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<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): April 21, 1998
WELLS FARGO & COMPANY
(Exact name of registrant as specified in its charter)
Delaware 1-6214 No. 13-2553920
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
420 Montgomery Street, San Francisco, California 94163
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 1-800-411-4932
Not applicable
(Former name or former address, if changed since last report)
<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 March 31,
1998. Final financial statements with additional analyses will be
filed as part of the Company's Form 10-Q in May 1998.
Item 7: FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
27 Financial Data Schedules
99 Copy of the Press Release announcing Wells Fargo & Company's
financial results for the quarter ended March 31, 1998.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, on April 21, 1998.
WELLS FARGO & COMPANY
By: FRANK A. MOESLEIN
---------------------------------------
Frank A. Moeslein
Executive Vice President and Controller
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE 8-K
DATED APRIL 21, 1998 FOR THE PERIOD ENDED MARCH 31, 1998 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL INFORMATION.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 8,303
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 111
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 8,676
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 64,504
<ALLOWANCE> 1,830
<TOTAL-ASSETS> 94,820
<DEPOSITS> 72,316
<SHORT-TERM> 1,392
<LIABILITIES-OTHER> 2,673
<LONG-TERM> 5,559
0
275
<COMMON> 426
<OTHER-SE> 12,102
<TOTAL-LIABILITIES-AND-EQUITY> 94,820
<INTEREST-LOAN> 1,512
<INTEREST-INVEST> 145
<INTEREST-OTHER> 27
<INTEREST-TOTAL> 1,684
<INTEREST-DEPOSIT> 410
<INTEREST-EXPENSE> 557
<INTEREST-INCOME-NET> 1,127
<LOAN-LOSSES> 180
<SECURITIES-GAINS> 5
<EXPENSE-OTHER> 1,092
<INCOME-PRETAX> 581
<INCOME-PRE-EXTRAORDINARY> 315
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 315
<EPS-PRIMARY> 3.62<F1>
<EPS-DILUTED> 3.58
<YIELD-ACTUAL> 6.01
<LOANS-NON> 503
<LOANS-PAST> 0
<LOANS-TROUBLED> 9
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,828
<CHARGE-OFFS> 241
<RECOVERIES> 63
<ALLOWANCE-CLOSE> 1,830
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
<FN>
<F1>Amount represents basic earnings per common share pursuant to FAS 128.
</FN>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE 10-K
FILINGS DATED 3/16/98, 3/14/97 AND 3/19/96 FOR THE YEARS ENDED 12/31/97,
12/31/96 AND 12/31/95, RESPECTIVELY, AND THE 10-Q FILINGS DATED 11/13/97 AND
8/13/97 FOR THE YEAR-TO-DATE PERIODS ENDED 9/30/97 AND 6/30/97, RESPECTIVELY,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL INFORMATION.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000,000
<S> <C> <C> <C> <C>
<C>
<PERIOD-TYPE> YEAR YEAR YEAR 9-MOS
6-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1996 DEC-31-1995 DEC-31-1997
DEC-31-1997
<PERIOD-START> JAN-01-1997 JAN-01-1996 JAN-01-1995 JAN-01-1997
JAN-01-1997
<PERIOD-END> DEC-31-1997 DEC-31-1996 DEC-31-1995 SEP-30-1997
JUN-30-1997
<CASH> 8,169 11,736 3,375 7,823
8,037
<INT-BEARING-DEPOSITS> 0 0 0 0
0
<FED-FUNDS-SOLD> 82 187 177 188
224
<TRADING-ASSETS> 815 404 0 0
0
<INVESTMENTS-HELD-FOR-SALE> 9,888 13,505 8,920 10,737
