 | 150 | 127 | |||||||||||
Postage, stationery and supplies | 142 | 137 | 128 | 134 | 145 | |||||||||||
Telecommunications | 92 | 92 | 90 | 91 | 91 | |||||||||||
Foreclosed assets | 38 | 47 | 66 | 52 | 86 | |||||||||||
Insurance | 26 | 28 | 24 | 24 | 24 | |||||||||||
All other (1) | 573 | 330 | 450 | 554 | 509 | |||||||||||
Total | $ | 14,242 | 16,800 | 14,351 | 13,541 | 13,792 | ||||||||||
(1) Prior periods have been revised to conform with the current period presentation whereby temporary help is included in contract services rather than in all other noninterest expense. |
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Wells Fargo & Company and Subsidiaries |
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CONSOLIDATED BALANCE SHEET | |||||||||||||
Mar 31, | Dec 31, | % | |||||||||||
(in millions, except shares) | 2018 | 2017 | Change | ||||||||||
Assets | |||||||||||||
Cash and due from banks | $ | 18,145 | 23,367 | (22 | )% | ||||||||
Interest-earning deposits with banks (1) | 184,250 | 192,580 | (4 | ) | |||||||||
Total cash, cash equivalents, and restricted cash (1) | 202,395 | 215,947 | (6 | ) | |||||||||
Federal funds sold, securities purchased under resale agreements and other short-term investments (1) | 73,550 | 80,025 | (8 | ) | |||||||||
Debt securities: | |||||||||||||
Trading, at fair value (2) | 59,866 | 57,624 | 4 | ||||||||||
Available-for-sale, at fair value (2) | 271,656 | 276,407 | (2 | ) | |||||||||
Held-to-maturity, at cost | 141,446 | 139,335 | 2 | ||||||||||
Mortgages held for sale | 17,944 | 20,070 | (11 | ) | |||||||||
Loans held for sale (2) | 3,581 | 1,131 | 217 | ||||||||||
Loans | 947,308 | 956,770 | (1 | ) | |||||||||
Allowance for loan losses | (10,373 | ) | (11,004 | ) | (6 | ) | |||||||
Net loans | 936,935 | 945,766 | (1 | ) | |||||||||
Mortgage servicing rights: | |||||||||||||
Measured at fair value | 15,041 | 13,625 | 10 | ||||||||||
Amortized | 1,411 | 1,424 | (1 | ) | |||||||||
Premises and equipment, net | 8,828 | 8,847 | — | ||||||||||
Goodwill | 26,445 | 26,587 | (1 | ) | |||||||||
Derivative assets | 11,467 | 12,228 | (6 | ) | |||||||||
Equity securities (2) | 58,935 | 62,497 | (6 | ) | |||||||||
Other assets (2) | 85,888 | 90,244 | (5 | ) | |||||||||
Total assets | $ | 1,915,388 | 1,951,757 | (2 | ) | ||||||||
Liabilities | |||||||||||||
Noninterest-bearing deposits | $ | 370,085 | 373,722 | (1 | ) | ||||||||
Interest-bearing deposits | 933,604 | 962,269 | (3 | ) | |||||||||
Total deposits | 1,303,689 | 1,335,991 | (2 | ) | |||||||||
Short-term borrowings | 97,207 | 103,256 | (6 | ) | |||||||||
Derivative liabilities | 7,883 | 8,796 | (10 | ) | |||||||||
Accrued expenses and other liabilities | 72,597 | 70,615 | 3 | ||||||||||
Long-term debt | 227,302 | 225,020 | 1 | ||||||||||
Total liabilities | 1,708,678 | 1,743,678 | (2 | ) | |||||||||
Equity | |||||||||||||
Wells Fargo stockholders’ equity: | |||||||||||||
Preferred stock | 26,227 | 25,358 | 3 | ||||||||||
Common stock – $1-2/3 par value, authorized 9,000,000,000 shares; issued 5,481,811,474 shares | 9,136 | 9,136 | — | ||||||||||
Additional paid-in capital | 60,399 | 60,893 | (1 | ) | |||||||||
Retained earnings | 148,728 | 145,263 | 2 | ||||||||||
Cumulative other comprehensive income (loss) | (4,921 | ) | (2,144 | ) | 130 | ||||||||
Treasury stock – 607,928,993 shares and 590,194,846 shares | (31,246 | ) | (29,892 | ) | 5 | ||||||||
Unearned ESOP shares | (2,571 | ) | (1,678 | ) | 53 | ||||||||
Total Wells Fargo stockholders’ equity | 205,752 | 206,936 | (1 | ) | |||||||||
Noncontrolling interests | 958 | 1,143 | (16 | ) | |||||||||
