Wells Fargo Reports $6.2 Billion in Quarterly Net Income; Diluted EPS of $1.30

SAN FRANCISCO--()--Wells Fargo & Company (NYSE:WFC):

  • Financial results:
    • Net income of $6.2 billion, compared with $5.2 billion in second quarter 2018
    • Diluted earnings per share (EPS) of $1.30, compared with $0.98
    • Revenue of $21.6 billion
      • Net interest income of $12.1 billion, down $446 million
      • Noninterest income of $9.5 billion, up $477 million
    • Noninterest expense of $13.4 billion, down $533 million
    • Average deposits of $1.3 trillion, down $2.4 billion
    • Average loans of $947.5 billion, up $3.4 billion
    • Return on assets (ROA) of 1.31%, return on equity (ROE) of 13.26%, and return on average tangible common equity (ROTCE) of 15.78%1
  • Credit quality:
    • Provision expense of $503 million, up $51 million from second quarter 2018
      • Net charge-offs of $653 million, up $51 million
        • Net charge-offs of 0.28% of average loans (annualized), up from 0.26%
      • Reserve release2 of $150 million, equal to the amount released in second quarter 2018
    • Nonaccrual loans of $5.9 billion, down $1.2 billion, or 17%
  • Strong capital position while returning more capital to shareholders:
    • Returned $6.1 billion to shareholders through common stock dividends and net share repurchases, up 52% from $4.0 billion in second quarter 2018
    • Common Equity Tier 1 ratio (fully phased-in) of 12.0%3, which continued to exceed both the regulatory minimum of 9% and our current internal target of 10%
    • Received a non-objection to the Company's 2019 Capital Plan submission from the Federal Reserve
      • As part of the plan, the Company expects to increase its third quarter 2019 common stock dividend to $0.51 per share from $0.45 per share, subject to approval by the Company's Board of Directors. The plan also includes up to $23.1 billion of gross common stock repurchases, subject to management discretion, for the four-quarter period from third quarter 2019 through second quarter 2020.

Financial results reported in this document are preliminary. Final financial results and other disclosures will be reported in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, and may differ materially from the results and disclosures in this document due to, among other things, the completion of final review procedures, the occurrence of subsequent events, or the discovery of additional information.

Selected Financial Information

 

 

 

Quarter ended

 

Jun 30,
2019

 

Mar 31,
2019

 

Jun 30,
2018

Earnings

 

 

 

 

 

Diluted earnings per common share

$

1.30

 

 

1.20

 

 

0.98

 

Wells Fargo net income (in billions)

6.21

 

 

5.86

 

 

5.19

 

Return on assets (ROA)

1.31

%

 

1.26

 

 

1.10

 

Return on equity (ROE)

13.26

 

 

12.71

 

 

10.60

 

Return on average tangible common equity (ROTCE) (a)

15.78

 

 

15.16

 

 

12.62

 

Asset Quality

 

 

 

 

 

Net charge-offs (annualized) as a % of average total loans

0.28

%

 

0.30

 

 

0.26

 

Allowance for credit losses as a % of total loans

1.12

 

 

1.14

 

 

1.18

 

Allowance for credit losses as a % of annualized net charge-offs

405

 

 

384

 

 

460

 

Other

 

 

 

 

 

Revenue (in billions)

$

21.6

 

 

21.6

 

 

21.6

 

Efficiency ratio (b)

62.3

%

 

64.4

 

 

64.9

 

Average loans (in billions)

$

947.5

 

 

950.0

 

 

944.1

 

Average deposits (in billions)

1,269.0

 

 

1,262.1

 

 

1,271.3

 

Net interest margin

2.82

%

 

2.91

 

 

2.93

 

(a) Tangible common equity is a non-GAAP financial measure and represents total equity less preferred equity, noncontrolling interests, and goodwill and certain identifiable intangible assets (including goodwill and intangible assets associated with certain of our nonmarketable equity securities but excluding mortgage servicing rights), net of applicable deferred taxes. The methodology of determining tangible common equity may differ among companies. Management believes that return on average tangible common equity, which utilizes tangible common equity, is a useful financial measure because it enables investors and others to assess the Company's use of equity. For additional information, including a corresponding reconciliation to GAAP financial measures, see the “Tangible Common Equity” tables on page 36.

(b) The efficiency ratio is noninterest expense divided by total revenue (net interest income and noninterest income).

Wells Fargo & Company (NYSE:WFC) reported net income of $6.2 billion, or $1.30 per diluted common share, for second quarter 2019, compared with $5.2 billion, or $0.98 per share, for second quarter 2018, and $5.9 billion, or $1.20 per share, for first quarter 2019.