11,530
<INVESTMENTS-CARRYING> 0 0 0 0
0
<INVESTMENTS-MARKET> 0 0 0 0
0
<LOANS> 65,734 67,389 35,582 65,104
65,689
<ALLOWANCE> 1,828 2,018 1,794 1,823
1,850
<TOTAL-ASSETS> 97,456 108,888 50,316 97,655
100,180
<DEPOSITS> 72,199 81,821 38,982 70,922
73,748
<SHORT-TERM> 3,825 2,430 2,976 4,726
4,445
<LIABILITIES-OTHER> 2,578 4,118 1,156 2,819
3,065
<LONG-TERM> 5,867 6,210 3,049 6,164
5,719
0 0 0 0
0
275 600 489 275
275
<COMMON> 431 457 235 434
440
<OTHER-SE> 12,183 13,055 3,331 12,211
12,391
<TOTAL-LIABILITIES-AND-EQUITY> 97,456 108,888 50,316 97,655
100,180
<INTEREST-LOAN> 6,094 5,688 3,403 4,570
3,057
<INTEREST-INVEST> 732 779 599 573
398
<INTEREST-OTHER> 78 56 83 54
35
<INTEREST-TOTAL> 6,904 6,523 4,085 5,197
3,490
<INTEREST-DEPOSIT> 1,703 1,586 997 1,280
851
<INTEREST-EXPENSE> 2,290 2,002 1,431 1,710
1,131
<INTEREST-INCOME-NET> 4,614 4,521 2,654 3,487
2,359
<LOAN-LOSSES> 615 105 0 420
245
<SECURITIES-GAINS> 20 10 (17) 6
7
<EXPENSE-OTHER> 4,549 4,637 2,201 3,450
2,363
<INCOME-PRETAX> 2,154 1,979 1,777 1,613
1,070
<INCOME-PRE-EXTRAORDINARY> 1,155 1,071 1,032 857
568
<EXTRAORDINARY> 0 0 0 0
0
<CHANGES> 0 0 0 0
0
<NET-INCOME> 1,155 1,071 1,032 857
568
<EPS-PRIMARY> 12.77<F1> 12.21<F1> 20.37<F1>
9.38<F1> 6.12<F1>
<EPS-DILUTED> 12.64 12.05 20.06 9.28
6.06
<YIELD-ACTUAL> 5.99 6.11 5.80 6.00
6.03
<LOANS-NON> 528 714 538 565
602
<LOANS-PAST> 243 333 144 241
259
<LOANS-TROUBLED> 9 10 14 9
10
<LOANS-PROBLEM> 0 0 0 0
0
<ALLOWANCE-OPEN> 2,018 1,794 2,082 2,018
2,018
<CHARGE-OFFS> 1,078 860 422 816
545
<RECOVERIES> 273 220 134 201
132
<ALLOWANCE-CLOSE> 1,828 2,018 1,794 1,823
1,850
<ALLOWANCE-DOMESTIC> 0 0 0 0
0
<ALLOWANCE-FOREIGN> 0 0 0 0
0
<ALLOWANCE-UNALLOCATED> 608 798 939 0
0
<FN>
<F1>Amounts for all periods presented represent basic earnings per common share pursuant to FAS 128.
</FN>
</TABLE>
<PAGE>
Cindy Koehn 415/396-3099
Investor Relations
FOR IMMEDIATE RELEASE
Tues., April 21, 1998
WELLS FARGO REPORTS INCREASE IN FIRST QUARTER EARNINGS
EARNINGS PER SHARE OF $3.62 VS. $3.40 IN FOURTH QUARTER 1997
CASH EARNINGS PER SHARE OF $4.92 VS. $4.71 IN FOURTH QUARTER 1997
SAN FRANCISCO -- Wells Fargo & Co. (NYSE:WFC) today reported
earnings per share for the quarter of $3.62, compared with $3.40 for the
fourth quarter of 1997 and $3.62 for the first quarter of 1997. Return on
average assets (ROA) was 1.34 percent and return on average common equity
(ROE) was 10.07 percent for the quarter, compared with 1.23 percent and 9.29
percent, respectively, for the fourth quarter of 1997. In the year-ago
period, ROA was 1.31 percent and ROE was 10.02 percent. Cash earnings per
share were $4.92 for the first quarter of 1998, compared with $4.71 for the
fourth quarter of 1997 and $4.88 for the first quarter of 1997. Cash ROA was
1.98 percent and cash ROE was 37.46 percent for the first quarter of 1998,
compared with 1.85 percent and 36.15 percent, respectively, for the fourth
quarter of 1997. In the year-ago period, cash ROA was 1.90 percent and cash
ROE was 36.67 percent. Cash earnings are earnings before the amortization of
goodwill and nonqualifying core deposit intangible. Management believes that
cash earnings are the more relevant measure of financial performance for
shareholders because they measure Wells Fargo's ability to support growth,
pay dividends and repurchase stock.
