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Previous: VANGUARD/WELLINGTON FUND INC, NSAR-A, 1996-07-16 |
Next: WHIRLPOOL CORP /DE/, 8-K, 1996-07-16 |
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported): July 16, 1996
WELLS FARGO & COMPANY
(Exact name of registrant as specified in its charter)
Delaware 1-6214 No. 13-2553920
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
420 Montgomery Street, San Francisco, California 94163
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (415) 477-1000
Not applicable
(Former name or former address, if changed since last report)
<PAGE>
Item 5: OTHER EVENTS
Attached hereto as Exhibit 99 is a Press Release announcing Wells
Fargo & Company's financial results for the quarter ended June 30,
1996. Final financial statements with additional analyses will be
filed as part of the Company's Form 10-Q in August 1996.
Item 7: FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
27 Financial Data Schedule
99 Copy of the Press Release announcing Wells Fargo & Company's
financial results for the quarter ended June 30, 1996.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, on July 16, 1996.
WELLS FARGO & COMPANY
By: /s/FRANK A. MOESLEIN
--------------------------------
Frank A. Moeslein
Executive Vice President and Controller
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE 8-K
DATED JULY 16, 1996 FOR THE PERIOD ENDED JUNE 30, 1996 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL INFORMATION.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 8,882
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 1,344
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 13,692
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 70,541
<ALLOWANCE> 2,273
<TOTAL-ASSETS> 108,586
<DEPOSITS> 83,868
<SHORT-TERM> 1,206
<LIABILITIES-OTHER> 3,042
<LONG-TERM> 5,230
0
839
<COMMON> 475
<OTHER-SE> 13,716
<TOTAL-LIABILITIES-AND-EQUITY> 108,586
<INTEREST-LOAN> 2,494
<INTEREST-INVEST> 353
<INTEREST-OTHER> 7
<INTEREST-TOTAL> 2,864
<INTEREST-DEPOSIT> 695
<INTEREST-EXPENSE> 888
<INTEREST-INCOME-NET> 1,976
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 2
<EXPENSE-OTHER> 1,844
<INCOME-PRETAX> 1,125
<INCOME-PRE-EXTRAORDINARY> 627
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 627
<EPS-PRIMARY> 8.39
<EPS-DILUTED> 0
<YIELD-ACTUAL> 6.08
<LOANS-NON> 731
<LOANS-PAST> 0
<LOANS-TROUBLED> 11
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,794
<CHARGE-OFFS> 380
<RECOVERIES> 89
<ALLOWANCE-CLOSE> 2,273
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
<PAGE>
Cindy Koehn 415/396-3099
Investor Relations
Exhibit 99
FOR IMMEDIATE RELEASE
Tues., July 16, 1996
WELLS FARGO REPORTS SECOND QUARTER EARNINGS
PER SHARE EARNINGS OF $3.61 FOR FIRST POST-MERGER QUARTER
Wells Fargo & Co. (NYSE:WFC) today reported net income of $363 million for
the second quarter of 1996. Per share earnings for the quarter were $3.61.
Return on average assets (ROA) was 1.35 percent and return on average common
equity (ROE) was 9.77 percent.
Earnings before the amortization of goodwill and nonqualifying core deposit
intangibles ("cash earnings") were $4.89 per share. Cash ROA was 1.96 percent;
cash ROE was 33.43 percent.
"Following our merger with First Interstate, cash earnings, as well as
cash ROA and ROE, are the measures of performance which will be most comparable
with prior quarters. They are also the most relevant measures of financial
performance for shareholders because they measure Wells Fargo's ability to
repurchase stock, pay dividends and support growth," said Chairman Paul Hazen.
"Cash EPS of $4.89 is down from cash EPS of $5.58 for the first quarter of 1996
given merger-related expenses and because we are just beginning to realize the
economic benefits of the merger. We are confident that we will meet our
original merger targets within the first 18 months."
Since the Company's second quarter 1996 results reflect the effects of the
merger beginning April 1, 1996, these results and the results for the first six
months of 1996 are not comparable to the reported results for the corresponding
prior periods.
Because the merger was accounted for as a purchase, $7.2 billion of
goodwill was recorded during the second quarter. Goodwill may change as certain
estimates are finalized, although any adjustments are not expected to have a
significant effect on the ultimate amount of goodwill.
-more-
<PAGE>
2/WF Earnings
Net interest income on a taxable-equivalent basis was $1,304 million in the
second quarter. The Company's net interest margin for the quarter was 6.03
percent. Noninterest income (NII) for the quarter was $639 million.
Noninterest expense (NIE) for the quarter was $1,277 million, reflecting
severance and other merger-related expenses.
Net charge-offs in the second quarter totaled $178 million, or 1.01 percent
of average loans (annualized). The largest category of net charge-offs was
credit card loans ($90 million).