Total equity | 206,710 | 208,079 | (1 | ) | |||||||||
Total liabilities and equity |
$ | 1,915,388 | 1,951,757 | (2 | ) | ||||||||
(1) Financial information has been revised to reflect the impact of the adoption of ASU 2016-18 – Statement of Cash Flows (Topic 230): Restricted Cash in which we changed the presentation of our cash and cash equivalents to include both cash and due from banks as well as interest-earning deposits with banks, which are inclusive of any restricted cash. |
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(2) Financial information for the prior quarter has been revised to reflect the impact of the adoption of ASU 2016-01 – Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. See pages 17 and 18 for more information. |
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Wells Fargo & Company and Subsidiaries |
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FIVE QUARTER CONSOLIDATED BALANCE SHEET | |||||||||||||||||||||
Mar 31, | Dec 31, | Sep 30, | Jun 30, | Mar 31, | |||||||||||||||||
(in millions) | 2018 | 2017 | 2017 | 2017 | 2017 | ||||||||||||||||
Assets | |||||||||||||||||||||
Cash and due from banks | $ | 18,145 | 23,367 | 19,206 | 20,248 | 19,698 | |||||||||||||||
Interest-earning deposits with banks (1) | 184,250 | 192,580 | 205,648 | 195,700 | 227,635 | ||||||||||||||||
Total cash, cash equivalents, and restricted cash (1) | 202,395 | 215,947 | 224,854 | 215,948 | 247,333 | ||||||||||||||||
Federal funds sold, securities purchased under resale agreements and other short-term investments (1) | 73,550 | 80,025 | 67,457 | 69,006 | 81,112 | ||||||||||||||||
Debt securities: | |||||||||||||||||||||
Trading, at fair value (2) | 59,866 | 57,624 | 60,970 | 54,324 | 50,534 | ||||||||||||||||
Available-for-sale, at fair value (2) | 271,656 | 276,407 | 271,317 | 268,174 | 298,405 | ||||||||||||||||
Held-to-maturity, at cost | 141,446 | 139,335 | 142,423 | 140,392 | 108,030 | ||||||||||||||||
Mortgages held for sale | 17,944 | 20,070 | 20,009 | 24,807 | 17,822 | ||||||||||||||||
Loans held for sale (2) | 3,581 | 1,131 | 1,339 | 1,898 | 1,373 | ||||||||||||||||
Loans | 947,308 | 956,770 | 951,873 | 957,423 | 958,405 | ||||||||||||||||
Allowance for loan losses | (10,373 | ) | (11,004 | ) | (11,078 | ) | (11,073 | ) | (11,168 | ) | |||||||||||
Net loans | 936,935 | 945,766 | 940,795 | 946,350 | 947,237 | ||||||||||||||||
Mortgage servicing rights: | |||||||||||||||||||||
Measured at fair value | 15,041 | 13,625 | 13,338 | 12,789 | 13,208 | ||||||||||||||||
Amortized | 1,411 | 1,424 | 1,406 | 1,399 | 1,402 | ||||||||||||||||
Premises and equipment, net | 8,828 | 8,847 | 8,449 | 8,403 | 8,320 | ||||||||||||||||
Goodwill | 26,445 | 26,587 | 26,581 | 26,573 | 26,666 | ||||||||||||||||
Derivative assets | 11,467 | 12,228 | 12,580 | 13,273 | 12,564 | ||||||||||||||||
Equity securities (2) | 58,935 | 62,497 | 54,981 | 55,742 | 56,991 | ||||||||||||||||
Other assets (2) | 85,888 | 90,244 | 88,381 | 91,714 | 80,504 | ||||||||||||||||
Total assets | $ | 1,915,388 | 1,951,757 | 1,934,880 | 1,930,792 | 1,951,501 | |||||||||||||||
Liabilities | |||||||||||||||||||||
Noninterest-bearing deposits | $ | 370,085 | 373,722 | 366,528 | 372,766 | 365,780 | |||||||||||||||
Interest-bearing deposits | 933,604 | 962,269 | 940,178 | 933,064 | 959,664 | ||||||||||||||||
Total deposits |
1,303,689 | 1,335,991 | 1,306,706 | 1,305,830 | 1,325,444 | ||||||||||||||||
Short-term borrowings | 97,207 | 103,256 | 93,811 | 95,356 | 94,871 | ||||||||||||||||
Derivative liabilities | 7,883 | 8,796 | 9,497 | 11,636 | 12,461 | ||||||||||||||||