"This is a good beginning to what we believe will be an excellent
year for Wells Fargo," said Chairman Paul Hazen. "Most of our core
businesses are making progress in acquiring new customers. Revenue growth
this quarter is encouraging, and our business groups continue to build
momentum for future growth."
Net income was $315 million for the first quarter of 1998, compared
with $298 million for the fourth quarter of 1997 and $339 million for the
first quarter of 1997.
Net interest income on a taxable-equivalent basis was $1.130 billion
in the first quarter of 1998, compared with $1.130 billion in the fourth
quarter of 1997 and $1.216 billion in the first quarter of 1997. The
decrease from a year ago was primarily due to a decline in earning assets.
The Company's net interest margin for the first quarter of 1998 was 6.01
percent, compared with 5.94 percent in the fourth quarter of 1997 and 6.14
percent in the first quarter of 1997.
-more-
<PAGE>
2/WF Earnings
Noninterest income (NII) in the first quarter of 1998 was $726
million, compared with $708 million in the fourth quarter of 1997 and $640
million in the first quarter of 1997. The increase from a year ago was
primarily due to gains on sales of loans, higher credit card fees and lower
losses on dispositions of premises and equipment.
Noninterest expense (NIE) in the first quarter of 1998 was $1.092
billion, compared with $1.098 billion in the fourth quarter of 1997 and
$1.117 billion in the first quarter of 1997.
The loan loss provision was $180 million for the first quarter of
1998, compared with $195 million for the fourth quarter of 1997 and $105
million for the first quarter of 1997. Net charge-offs in the first quarter
of 1998 totaled $178 million, or 1.11 percent of average loans (annualized).
In the fourth quarter of 1997, net charge-offs totaled $190 million, or 1.17
percent of average loans (annualized). In the first quarter of 1997, net
charge-offs totaled $201 million, or 1.23 percent of average loans
(annualized). The largest category of net charge-offs was credit card loans
for all periods presented.
At March 31, 1998, the allowance for loan losses of $1.830 billion
equaled 2.84 percent of total loans, compared with 2.78 percent at December
31, 1997 and 2.94 percent at March 31, 1997. Total nonaccrual and
restructured loans were $512 million at March 31, 1998, compared with $537
million at December 31, 1997 and $655 million at March 31, 1997. Foreclosed
assets were $155 million at March 31, 1998, compared with $158 million at
December 31, 1997 and $207 million at March 31, 1997.
At March 31, 1998, the Company's preliminary risk-based capital
ratios were 11.60 percent for total risk-based capital and 7.75 percent for
Tier 1 risk-based capital, exceeding the minimum regulatory guidelines of 8
percent and 4 percent, respectively. The leverage ratio at March 31, 1998
was 7.05 percent. The ratio of common equity to total assets at March 31,
1998 was 13.21 percent.
________________
The following appears in accordance with the Securities Litigation Reform Act:
This press release includes forward-looking statements that involve inherent
risks and uncertainties. A number of important factors could cause actual
results to differ materially from those in the forward-looking statements.
Those factors include fluctuations in interest rates, inflation, government
regulations, the completion of the First Interstate Bancorp integration,
customer disintermediation, technology changes and economic conditions and
competition in the geographic and business areas in which the Company
conducts its operations.
###
Founded in 1852, Wells Fargo & Company has operations in Arizona, California,
Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah and Washington.