At June 30, 1996, the allowance for loan losses equaled 3.22 percent of
total loans. Total nonaccrual and restructured loans were $742 million at June
30, 1996. Foreclosed assets were $238 million.
The Company's effective tax rate for the second quarter of 1996 was 45%.
At June 30, 1996, the Company's preliminary risk-based capital ratios were
11.20 percent for total risk-based capital and 7.45 percent for Tier 1 risk-
based capital, exceeding the minimum regulatory guidelines of 8 percent and 4
percent, respectively. The leverage ratio was 6.35 percent. The ratio of
common equity to total assets at the end of the quarter was 13.07 percent.
###
<PAGE>
- 3 -
<TABLE>
<CAPTION>
Wells Earnings
Wells Fargo & Company and Subsidiaries
SUMMARY FINANCIAL DATA -- NEWS RELEASE
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
% Change
Quarter ended June 30, 1996 from Six months ended
------------------------------ ------------------ -------------------
JUNE 30, Mar. 31, June 30, Mar. 31, June 30, JUNE 30, June 30, %
(in millions) 1996 1996 1995 1996 1995 1996 1995 Change
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE PERIOD
Net income $ 363 $ 264 $ 232 38% 56% $ 627 $ 465 35%
Net income applicable to common stock 344 254 222 35 55 598 444 35
Per common share
Net income $ 3.61 $ 5.39 $ 4.51 (33) (20) $ 8.39 $ 8.92 (6)
Dividends declared 1.30 1.30 1.15 -- 13 2.60 2.30 13
Average common shares outstanding 95.6 47.0 49.1 103 95 71.3 49.8 43
Profitability ratios (annualized)
Net income to average total assets (ROA) 1.35% 2.16% 1.81% (38) (25) 1.60% 1.80% (11)
Net income applicable to common stock to
average common stockholders' equity (ROE) 9.77 28.34 26.71 (66) (63) 13.52 26.80 (50)
Efficiency ratio (1) 65.8% 55.1% 57.8% 19 14 62.1% 58.5% 6
Average loans $ 70,734 $ 35,025 $ 33,202 102 113 $ 52,880 $ 34,759 52
Average assets 108,430 49,134 51,491 121 111 78,782 51,938 52
Average core deposits 83,356 36,819 36,226 126 130 60,087 36,462 65
Net interest margin 6.03% 6.18% 5.66% (2) 7 6.08% 5.63% 8
AT PERIOD END
Investment securities $ 13,692 $ 8,435 $ 10,135 62 35 $ 13,692 $ 10,135 35
Loans 70,541 35,167 33,896 101 108 70,541 33,896 108
Allowance for loan losses 2,273 1,681 1,947 35 17 2,273 1,947 17
Goodwill 7,479 373 399 -- -- 7,479 399 --
Assets 108,586 48,978 50,931 122 113 108,586 50,931 113
Core deposits 83,331 37,414 37,026 123 125 83,331 37,026 125
Common stockholders' equity 14,191 3,713 3,373 282 321 14,191 3,373 321
Stockholders' equity 15,030 4,202 3,862 258 289 15,030 3,862 289
Capital ratios
Common stockholders' equity to assets 13.07% 7.58% 6.62% 72 97 13.07% 6.62% 97
Stockholders' equity to assets 13.84 8.58 7.58 61 83 13.84 7.58 83
Risk-based capital (2)
Tier 1 capital 7.45 9.40 8.60 (21) (13) 7.45 8.60 (13)
Total capital 11.20 13.04 12.48 (14) (10) 11.20 12.48 (10)
Leverage (2) 6.35 7.91 6.69 (20) (5) 6.35 6.69 (5)
Book value per common share $ 149.52 $ 79.01 $ 69.59 89 115 $ 149.52 $ 69.59 115
Staff (active, full-time equivalent) 41,548 18,748 18,977 122 119 41,548 18,977 119
NET INCOME AND RATIOS EXCLUDING
GOODWILL AND NONQUALIFYING CORE DEPOSIT
INTANGIBLE AMORTIZATION AND BALANCES
("CASH" OR "TANGIBLE") (3)
Net income applicable to common stock $ 468 $ 262 $ 230 79 103 $ 730 $ 461 58
Net income per common share 4.89 5.58 4.69 (12) 4 10.24 9.27 10
ROA 1.96% 2.25% 1.89% (13) 4 2.05% 1.89% 8
ROE 33.43 32.74 31.58 2 6 33.18 31.67 5
Efficiency ratio 58.0 54.3 56.9 7 2 56.7 57.5 (1)
COMMON STOCK PRICE
High $264-1/2 $261-1/4 $ 185-7/8 1 42 $264-1/2 $185-7/8 42
Low 232-1/8 203-1/8 157 14 48 203-1/8 143-3/8 42
Period end 239-1/8 261-1/4 180-1/4 (8) 33 239-1/8 180-1/4 33
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The efficiency ratio is defined as noninterest expense divided by the total
of net interest income and noninterest income.
