|
|
|
|
|
|
|
|
|
|
|
|
|
<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): October 21, 1997
WELLS FARGO & COMPANY
(Exact name of registrant as specified in its charter)
Delaware 1-6214 No. 13-2553920
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
420 Montgomery Street, San Francisco, California 94163
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 1-800-411-4932
Not applicable
(Former name or former address, if changed since last report)
<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
September 30, 1997. Final financial statements with additional
analyses will be filed as part of the Company's Form 10-Q in
November 1997.
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 September 30, 1997.
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 October 21, 1997.
WELLS FARGO & COMPANY
By: 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 OCTOBER 21, 1997 FOR THE PERIOD ENDED SEPTEMBER 30, 1997 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL INFORMATION.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 7,823
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 188
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 10,737
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 65,104
<ALLOWANCE> 1,823
<TOTAL-ASSETS> 97,655
<DEPOSITS> 70,922
<SHORT-TERM> 4,726
<LIABILITIES-OTHER> 2,819
<LONG-TERM> 6,164
0
275
<COMMON> 434
<OTHER-SE> 12,211
<TOTAL-LIABILITIES-AND-EQUITY> 97,655
<INTEREST-LOAN> 4,570
<INTEREST-INVEST> 573
<INTEREST-OTHER> 39
<INTEREST-TOTAL> 5,197
<INTEREST-DEPOSIT> 1,280
<INTEREST-EXPENSE> 1,710
<INTEREST-INCOME-NET> 3,487
<LOAN-LOSSES> 420
<SECURITIES-GAINS> 6
<EXPENSE-OTHER> 3,450
<INCOME-PRETAX> 1,613
<INCOME-PRE-EXTRAORDINARY> 857
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 857
<EPS-PRIMARY> 9.38
<EPS-DILUTED> 0.00
<YIELD-ACTUAL> 6.00
<LOANS-NON> 565
<LOANS-PAST> 0
<LOANS-TROUBLED> 9
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 2,018
<CHARGE-OFFS> 816
<RECOVERIES> 201
<ALLOWANCE-CLOSE> 1,823
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
<PAGE>
Cindy Koehn 415/396-3099
Investor Relations
FOR IMMEDIATE RELEASE
- ---------------------
Tues., Oct. 21, 1997
WELLS FARGO REPORTS HIGHER PER SHARE EARNINGS IN THIRD QUARTER
PER SHARE EARNINGS OF $3.26 VS. $3.23 A YEAR AGO
CASH EARNINGS PER SHARE OF $4.57 VS. $4.52 A YEAR AGO
SAN FRANCISCO -- Wells Fargo & Co. (NYSE:WFC) today reported net income of
$290 million for the third quarter of 1997, compared with $321 million for the
third quarter of 1996. Per share earnings for the quarter were $3.26, compared
with $3.23 in the third quarter of 1996. Return on average assets (ROA) was
1.18 percent and return on average common equity (ROE) was 8.94 percent in the
third quarter of 1997. In the year-ago period, ROA was 1.18 percent and ROE was
8.64 percent.
Cash earnings for the third quarter of 1997 were $4.57 per share, compared
with $4.52 for the third quarter of 1996, an increase of 1 percent. Cash ROA
was 1.81 percent and cash ROE was 35.44 percent for the third quarter of 1997,
compared with 1.77 percent and 31.91 percent, respectively, for the third
quarter of 1996. Cash earnings are earnings before the amortization of goodwill
and nonqualifying core deposit intangible.
"We are encouraged by the business trends we have seen this quarter and the
upturn in loan volumes that occurred at the end of the quarter," said Paul
Hazen, Chairman. "Both loans and checking deposits bottomed out in August, and
grew in September." He pointed out that during the quarter, the bank completed
the sale of 83 branches and their deposits of $1.0 billion, which contributed to
the reduction in total deposits reported for the quarter.
Net interest income on a taxable-equivalent basis was $1.132 billion in the
third quarter of 1997, compared with $1.299 billion a year ago, a decrease of 13
percent. The decrease was primarily due to a decline in earning assets. The
Company's net interest margin for the quarter was 5.94 percent, compared with
6.15 percent a year ago.
Noninterest income for the third quarter of 1997 was $677 million, compared
with $643 million in the same period a year ago, an increase of 5 percent.
Noninterest expense for the third quarter of 1997 was $1.087 billion versus
$1.305 billion a year ago. The major portion of this decrease resulted from
cost savings achieved subsequent to the merger with First Interstate.
-more-
<PAGE>
2/WF 3Q earnings
The loan loss provision was $175 million in the third quarter of 1997,
compared with $35 million in the third quarter of 1996. The $140 million
increase from a year ago contributed substantially to the decline in the
Company's net income. Since the third quarter of 1996, the Company has been
increasing its loan loss provision by $30 to $40 million every quarter. In the
second quarter of 1997, the Company made a $140 million provision. The Company
expects that the provision will increase to approximately $205 to $215 million
in the fourth quarter of 1997, when it is anticipated that the provision will
approximate net charge-offs.