VISIT WELLS FARGO ON THE WORLD WIDE WEB AT HTTP://WWW.WELLSFARGO.COM
<PAGE>
-3-
Wells Earnings
Wells Fargo & Company and Subsidiaries
SUMMARY FINANCIAL DATA--NEWS RELEASE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
% Change
Quarter ended March 31, 1998 from
-------------------------------- -------------------
March 31, Dec. 31, March 31, Dec. 31, March 31,
(in millions) 1998 1997 1997 1997 1997
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FOR THE QUARTER
Net income $ 315 $ 298 $ 339 6% (7)%
Net income applicable to common stock 311 294 329 6 (5)
Earnings per common share $ 3.62 $ 3.40 $ 3.62 6 --
Diluted earnings per common share 3.58 3.36 3.58 7 --
Dividends declared per common share 1.30 1.30 1.30 -- --
Average common shares outstanding 85.8 86.5 90.8 (1) (6)
Diluted average common shares outstanding 86.6 87.3 91.9 (1) (6)
Profitability ratios (annualized)
Net income to average total assets (ROA) 1.34% 1.23% 1.31% 9 2
Net income applicable to common stock to
average common stockholders' equity (ROE) 10.07 9.29 10.02 8 --
Efficiency ratio (1) 58.9% 59.9% 60.3% (2) (2)
Average loans $65,067 $64,545 $ 65,493 1 (1)
Average assets 95,258 96,170 105,430 (1) (10)
Average core deposits 69,858 70,198 77,622 -- (10)
Net interest margin 6.01% 5.94% 6.14% 1 (2)
NET INCOME AND RATIOS EXCLUDING
GOODWILL AND NONQUALIFYING CORE DEPOSIT
INTANGIBLE AMORTIZATION AND BALANCES
("CASH" OR "TANGIBLE") (2)
Net income applicable to common stock $ 423 $ 407 $ 443 4 (5)
Earnings per common share 4.92 4.71 4.88 4 1
Diluted earnings per common share 4.88 4.66 4.83 5 1
ROA 1.98% 1.85% 1.90% 7 4
ROE 37.46 36.15 36.67 4 2
Efficiency ratio 51.7 52.5 52.9 (2) (2)
AT QUARTER END
Investment securities $ 8,676 $ 9,888 $ 12,634 (12) (31)
Loans 64,504 65,734 65,436 (2) (1)
Allowance for loan losses 1,830 1,828 1,922 -- (5)
Goodwill 6,943 7,031 7,312 (1) (5)
Assets 94,820 97,456 101,863 (3) (7)
Core deposits 72,041 71,397 76,156 1 (5)
Common stockholders' equity 12,528 12,614 13,170 (1) (5)
Stockholders' equity 12,803 12,889 13,595 (1) (6)
Capital ratios
Common stockholders' equity to assets 13.21% 12.94% 12.93% 2 2
Stockholders' equity to assets 13.50 13.22 13.35 2 1
Risk-based capital (3)
Tier 1 capital 7.75 7.61 7.80 2 (1)
Total capital 11.60 11.49 12.05 1 (4)
Leverage (3) 7.05 6.95 6.61 1 7
Book value per common share $146.90 $146.41 $ 146.37 -- --
Staff (active, full-time equivalent) 32,414 33,100 34,486 (2) (6)
COMMON STOCK PRICE
High $337.88 $339.44 $ 319.25 -- 6
Low 295.00 275.75 271.00 7 9
Quarter end 331.25 339.44 284.13 (2) 17
- ---------------------------------------------------------------------------------------------------------------
</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 $31
million and $944 million, respectively, for the quarter ended March 31,
1998. Goodwill amortization and average balance (which are not tax
effected) were $81 million and $6,990 million, respectively, for the
quarter ended March 31, 1998.
(3) The March 31, 1998 ratios are preliminary.