(2) The June 30, 1996 ratios are preliminary.
(3) Nonqualifying core deposit intangible (CDI) amortization and average
balance excluded from these calculations are, with the exception of the
efficiency ratio, net of applicable taxes. The after-tax amounts for the
amortization and average balance of nonqualifying CDI were $43 million and
$1,334 million for the quarter ended June 30, 1996, respectively, and $43
million and $667 million for the six months ended June 30, 1996,
respectively. Goodwill amortization and average balance (which are not tax
effected) were $81 million and $7,238 million for the quarter ended June
30, 1996, respectively, and $89 million and $3,808 million for the six
months ended June 30, 1996, respectively.
<PAGE>
- 4 -
<TABLE>
<CAPTION>
Wells Fargo & Company and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
Quarter Six months
ended June 30, ended June 30,
---------------- % ----------------- %
(in millions) 1996 1995 Change 1996 1995 Change
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INTEREST INCOME
Federal funds sold and securities purchased
(1) under resale agreements $ 8 $ 1 700% $ 10 $ 2 400%
(2) Investment securities 225 152 48 353 317 11
(3) Mortgage loans held for sale -- 54 (100) -- 54 (100)
(4) Loans 1,618 823 97 2,494 1,681 48
(5) Other 7 1 600 7 2 250
------ ------ ------ ------
(6) Total interest income 1,858 1,031 80 2,864 2,056 39
------ ------ ------ ------
INTEREST EXPENSE
(7) Deposits 454 254 79 695 496 40
Federal funds purchased and securities sold
(8) under repurchase agreements 21 59 (64) 57 115 (50)
(9) Commercial paper and other short-term borrowings 3 9 (67) 8 19 (58)
(10) Senior and subordinated debt 80 50 60 128 102 25
------ ------ ------ ------
(11) Total interest expense 558 372 50 888 732 21
------ ------ ------ ------
(12) NET INTEREST INCOME 1,300 659 97 1,976 1,324 49
(13) Provision for loan losses -- -- -- -- -- --
------ ------ ------ ------
Net interest income after
(14) provision for loan losses 1,300 659 97 1,976 1,324 49
------ ------ ------ ------
NONINTEREST INCOME
(15) Service charges on deposit accounts 258 119 117 380 236 61
(16) Fees and commissions 211 103 105 329 204 61
(17) Trust and investment services income 104 57 82 164 112 46
(18) Investment securities gains (losses) 3 -- -- 2 (15) --
(19) Other 63 31 103 118 14 743
------ ------ ------ ------
(20) Total noninterest income 639 310 106 993 551 80
------ ------ ------ ------
NONINTEREST EXPENSE
(21) Salaries 400 177 126 581 349 66
(22) Incentive compensation 61 33 85 93 60 55
(23) Employee benefits 102 48 113 157 101 55
(24) Equipment 111 45 147 167 92 82
(25) Net occupancy 108 53 104 161 106 52
(26) Core deposit intangible 82 11 645 91 22 314
(27) Goodwill 81 9 800 89 17 424
(28) Other 332 184 80 505 349 45
------ ------ ------ ------
(29) Total noninterest expense 1,277 560 128 1,844 1,096 68
------ ------ ------ ------
INCOME BEFORE INCOME TAX
(30) EXPENSE 662 409 62 1,125 779 44
(31) Income tax expense 299 177 69 498 314 59
------ ------ ------ ------
(32) NET INCOME $ 363 $ 232 56% $ 627 $ 465 35%
------ ------ ----- ------ ------- -----
NET INCOME APPLICABLE TO
(33) COMMON STOCK $ 344 $ 222 55% $ 598 $ 444 35%
------ ------ ----- ------ ------- -----
PER COMMON SHARE
(34) Net income $ 3.61 $ 4.51 (20)% $ 8.39 $ 8.92 (6)%
------ ------ ----- ------ ------- -----
(35) Dividends declared $ 1.30 $ 1.15 13% $ 2.60 $ 2.30 13%
------ ------ ----- ------ ------- -----
(36) Average common shares outstanding 95.6 49.1 95% 71.3 49.8 43%
------ ------ ----- ------ ------- -----
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- 5 -
<TABLE>
<CAPTION>
Wells Fargo & Company and Subsidiaries
CONSOLIDATED BALANCE SHEET
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
% Change
June 30, 1996 from
------------------
JUNE 30, Dec. 31, June 30, Dec. 31, June 30,
(in millions) 1996 1995 1995 1995 1995
- ------------------------------------------------------------------------------------------------------------------------
ASSETS
<S> <C> <C> <C> <C> <C>
(1) Cash and due from banks $ 8,882 $ 3,375 $ 2,848 163% 212%
Federal funds sold and securities
(2) purchased under resale agreements 1,344 177 375 659 258
Investment securities:
(3) At fair value 13,692 8,920 2,473 53 454