Accrued expenses and other liabilities | 72,597 | 70,615 | 78,993 | 72,799 | 59,629 | ||||||||||||||||
Long-term debt | 227,302 | 225,020 | 239,256 | 239,222 | 256,786 | ||||||||||||||||
Total liabilities | 1,708,678 | 1,743,678 | 1,728,263 | 1,724,843 | 1,749,191 | ||||||||||||||||
Equity | |||||||||||||||||||||
Wells Fargo stockholders’ equity: | |||||||||||||||||||||
Preferred stock | 26,227 | 25,358 | 25,576 | 25,785 | 25,501 | ||||||||||||||||
Common stock | 9,136 | 9,136 | 9,136 | 9,136 | 9,136 | ||||||||||||||||
Additional paid-in capital | 60,399 | 60,893 | 60,759 | 60,689 | 60,585 | ||||||||||||||||
Retained earnings | 148,728 | 145,263 | 141,549 | 139,366 | 135,828 | ||||||||||||||||
Cumulative other comprehensive income (loss) | (4,921 | ) | (2,144 | ) | (1,622 | ) | (2,148 | ) | (3,153 | ) | |||||||||||
Treasury stock | (31,246 | ) | (29,892 | ) | (27,772 | ) | (25,675 | ) | (24,030 | ) | |||||||||||
Unearned ESOP shares | (2,571 | ) | (1,678 | ) | (1,904 | ) | (2,119 | ) | (2,546 | ) | |||||||||||
Total Wells Fargo stockholders’ equity | 205,752 | 206,936 | 205,722 | 205,034 | 201,321 | ||||||||||||||||
Noncontrolling interests | 958 | 1,143 | 895 | 915 | 989 | ||||||||||||||||
Total equity | 206,710 | 208,079 | 206,617 | 205,949 | 202,310 | ||||||||||||||||
Total liabilities and equity | $ | 1,915,388 | 1,951,757 | 1,934,880 | 1,930,792 | 1,951,501 | |||||||||||||||
(1) Financial information has been revised to reflect the impact of the adoption of ASU 2016-18 – Statement of Cash Flows (Topic 230): Restricted Cash in which we changed the presentation of our cash and cash equivalents to include both cash and due from banks as well as interest-earning deposits with banks, which are inclusive of any restricted cash. |
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(2) Financial information for prior quarters has been revised to reflect the impact of the adoption of ASU 2016-01 – Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. See pages 17 and 18 for more information. |
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Wells Fargo & Company and Subsidiaries |
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FIVE QUARTER TRADING ASSETS AND LIABILITIES | |||||||||||||||||||||
Mar 31, | Dec 31, | Sep 30, | Jun 30, | Mar 31, | |||||||||||||||||
(in millions) | 2018 | 2017 | 2017 | 2017 | 2017 | ||||||||||||||||
Trading assets | |||||||||||||||||||||
Debt securities | $ | 59,866 | 57,624 | 60,970 | 54,324 | 50,534 | |||||||||||||||
Equity securities (1) | 25,327 | 30,004 | 22,797 | 24,229 | 25,358 | ||||||||||||||||
Loans held for sale | 1,695 | 1,023 | 1,182 | 1,742 | 1,120 | ||||||||||||||||
Gross trading derivative assets | 30,644 | 31,340 | 31,052 | 31,451 | 71,793 | ||||||||||||||||
Netting (2) | (20,112 | ) | (19,629 | ) | (18,881 | ) | (19,289 | ) | (60,483 | ) | |||||||||||
Total trading derivative assets | 10,532 | 11,711 | 12,171 | 12,162 | 11,310 | ||||||||||||||||
Total trading assets | 97,420 | 100,362 | 97,120 | 92,457 | 88,322 | ||||||||||||||||
Trading liabilities | |||||||||||||||||||||
Short sales | 23,303 | 18,472 | 19,096 | 16,845 | 19,982 | ||||||||||||||||
Gross trading derivative liabilities | 29,717 | 31,386 | 30,365 | 31,172 | 75,441 | ||||||||||||||||
Netting (2) | (22,569 | ) | (23,062 | ) | (21,662 | ) | (20,544 | ) | (64,138 | ) | |||||||||||
Total trading derivative liabilities | 7,148 | 8,324 | 8,703 | 10,628 | 11,303 | ||||||||||||||||
Total trading liabilities | $ | 30,451 | 26,796 | 27,799 | 27,473 | 31,285 | |||||||||||||||