<PAGE>
-4-
Wells Fargo & Company and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Quarter
ended March 31,
------------------- %
(in millions) 1998 1997 Change
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INTEREST INCOME
Federal funds sold and securities purchased
(1) under resale agreements $ 6 $ 5 20%
(2) Investment securities 145 208 (30)
(3) Loans 1,512 1,549 (2)
(4) Other 21 11 91
------ ------
(5) Total interest income 1,684 1,773 (5)
------ ------
INTEREST EXPENSE
(6) Deposits 410 422 (3)
Federal funds purchased and securities sold
(7) under repurchase agreements 40 31 29
(8) Commercial paper and other short-term borrowings 7 2 250
(9) Senior and subordinated debt 75 81 (7)
Guaranteed preferred beneficial interests in
(10) Company's subordinated debentures 25 25 --
------ ------
(11) Total interest expense 557 561 (1)
------ ------
(12) NET INTEREST INCOME 1,127 1,212 (7)
(13) Provision for loan losses 180 105 71
------ ------
Net interest income after
(14) provision for loan losses 947 1,107 (14)
------ ------
NONINTEREST INCOME
(15) Fees and commissions 255 214 19
(16) Service charges on deposit accounts 208 221 (6)
(17) Trust and investment services income 114 109 5
(18) Investment securities gains 5 4 25
(19) Other 144 92 57
------ ------
(20) Total noninterest income 726 640 13
------ ------
NONINTEREST EXPENSE
(21) Salaries 305 341 (11)
(22) Incentive compensation 53 41 29
(23) Employee benefits 91 95 (4)
(24) Equipment 98 94 4
(25) Net occupancy 101 102 (1)
(26) Goodwill 81 83 (2)
(27) Core deposit intangible 60 62 (3)
(28) Operating losses 31 42 (26)
(29) Other 272 257 6
------ ------
(30) Total noninterest expense 1,092 1,117 (2)
------ ------
INCOME BEFORE INCOME TAX
(31) EXPENSE 581 630 (8)
(32) Income tax expense 266 291 (9)
------ ------
(33) NET INCOME $ 315 $ 339 (7)%
------ ------ ----
------ ------ ----
NET INCOME APPLICABLE TO
(34) COMMON STOCK $ 311 $ 329 (5)%
------ ------ ----
------ ------ ----
(35) EARNINGS PER COMMON SHARE $ 3.62 $ 3.62 --%
------ ------ ----
------ ------ ----
(36) DILUTED EARNINGS PER COMMON SHARE $ 3.58 $ 3.58 --%
------ ------ ----
------ ------ ----
DIVIDENDS DECLARED
(37) PER COMMON SHARE $ 1.30 $ 1.30 --%
------ ------ ----
------ ------ ----
(38) Average common shares outstanding 85.8 90.8 (6)%
------ ------ ----
------ ------ ----
(39) Diluted average common shares outstanding 86.6 91.9 (6)%
------ ------ ----
------ ------ ----
- ---------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
-5-
Wells Fargo & Company and Subsidiaries
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
% Change
March 31, 1998 from
-------------------
MAR. 31, Dec. 31, Mar. 31, Dec. 31, Mar. 31,
(in millions) 1998 1997 1997 1997 1997
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
(1) Cash and due from banks $ 8,303 $ 8,169 $ 8,530 2% (3)%
Federal funds sold and securities
(2) purchased under resale agreements 111 82 209 35 (47)
(3) Investment securities at fair value 8,676 9,888 12,634 (12) (31)
(4) Loans 64,504 65,734 65,436 (2) (1)
(5) Allowance for loan losses 1,830 1,828 1,922 -- (5)
------- ------- --------
(6) Net loans 62,674 63,906 63,514 (2) (1)
------- ------- --------
(7) Due from customers on acceptances 77 98 96 (21) (20)
(8) Accrued interest receivable 504 507 611 (1) (18)
(9) Premises and equipment, net 2,081 2,117 2,310 (2) (10)
(10) Core deposit intangible 1,649 1,709 1,901 (4) (13)
(11) Goodwill 6,943 7,031 7,312 (1) (5)
(12) Other assets 3,802 3,949 4,746 (4) (20)
------- ------- --------
(13) Total assets $94,820 $97,456 $101,863 (3) (7)%
------- ------- -------- ---- ----
------- ------- -------- ---- ----
LIABILITIES
(14) Noninterest-bearing deposits $24,421 $23,953 $ 25,337 2% (4)%
(15) Interest-bearing deposits 47,895 48,246 51,090 (1) (6)
------- ------- --------
(16) Total deposits 72,316 72,199 76,427 -- (5)
Federal funds purchased and securities
(17) sold under repurchase agreements 1,068 3,576 1,685 (70) (37)
(18) Commercial paper and other short-term borrowings 324 249 241 30 34
(19) Acceptances outstanding 77 98 96 (21) (20)
(20) Accrued interest payable 235 175 242 34 (3)
(21) Other liabilities 2,438 2,403 3,400 1 (28)
(22) Senior debt 1,751 1,983 1,940 (12) (10)
(23) Subordinated debt 2,509 2,585 2,938 (3) (15)
Guaranteed preferred beneficial interests in
(24) Company's subordinated debentures 1,299 1,299 1,299 -- --
STOCKHOLDERS' EQUITY
(25) Preferred stock 275 275 425 -- (35)
Common stock - $5 par value,
authorized 150,000,000 shares;
issued and outstanding 85,284,480 shares,
(26) 86,152,779 shares and 89,977,610 shares 426 431 450 (1) (5)
(27) Additional paid-in capital 8,431 8,712 9,801 (3) (14)
(28) Retained earnings 3,615 3,416 2,959 6 22
(29) Cumulative other comprehensive income (loss) 56 55 (40) 2 --
------- ------- --------
(30) Total stockholders' equity 12,803 12,889 13,595 (1) (6)
------- ------- --------
