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, 1995
NORWEST CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-2979 41-0449260
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
Norwest Center
Sixth and Marquette
Minneapolis, Minnesota 55479
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 612-667-1234
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ITEM 5. Other Events.
RECENT OPERATING RESULTS
On April 19, 1995 Norwest Corporation ("Norwest") reported net income of
$216.8 million for the quarter ended March 31, 1995, an increase of 13.8% over
the $190.5 million earned in the first quarter of 1994. Net income per common
share was 66 cents, compared with 59 cents in the first quarter of 1994, an
increase of 11.9%. Return on realized common equity was 22.2% and return on
assets was 1.46% for the first quarter of 1995, compared with 21.5% and 1.45%,
respectively, in the first quarter of 1994.
Consolidated tax-equivalent net interest income in the first quarter of 1995
was $752.0 million, compared with $657.2 million in the first quarter of 1994,
an increase of 14.4%. The improvement from the first quarter of 1994 was
primarily due to a 12.9% growth in average earning assets, partially offset by
a change in funding mix due to increases in long-term debt and increased
funding cost.
Norwest provided $55.3 million for credit losses in the first quarter of 1995,
or 0.67% of average loans and leases. This compares with $36.3 million or
0.51% in the same period a year ago. Net credit losses totaled $48.0 million
in the first quarter of 1995, compared with $43.2 million in the first quarter
of 1994. As a percent of average loans and leases, net credit losses were
0.59% in the first quarter of 1995, compared with 0.61% in the same period a
year ago.
During the quarter, non-performing assets increased slightly due to
acquisitions and totaled $162.8 million, only 0.48% of loans, leases and other
real estate owned at March 31, 1995, and were 29.8% below last year's first
quarter. Reserve coverage of non-performing assets was 499.1% at March 31,
1995 and the allowance was 2.40% of loans and leases.
Consolidated non-interest income was $428.2 million in the first quarter of
1995, a decrease of $5.9 million from first quarter of 1994. Net investment
securities losses of $35.2 million were recorded in the first quarter of 1995
compared with net gains of $36.5 million in the first quarter of 1994. The
first quarter 1995 securities losses were taken to provide an opportunity to
reinvest at higher yields. The reduction in non-interest income due to the
first quarter of 1995 securities losses was partially offset by growth in all
fee-based businesses and trading account gains.
Consolidated non-interest expenses were $792.6 million in the first quarter of
1995. These expenses increased 3.1% over the first quarter of 1994 primarily
as a result of increased expenses due to acquisition growth. Salaries and
benefits were essentially flat in the first quarter compared with a year ago
as acquisition related growth in the Banking Group was offset by reductions in
Mortgage Banking.
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Norwest's Banking Group reported earnings of $140.1 million in the first
quarter of 1995, 9.6% above first quarter 1994 earnings of $127.9 million. The
Banking Group earnings increase over first quarter of 1994 reflected a 22.8%
growth in net interest income and increases in fee-based revenues, partially
offset by a $12.9 million increase in the provision for credit losses and
$35.2 million of investment securities losses recorded in the quarter.
Norwest Venture Capital realized gains of $21.6 million in the first quarter,
essentially flat with the same period a year ago. At March 31, 1995, Venture
Capital had a net unrealized appreciation in its investment portfolio of
$118.2 million.
Mortgage banking operations earned $21.1 million in the current quarter
compared with $10.8 million in the first quarter of 1994. Combined gains on
sales of mortgages and servicing rights in the first quarter of 1995 amounted
to $47.3 million, compared with $54.9 million in the same quarter last year.
Servicing increased $50.0 billion from the first quarter of 1994 and $28.8
billion from year-end 1994 and at March 31, 1995 totals $100.3 billion with a
weighted average mortgage interest rate of 7.76%. Approximately $29.3 billion
of servicing was added in the first quarter of 1995 principally as a result of
the acquisitions of Directors Mortgage Loan Corporation and the servicing
portfolio of BarclaysAmerican/Mortgage Corporation. Capitalized servicing
intangibles totaled $945 million or 94 basis points of the $100.3 billion
servicing portfolio.
Norwest Financial reported first quarter 1995 net income of $55.6 million, an
increase of 7.3% from 1994 first quarter earnings of $51.8 million. Norwest
Financial's net interest income increased 9.8% as average finance receivables
grew 15.4% from the first quarter of 1994. Norwest Financial's net interest
margin narrowed 80 basis points from the first quarter last year, reflecting
higher funding costs.
At March 31, 1995, consolidated total assets were $61.8 billion, compared with
$59.3 billion at December 31, 1994. Consolidated loans and leases, net of
unearned discount, increased 4.0% from December 31, 1994, and totaled $33.9
billion at March 31, 1995. Total investment securities were $15.5 billion at
March 31, 1995, compared with $14.8 billion at December 31, 1994. Total
deposits were $37.1 billion at March 31, 1995, compared with $36.4 billion at
December 31, 1994. Consolidated stockholders' equity was $4.4 billion at
March 31, 1995, compared with $3.8 billion at December 31, 1994. Tier 1 and
total capital ratios were 9.67% and 11.93%, respectively, at March 31, 1995,
compared with 9.89% and 12.23%, respectively, at December 31, 1994. The
leverage ratio was 6.72% at March 31, 1995 and 6.94% at December 31, 1994.
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SIGNATURES
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 hereunto duly authorized.
Norwest Corporation
(Registrant)
Dated: April 21, 1995 By: /s/ Michael A. Graf
Michael A. Graf
Senior Vice President and Controller
(Principal Accounting Officer)
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