Net charge-offs in the third quarter of 1997 totaled $202 million, or 1.25
percent of average loans (annualized). The largest category of net charge-offs
was credit card loans ($112 million). For the third quarter of 1996, net
charge-offs totaled $171 million, or .98 percent of average loans (annualized).
The largest category of net charge-offs in that period was also credit card
loans ($95 million).
At September 30, 1997, the allowance for loan losses of $1.823 billion
equaled 2.80 percent of total loans, compared with 2.82 percent at June 30, 1997
and 3.09 percent at September 30, 1996. Total nonaccrual and restructured loans
were $574 million at September 30, 1997, compared with $612 million at June 30,
1997 and $728 million at September 30, 1996. Foreclosed assets were $196
million at September 30, 1997, compared with $194 million at June 30, 1997 and
$227 million at September 30, 1996.
At September 30, 1997, the Company's preliminary risk-based capital ratios
were 11.45 percent for total risk-based capital and 7.50 percent for Tier 1
risk-based capital, exceeding the minimum regulatory guidelines of 8 percent and
4 percent, respectively. At June 30, 1997, these risk-based capital ratios were
11.45 percent and 7.49 percent, respectively. At September 30, 1996, the
Company's total risk-based capital ratio was 11.05 percent and the Tier 1
risk-based capital ratio was 7.04 percent. The leverage ratio at September 30,
1997 was 6.75 percent, compared with 6.67 percent at June 30, 1997 and 6.12
percent at September 30, 1996. The ratio of common equity to total assets was
12.95 percent at September 30, 1997, 12.81 percent at June 30, 1997 and 12.71
percent at September 30, 1996.
- ----------------------------
The following appears in accordance with the Securities Litigation Reform Act:
This press release includes forward-looking statements that involve inherent
risks and uncertainties. A number of important factors could cause actual
results to differ materially from those in the forward-looking statements. Those
factors include fluctuations in interest rates, inflation, government
regulations, the progress of integrating First Interstate and economic
conditions and competition in the geographic and business areas in which the
Company conducts its operations.
#
VISIT WELLS FARGO ON THE WORLD WIDE WEB AT HTTP://WWW.WELLSFARGO.COM
<PAGE>
- 3 -
Wells Earnings
Wells Fargo & Company and Subsidiaries
SUMMARY FINANCIAL DATA -- NEWS RELEASE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
% Change
Quarter ended Sept. 30, 1997 from Nine months ended
----------------------------- ------------------- ------------------
SEPT. 30, June 30, Sept. 30, June 30, Sept. 30, SEPT. 30, Sept. 30, %
(in millions) 1997 1997 1996 1997 1996 1997 1996 Change
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE PERIOD
Net income $ 290 $ 228 $ 321 27% (10)% $ 857 $ 948 (10)%
Net income applicable to common stock 285 222 302 28 (6) 836 901 (7)
Per common share
Net income $ 3.26 $ 2.49 $ 3.23 31 1 $ 9.38 $ 11.42 (18)
Dividends declared 1.30 1.30 1.30 -- -- 3.90 3.90 --
Average common shares outstanding 87.5 89.0 93.7 (2) (7) 89.1 78.8 13
Profitability ratios (annualized)
Net income to average total assets (ROA) 1.18% .92% 1.18% 28 -- 1.14% 1.43% (20)
Net income applicable to common stock to
average common stockholders' equity (ROE) 8.94 6.88 8.64 30 3 8.62 11.36 (24)
Efficiency ratio (1) 60.2% 68.2% 67.3% (12) (11) 62.9% 64.2% (2)
Average loans $ 63,865 $ 64,618 $ 69,274 (1) (8) $ 64,653 $ 58,384 11
Average assets 97,032 99,739 108,378 (3) (10) 100,703 88,719 14
Average core deposits 70,744 73,524 82,378 (4) (14) 73,937 67,572 9
Net interest margin 5.94% 5.93% 6.15% -- (3) 6.00% 6.11% (2)
NET INCOME AND RATIOS EXCLUDING
GOODWILL AND NONQUALIFYING CORE DEPOSIT
INTANGIBLE AMORTIZATION AND BALANCES
("CASH" OR "TANGIBLE") (2)
Net income applicable to common stock $ 400 $ 338 $ 424 18 (6) $ 1,181 $ 1,154 2
Net income per common share 4.57 3.79 4.52 21 1 13.25 14.64 (9)
ROA 1.81% 1.51% 1.77% 20 2 1.74% 1.94% (10)
ROE 35.44 29.27 31.91 21 11 33.83 32.70 3
Efficiency ratio 52.6 60.6 59.6 (13) (12) 55.4 57.8 (4)
AT PERIOD END
Investment securities $ 10,737 $ 11,530 $ 13,433 (7) (20) $ 10,737 $ 13,433 (20)
Loans 65,104 65,689 69,233 (1) (6) 65,104 69,233 (6)
Allowance for loan losses 1,823 1,850 2,137 (1) (15) 1,823 2,137 (15)
Goodwill 7,149 7,231 7,407 (1) (3) 7,149 7,407 (3)
Assets 97,655 100,180 109,176 (3) (11) 97,655 109,176 (11)