(31) Total liabilities and stockholders' equity $94,820 $97,456 $101,863 (3)% (7)%
------- ------- -------- ---- ----
------- ------- -------- ---- ----
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
-6-
Wells Fargo & Company and Subsidiaries
CONDENSED CONSOLIDATED STATEMENT OF
CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Quarter ended March 31,
----------------------
(in millions) 1998 1997
- --------------------------------------------------------------------------------------
<S> <C> <C>
BALANCE, BEGINNING OF QUARTER $12,889 $14,112
Net income 315 339
Other comprehensive income (loss), net of tax:
Change in foreign currency translation adjustments -- 4
Change in investment securities valuation allowance 1 (63)
Common stock issued under employee benefit and
dividend reinvestment plans 26 24
Preferred stock redeemed -- (175)
Common stock repurchased (312) (517)
Preferred stock dividends (4) (10)
Common stock dividends (112) (119)
------- -------
BALANCE, END OF QUARTER $12,803 $13,595
------- -------
------- -------
- --------------------------------------------------------------------------------------
</TABLE>
LOANS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
MARCH 31, December 31, March 31,
(in millions) 1998 1997 1997
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Commercial $20,424 $20,144 $19,025
Real estate 1-4 family first mortgage 8,349 8,869 10,032
Other real estate mortgage 11,722 12,186 11,497
Real estate construction 2,383 2,320 2,243
Consumer:
Real estate 1-4 family junior lien mortgage 5,588 5,865 6,112
Credit card 4,675 5,039 5,232
Other revolving credit and monthly payment 6,982 7,185 7,984
------- ------- -------
Total consumer 17,245 18,089 19,328
Lease financing 4,274 4,047 3,152
Foreign 107 79 159
------- ------- -------
Total loans $64,504 $65,734 $65,436
------- ------- -------
------- ------- -------
- --------------------------------------------------------------------------------------
</TABLE>
<PAGE>
-7-
Wells Fargo & Company and Subsidiaries
CHANGES IN THE ALLOWANCE FOR LOAN LOSSES
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Quarter ended
-----------------------------------
MARCH 31, December 31, March 31,
(in millions) 1998 1997 1997
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
BALANCE, BEGINNING OF QUARTER $1,828 $1,823 $2,018
Provision for loan losses 180 195 105
Loan charge-offs:
Commercial (49) (71) (69)
Real estate 1-4 family first mortgage (4) (4) (5)
Other real estate mortgage -- (5) (8)
Real estate construction (1) -- (1)
Consumer:
Real estate 1-4 family junior lien mortgage (3) (5) (6)
Credit card (118) (114) (115)
Other revolving credit and monthly payment (55) (51) (56)
------ ------ ------
Total consumer (176) (170) (177)
Lease financing (11) (12) (10)
------ ------ ------
Total loan charge-offs (241) (262) (270)
------ ------ ------
Loan recoveries:
Commercial 19 17 13
Real estate 1-4 family first mortgage 3 1 1
Other real estate mortgage 9 11 22
Real estate construction -- 8 1
Consumer:
Real estate 1-4 family junior lien mortgage 2 2 2
Credit card 11 14 11
Other revolving credit and monthly payment 16 16 16
------ ------ ------
Total consumer 29 32 29
Lease financing 3 3 3
------ ------ ------
Total loan recoveries 63 72 69
------ ------ ------
Total net loan charge-offs (178) (190) (201)
------ ------ ------
BALANCE, END OF QUARTER $1,830 $1,828 $1,922
------ ------ ------
------ ------ ------
Total net loan charge-offs as a percentage
of average loans (annualized) 1.11% 1.17% 1.23%
------ ------ ------
------ ------ ------
Allowance as a percentage of total loans 2.84% 2.78% 2.94%
------ ------ ------
------ ------ ------
- ---------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
-8-
Wells Fargo & Company and Subsidiaries
NONACCRUAL AND RESTRUCTURED LOANS AND OTHER ASSETS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
MARCH 31, December 31, March 31,
(in millions) 1998 1997 1997
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Nonaccrual loans:
Commercial $163 $155 $199
Real estate 1-4 family first mortgage 89 104 97
Other real estate mortgage 208 228 306
Real estate construction 28 23 24
Consumer:
Real estate 1-4 family junior lien mortgage 12 17 16
Other revolving credit and monthly payment 3 1 1
Lease financing -- -- 2
---- ---- ----
Total nonaccrual loans 503 528 645
Restructured loans 9 9 10
---- ---- ----
Nonaccrual and restructured loans 512 537 655
As a percentage of total loans .8% .8% 1.0%
Foreclosed assets 155 158 207
Real estate investments (1) 4 4 5
---- ---- ----
Total nonaccrual and restructured loans
and other assets $671 $699 $867
---- ---- ----
---- ---- ----
- ---------------------------------------------------------------------------------------------------
</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 $162 million,
$172 million and $158 million at March 31, 1998, December 31, 1997 and
March 31, 1997, respectively.