Interim Chief Executive Officer Allen Parker said, “In second quarter 2019, we recorded strong earnings and continued to make progress on our top priorities: focusing on our customers and team members; meeting the expectations of our regulators; and continuing the important transformation of our Company. The commitment of our team members to provide outstanding customer service was reflected in higher customer experience survey scores from our branches, continued growth in primary consumer checking customers, and an increase in referred investment assets as a result of the partnership between our Wealth and Investment Management team and our Community Banking team. During the second quarter, we formed a new Strategic Execution and Operations Office that will focus on achieving operational excellence across our businesses to enable us to execute more effectively on our regulatory priorities and further drive our transformation. Finally, our recent CCAR results demonstrated the strength of our diversified business model, our strong capital position, our sound financial risk management, and our commitment to return excess capital to our shareholders in a prudent manner. I’m confident that all our stakeholders will benefit from the transformational changes we are implementing as we work to build the most customer-focused, efficient, and innovative Wells Fargo ever.”

Chief Financial Officer John Shrewsberry said, “Wells Fargo reported $6.2 billion of net income in the second quarter and diluted earnings per share of $1.30. We grew period-end loans and deposits, as well as pre-tax pre-provision profit, compared with the first quarter and a year ago. Our credit quality remained solid with net charge-offs near historic lows. Additionally, our strong capital position was reflected in our 2019 Capital Plan, which includes an increase in our quarterly common stock dividend rate in third quarter 2019 to $0.51 per share from $0.45 per share, subject to board approval, as well as up to $23.1 billion of gross common stock repurchases during the four-quarter period beginning in third quarter 2019. ”

Net Interest Income

Net interest income in the second quarter was $12.1 billion, down $216 million from first quarter 2019, driven by balance sheet mix and repricing, including the impacts of higher deposit costs and the lower interest rate environment, as well as higher mortgage-backed securities (MBS) premium amortization, partially offset by the benefit of one additional day in the quarter.

The net interest margin was 2.82%, down 9 basis points from the prior quarter due to balance sheet mix and repricing, including the impacts of higher deposit costs and the lower interest rate environment, as well as higher MBS premium amortization.

Noninterest Income

Noninterest income in the second quarter was $9.5 billion, up $191 million from first quarter 2019. Second quarter noninterest income included higher trust and investment fees, other income, services charges on deposit accounts, and card fees, partially offset by lower market sensitive revenue4.

  • Service charges on deposit accounts were $1.2 billion, up from $1.1 billion in first quarter 2019, due to seasonally lower fees and higher fee waivers in the first quarter, as well as higher treasury management fees in the second quarter.
  • Trust and investment fees were $3.6 billion, up from $3.4 billion in first quarter 2019, driven by higher asset-based fees on retail brokerage advisory assets reflecting higher market valuations at March 31, 2019, and higher investment banking fees on increased debt and equity underwriting.
  • Card fees were $1.0 billion, up from a seasonally lower first quarter of $944 million.
  • Mortgage banking income was $758 million, up from $708 million in first quarter 2019. Net mortgage servicing income was $277 million, down from $364 million in the first quarter primarily due to the impact of lower interest rates including higher loan payoffs. The production margin on residential held-for-sale mortgage loan originations5 decreased to 0.98% from 1.05% in the first quarter. Residential held-for-sale mortgage loan originations increased in the second quarter to $33 billion from $22 billion in the first quarter, primarily due to seasonality, as well as lower mortgage loan interest rates in the second quarter.
  • Market sensitive revenue4 was $871 million, down from $1.3 billion in first quarter 2019, and included lower net gains from equity securities driven by a $258 million decrease in deferred compensation plan investment results in the second quarter (largely offset by lower employee benefits expense). Net gains from trading activities decreased $128 million compared with the prior quarter, driven by lower credit trading results. Net gains from debt securities decreased $105 million compared with the prior quarter, which included gains related to the sale of non-agency residential mortgage-backed securities.
  • Other income was $744 million and included a $721 million gain from the sale of $1.9 billion of Pick-a-Pay purchased credit-impaired (PCI) loans.

Noninterest Expense

Noninterest expense in the second quarter declined $467 million from the prior quarter to $13.4 billion, predominantly due to a decline in employee benefits expense and incentive compensation expense, which were seasonally elevated in the first quarter, as well as a $243 million decrease in deferred compensation expense (largely offset by lower net gains from equity securities). These decreases were partially offset by higher outside professional and contract services, salary, and advertising and promotion expense. The efficiency ratio was 62.3% in second quarter 2019, compared with 64.4% in the first quarter.

