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 17, 1996
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
ITEM 5. Other Events.
RECENT OPERATING RESULTS
Norwest Corporation's ("Norwest") net income was $271.4 million for the
quarter ended March 31, 1996, an increase of 25.2% over the $216.8
million earned in the first quarter of 1995. Fully diluted earnings per
common share were 74 cents, compared with 65 cents in the first quarter
of 1995, an increase of 13.8%. Primary earnings per common share
increased 12.1% to 74 cents, from the first quarter of 1995. Return on
realized common equity was 22.7% and return on assets was 1.51% for the
first quarter of 1996, compared with 22.2% and 1.46%, respectively, in
the first quarter of 1995.
Consolidated net interest income in the first quarter of 1996 was $890.8
million, compared with $743.7 million in the first quarter of 1995, an
increase of 19.8%. The improvement from the first quarter of 1995 was
principally due to a 16.8% increase in average earning assets and a 20
basis point increase in net interest margin from 5.49% to 5.69%.
Norwest provided $87.8 million for credit losses in the first quarter of
1996, or 95 basis points of average loans and leases on an annualized
basis. This compares with $55.3 million or 67 basis points in the same
period a year ago. Net credit losses totaled $85.5 million in the first
quarter of 1996, up from $48.0 million in the first quarter of 1995
principally due to higher consumer loan charge-offs. As a percent of
average loans and leases, net credit losses were 93 basis points in the
first quarter of 1996, compared with 59 basis points in the same period a
year ago.
During the quarter, non-performing assets increased $9.8 million due to
acquisitions and totaled $215.8 million, or 0.58% of loans, leases and
other real estate owned at March 31, 1996. Reserve coverage of non-
performing assets was 444.8% at March 31, 1996, and the allowance for
credit losses was 2.57% of loans and leases.
Consolidated non-interest income was $555.1 million in the first quarter
of 1996, an increase of $160.3 million, or 40.6%, from the first quarter
of 1995. Venture capital gains increased $44.9 million from the first
quarter of 1995. This increase was offset by a decrease in combined
gains on sales of servicing rights and sales of mortgages of $31.7
million and a decline in trading income of $25.7 million.
Consolidated non-interest expenses were $945.5 million in the first
quarter of 1996. These expenses increased 24.5% over the first quarter
of 1995, primarily as a result of increased operating expenses associated
with acquisitions, partially offset by reductions in FDIC insurance
premiums.
Norwest's Banking Group reported earnings of $181.2 million in the first
quarter of 1996, 29.3% above first quarter 1995 earnings of $140.1
million. The increase in Banking Group earnings over the first quarter
of 1995 reflects growth in net interest income and higher venture capital
gains, partially offset by a higher provision for credit losses and by a
decline in trading income. At March 31, 1996, Norwest Venture Capital
had a net unrealized appreciation in its investment portfolio of $248.2
million.
Mortgage Banking earned $30.4 million in the current quarter, compared
with $21.1 million in the first quarter of 1995. Combined gains on sales
of mortgages and servicing rights in the first quarter of 1996 amounted
to $9.4 million, compared with $41.1 million in the same quarter last
year. Mortgage loan originations were $11.7 billion in the first quarter
of 1996, compared with $4.6 billion in the first quarter of 1995.
Mortgage Banking capitalized $84.2 million of mortgage servicing rights
in the first quarter of 1996, representing 125 basis points of originated
mortgage loans, compared with $25.4 for the first quarter of 1995.
Amortization of capitalized mortgage servicing rights, including excess
servicing rights, was $47.0 million for the quarter ending March 31,
1996, compared with $21.3 million for the three months ended March 31,
1995. The servicing portfolio increased $11.8 billion from the first
quarter of 1995 and $4.7 billion from year-end 1995, and at March 31,
1996 totaled $112.1 billion with a weighted average interest rate of
7.71%. Capitalized mortgage servicing rights totaled $1.4 billion, or
128 basis points of the mortgage servicing portfolio, at March 31, 1996.
Norwest Financial reported first quarter 1996 net income of $59.8
million, an increase of 7.7% from 1995 first quarter earnings of $55.6
million. The increase in Norwest Financial's earnings was principally
due to higher net interest income as average finance receivables grew
33.9% from the first quarter of 1995. Norwest Financial's net charge-
offs in the first quarter of 1996 were $55.8 million, compared with $30.5
million in the first quarter of 1995. The increase in charge-offs was
due to higher domestic consumer credit losses as well as to Island
Finance, which was acquired in May 1995.
At March 31, 1996, consolidated total assets were $73.9 billion, compared
with $72.1 billion at December 31, 1995. Consolidated loans and leases,
net of unearned discount, increased 3.4% from December 31, 1995, and
totaled $37.4 billion at March 31, 1996. Consolidated total deposits
were $43.1 billion at March 31, 1996, compared with $42.0 billion at
December 31, 1995. Consolidated long-term debt at March 31, 1996, was
$14.3 billion, compared with $13.7 billion at year-end 1995.
Consolidated stockholders' equity was $5.4 billion at March 31, 1996,
compared with $5.3 billion at December 31, 1995. Tier 1 and total
capital ratios were 8.21% and 10.25%, respectively, at March 31, 1996,
compared with 8.11% and 10.18%, respectively, at December 31, 1995. The
leverage ratio was 5.96% at March 31, 1996 and 5.65% at December 31,
1995. Dividends declared per common share were 24 cents for the first
quarter of 1996, compared with 21 cents for the same period of 1995. The
dividend payout ratio was 32.4% and 31.8% for the three months ended
March 31, 1996 and 1995, respectively.
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 22, 1996 By: /s/ Michael A. Graf
Michael A. Graf
Senior Vice President and Controller
(Principal Accounting Officer)