Core deposits 70,580 73,545 83,308 (4) (15) 70,580 83,308 (15)
Common stockholders' equity 12,645 12,831 13,884 (1) (9) 12,645 13,884 (9)
Stockholders' equity 12,920 13,106 14,923 (1) (13) 12,920 14,923 (13)
Capital ratios
Common stockholders' equity to assets 12.95% 12.81% 12.71% 1 2 12.95% 12.71% 2
Stockholders' equity to assets 13.23 13.08 13.66 1 (3) 13.23 13.66 (3)
Risk-based capital (3)
Tier 1 capital 7.50 7.49 7.04 -- 7 7.50 7.04 7
Total capital 11.45 11.45 11.05 -- 4 11.45 11.05 4
Leverage (3) 6.75 6.67 6.12 1 10 6.75 6.12 10
Book value per common share $ 145.72 $ 145.68 $ 149.44 -- (2) $ 145.72 $ 149.44 (2)
Staff (active, full-time equivalent) 32,663 33,216 38,859 (2) (16) 32,663 38,859 (16)
COMMON STOCK PRICE
High $ 279.88 $ 287.88 $ 264.00 (3) 6 $ 319.25 $ 264.50 21
Low 250.13 246.00 220.13 2 14 246.00 203.13 21
Period end 275.00 269.50 260.00 2 6 275.00 260.00 6
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The efficiency ratio is defined as noninterest expense divided by the total
of net interest income and noninterest income.
(2) Nonqualifying core deposit intangible (CDI) amortization and average
balance excluded from these calculations are, with the exception of the
efficiency ratio, net of applicable taxes. The after-tax amounts for the
amortization and average balance of nonqualifying CDI were $34 million and
$1,000 million, respectively, for the quarter ended September 30, 1997 and
$100 million and $1,043 million, respectively, for the nine months ended
September 30, 1997. Goodwill amortization and average balance (which are
not tax effected) were $81 million and $7,190 million, respectively, for
the quarter ended September 30, 1997 and $245 million and $7,255 million,
respectively, for the nine months ended September 30, 1997.
(3) The September 30, 1997 ratios are preliminary.
<PAGE>
- 4 -
Wells Fargo & Company and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Quarter Nine months
ended Sept. 30, % ended Sept. 30, %
--------------------- --------------------
(in millions) 1997 1996 Change 1997 1996 Change
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
INTEREST INCOME
Federal funds sold and securities purchased
(1) under resale agreements $ 3 $ 11 (73)% $ 15 $ 21 (29)%
(2) Investment securities 175 215 (19) 573 568 1
(3) Loans 1,513 1,612 (6) 4,570 4,106 11
(4) Other 16 9 78 39 16 144
------ ------ ------ ------
(5) Total interest income 1,707 1,847 (8) 5,197 4,711 10
------ ------ ------ ------
INTEREST EXPENSE
(6) Deposits 430 446 (4) 1,280 1,140 12
Federal funds purchased and securities sold
(7) under repurchase agreements 44 15 193 109 72 51
(8) Commercial paper and other short-term borrowings 5 3 67 12 11 9
(9) Senior and subordinated debt 75 88 (15) 234 217 8
Guaranteed preferred beneficial interests in
(10) Company's subordinated debentures 25 -- -- 75 -- --
------ ------ ------ ------
(11) Total interest expense 579 552 5 1,710 1,440 19
------ ------ ------ ------
(12) NET INTEREST INCOME 1,128 1,295 (13) 3,487 3,271 7
(13) Provision for loan losses 175 35 400 420 35 --
------ ------ ------ ------
Net interest income after
(14) provision for loan losses 953 1,260 (24) 3,067 3,236 (5)
------ ------ ------ ------
NONINTEREST INCOME
(15) Service charges on deposit accounts 214 254 (16) 649 634 2
(16) Fees and commissions 246 205 20 694 534 30
(17) Trust and investment services income 117 104 13 338 267 27
(18) Investment securities gains (losses) (1) -- -- 6 2 200
(19) Other 101 80 26 309 199 55
------ ------ ------ ------
(20) Total noninterest income 677 643 5 1,996 1,636 22
------ ------ ------ ------
NONINTEREST EXPENSE
(21) Salaries 308 378 (19) 964 960 --
(22) Incentive compensation 54 53 2 143 146 (2)
(23) Employee benefits 80 105 (24) 256 261 (2)
(24) Equipment 97 103 (6) 289 269 7
(25) Net occupancy 96 96 -- 292 257 14
(26) Goodwill 81 81 -- 245 170 44
(27) Core deposit intangible 64 78 (18) 193 170 14
(28) Operating losses 40 31 29 262 72 264
(29) Other 267 380 (30) 806 844 (5)
------ ------ ------ ------
(30) Total noninterest expense 1,087 1,305 (17) 3,450 3,149 10
------ ------ ------ ------
INCOME BEFORE INCOME TAX
(31) EXPENSE 543 598 (9) 1,613 1,723 (6)
(32) Income tax expense 253 277 (9) 756 775 (2)
------ ------ ------ ------
(33) NET INCOME $ 290 $ 321 (10)% $ 857 $ 948 (10)%
------ ------ ----- ------ ------ -----
------ ------ ----- ------ ------ -----
NET INCOME APPLICABLE TO