(4) At cost (estimated fair value $7,602) -- -- 7,662 -- (100)
-------- -------- --------
(5) Total investment securities 13,692 8,920 10,135 53 35
(6) Mortgage loans held for sale -- -- 1,336 -- (100)
(7) Loans 70,541 35,582 33,896 98 108
(8) Allowance for loan losses 2,273 1,794 1,947 27 17
-------- -------- --------
(9) Net loans 68,268 33,788 31,949 102 114
-------- -------- --------
(10) Due from customers on acceptances 210 98 71 114 196
(11) Accrued interest receivable 591 308 300 92 97
(12) Premises and equipment, net 2,400 862 863 178 178
(13) Core deposit intangible 2,208 166 186 -- --
(14) Goodwill 7,479 382 399 -- --
(15) Other assets 3,512 2,240 2,469 57 42
-------- -------- --------
(16) Total assets $108,586 $ 50,316 $ 50,931 116% 113%
-------- -------- -------- --- ---
-------- -------- -------- --- ---
LIABILITIES
(17) Noninterest-bearing deposits $ 27,535 $ 10,391 $ 9,600 165% 187%
(18) Interest-bearing deposits 56,333 28,591 29,184 97 93
-------- -------- --------
(19) Total deposits 83,868 38,982 38,784 115 116
Federal funds purchased and securities
(20) sold under repurchase agreements 944 2,781 3,693 (66) (74)
(21) Commercial paper and other short-term
borrowings 262 195 532 34 (51)
(22) Acceptances outstanding 210 98 71 114 196
(23) Accrued interest payable 177 85 89 108 99
(24) Other liabilities 2,865 1,071 933 168 207
(25) Senior debt 2,586 1,783 1,485 45 74
(26) Subordinated debt 2,644 1,266 1,482 109 78
-------- -------- --------
(27) Total liabilities 93,556 46,261 47,069 102 99
-------- -------- --------
STOCKHOLDERS' EQUITY
(28) Preferred stock 839 489 489 72 72
Common stock - $5 par value,
authorized 150,000,000 shares;
issued and outstanding 94,912,532 shares,
(29) 46,973,319 shares and 48,473,804 shares 475 235 242 102 96
(30) Additional paid-in capital 11,207 1,135 407 887 --
(31) Retained earnings 2,586 2,174 2,737 19 (6)
(32) Cumulative foreign currency translation
adjustments (4) (4) (4) -- --
(33) Investment securities valuation allowance (73) 26 (9) -- 711
-------- -------- --------
(34) Total stockholders' equity 15,030 4,055 3,862 271 289
-------- -------- --------
(35) Total liabilities and stockholders'
equity $108,586 $ 50,316 $ 50,931 116% 113%
-------- -------- -------- --- ---
-------- -------- -------- --- ---
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- 6 -
<TABLE>
<CAPTION>
Wells Fargo & Company and Subsidiaries
CONDENSED CONSOLIDATED STATEMENT OF
CHANGES IN STOCKHOLDERS' EQUITY
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
Six months ended June 30,
------------------------
(in millions) 1996 1995
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
BALANCE, BEGINNING OF PERIOD $ 4,055 $ 3,911
Net income 627 465
Common stock issued to First Interstate stockholders 11,299 --
Common stock issued under employee benefit and
dividend reinvestment plans 55 61
Preferred stock issued to First Interstate stockholders 360 --
Common stock repurchased (1,163) (539)
Preferred stock dividends (29) (21)
Common stock dividends (186) (116)
Change in investment securities valuation allowance (99) 101
Fair value adjustment related to First Interstate stock options 111 --
--------- ---------
BALANCE, END OF PERIOD $ 15,030 $ 3,862
--------- ---------
--------- ---------
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
LOANS
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
June 30, December 31, June 30,
(in millions) 1996 1995 1995
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Commercial $ 19,575 $ 9,750 $ 8,872
Real estate 1-4 family first mortgage (1) 11,811 4,448 5,051
Other real estate mortgage 12,920 8,263 7,973
Real estate construction 2,401 1,366 1,110
Consumer:
Real estate 1-4 family junior lien mortgage 6,736 3,358 3,373
Credit card 5,276 4,001 3,628
Other revolving credit and monthly payment 9,075 2,576 2,409
---------- --------- ---------
Total consumer 21,087 9,935 9,410
Lease financing 2,689 1,789 1,451
Foreign 58 31 29
---------- --------- ---------
Total loans $ 70,541 $ 35,582 $ 33,896
---------- --------- ---------
---------- --------- ---------
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
</TABLE>
(1) Excludes mortgage loans held for sale of $1,336 million at June 30, 1995.