(1) Financial information for prior quarters has been revised to reflect the impact of the adoption of ASU 2016-01 and assets held as economic hedges for our deferred compensation plan obligations have been reclassified as marketable equity securities not held for trading. |
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(2) Represents balance sheet netting for trading derivative assets and liability balances, and trading portfolio level counterparty valuation adjustments. |
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FIVE QUARTER DEBT SECURITIES |
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Mar 31, | Dec 31, | Sep 30, | Jun 30, | Mar 31, | ||||||||||||
(in millions) | 2018 | 2017 | 2017 | 2017 | 2017 | |||||||||||
Trading debt securities | $ | 59,866 | 57,624 | 60,970 | 54,324 | 50,534 | ||||||||||
Available-for-sale debt securities: | ||||||||||||||||
Securities of U.S. Treasury and federal agencies | 6,279 | 6,319 | 6,350 | 17,896 | 24,625 | |||||||||||
Securities of U.S. states and political subdivisions | 49,643 | 51,326 | 52,774 | 52,013 | 52,061 | |||||||||||
Mortgage-backed securities: | ||||||||||||||||
Federal agencies | 156,814 | 160,219 | 150,181 | 135,938 | 156,966 | |||||||||||
Residential and commercial | 9,264 | 9,173 | 11,046 | 12,772 | 14,233 | |||||||||||
Total mortgage-backed securities | 166,078 | 169,392 | 161,227 | 148,710 | 171,199 | |||||||||||
Other debt securities | 49,656 | 49,370 | 50,966 | 49,555 | 50,520 | |||||||||||
Total available-for-sale debt securities | 271,656 | 276,407 | 271,317 | 268,174 | 298,405 | |||||||||||
Held-to-maturity debt securities: | ||||||||||||||||
Securities of U.S. Treasury and federal agencies | 44,727 | 44,720 | 44,712 | 44,704 | 44,697 | |||||||||||
Securities of U.S. states and political subdivisions | 6,307 | 6,313 | 6,321 | 6,325 | 6,331 | |||||||||||
Federal agency and other mortgage-backed securities (1) | 89,748 | 87,527 | 90,071 | 87,525 | 53,778 | |||||||||||
Other debt securities | 664 | 775 | 1,319 | 1,838 | 3,224 | |||||||||||
Total held-to-maturity debt securities | 141,446 | 139,335 | 142,423 | 140,392 | 108,030 | |||||||||||
Total debt securities | $ | 472,968 | 473,366 | 474,710 | 462,890 | 456,969 | ||||||||||
(1) Predominantly consists of federal agency mortgage-backed securities. |
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Wells Fargo & Company and Subsidiaries |
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FIVE QUARTER EQUITY SECURITIES | ||||||||||||||||
Mar 31, | Dec 31, | Sep 30, | Jun 30, | Mar 31, | ||||||||||||
(in millions) | 2018 | 2017 | 2017 | 2017 | 2017 | |||||||||||
Held for trading at fair value | ||||||||||||||||
Marketable equity securities | $ | 25,327 | 30,004 | 22,797 | 24,229 | 25,358 | ||||||||||
Not held for trading: | ||||||||||||||||
Fair value: | ||||||||||||||||
Marketable equity securities (1) | 4,931 | 4,356 | 4,348 | 4,340 | 4,439 | |||||||||||
Nonmarketable equity securities (2) | 5,303 | 4,867 | 4,523 | 3,986 | 3,780 | |||||||||||
Total equity securities at fair value | 10,234 | 9,223 | 8,871 | 8,326 | 8,219 | |||||||||||
Equity method: | ||||||||||||||||
LIHTC (3) | 10,318 | 10,269 | 9,884 | 9,828 | 9,624 | |||||||||||
Private equity | 3,840 | 3,839 | 3,757 | 3,740 | 3,620 | |||||||||||
Tax-advantaged renewable energy | 1,822 | 1,950 | 1,954 | 1,960 | 2,013 | |||||||||||
New market tax credit and other | 268 | 294 | 292 | 295 | 277 | |||||||||||
Total equity method | 16,248 | 16,352 | 15,887 | 15,823 | 15,534 | |||||||||||
Other: | ||||||||||||||||