(34) COMMON STOCK $ 285 $ 302 (6)% $ 836 $ 901 (7)%
------ ------ ----- ------ ------ -----
------ ------ ----- ------ ------ -----
PER COMMON SHARE
(35) Net income $ 3.26 $ 3.23 1 % $ 9.38 $11.42 (18)%
------ ------ ----- ------ ------ -----
------ ------ ----- ------ ------ -----
(36) Dividends declared $ 1.30 $ 1.30 -- % $ 3.90 $ 3.90 -- %
------ ------ ----- ------ ------ -----
------ ------ ----- ------ ------ -----
(37) Average common shares outstanding 87.5 93.7 (7)% 89.1 78.8 13 %
------ ------ ----- ------ ------ -----
------ ------ ----- ------ ------ -----
------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- 5 -
Wells Fargo & Company and Subsidiaries
CONSOLIDATED BALANCE SHEET
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
% Change
Sept. 30, 1997 from
-----------------------
SEPT. 30, Dec. 31, Sept. 30, Dec. 31, Sept. 30,
(in millions) 1997 1996 1996 1996 1996
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
(1) Cash and due from banks $ 7,823 $ 11,736 $ 11,622 (33)% (33)%
Federal funds sold and securities
(2) purchased under resale agreements 188 187 284 1 (34)
(3) Investment securities at fair value 10,737 13,505 13,433 (20) (20)
(4) Loans 65,104 67,389 69,233 (3) (6)
(5) Allowance for loan losses 1,823 2,018 2,137 (10) (15)
------- -------- --------
(6) Net loans 63,281 65,371 67,096 (3) (6)
------- -------- --------
(7) Due from customers on acceptances 104 197 356 (47) (71)
(8) Accrued interest receivable 537 665 590 (19) (9)
(9) Premises and equipment, net 2,173 2,406 2,380 (10) (9)
(10) Core deposit intangible 1,771 2,038 2,130 (13) (17)
(11) Goodwill 7,149 7,322 7,407 (2) (3)
(12) Other assets 3,892 5,461 3,878 (29) --
------- -------- --------
(13) Total assets $97,655 $108,888 $109,176 (10)% (11)%
------- -------- -------- --- ---
------- -------- -------- --- ---
LIABILITIES
(14) Noninterest-bearing deposits $23,005 $ 29,073 $ 29,512 (21)% (22)%
(15) Interest-bearing deposits 47,917 52,748 54,225 (9) (12)
------- -------- --------
(16) Total deposits 70,922 81,821 83,737 (13) (15)
Federal funds purchased and securities
(17) sold under repurchase agreements 4,268 2,029 1,033 110 313
(18) Commercial paper and other short-term borrowings 458 401 350 14 31
(19) Acceptances outstanding 104 197 356 (47) (71)
(20) Accrued interest payable 245 171 215 43 14
(21) Other liabilities 2,574 3,947 3,151 (35) (18)
(22) Senior debt 2,280 2,120 2,470 8 (8)
(23) Subordinated debt 2,585 2,940 2,941 (12) (12)
Guaranteed preferred beneficial interests in
(24) Company's subordinated debentures 1,299 1,150 -- 13 --
STOCKHOLDERS' EQUITY
(25) Preferred stock 275 600 1,039 (54) (74)
Common stock - $5 par value,
authorized 150,000,000 shares;
issued and outstanding 86,780,522 shares,
(26) 91,474,425 shares and 92,875,661 shares 434 457 464 (5) (6)
(27) Additional paid-in capital 8,925 10,287 10,674 (13) (16)
(28) Retained earnings 3,235 2,749 2,766 18 17
(29) Cumulative foreign currency translation adjustments -- (4) (4) (100) (100)
(30) Investment securities valuation allowance 51 23 (16) 122 --
------- -------- --------
(31) Total stockholders' equity 12,920 14,112 14,923 (8) (13)
------- -------- --------
(32) Total liabilities and stockholders' equity $97,655 $108,888 $109,176 (10)% (11)%
------- -------- -------- -- --
------- -------- -------- -- --
----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- 6 -
Wells Fargo & Company and Subsidiaries
CONDENSED CONSOLIDATED STATEMENT OF
CHANGES IN STOCKHOLDERS' EQUITY
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Nine months ended Sept. 30,
--------------------------
(in millions) 1997 1996
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
BALANCE, BEGINNING OF PERIOD $14,112 $ 4,055
Net income 857 948
Common stock issued to First Interstate stockholders -- 11,297
Common stock issued under employee benefit and
dividend reinvestment plans 67 88
Preferred stock issued to First Interstate stockholders -- 360
Preferred stock redeemed (325) 197
Common stock repurchased (1,452) (1,735)
Preferred stock dividends (21) (47)
Common stock dividends (350) (309)
Change in foreign currency translation adjustments 4 --
Change in investment securities valuation allowance 28 (42)
Fair value adjustment related to First Interstate stock options -- 111
------- -------
BALANCE, END OF PERIOD $12,920 $14,923
------- -------
------- -------
- ----------------------------------------------------------------------------------------------------