<PAGE>
-7-
<TABLE>
<CAPTION>
Wells Fargo & Company and Subsidiaries
CHANGES IN THE ALLOWANCE FOR LOAN LOSSES
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Quarter ended Six months ended
-------------------------------------- -----------------------
JUNE 30, March 31, June 30, JUNE 30, June 30,
(in millions) 1996 1996 1995 1996 1995
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
BALANCE, BEGINNING OF PERIOD $ 1,681 $ 1,794 $ 2,017 $ 1,794 $ 2,082
Allowance of First Interstate 770 -- -- 770 --
Loan charge-offs:
Commercial (48) (13) (10) (61) (17)
Real estate 1-4 family first mortgage (5) (4) (3) (9) (6)
Other real estate mortgage (13) (3) (12) (16) (34)
Real estate construction (4) (1) (1) (5) (4)
Consumer:
Real estate 1-4 family junior lien mortgage (13) (4) (4) (17) (7)
Credit card (101) (86) (46) (187) (83)
Other revolving credit and monthly payment (51) (20) (13) (71) (23)
-------- -------- -------- -------- --------
Total consumer (165) (110) (63) (275) (113)
Lease financing (8) (6) (3) (14) (7)
-------- -------- -------- -------- --------
Total loan charge-offs (243) (137) (92) (380) (181)
-------- -------- -------- -------- --------
Loan recoveries:
Commercial 8 5 6 13 14
Real estate 1-4 family first mortgage 2 3 1 5 2
Other real estate mortgage 19 4 7 23 13
Real estate construction 4 1 -- 5 1
Consumer:
Real estate 1-4 family junior lien mortgage 4 1 1 5 2
Credit card 11 5 3 16 6
Other revolving credit and monthly payment 15 3 3 18 5
-------- -------- -------- -------- --------
Total consumer 30 9 7 39 13
Lease financing 2 2 1 4 3
-------- -------- -------- -------- --------
Total loan recoveries 65 24 22 89 46
-------- -------- -------- -------- --------
Total net loan charge-offs (178) (113) (70) (291) (135)
-------- -------- -------- -------- --------
BALANCE, END OF PERIOD $ 2,273 $ 1,681 $ 1,947 $ 2,273 $ 1,947
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Total net loan charge-offs as a percentage
of average loans (annualized) (1) 1.01% 1.30% .84% 1.10% .78%
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Allowance as a percentage of total loans (1) 3.22% 4.78% 5.74% 3.22% 5.74%
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Average and total loans exclude first mortgage loans held for sale at
June 30, 1995.
<PAGE>
-8-
<TABLE>
<CAPTION>
Wells Fargo & Company and Subsidiaries
NONACCRUAL AND RESTRUCTURED LOANS AND OTHER ASSETS
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
JUNE 30, December 31, June 30,
(in millions) 1996 1995 1995
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Nonaccrual loans:
Commercial $ 208 $ 112 $ 121
Real estate 1-4 family first mortgage 87 64 64
Other real estate mortgage 363 307 373
Real estate construction 47 46 58
Consumer:
Real estate 1-4 family junior lien mortgage 22 8 12
Other revolving credit and monthly payment 1 1 3
Lease financing 3 -- --
----- ----- -----
Total nonaccrual loans 731 538 631
Restructured loans 11 14 13
----- ----- -----
Nonaccrual and restructured loans 742 552 644
As a percentage of total loans (1) 1.1% 1.6% 1.9%
Foreclosed assets 238 186 224
Real estate investments (2) 7 12 14
----- ----- -----
Total nonaccrual and restructured loans
and other assets $ 987 $ 750 $ 882
----- ----- -----
----- ----- -----
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Total loans exclude mortgage loans held for sale at June 30, 1995.
(2) Represents the amount of real estate investments (contingent interest loans
accounted for as investments) that would be classified as nonaccrual if
such assets were loans. Real estate investments totaled $124 million,
$95 million and $75 million at June 30, 1996, December 31, 1995 and June
30, 1995, respectively.