Income Taxes

The Company’s effective income tax rate was 17.3% for second quarter 2019. The effective income tax rate in first quarter 2019 was 13.1% and included net discrete income tax benefits of $297 million related mostly to the results of U.S. federal and state income tax examinations and the accounting for stock compensation activity. The Company currently expects the effective income tax rate for the remainder of 2019 to be approximately 18%, excluding the impact of any unanticipated discrete items.

Loans

Average loans were $947.5 billion in the second quarter, down $2.6 billion from the first quarter. Period-end loan balances were $949.9 billion at June 30, 2019, up $1.6 billion from March 31, 2019. Commercial loans were flat compared with March 31, 2019. Consumer loans increased $1.6 billion from the prior quarter, reflecting the following:

  • Real estate 1-4 family first mortgage loans increased $1.9 billion, as $19.8 billion of held-for-investment mortgage loan originations were partially offset by paydowns, the sale of $1.9 billion of Pick-a-Pay PCI loans, and the reclassification of $1.8 billion of mortgage loans to held for sale
  • Real estate 1-4 family junior lien mortgage loans decreased $1.0 billion, as paydowns continued to exceed originations
  • Credit card loans increased $541 million, up from a seasonally lower first quarter
  • Automobile loans increased $751 million, as originations of $6.3 billion outpaced paydowns, resulting in linked-quarter growth for the first time since third quarter 2016

Period-End Loan Balances

(in millions)

Jun 30,
2019

 

Mar 31,
2019

 

Dec 31,
2018

 

Sep 30,
2018

 

Jun 30,
2018

Commercial

$

512,245

 

 

512,226

 

 

513,405

 

 

501,886

 

 

503,105

 

Consumer

437,633

 

 

436,023

 

 

439,705

 

 

440,414

 

 

441,160

 

Total loans

$

949,878

 

 

948,249

 

 

953,110

 

 

942,300

 

 

944,265

 

Change from prior quarter

$

1,629

 

 

(4,861

)

 

10,810

 

 

(1,965

)

 

(3,043

)

Debt and Equity Securities

Debt securities include available-for-sale and held-to-maturity debt securities, as well as debt securities held for trading. Period-end debt securities were $482.1 billion at June 30, 2019, down $1.4 billion from the first quarter, predominantly due to a net decrease in available-for-sale debt securities. Debt securities purchases of approximately $15.9 billion, predominantly federal agency MBS in the available-for-sale portfolio, were more than offset by runoff and sales.

Net unrealized gains on available-for-sale debt securities were $2.5 billion at June 30, 2019, compared with $853 million at March 31, 2019, primarily due to lower long-term interest rates in the second quarter.

Period-end equity securities, which include marketable and non-marketable equity securities, as well as equity securities held for trading, were $61.5 billion at June 30, 2019, up $3.1 billion from the first quarter.

Deposits

Total average deposits for second quarter 2019 were $1.3 trillion, up $6.9 billion from the prior quarter primarily due to higher retail banking deposits reflecting increased promotional activity, partially offset by lower Wealth and Investment Management deposits. The average deposit cost for second quarter 2019 was 70 basis points, up 5 basis points from the prior quarter and 30 basis points from a year ago.

Capital

The Company's Common Equity Tier 1 ratio (fully phased-in) was 12.0%3 and continued to exceed both the regulatory minimum of 9% and our current internal target of 10%. In second quarter 2019, the Company repurchased 104.9 million shares of its common stock, which, net of issuances, reduced period-end common shares outstanding by 92.4 million. The Company paid a quarterly common stock dividend of $0.45 per share.

In June 2019, the Company received a non-objection to its 2019 Capital Plan from the Federal Reserve. As part of the plan, the Company expects to increase its third quarter 2019 common stock dividend to $0.51 per share, subject to approval by the Company's Board of Directors. The plan also includes up to $23.1 billion of gross common stock repurchases, subject to management discretion, for the four-quarter period from third quarter 2019 through second quarter 2020. In addition, the Company may consider redemptions or repurchases of other capital securities as part of the plan.

As of June 30, 2019, our eligible external total loss absorbing capacity (TLAC) as a percentage of total risk-weighted assets was 24.1%6, compared with the required minimum of 22.0%.