<CAPTION>
LOANS
- ----------------------------------------------------------------------------------------------------
SEPT. 30, Dec. 31, Sept. 30,
(in millions) 1997 1996 1996
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Commercial $19,512 $19,515 $20,064
Real estate 1-4 family first mortgage 9,311 10,425 10,754
Other real estate mortgage 11,614 11,860 12,462
Real estate construction 2,351 2,303 2,331
Consumer:
Real estate 1-4 family junior lien mortgage 5,931 6,278 6,406
Credit card 5,020 5,462 5,292
Other revolving credit and monthly payment 7,513 8,374 8,846
------- ------- -------
Total consumer 18,464 20,114 20,544
Lease financing 3,754 3,003 2,891
Foreign 98 169 187
------- ------- -------
Total loans $65,104 $67,389 $69,233
------- ------- -------
------- ------- -------
- ----------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- 7 -
Wells Fargo & Company and Subsidiaries
CHANGES IN THE ALLOWANCE FOR LOAN LOSSES
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Quarter ended Nine months ended
-------------------------------------- -----------------------
SEPT. 30, June 30, Sept. 30, SEPT. 30, Sept. 30,
(in millions) 1997 1997 1996 1997 1996
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
BALANCE, BEGINNING OF PERIOD $1,850 $1,922 $2,273 $2,018 $1,794
Allowance of First Interstate -- -- -- -- 770
Provision for loan losses 175 140 35 420 35
Loan charge-offs:
Commercial (69) (60) (30) (198) (91)
Real estate 1-4 family first mortgage (5) (5) (4) (15) (13)
Other real estate mortgage (2) (2) (13) (13) (29)
Real estate construction -- (2) (5) (3) (9)
Consumer:
Real estate 1-4 family junior lien mortgage (6) (6) (7) (18) (24)
Credit card (124) (133) (105) (372) (292)
Other revolving credit and monthly payment (55) (57) (52) (168) (124)
------ ------ ------ ------ ------
Total consumer (185) (196) (164) (558) (440)
Lease financing (10) (10) (7) (29) (21)
------ ------ ------ ------ ------
Total loan charge-offs (271) (275) (223) (816) (603)
------ ------ ------ ------ ------
Loan recoveries:
Commercial 21 20 16 53 30
Real estate 1-4 family first mortgage 1 1 1 3 6
Other real estate mortgage 13 8 9 42 32
Real estate construction 1 -- 2 3 6
Consumer:
Real estate 1-4 family junior lien mortgage 2 1 2 6 7
Credit card 12 11 10 34 26
Other revolving credit and monthly payment 17 19 10 51 28
------ ------ ------ ------ ------
Total consumer 31 31 22 91 61
Lease financing 2 3 2 9 6
------ ------ ------ ------ ------
Total loan recoveries 69 63 52 201 141
------ ------ ------ ------ ------
Total net loan charge-offs (202) (212) (171) (615) (462)
------ ------ ------ ------ ------
BALANCE, END OF PERIOD $1,823 $1,850 $2,137 $1,823 $2,137
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Total net loan charge-offs as a percentage
of average loans (annualized) 1.25% 1.32% .98% 1.27% 1.05%
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Allowance as a percentage of total loans 2.80% 2.82% 3.09% 2.80% 3.09%
------ ------ ------ ------ ------
------ ------ ------ ------ ------
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- 8 -
Wells Fargo & Company and Subsidiaries
NONACCRUAL AND RESTRUCTURED LOANS AND OTHER ASSETS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
SEPT. 30, Dec. 31, Sept. 30,
(in millions) 1997 1996 1996
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Nonaccrual loans:
Commercial $172 $223 $216
Real estate 1-4 family first mortgage 100 99 77
Other real estate mortgage 258 349 370
Real estate construction 18 25 28
Consumer:
Real estate 1-4 family junior lien mortgage 16 15 21
Other revolving credit and monthly payment 1 1 2
Lease financing -- 2 3
---- ---- ----
Total nonaccrual loans 565 714 717
Restructured loans 9 10 11
---- ---- ----
Nonaccrual and restructured loans 574 724 728
As a percentage of total loans .9% 1.1% 1.1%
Foreclosed assets 196 219 227
Real estate investments (1) 4 4 6
---- ---- ----
Total nonaccrual and restructured loans
and other assets $774 $947 $961
---- ---- ----
---- ---- ----
- ------------------------------------------------------------------------------------------
</TABLE>
(1) Represents the amount of real estate investments (contingent interest loans
accounted for as investments) that would be classified as nonaccrual if
such assets were loans. Real estate investments totaled $170 million, $154
million and $128 million at September 30, 1997, December 31, 1996 and
September 30, 1996, respectively.