<PAGE>
-9-
<TABLE>
<CAPTION>
Wells Fargo & Company and Subsidiaries
NONINTEREST INCOME
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Quarter Six months
ended June 30, ended June 30,
--------------------- % ---------------------- %
(in millions) 1996 1995 Change 1996 1995 Change
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Service charges on deposit accounts $ 258 $ 119 117% $ 380 $ 236 61%
Fees and commissions:
Credit card membership and other credit card fees 26 23 13 53 42 26
Debit and credit card merchant fees 37 17 118 52 30 73
Charges and fees on loans 32 12 167 50 23 117
Shared ATM network fees 27 13 108 39 24 63
Mutual fund and annuity sales fees 18 8 125 27 18 50
All other 71 30 137 108 67 61
-------- -------- -------- --------
Total fees and commissions 211 103 105 329 204 61
Trust and investment services income:
Asset management and custody fees 60 32 88 95 63 51
Mutual fund management fees 34 17 100 55 31 77
All other 10 8 25 14 18 (22)
-------- -------- -------- --------
Total trust and investment services income 104 57 82 164 112 46
Investment securities gains (losses) 3 -- -- 2 (15) --
Income from equity investments accounted for by the:
Cost method 20 13 54 55 32 72
Equity method 8 12 (33) 10 20 (50)
Check printing charges 15 9 67 24 20 20
Gains (losses) from dispositions of operations 1 (9) -- 5 (9) --
Gains (losses) on sales of loans 1 1 -- 5 (66) --
Losses on dispositions of premises and equipment (5) (5) -- (17) (8) (113)
All other 23 10 130 36 25 44
-------- -------- -------- --------
Total $ 639 $ 310 106% $ 993 $ 551 80%
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
NONINTEREST EXPENSE
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Quarter Six months
ended June 30, ended June 30,
--------------------- % ---------------------- %
(in millions) 1996 1995 Change 1996 1995 Change
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Salaries $ 400 $ 177 126% $ 581 $ 349 66%
Incentive compensation 61 33 85 93 60 55
Employee benefits 102 48 113 157 101 55
Equipment 111 45 147 167 92 82
Net occupancy 108 53 104 161 106 52
Contract services 66 38 74 108 64 69
Core deposit intangible:
Nonqualifying (1) 72 -- -- 72 -- --
Qualifying 10 11 (9) 19 22 (14)
Goodwill 81 9 800 89 17 424
Outside professional services 31 11 182 44 20 120
Telecommunications 28 15 87 44 28 57
Operating losses 27 11 145 42 27 56
Postage 26 14 86 41 26 58
Advertising and promotion 21 17 24 34 31 10
Stationery and supplies 21 9 133 31 18 72
Travel and entertainment 16 10 60 26 17 53
Security 17 5 240 23 10 130
Outside data processing 15 3 400 18 5 260
Check printing 10 6 67 16 12 33
Escrow and collection agency fees 9 4 125 13 8 63
Federal deposit insurance 3 24 (88) 4 47 (91)
Foreclosed assets 1 2 (50) 3 (2) --
All other 41 15 173 58 38 53
-------- -------- -------- --------
Total $ 1,277 $ 560 128% $ 1,844 $ 1,096 68%
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Amortization of core deposit intangibles acquired after February 1992
that are subtracted from stockholders' equity in computing regulatory
capital for bank holding companies.
<PAGE>
-10-
<TABLE>
<CAPTION>
Wells Fargo & Company and Subsidiaries
AVERAGE BALANCES, YIELDS AND RATES PAID (TAXABLE-EQUIVALENT BASIS) (1)
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
Quarter ended June 30,
--------------------------------------------------------------------
1996 1995
--------------------------------------------------------------------
INTEREST Interest
AVERAGE YIELDS/ INCOME/ Average Yields/ income/
(in millions) BALANCE RATES EXPENSE balance rates expense
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EARNING ASSETS
Federal funds sold and securities purchased
(1) under resale agreements $ 588 5.36% $ 8 $ 66 6.18% $ 1
Investment securities:
At fair value (2):
(2) U.S. Treasury securities 3,177 5.52 44 426 6.70 7
Securities of U.S. government agencies
(3) and corporations 8,434 6.07 129 998 5.38 14
(4) Private collateralized mortgage obligations 2,653 6.23 42 956 6.41 16
(5) Other securities 668 6.83 10 62 14.42 1
-------- -------- -------- --------
(6) Total investment securities at fair value 14,932 6.01 225 2,442 6.16 38
At cost:
(7) U.S. Treasury securities -- -- -- 1,469 4.85 18
Securities of U.S. government agencies
(8) and corporations -- -- -- 4,996 6.04 75
(9) Private collateralized mortgage obligations -- -- -- 1,249 5.85 18
(10) Other securities -- -- -- 156 6.85 3
-------- -------- -------- --------
(11) Total investment securities at cost -- -- -- 7,870 5.80 114
-------- -------- -------- --------
(12) Total investment securities 14,932 6.01 225 10,312 5.89 152
(13) Mortgage loans held for sale (2) -- -- -- 2,884 7.33 54
Loans:
(14) Commercial 19,460 8.75 424 8,436 10.01 211
(15) Real estate 1-4 family first mortgage 11,924 7.50 224 5,063 7.42 94
(16) Other real estate mortgage 13,006 9.32 300 8,058 9.49 190
(17) Real estate construction 2,385 10.07 60 1,070 10.20 27
Consumer:
(18) Real estate 1-4 family junior lien mortgage 6,790 8.96 152 3,356 8.55 72
(19) Credit card 5,183 14.61 189 3,433 15.62 134
(20) Other revolving credit and monthly payment 9,151 9.35 213 2,353 10.56 62
-------- -------- -------- --------
(21) Total consumer 21,124 10.51 554 9,142 11.73 268
(22) Lease financing 2,599 8.76 57 1,405 9.22 32
(23) Foreign 236 4.72 3 28 7.98 1
-------- -------- -------- --------
(24) Total loans 70,734 9.20 1,622 33,202 9.93 823
(25) Other 396 6.62 7 61 5.30 1
-------- -------- -------- --------
(26) Total earning assets $ 86,650 8.62 1,862 $ 46,525 8.86 1,031
-------- -------- -------- --------
-------- --------
FUNDING SOURCES
Interest-bearing liabilities:
Deposits:
(27) Interest-bearing checking $ 7,060 1.24 22 $ 4,210 1.00 11
(28) Market rate and other savings 32,921 2.68 220 15,170 2.54 96
(29) Savings certificates 16,779 4.84 201 7,948 5.27 104
(30) Other time deposits 483 5.89 7 442 7.21 8
(31) Deposits in foreign offices 303 5.17 4 2,309 6.06 35
-------- -------- -------- --------
(32) Total interest-bearing deposits 57,546 3.17 454 30,079 3.38 254
Federal funds purchased and securities sold
(33) under repurchase agreements 1,667 5.08 21 3,924 6.02 59
(34) Commercial paper and other short-term borrowings 296 4.19 3 621 5.95 9
(35) Senior debt 2,289 6.07 35 1,511 6.85 26
(36) Subordinated debt 2,580 7.03 45 1,484 6.54 24
-------- -------- -------- --------
(37) Total interest-bearing liabilities 64,378 3.49 558 37,619 3.96 372
(38) Portion of noninterest-bearing funding sources 22,272 -- -- 8,906 -- --
-------- -------- -------- --------
(39) Total funding sources $ 86,650 2.59 558 $ 46,525 3.20 372
-------- -------- -------- --------
-------- --------
NET INTEREST MARGIN AND NET INTEREST INCOME ON
(40) A TAXABLE-EQUIVALENT BASIS (3) 6.03% $ 1,304 5.66% $ 659
----- -------- ----- --------
----- -------- ----- --------
NONINTEREST-EARNING ASSETS
(41) Cash and due from banks $ 8,569 $ 2,602
(42) Other 13,211 2,364
-------- --------
Total noninterest-earning assets $ 21,780 $ 4,966
-------- --------
-------- --------
NONINTEREST-BEARING FUNDING SOURCES
(43) Deposits $ 26,596 $ 8,898
(44) Other liabilities 2,414 1,157
(45) Preferred stockholders' equity 839 489
(46) Common stockholders' equity 14,203 3,328
Noninterest-bearing funding sources used to
(47) fund earning assets (22,272) (8,906)
-------- --------
(48) Net noninterest-bearing funding sources $ 21,780 $ 4,966
-------- --------
-------- --------
(49) TOTAL ASSETS $108,430 $ 51,491
-------- --------
-------- --------
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The average prime rate of Wells Fargo Bank was 8.25% and 9.00%
for the quarters ended June 30, 1996 and 1995, respectively.
The average three-month London Interbank Offered Rate (LIBOR) was
5.52% and 6.12% for the same quarters, respectively.
(2) Yields are based on amortized cost balances. The average
amortized cost balances for investment securities at fair value
totaled $15,012 million and $2,492 million for the quarters ended
June 30, 1996 and 1995, respectively. The average amortized cost
balance for mortgage loans held for sale totaled $2,925 million
for the quarter ended June 30, 1995.
(3) Includes taxable-equivalent adjustments that primarily relate to
income on certain loans and securities that is exempt from
federal and applicable state income taxes. The federal statutory
tax rate was 35% for all periods presented.