Credit Quality

Net Loan Charge-offs

The quarterly loss rate in the second quarter was 0.28% (annualized), down from 0.30% in the prior quarter, and up from 0.26% a year ago. Commercial and consumer losses were 0.13% and 0.45%, respectively. Total credit losses were $653 million in second quarter 2019, down $42 million from first quarter 2019. Commercial losses increased $20 million, while consumer losses decreased $62 million primarily due to lower automobile losses.

Net Loan Charge-Offs

 

Quarter ended

 

June 30, 2019

 

March 31, 2019

 

June 30, 2018

($ in millions)

Net loan

charge-

offs

 

As a % of

average

loans (a)

 

Net loan

charge-

offs

 

As a % of

average

loans (a)

 

Net loan

charge-

offs

 

As a % of

average

loans (a)

Commercial:

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

$

159

 

 

0.18

%

 

$

133

 

 

0.15

%

 

$

58

 

 

0.07

%

Real estate mortgage

4

 

 

0.01

 

 

6

 

 

0.02

 

 

 

 

 

Real estate construction

(2

)

 

(0.04

)

 

(2

)

 

(0.04

)

 

(6

)

 

(0.09

)

Lease financing

4

 

 

0.09

 

 

8

 

 

0.17

 

 

15

 

 

0.32

 

Total commercial

165

 

 

0.13

 

 

145

 

 

0.11

 

 

67

 

 

0.05

 

Consumer:

 

 

 

 

 

 

 

 

 

 

 

Real estate 1-4 family first mortgage

(30

)

 

(0.04

)

 

(12

)

 

(0.02

)

 

(23

)

 

(0.03

)

Real estate 1-4 family junior lien mortgage

(19

)

 

(0.24

)

 

(9

)

 

(0.10

)

 

(13

)

 

(0.13

)

Credit card

349

 

 

3.68

 

 

352

 

 

3.73

 

 

323

 

 

3.61

 

Automobile

52

 

 

0.46

 

 

91

 

 

0.82

 

 

113

 

 

0.93

 

Other revolving credit and installment

136

 

 

1.56

 

 

128

 

 

1.47

 

 

135

 

 

1.44

 

Total consumer

488

 

 

0.45

 

 

550

 

 

0.51

 

 

535

 

 

0.49

 

Total

$

653

 

 

0.28

%

 

$

695

 

 

0.30

%

 

$

602

 

 

0.26

%

 

 

 

 

 

 

 

 

 

 

 

 

(a) Quarterly net charge-offs (recoveries) as a percentage of average loans are annualized.

Nonperforming Assets

Nonperforming assets decreased $1.0 billion, or 14%, from first quarter 2019 to $6.3 billion. Nonaccrual loans decreased $983 million from first quarter 2019 to $5.9 billion. Commercial nonaccrual loans decreased $327 million driven by reductions in the commercial and industrial portfolio reflecting broad-based improvement across industry sectors. Consumer nonaccrual loans decreased $656 million driven by lower nonaccruals in the real estate 1-4 family first mortgage portfolio, which included a $373 million decline related to the reclassification of $1.8 billion of mortgage loans to held for sale.

Nonperforming Assets (Nonaccrual Loans and Foreclosed Assets)

 

June 30, 2019

 

March 31, 2019

 

June 30, 2018

($ in millions)

Total

balances

 

As a % of

total

loans

 

Total balances

 

As a

% of

total

loans

 

Total

balances

 

As a

% of

total

loans

Commercial:

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

$

1,634

 

 

0.47

%

 

$

1,986

 

 

0.57

%

 

$

1,559

 

 

0.46

%

Real estate mortgage

737

 

 

0.60

 

 

699

 

 

0.57

 

 

765

 

 

0.62

 

Real estate construction

36

 

 

0.17

 

 

36

 

 

0.16

 

 

51

 

 

0.22

 

Lease financing

63

 

 

0.33

 

 

76

 

 

0.40

 

 

80

 

 

0.41

 

Total commercial

2,470

 

 

0.48

 

 

2,797

 

 

0.55

 

 

2,455

 

 

0.49

 

Consumer:

 

 

 

 

 

 

 

 

 

 

 

Real estate 1-4 family first mortgage

2,425

 

 

0.85

 

 

3,026

 

 

1.06

 

 

3,469

 

 

1.23

 

Real estate 1-4 family junior lien mortgage

868

 

 

2.71

 

 

916

 

 

2.77

 

 

1,029

 

 

2.82

 

Automobile

115

 

 

0.25

 

 

116

 

 

0.26

 

 

119

 

 

0.25

 

Other revolving credit and installment

44

 

 

0.13

 

 

50

 

 

0.14

 

 

54

 

 

0.14

 

Total consumer

3,452

 