<PAGE>
- 9 -
Wells Fargo & Company and Subsidiaries
NONINTEREST INCOME
<TABLE>
<CAPTION>
Quarter Nine months
ended Sept. 30, % ended Sept. 30, %
----------------- --------------
(in millions) 1997 1996 Change 1997 1996 Change
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Service charges on deposit accounts $214 $254 (16)% $ 649 $ 634 2%
Fees and commissions:
Credit card membership and other credit card fees 62 30 107 162 83 95
Shared ATM network fees 43 28 54 125 67 87
Charges and fees on loans 37 32 16 100 81 23
Debit and credit card merchant fees 25 33 (24) 72 85 (15)
Mutual fund and annuity sales fees 18 17 6 51 44 16
All other 61 65 (6) 184 174 6
---- ---- ------ ------
Total fees and commissions 246 205 20 694 534 30
Trust and investment services income:
Asset management and custody fees 64 59 8 186 154 21
Mutual fund management fees 47 34 38 131 89 47
All other 6 11 (45) 21 24 (13)
---- ---- ------ ------
Total trust and investment services income 117 104 13 338 267 27
Investment securities gains (losses) (1) -- -- 6 2 200
Income from equity investments accounted for by the:
Cost method 18 37 (51) 109 92 18
Equity method 11 3 267 42 13 223
Check printing charges 17 15 13 53 39 36
Gains on sales of loans 28 6 367 41 11 273
Gains (losses) from dispositions of operations (1) (1) -- 7 5 40
Losses on dispositions of premises and equipment (10) (8) 25 (45) (25) 80
All other 38 28 36 102 64 59
---- ---- ------ ----
Total $677 $643 5% $1,996 $1,636 22%
---- ---- -- ------ ------ ---
---- ---- -- ------ ------ ---
- --------------------------------------------------------------------------------------------------------------------------
NONINTEREST EXPENSE
- --------------------------------------------------------------------------------------------------------------------------
Quarter Nine months
ended Sept. 30, % ended Sept. 30, %
----------------- ----------------
(in millions) 1997 1996 Change 1997 1996 Change
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Salaries $ 308 $ 378 (19)% $ 964 $ 960 --%
Incentive compensation 54 53 2 143 146 (2)
Employee benefits 80 105 (24) 256 261 (2)
Equipment 97 103 (6) 289 269 7
Net occupancy 96 96 -- 292 257 14
Goodwill 81 81 -- 245 170 44
Core deposit intangible:
Nonqualifying (1) 56 69 (19) 169 142 19
Qualifying 8 9 (11) 24 28 (14)
Operating losses 40 31 29 262 72 264
Contract services 56 88 (36) 172 196 (12)
Telecommunications 35 42 (17) 108 85 27
Security 22 16 38 66 38 74
Postage 19 27 (30) 64 68 (6)
Outside professional services 20 32 (38) 56 76 (26)
Stationery and supplies 19 18 6 56 49 14
Advertising and promotion 19 32 (41) 53 66 (20)
Travel and entertainment 15 23 (35) 44 48 (8)
Check printing 12 11 9 42 27 56
Outside data processing 11 17 (35) 37 36 3
Foreclosed assets 1 2 (50) (2) 5 --
All other 38 72 (47) 110 150 (27)
------ ------ ------ ------
Total $1,087 $1,305 (17)% $3,450 $3,149 10%
------ ------ --- ------ ------ --
------ ------ --- ------ ------ --
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Amortization of core deposit intangible acquired after February 1992 that
is subtracted from stockholders' equity in computing regulatory capital for
bank holding companies.