<PAGE>
-9-
Wells Fargo & Company and Subsidiaries
NONINTEREST INCOME
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Quarter
ended March 31,
----------------- %
(in millions) 1998 1997 Change
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Fees and commissions:
Credit card membership and other credit card fees $ 66 $ 45 47%
ATM network fees 44 39 13
Charges and fees on loans 41 31 32
Debit and credit card merchant fees 21 22 (5)
Mutual fund and annuity sales fees 21 16 31
All other 62 61 2
---- ----
Total fees and commissions 255 214 19
Service charges on deposit accounts 208 221 (6)
Trust and investment services income:
Asset management and custody fees 63 61 3
Mutual fund management fees 45 40 13
All other 6 8 (25)
---- ----
Total trust and investment services income 114 109 5
Investment securities gains 5 4 25
Income from equity investments accounted for by the:
Cost method 50 51 (2)
Equity method 15 16 (6)
Check printing charges 18 17 6
Gains on sales of loans 36 6 500
Gains (losses) from dispositions of operations (3) 7 --
Losses on dispositions of premises and equipment (9) (30) (70)
All other 37 25 48
---- ----
Total $726 $640 13%
---- ---- ---
---- ---- ---
- ---------------------------------------------------------------------------------------------------
</TABLE>
NONINTEREST EXPENSE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Quarter
ended March 31,
----------------- %
(in millions) 1998 1997 Change
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Salaries $ 305 $ 341 (11)%
Incentive compensation 53 41 29
Employee benefits 91 95 (4)
Equipment 98 94 4
Net occupancy 101 102 (1)
Goodwill 81 83 (2)
Core deposit intangible:
Nonqualifying (1) 52 54 (4)
Qualifying 8 8 --
Operating losses 31 42 (26)
Contract services 65 56 16
Telecommunications 31 38 (18)
Security 22 22 --
Postage 19 23 (17)
Outside professional services 20 15 33
Advertising and promotion 21 13 62
Stationery and supplies 14 21 (33)
Travel and entertainment 16 14 14
Check printing 12 15 (20)
Outside data processing 13 13 --
Foreclosed assets 5 (9) --
All other 34 36 (6)
------ ------
Total $1,092 $1,117 (2)%
------ ------ ---
------ ------ ---
- ---------------------------------------------------------------------------------------------------
</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 March 31,
-----------------------------------------------------------------
1998 1997
--------------------------------- ---------------------------
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 $ 428 5.69% $ 6 $ 374 5.43% $ 5
Investment securities at fair value (2):
(2) U.S. Treasury securities 2,466 6.08 37 2,916 6.04 43
Securities of U.S. government agencies
(3) and corporations 3,991 6.61 65 6,703 6.41 107
(4) Private collateralized mortgage obligations 2,180 6.71 37 3,134 6.57 52
(5) Other securities 487 7.36 8 368 6.35 6
------- ------ ------- ------
(6) Total investment securities at fair value 9,124 6.53 147 13,121 6.36 208
Loans:
(7) Commercial 20,019 9.13 451 18,406 8.98 409
(8) Real estate 1-4 family first mortgage 8,668 7.50 162 10,236 7.41 189
(9) Other real estate mortgage 12,138 9.19 275 11,550 10.89 310
(10) Real estate construction 2,339 9.66 56 2,299 9.75 55
Consumer:
(11) Real estate 1-4 family junior lien mortgage 5,720 9.53 135 6,170 9.30 142
(12) Credit card 4,835 14.98 181 5,330 14.07 188