 

0.79

 

 

4,108

 

 

0.94

 

 

4,671

 

 

1.06

 

Total nonaccrual loans (a)

5,922

 

 

0.62

 

 

6,905

 

 

0.73

 

 

7,126

 

 

0.75

 

Foreclosed assets:

 

 

 

 

 

 

 

 

 

 

 

Government insured/guaranteed

68

 

 

 

 

75

 

 

 

 

90

 

 

 

Non-government insured/guaranteed

309

 

 

 

 

361

 

 

 

 

409

 

 

 

Total foreclosed assets

377

 

 

 

 

436

 

 

 

 

499

 

 

 

Total nonperforming assets

$

6,299

 

 

0.66

%

 

$

7,341

 

 

0.77

%

 

$

7,625

 

 

0.81

%

Change from prior quarter:

 

 

 

 

 

 

 

 

 

 

 

Total nonaccrual loans (a)

$

(983

)

 

 

 

$

409

 

 

 

 

$

(213

)

 

 

Total nonperforming assets

(1,042

)

 

 

 

394

 

 

 

 

(285

)

 

 

(a) Financial information for periods prior to December 31, 2018, has been revised to exclude mortgage loans held for sale (MLHFS), loans held for sale (LHFS) and loans held at fair value. For additional information, see the “Five Quarter Nonperforming Assets” table on page 33.

Allowance for Credit Losses

The allowance for credit losses, including the allowance for unfunded commitments, totaled $10.6 billion at June 30, 2019, down $218 million from March 31, 2019. Second quarter 2019 included a $150 million reserve release2 primarily driven by strong overall credit portfolio performance. The allowance coverage for total loans was 1.12%, compared with 1.14% in first quarter 2019. The allowance covered 4.0 times annualized second quarter net charge-offs, compared with 3.8 times in the prior quarter. The allowance coverage for nonaccrual loans was 179% at June 30, 2019, compared with 157% at March 31, 2019.

Business Segment Performance

Wells Fargo defines its operating segments by product type and customer segment. Segment net income for each of the three business segments was:

 

Quarter ended

(in millions)

Jun 30,
2019

 

Mar 31,
2019

 

Jun 30,
2018

Community Banking

$

3,147

 

 

2,823

 

 

2,496

 

Wholesale Banking

2,789

 

 

2,770

 

 

2,635

 

Wealth and Investment Management

602

 

 

577

 

 

445

 

Community Banking offers a complete line of diversified financial products and services for consumers and small businesses including checking and savings accounts, credit and debit cards, and automobile, student, mortgage, home equity and small business lending, as well as referrals to Wholesale Banking and Wealth and Investment Management business partners. The Community Banking segment also includes the results of our Corporate Treasury activities net of allocations (including funds transfer pricing, capital, liquidity and certain corporate expenses) in support of the other operating segments and results of investments in our affiliated venture capital and private equity partnerships.

Selected Financial Information

 

Quarter ended

(in millions)

Jun 30,
2019

 

Mar 31,
2019

 

Jun 30,
2018

Total revenue

$

11,805

 

 

11,750

 

 

11,806

 

Provision for credit losses

479

 

 

710

 

 

484

 

Noninterest expense

7,212

 

 

7,689

 

 

7,290

 

Segment net income

3,147

 

 

2,823

 

 

2,496

 

(in billions)

 

 

 

 

 

Average loans

457.7

 

 

458.2

 

 

463.8

 

Average assets

1,024.8

 

 

1,015.4

 

 

1,034.3

 

Average deposits

777.6

 

 

765.6

 

 

760.6

 

Second Quarter 2019 vs. First Quarter 2019

  • Net income of $3.1 billion, up $324 million, or 11%
  • Revenue was $11.8 billion, flat compared with the prior quarter, as higher service charges on deposit accounts, card fees, and other income were predominantly offset by lower net interest income, and lower market sensitive revenue4 reflecting lower deferred compensation plan investment results (largely offset by lower employee benefits expense)
  • Noninterest expense of $7.2 billion decreased $477 million, or 6%, predominantly driven by lower personnel expense, which was seasonally elevated in the first quarter, as well as lower deferred compensation expense (largely offset by lower net gains from equity securities), partially offset by higher advertising and promotion expense
  • Provision for credit losses decreased $231 million, primarily due to credit improvement in the automobile and consumer real estate portfolios