<PAGE>
- 10 -
Wells Fargo & Company and Subsidiaries
AVERAGE BALANCES, YIELDS AND RATES PAID (TAXABLE-EQUIVALENT BASIS) (1)
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
Quarter ended September 30,
-------------------------------------------------------------------
1997 1996
-------------------------------- ------------------------------
INTEREST Interest
AVERAGE YIELDS/ INCOME/ Average Yields/ income/
(in millions) BALANCE RATES EXPENSE balance rates expense
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
EARNING ASSETS
Federal funds sold and securities purchased
(1) under resale agreements $ 229 5.63% $ 3 $ 800 5.44% $ 11
Investment securities at fair value (2):
(2) U.S. Treasury securities 2,634 6.00 40 2,678 5.92 40
Securities of U.S. government agencies
(3) and corporations 5,303 6.42 85 7,473 6.32 119
(4) Private collateralized mortgage obligations 2,737 6.68 46 2,920 6.49 48
(5) Other securities 330 6.41 4 489 6.49 8
-------- -------- -------- --------
(6) Total investment securities at fair value 11,004 6.38 175 13,560 6.28 215
Loans:
(7) Commercial 18,283 9.11 419 18,848 8.92 422
(8) Real estate 1-4 family first mortgage 9,543 7.52 180 11,514 7.32 211
(9) Other real estate mortgage 11,421 9.35 269 12,614 9.15 290
(10) Real estate construction 2,304 10.90 63 2,345 10.97 65
Consumer:
(11) Real estate 1-4 family junior lien mortgage 5,946 9.35 140 6,716 9.17 154
(12) Credit card 5,073 14.66 186 5,295 14.84 196
(13) Other revolving credit and monthly payment 7,638 9.26 178 9,011 9.44 214
-------- -------- -------- --------
(14) Total consumer 18,657 10.75 504 21,022 10.71 564
(15) Lease financing 3,533 8.99 79 2,791 8.75 61
(16) Foreign 124 6.88 2 140 8.25 3
-------- -------- -------- --------
(17) Total loans 63,865 9.45 1,516 69,274 9.30 1,616
(18) Other 883 7.18 16 550 6.25 9
-------- -------- -------- --------
Total earning assets $ 75,981 8.97 1,710 $ 84,184 8.76 1,851
-------- -------- -------- --------
-------- --------
FUNDING SOURCES
Deposits:
(19) Interest-bearing checking $ 1,736 1.45 6 $ 6,022 1.31 20
(20) Market rate and other savings 31,098 2.64 207 32,918 2.64 218
(21) Savings certificates 15,602 5.17 203 16,496 4.74 197
(22) Other time deposits 253 4.83 3 381 6.89 7
(23) Deposits in foreign offices 731 5.48 10 293 5.08 4
-------- -------- -------- --------
(24) Total interest-bearing deposits 49,420 3.45 429 56,110 3.15 446
Federal funds purchased and securities sold
(25) under repurchase agreements 3,211 5.48 44 1,217 5.01 15
(26) Commercial paper and other short-term borrowings 343 5.82 5 361 3.37 3
(27) Senior debt 1,770 6.47 29 2,607 6.05 40
(28) Subordinated debt 2,604 7.12 46 2,816 6.92 48
Guaranteed preferred beneficial interests in Company's
(29) subordinated debentures 1,299 7.81 25 -- -- --
-------- -------- -------- --------
(30) Total interest-bearing liabilities 58,647 3.92 578 63,111 3.48 552
(31) Portion of noninterest-bearing funding sources 17,334 -- -- 21,073 -- --
-------- -------- -------- --------
(32) Total funding sources $ 75,981 3.03 578 $ 84,184 2.61 552
-------- -------- -------- --------
-------- --------
NET INTEREST MARGIN AND NET INTEREST INCOME ON
(33) A TAXABLE-EQUIVALENT BASIS (3) 5.94% $ 1,132 6.15% $ 1,299
-------- -------- -------- --------
-------- -------- -------- --------
NONINTEREST-EARNING ASSETS
(34) Cash and due from banks $ 7,299 $ 9,877
(35) Goodwill 7,190 7,439
(36) Other 6,562 6,878
-------- --------
Total noninterest-earning assets $ 21,051 $ 24,194
-------- --------
-------- --------
NONINTEREST-BEARING FUNDING SOURCES
(37) Deposits $ 22,308 $ 26,942
(38) Other liabilities 3,135 3,551
(39) Preferred stockholders' equity 275 854
(40) Common stockholders' equity 12,667 13,920
Noninterest-bearing funding sources used to
(41) fund earning assets (17,334) (21,073)
-------- --------
(42) Net noninterest-bearing funding sources $ 21,051 $ 24,194
-------- --------
-------- --------
(43) TOTAL ASSETS $ 97,032 $108,378
-------- --------
-------- --------
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The average prime rate of Wells Fargo Bank was 8.50% and 8.25% for the
quarters ended September 30, 1997 and 1996, respectively. The average
three-month London Interbank Offered Rate (LIBOR) was 5.73% and 5.59%
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 $10,931 million
and $13,651 million for the quarters ended September 30, 1997 and 1996,
respectively.
(3) Includes taxable-equivalent adjustments that primarily relate to income
on certain loans and securities that is exempt from federal and
applicable state income taxes. The federal statutory tax rate was 35%
for the quarters ended September 30, 1997 and 1996.