<PAGE>
-11-
<TABLE>
<CAPTION>
Wells Fargo & Company and Subsidiaries
AVERAGE BALANCES, YIELDS AND RATES PAID (TAXABLE-EQUIVALENT BASIS) (1)
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
Quarter ended June 30,
--------------------------------------------------------------------
1996 1995
--------------------------------------------------------------------
INTEREST Interest
AVERAGE YIELDS/ INCOME/ Average Yields/ income/
(in millions) BALANCE RATES EXPENSE balance rates expense
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EARNING ASSETS
Federal funds sold and securities purchased
(1) under resale agreements $ 357 5.42% $ 10 $ 57 5.93% $ 2
Investment securities:
At fair value (2):
(2) U.S. Treasury securities 2,266 5.52 62 406 6.70 14
Securities of U.S. government agencies
(3) and corporations 6,712 6.02 203 1,104 5.59 32
(4) Private collateralized mortgage obligations 2,366 6.15 73 1,022 6.38 34
(5) Other securities 447 7.03 15 64 14.49 3
-------- -------- -------- --------
(6) Total investment securities at fair value 11,791 5.99 353 2,596 6.21 83
At cost:
(7) U.S. Treasury securities -- -- -- 1,557 4.84 38
Securities of U.S. government agencies
(8) and corporations -- -- -- 5,114 6.03 154
(9) Private collateralized mortgage obligations -- -- -- 1,267 5.89 37
(10) Other securities -- -- -- 160 6.76 5
-------- -------- -------- --------
(11) Total investment securities at cost -- -- -- 8,098 5.79 234
-------- -------- -------- --------
(12) Total investment securities 11,791 5.99 353 10,694 5.90 317
(13) Mortgage loans held for sale (2) -- -- -- 1,450 7.29 54
Loans:
(14) Commercial 14,384 9.15 655 8,246 9.89 405
(15) Real estate 1-4 family first mortgage 8,162 7.52 307 7,042 7.24 255
(16) Other real estate mortgage 10,602 9.28 489 8,090 9.54 383
(17) Real estate construction 1,856 10.04 93 1,045 10.18 53
Consumer:
(18) Real estate 1-4 family junior lien mortgage 5,062 8.81 222 3,339 8.60 143
(19) Credit card 4,558 15.02 343 3,280 15.69 257
(20) Other revolving credit and monthly payment 5,875 9.76 285 2,311 10.49 121
-------- -------- -------- --------
(21) Total consumer 15,495 10.99 850 8,930 11.70 521
(22) Lease financing 2,248 8.95 101 1,378 9.19 63
(23) Foreign 133 4.98 3 28 7.46 1
-------- -------- -------- --------
(24) Total loans 52,880 9.48 2,498 34,759 9.72 1,681
(25) Other 231 6.57 7 60 5.44 2
-------- -------- -------- --------
(26) Total earning assets $ 65,259 8.82 2,868 $ 47,020 8.76 2,056
-------- -------- -------- --------
-------- -------- --------
FUNDING SOURCES
Interest-bearing liabilities:
Deposits:
(27) Interest-bearing checking $ 3,958 1.21 24 $ 4,287 1.00 21
(28) Market rate and other savings 25,456 2.62 332 15,643 2.55 198
(29) Savings certificates 12,707 4.98 315 7,649 5.09 193
(30) Other time deposits 412 6.46 13 400 5.10 10
(31) Deposits in foreign offices 414 5.33 11 2,486 5.96 74
-------- -------- -------- --------
(32) Total interest-bearing deposits 42,947 3.25 695 30,465 3.28 496
Federal funds purchased and securities sold
(33) under repurchase agreements 2,186 5.25 57 3,905 5.92 115
(34) Commercial paper and other short-term borrowings 350 4.81 8 654 5.92 19
(35) Senior debt 2,000 6.15 61 1,575 6.89 54
(36) Subordinated debt 1,923 6.97 67 1,477 6.57 48
-------- -------- -------- --------
(37) Total interest-bearing liabilities 49,406 3.61 888 38,076 3.87 732
(38) Portion of noninterest-bearing funding sources 15,853 -- -- 8,944 -- --
-------- -------- -------- --------
(39) Total funding sources $ 65,259 2.74 888 $ 47,020 3.13 732
-------- -------- -------- --------
-------- --------
NET INTEREST MARGIN AND NET INTEREST INCOME ON
(40) A TAXABLE-EQUIVALENT BASIS (3) 6.08% $ 1,980 5.63% $ 1,324
---- -------- ---- --------
---- -------- ---- --------
NONINTEREST-EARNING ASSETS
(41) Cash and due from banks $ 5,721 $ 2,595
(42) Other 7,802 2,323
-------- --------
Total noninterest-earning assets $ 13,523 $ 4,918
-------- --------
-------- --------
NONINTEREST-BEARING FUNDING SOURCES
(43) Deposits $ 17,966 $ 8,883
(44) Other liabilities 1,846 1,149
(45) Preferred stockholders' equity 664 489
(46) Common stockholders' equity 8,900 3,341
Noninterest-bearing funding sources used to
(47) fund earning assets (15,853) (8,944)
-------- --------
(48) Net noninterest-bearing funding sources $ 13,523 $ 4,918
-------- --------
-------- --------
(49) TOTAL ASSETS $ 78,782 $ 51,938
-------- --------
-------- --------
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The average prime rate of Wells Fargo Bank was 8.29% and 8.91%
for the six months ended June 30, 1996 and 1995, respectively.
The average three-month London Interbank Offered Rate (LIBOR) was
5.46% and 6.21% for the same periods, respectively.
(2) Yields are based on amortized cost balances. The average
amortized cost balances for investment securities at fair value
totaled $11,814 million and $2,685 million for the six months
ended June 30, 1996 and 1995, respectively. The average amortized
cost balance for mortgage loans held for sale totaled
$1,470 million for the six months ended June 30, 1995.
(3) Includes taxable-equivalent adjustments that primarily relate to
income on certain loans and securities that is exempt from
federal and applicable state income taxes. The federal statutory
tax rate was 35% for all periods presented.
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