Second Quarter 2019 vs. Second Quarter 2018

  • Net income was up $651 million, or 26%, driven by net discrete tax expense of $481 million in second quarter 2018
  • Revenue was flat compared with a year ago, as lower net interest income was offset by higher gains from sales of Pick-a-Pay PCI loans and higher service charges on deposit accounts
  • Noninterest expense decreased $78 million, or 1%, driven by lower core deposit and other intangibles amortization, FDIC expense, and operating losses, partially offset by higher personnel, equipment, and advertising and promotion expense

Business Metrics and Highlights

  • Primary consumer checking customers7,8 of 24.3 million, up 1.3% from a year ago. The sale of 52 branches and $1.8 billion of deposits which closed in fourth quarter 2018 reduced the growth rate by 0.4%
  • Branch customer experience surveys completed during second quarter 2019 reflected higher scores from the previous quarter, with both ‘Customer Loyalty’ and ‘Overall Satisfaction with Most Recent Visit’ scores reaching their highest level in more than three years
  • Debit card point-of-sale purchase volume9 of $93.2 billion in the second quarter, up 6% year-over-year
  • General purpose credit card point-of-sale purchase volume of $20.4 billion in the second quarter, up 6% year-over-year
  • 30.0 million digital (online and mobile) active customers, including 23.7 million mobile active customers8,10
  • 5,442 retail bank branches as of the end of second quarter 2019, reflecting 78 branch consolidations in the first half of 2019
  • Home Lending
    • Originations of $53 billion, up from $33 billion in the prior quarter, primarily due to seasonality, as well as lower mortgage loan interest rates
      • Originations of loans held-for-sale and loans held-for-investment were $33 billion and $20 billion, respectively
    • Production margin on residential held-for-sale mortgage loan originations5 of 0.98%, down from 1.05% in the prior quarter
    • Applications of $90 billion, up from $64 billion in the prior quarter, driven primarily by seasonality, as well as lower mortgage loan interest rates
    • Unclosed application pipeline of $44 billion at quarter end, up from $32 billion at March 31, 2019, driven primarily by seasonality, as well as lower mortgage loan interest rates
  • Automobile originations of $6.3 billion in the second quarter, up 43% from the prior year, reflecting our focus on growing auto loans following the restructuring of the business
  • For the third year in a row, Wells Fargo was #1 in Nilson's annual ranking of the top 50 U.S. debit card issuers, receiving the top ranking by both purchase volume and number of transactions (April 2019)

Wholesale Banking provides financial solutions to businesses across the United States and globally with annual sales generally in excess of $5 million. Products and businesses include Commercial Banking, Commercial Real Estate, Corporate and Investment Banking, Credit Investment Portfolio, Treasury Management, and Commercial Capital.

Selected Financial Information

 

Quarter ended

(in millions)

Jun 30,
2019

 

Mar 31,
2019

 

Jun 30,
2018

Total revenue

$

7,065

 

 

7,111

 

 

7,197

 

Provision (reversal of provision) for credit losses

28

 

 

134

 

 

(36

)

Noninterest expense

3,882

 

 

3,838

 

 

4,219

 

Segment net income

2,789

 

 

2,770

 

 

2,635

 

(in billions)

 

 

 

 

 

Average loans

474.0

 

 

476.4

 

 

464.7

 

Average assets

852.2

 

 

844.5

 

 

826.4

 

Average deposits

410.4

 

 

409.8

 

 

414.0

 

Second Quarter 2019 vs. First Quarter 2019

  • Net income of $2.8 billion, up $19 million, or 1%
  • Revenue of $7.1 billion decreased $46 million, or 1%, driven by lower market sensitive revenue4, partially offset by higher investment banking fees, mortgage banking fees, commercial real estate brokerage fees, and treasury management fees
  • Noninterest expense of $3.9 billion increased $44 million, or 1%, reflecting higher regulatory, risk, and technology expense, partially offset by lower personnel expense, which was seasonally elevated in the first quarter
  • Provision for credit losses decreased $106 million, driven by lower nonaccrual loans and improvement in overall credit quality

Second Quarter 2019 vs. Second Quarter 2018

  • Net income increased $154 million, or 6%
  • Revenue decreased $132 million, or 2%, largely due to lower net interest income and treasury management fees, partially offset by higher market sensitive revenue4 and mortgage banking fees
  • Noninterest expense decreased $337 million, or 8%, on lower operating losses, FDIC expense, and core deposit and other intangibles amortization, partially offset by higher regulatory, risk, and technology expense
  • Provision for credit losses increased $64 million, reflecting higher loan losses and lower recoveries in second quarter 2019