<PAGE>
- 11 -
Wells Fargo & Company and Subsidiaries
AVERAGE BALANCES, YIELDS AND RATES PAID (TAXABLE-EQUIVALENT BASIS) (1)
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------
Nine months ended September 30,
-------------------------------------------------------------------
1997 1996
-------------------------------- ------------------------------
INTEREST Interest
AVERAGE YIELDS/ INCOME/ Average Yields/ income/
(in millions) BALANCE RATES EXPENSE balance rates expense
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
EARNING ASSETS
Federal funds sold and securities purchased
(1) under resale agreements $ 351 5.58% $ 15 $ 505 5.43% $ 21
Investment securities at fair value (2):
(2) U.S. Treasury securities 2,745 6.03 124 2,405 5.67 102
Securities of U.S. government agencies
(3) and corporations 5,972 6.43 287 6,968 6.13 322
(4) Private collateralized mortgage obligations 2,935 6.63 147 2,552 6.28 122
(5) Other securities 340 6.42 15 460 6.84 22
-------- ------ -------- ------
(6) Total investment securities at fair value 11,992 6.39 573 12,385 6.09 568
Loans:
(7) Commercial 18,373 9.07 1,246 15,883 9.05 1,077
(8) Real estate 1-4 family first mortgage 9,899 7.49 555 9,287 7.43 518
(9) Other real estate mortgage 11,514 9.82 846 11,277 9.23 778
(10) Real estate construction 2,288 10.23 175 2,020 10.40 157
Consumer:
(11) Real estate 1-4 family junior lien mortgage 6,049 9.34 423 5,617 8.95 377
(12) Credit card 5,188 14.39 560 4,805 14.95 539
(13) Other revolving credit and monthly payment 7,913 9.29 550 6,929 9.62 499
-------- ------ -------- ------
(14) Total consumer 19,150 10.69 1,533 17,351 10.88 1,415
(15) Lease financing 3,295 8.83 218 2,430 8.87 162
(16) Foreign 134 6.91 7 136 6.11 6
-------- ------ -------- ------
(17) Total loans 64,653 9.46 4,580 58,384 9.40 4,113
(18) Other 770 6.79 39 339 6.39 16
-------- ------ -------- ------
Total earning assets $ 77,766 8.94 5,207 $ 71,613 8.79 4,718
-------- ------ -------- ------
-------- ------ -------- ------
FUNDING SOURCES
Deposits:
(19) Interest-bearing checking $1,847 1.30 18 $4,651 1.26 44
(20) Market rate and other savings 32,562 2.59 632 27,962 2.63 550
(21) Savings certificates 15,596 5.10 595 13,979 4.88 511
(22) Other time deposits 201 4.47 7 402 6.59 20
(23) Deposits in foreign offices 708 5.38 28 373 5.26 15
-------- ------ -------- ------
(24) Total interest-bearing deposits 50,914 3.36 1,280 47,367 3.21 1,140
Federal funds purchased and securities sold
(25) under repurchase agreements 2,712 5.37 109 1,861 5.20 72
(26) Commercial paper and other short-term borrowings 264 5.96 12 354 4.32 11
(27) Senior debt 1,840 6.33 87 2,204 6.11 101
(28) Subordinated debt 2,808 6.99 147 2,222 6.94 116
Guaranteed preferred beneficial interests in Company's
(29) subordinated debentures 1,283 7.82 75 -- -- --
-------- ------ -------- ------
(30) Total interest-bearing liabilities 59,821 3.82 1,710 54,008 3.56 1,440
(31) Portion of noninterest-bearing funding sources 17,945 -- -- 17,605 -- --
-------- ------ -------- ------
(32) Total funding sources $ 77,766 2.94 1,710 $ 71,613 2.68 1,440
-------- ------ -------- ------
-------- ------ -------- ------
NET INTEREST MARGIN AND NET INTEREST INCOME ON
(33) A TAXABLE-EQUIVALENT BASIS (3) 6.00% $3,497 6.11% $3,278
-------- ------ -------- ------
-------- ------ -------- ------
NONINTEREST-EARNING ASSETS
(34) Cash and due from banks $ 8,293 $ 7,116
(35) Goodwill 7,255 5,027
(36) Other 7,389 4,963
-------- --------
Total noninterest-earning assets $ 22,937 $ 17,106
-------- --------
-------- --------
NONINTEREST-BEARING FUNDING SOURCES
(38) Deposits $ 23,932 $ 20,980
(39) Other liabilities 3,588 2,418
(40) Preferred stockholders' equity 397 728
Common stockholders' equity 12,965 10,585
(41) Noninterest-bearing funding sources used to
(42) fund earning assets (17,945) (17,605)
-------- --------
(43) Net noninterest-bearing funding sources $ 22,937 $ 17,106
-------- --------
-------- --------
(44) TOTAL ASSETS $100,703 $ 88,719
-------- --------
-------- --------
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The average prime rate of Wells Fargo Bank was 8.42% and 8.28% for
the nine months ended September 30, 1997 and 1996, respectively. The
average three-month London Interbank Offered Rate (LIBOR) was 5.71% and
5.51% 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 $11,973 million
and $12,431 million for the nine months ended September 30, 1997 and
1996, respectively.
(3) Includes taxable-equivalent adjustments that primarily relate to income
on certain loans and securities that is exempt from federal and
applicable state income taxes. The federal statutory tax rate was 35%
for the nine months ended September 30, 1997 and 1996.
|
|