Federal bank stock and other at cost (4) | 5,780 | 5,828 | 6,251 | 6,247 | 6,645 | |||||||||||
Private equity (5) | 1,346 | 1,090 | 1,175 | 1,117 | 1,235 | |||||||||||
Total equity securities not held for trading | 33,608 | 32,493 | 32,184 | 31,513 | 31,633 | |||||||||||
Total equity securities | 58,935 | 62,497 | 54,981 | 55,742 | 56,991 | |||||||||||
(1) Includes $3.5 billion, $3.7 billion, $3.5 billion, $3.3 billion and $3.3 billion at March 31, 2018, and December 31, September 30, June 30, and March 31, 2017, respectively, related to investments held as economic hedges of our deferred compensation plan obligations. |
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(2) Includes $5.0 billion, $4.9 billion, $4.5 billion, $4.0 billion and $3.8 billion at March 31, 2018, and December 31, September 30, June 30, and March 31, 2017, respectively, related to investments in which we elected the fair value option. |
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(3) Represents low-income housing tax credit investments. |
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(4) Includes $5.7 billion, $5.4 billion, $5.8 billion, $5.8 billion and $6.2 billion at March 31, 2018, and December 31, September 30, June 30, and March 31, 2017, respectively, related to investments in Federal Reserve Bank and Federal Home Loan Bank stock. |
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(5) Represents nonmarketable equity securities for which we have elected to account for the investment under the measurement alternative. |
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Wells Fargo & Company and Subsidiaries |
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FIVE QUARTER LOANS | ||||||||||||||||
Mar 31, | Dec 31, | Sep 30, | Jun 30, | Mar 31, | ||||||||||||
(in millions) | 2018 | 2017 | 2017 | 2017 | 2017 | |||||||||||
Commercial: | ||||||||||||||||
Commercial and industrial | $ | 334,678 | 333,125 | 327,944 | 331,113 | 329,252 | ||||||||||
Real estate mortgage | 125,543 | 126,599 | 128,475 | 130,277 | 131,532 | |||||||||||
Real estate construction | 23,882 | 24,279 | 24,520 | 25,337 | 25,064 | |||||||||||
Lease financing | 19,293 | 19,385 | 19,211 | 19,174 | 19,156 | |||||||||||
Total commercial | 503,396 | 503,388 | 500,150 | 505,901 | 505,004 | |||||||||||
Consumer: | ||||||||||||||||
Real estate 1-4 family first mortgage | 282,658 | 284,054 | 280,173 | 276,566 | 274,633 | |||||||||||
Real estate 1-4 family junior lien mortgage | 37,920 | 39,713 | 41,152 | 42,747 | 44,333 | |||||||||||
Credit card | 36,103 | 37,976 | 36,249 | 35,305 | 34,742 | |||||||||||
Automobile | 49,554 | 53,371 | 55,455 | 57,958 | 60,408 | |||||||||||
Other revolving credit and installment | 37,677 | 38,268 | 38,694 | 38,946 | 39,285 | |||||||||||
Total consumer | 443,912 | 453,382 | 451,723 | 451,522 | 453,401 | |||||||||||
Total loans (1) | $ | 947,308 | 956,770 | 951,873 | 957,423 | 958,405 | ||||||||||
(1) Includes $10.7 billion, $12.8 billion, $13.6 billion, $14.3 billion, and $15.7 billion of purchased credit-impaired (PCI) loans at March 31, 2018 and December 31, September 30, June 30, and March 31, 2017, respectively. |
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Our foreign loans are reported by respective class of financing receivable in the table above. Substantially all of our foreign loan portfolio is commercial loans. Loans are classified as foreign primarily based on whether the borrower's primary address is outside of the United States. The following table presents total commercial foreign loans outstanding by class of financing receivable.