Business Metrics and Highlights

  • Commercial card spend volume11 of $8.7 billion, up 6% from the prior year on increased transaction volumes, and up 3% compared with first quarter 2019
  • U.S. investment banking market share of 3.5% year-to-date 201912, compared with 3.3% year-to-date 201812

Wealth and Investment Management (WIM) provides a full range of personalized wealth management, investment and retirement products and services to clients across U.S. based businesses including Wells Fargo Advisors, The Private Bank, Abbot Downing, Wells Fargo Institutional Retirement and Trust, and Wells Fargo Asset Management. We deliver financial planning, private banking, credit, investment management and fiduciary services to high-net worth and ultra-high-net worth individuals and families. We also serve clients’ brokerage needs, supply retirement and trust services to institutional clients and provide investment management capabilities delivered to global institutional clients through separate accounts and the Wells Fargo Funds.

Selected Financial Information

 

Quarter ended

(in millions)

Jun 30,
2019

 

Mar 31,
2019

 

Jun 30,
2018

Total revenue

$

4,050

 

 

4,079

 

 

3,951

 

Provision (reversal of provision) for credit losses

(1

)

 

4

 

 

(2

)

Noninterest expense

3,246

 

 

3,303

 

 

3,361

 

Segment net income

602

 

 

577

 

 

445

 

(in billions)

 

 

 

 

 

Average loans

75.0

 

 

74.4

 

 

74.7

 

Average assets

83.8

 

 

83.2

 

 

84.0

 

Average deposits

143.5

 

 

153.2

 

 

167.1

 

Second Quarter 2019 vs. First Quarter 2019

  • Net income of $602 million, up $25 million, or 4%
  • Revenue of $4.1 billion decreased $29 million, or 1%, mostly due to lower net gains from equity securities on lower deferred compensation plan investment results of $97 million (largely offset by lower employee benefits expense), and lower net interest income, partially offset by higher trust and investment fees, up 5% driven by higher asset-based fees
  • Noninterest expense of $3.2 billion decreased $57 million, or 2%, primarily driven by lower personnel expense, which was seasonally higher in the first quarter, and lower employee benefits expense from deferred compensation plan expense of $95 million (largely offset by lower net gains from equity securities), partially offset by higher broker commissions

Second Quarter 2019 vs. Second Quarter 2018

  • Net income up $157 million, or 35%
  • Revenue increased $99 million, or 3%, primarily driven by higher net gains from equity securities primarily on lower other-than-temporary impairment compared with second quarter 2018 which included an impairment of $214 million related to the sale of Wells Fargo Asset Management's (WFAM) ownership stake in The Rock Creek Group, LP (RockCreek), partially offset by lower net interest income and asset-based fees
  • Noninterest expense decreased $115 million, or 3%, primarily due to lower operating losses and core deposit and other intangibles amortization, partially offset by higher personnel expense

Business Metrics and Highlights

Total WIM Segment

  • WIM total client assets of $1.9 trillion, down 1% from a year ago
  • Average loan balances were flat compared with a year ago
  • Second quarter 2019 closed referred investment assets (referrals resulting from the WIM/Community Banking partnership) up 1% compared with second quarter 2018, reaching their highest quarterly amount in two years

Retail Brokerage

  • Client assets of $1.6 trillion, flat compared with the prior year
  • Advisory assets of $561 billion, up 3% from the prior year, driven primarily by higher market valuations, partially offset by net outflows

Wealth Management

  • Client assets of $231 billion, down 3% from the prior year, driven primarily by net outflows, partially offset by higher market valuations

Asset Management

  • Total assets under management (AUM) of $495 billion, flat compared with the prior year, as higher market valuations and money market fund net inflows were offset by equity and fixed income net outflows, as well as the sale of WFAM's ownership stake in RockCreek and removal of the associated AUM

Retirement

  • IRA assets of $414 billion, up 3% from the prior year
  • Institutional Retirement plan assets of $388 billion, flat compared with the prior year
  • On July 1, 2019, we closed the previously announced sale of our Institutional Retirement and Trust business

Conference Call

The Company will host a live conference call on Tuesday, July 16, at 7:00 a.m. PT (10:00 a.m. ET). You may listen to the call by dialing 866-872-5161 (U.S. and Canada) or 440-424-4922 (International). The call will also be available online at https://www.wellsfargo.com/about/investor-relations/quarterly-earnings/ and https://engage.vevent.com/rt/wells_fargo_ao~5890548.