(13) Other revolving credit and monthly payment 7,078 9.15 160 8,271 9.27 189
------- ------ ------- ------
(14) Total consumer 17,633 10.87 476 19,771 10.57 519
(15) Lease financing 4,165 8.73 91 3,079 8.84 68
(16) Foreign 105 8.33 2 152 7.34 3
------- ------ ------- ------
(17) Total loans 65,067 9.39 1,513 65,493 9.57 1,553
(18)Other 1,148 7.46 21 706 6.25 11
------- ------ ------- ------
Total earning assets $ 75,767 8.99 1,687 $79,694 8.99 1,777
------- ------ ------- ------
------- -------
FUNDING SOURCES
Deposits:
(19) Interest-bearing checking $ 1,725 1.47 6 $ 1,913 1.14 5
(20) Market rate and other savings 30,476 2.68 202 34,103 2.55 214
(21) Savings certificates 15,182 5.16 193 15,518 5.05 193
(22) Other time deposits 281 4.90 3 180 3.94 2
(23) Deposits in foreign offices 379 5.22 5 559 5.13 7
------- ------ ------- ------
(24) Total interest-bearing deposits 48,043 3.46 409 52,273 3.27 421
Federal funds purchased and securities sold
(25) under repurchase agreements 2,984 5.45 40 2,425 5.18 31
(26)Commercial paper and other short-term borrowings 460 5.97 7 230 5.07 2
(27)Senior debt 1,912 6.31 30 2,001 6.19 31
(28)Subordinated debt 2,578 7.10 46 2,939 6.92 51
Guaranteed preferred beneficial interests in Company's
(29) subordinated debentures 1,299 7.80 25 1,251 7.85 25
------- ------ ------- ------
(30) Total interest-bearing liabilities 57,276 3.94 557 61,119 3.72 561
(31)Portion of noninterest-bearing funding sources 18,491 -- -- 18,575 -- --
------- ------ ------- ------
(32) Total funding sources $ 75,767 2.98 557 $ 79,694 2.85 561
------- ------ ------- ------
------- -------
NET INTEREST MARGIN AND NET INTEREST INCOME ON
(33) A TAXABLE-EQUIVALENT BASIS (3) 6.01% $1,130 6.14% $1,216
---- ------ ---- ------
---- ------ ---- ------
<PAGE>
NONINTEREST-EARNING ASSETS
(34) Cash and due from banks $ 6,808 $ 9,956
(35) Goodwill 6,990 7,306
(36) Other 5,693 8,474
-------- --------
Total noninterest-earning assets $ 19,491 $ 25,736
-------- --------
-------- --------
NONINTEREST-BEARING FUNDING SOURCES
(37) Deposits $ 22,475 $ 26,088
(38) Other liabilities 2,724 4,370
(39) Preferred stockholders' equity 275 548
(40) Common stockholders' equity 12,508 13,305
Noninterest-bearing funding sources used to
(41) fund earning assets (18,491) (18,575)
-------- --------
(42) Net noninterest-bearing funding sources $ 19,491 $ 25,736
-------- --------
(43) TOTAL ASSETS $ 95,258 $105,430
-------- --------
-------- --------
- -----------------------------------------------------------------------------------------------------------
</TABLE>
(1) The average prime rate of Wells Fargo Bank was 8.50% and 8.27% for the
quarters ended March 31, 1998 and 1997, respectively. The average
three-month London Interbank Offered Rate (LIBOR) was 5.66% and 5.57% for
the same quarters, respectively.
(2) Yields are based on amortized cost balances. The average amortized cost
balances for investment securities at fair value totaled $9,022 million
and $13,116 million for the quarters ended March 31, 1998 and 1997,
respectively.
(3) Includes taxable-equivalent adjustments that primarily relate to income on
certain loans and securities that is exempt from federal and applicable
state income taxes. The federal statutory tax rate was 35% for both
quarters presented.
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