Mar 31, | Dec 31, | Sep 30, | Jun 30, | Mar 31, | ||||||||||||
(in millions) | 2018 | 2017 | 2017 | 2017 | 2017 | |||||||||||
Commercial foreign loans: | ||||||||||||||||
Commercial and industrial | $ | 59,696 | 60,106 | 58,570 | 57,825 | 56,987 | ||||||||||
Real estate mortgage | 8,082 | 8,033 | 8,032 | 8,359 | 8,206 | |||||||||||
Real estate construction | 668 | 655 | 647 | 585 | 471 | |||||||||||
Lease financing | 1,077 | 1,126 | 1,141 | 1,092 | 986 | |||||||||||
Total commercial foreign loans | $ | 69,523 | 69,920 | 68,390 | 67,861 | 66,650 | ||||||||||
Wells Fargo & Company and Subsidiaries |
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FIVE QUARTER NONPERFORMING ASSETS (NONACCRUAL LOANS AND FORECLOSED ASSETS) | |||||||||||||||||
Mar 31, | Dec 31, | Sep 30, | Jun 30, | Mar 31, | |||||||||||||
(in millions) | 2018 | 2017 | 2017 | 2017 | 2017 | ||||||||||||
Nonaccrual loans: | |||||||||||||||||
Commercial: | |||||||||||||||||
Commercial and industrial | $ | 1,516 | 1,899 | 2,397 | 2,632 | 2,898 | |||||||||||
Real estate mortgage | 755 | 628 | 593 | 630 | 672 | ||||||||||||
Real estate construction | 45 | 37 | 38 | 34 | 40 | ||||||||||||
Lease financing | 93 | 76 | 81 | 89 | 96 | ||||||||||||
Total commercial | 2,409 | 2,640 | 3,109 | 3,385 | 3,706 | ||||||||||||
Consumer: | |||||||||||||||||
Real estate 1-4 family first mortgage | 4,053 | 4,122 | 4,213 | 4,413 | 4,743 | ||||||||||||
Real estate 1-4 family junior lien mortgage | 1,087 | 1,086 | 1,101 | 1,095 | 1,153 | ||||||||||||
Automobile | 117 | 130 | 137 | 104 | 101 | ||||||||||||
Other revolving credit and installment | 53 | 58 | 59 | 59 | 56 | ||||||||||||
Total consumer | 5,310 | 5,396 | 5,510 | 5,671 | 6,053 | ||||||||||||
Total nonaccrual loans (1)(2)(3) | $ | 7,719 | 8,036 | 8,619 | 9,056 | 9,759 | |||||||||||
As a percentage of total loans | 0.81 | % | 0.84 | 0.91 | 0.95 | 1.02 | |||||||||||
Foreclosed assets: | |||||||||||||||||
Government insured/guaranteed | $ | 103 | 120 | 137 | 149 | 179 | |||||||||||
Non-government insured/guaranteed | 468 | 522 | 569 | 632 | 726 | ||||||||||||
Total foreclosed assets | 571 | 642 | 706 | 781 | 905 | ||||||||||||
Total nonperforming assets | $ | 8,290 | 8,678 | 9,325 | 9,837 | 10,664 | |||||||||||
As a percentage of total loans | 0.88 | % | 0.91 | 0.98 | 1.03 | 1.11 | |||||||||||
(1) Includes nonaccrual mortgages held for sale and loans held for sale in their respective loan categories. |
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(2) Excludes PCI loans because they continue to earn interest income from accretable yield, independent of performance in accordance with their contractual terms. |
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(3) Real estate 1-4 family mortgage loans predominantly insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA) are not placed on nonaccrual status because they are insured or guaranteed. |
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LOANS 90 DAYS OR MORE PAST DUE AND STILL ACCRUING |
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Mar 31, | Dec 31, | Sep 30, | Jun 30, | Mar 31, | ||||||||||||
(in millions) | 2018 | 2017 | 2017 | 2017 | 2017 | |||||||||||
Total (excluding PCI)(1): | $ | 10,753 | 11,997 | 10,227 | 9,716 | 10,525 | ||||||||||
Less: FHA insured/guaranteed by the VA (2)(3) | 9,786 | 10,934 | 9,266 | 8,873 | 9,585 | |||||||||||
Total, not government insured/guaranteed | $ | 967 | 1,063 | 961 | 843 | 940 | ||||||||||
By segment and class, not government insured/guaranteed: | ||||||||||||||||
Commercial: | ||||||||||||||||
Commercial and industrial | $ | 40 |