A replay of the conference call will be available beginning at 11:00 a.m. PT (2:00 p.m. ET) on Tuesday, July 16 through Tuesday, July 30. Please dial 855-859-2056 (U.S. and Canada) or 404-537-3406 (International) and enter Conference ID #5890548. The replay will also be available online at https://www.wellsfargo.com/about/investor-relations/quarterly-earnings/ and https://engage.vevent.com/rt/wells_fargo_ao~5890548.

End Notes

1 Tangible common equity is a non-GAAP financial measure and represents total equity less preferred equity, noncontrolling interests, and goodwill and certain identifiable intangible assets (including goodwill and intangible assets associated with certain of our nonmarketable equity securities but excluding mortgage servicing rights), net of applicable deferred taxes. The methodology of determining tangible common equity may differ among companies. Management believes that return on average tangible common equity, which utilizes tangible common equity, is a useful financial measure because it enables investors and others to assess the Company's use of equity. For additional information, including a corresponding reconciliation to GAAP financial measures, see the “Tangible Common Equity” tables on page 36.

2 Reserve build represents the amount by which the provision for credit losses exceeds net charge-offs, while reserve release represents the amount by which net charge-offs exceed the provision for credit losses.

3 See table on page 37 for more information on Common Equity Tier 1. Common Equity Tier 1 (fully phased-in) is a preliminary estimate and is calculated assuming the full phase-in of the Basel III capital rules.

4 Market sensitive revenue represents net gains from trading activities, debt securities, and equity securities.

5 Production margin represents net gains on residential mortgage loan origination/sales activities divided by total residential held-for-sale mortgage originations. See the “Selected Five Quarter Residential Mortgage Production Data” table on page 42 for more information.

6 The TLAC ratio is a preliminary estimate.

7 Customers who actively use their checking account with transactions such as debit card purchases, online bill payments, and direct deposit.

8 Data as of May 2019, comparisons with May 2018.

9 Combined consumer and business debit card purchase volume dollars.

10 Digital and mobile active customers is the number of consumer and small business customers who have logged on via a digital or mobile device in the prior 90 days.

11 Includes commercial card volume for the entire company.

12 Year-to-date through June. Source: Dealogic U.S. investment banking fee market share.

Forward-Looking Statements

This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. In addition, we may make forward-looking statements in our other documents filed or furnished with the SEC, and our management may make forward-looking statements orally to analysts, investors, representatives of the media and others. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “target,” “projects,” “outlook,” “forecast,” “will,” “may,” “could,” “should,” “can” and similar references to future periods. In particular, forward-looking statements include, but are not limited to, statements we make about: (i) the future operating or financial performance of the Company, including our outlook for future growth; (ii) our noninterest expense and efficiency ratio; (iii) future credit quality and performance, including our expectations regarding future loan losses and allowance levels; (iv) the appropriateness of the allowance for credit losses; (v) our expectations regarding net interest income and net interest margin; (vi) loan growth or the reduction or mitigation of risk in our loan portfolios; (vii) future capital or liquidity levels or targets and our estimated Common Equity Tier 1 ratio under Basel III capital standards; (viii) the performance of our mortgage business and any related exposures; (ix) the expected outcome and impact of legal, regulatory and legislative developments, as well as our expectations regarding compliance therewith; (x) future common stock dividends, common share repurchases and other uses of capital; (xi) our targeted range for return on assets, return on equity, and return on tangible common equity; (xii) the outcome of contingencies, such as legal proceedings; and (xiii) the Company’s plans, objectives and strategies.

Forward-looking statements are not based on historical facts but instead represent our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. We caution you, therefore, against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. While there is no assurance that any list of risks and uncertainties or risk factors is complete, important factors that could cause actual results to differ materially from those in the forward-looking statements include the following, without limitation:

  • current and future economic and market conditions, including the effects of declines in housing prices, high unemployment rates, U.S. fiscal debt, budget and tax matters, geopolitical matters, and any slowdown in global economic growth;
  • our capital and liquidity requirements (including under regulatory capital standards, such as the Basel III capital standards) and our ability to generate capital internally or raise capital on favorable terms;
  • financial services reform and other current, pending or future legislation or regulation that could have a negative effect on our revenue and businesses, including the Dodd-Frank Act and other legislation and regulation relating to bank products and services;
  • developments in our mortgage banking business, including the extent of the success of our mortgage loan modification efforts, the amount of mortgage loan repurchase demands that we receive, any negative effects relating to our mortgage servicing, loan modification or foreclosure practices, and the effects of regulatory or judicial requirements or guidance impacting our mortgage banking business and any changes in industry standards;
  • our ability to realize any efficiency ratio or expense target as part of our expense management initiatives, including as a result of business and economic cyclicality, seasonality, changes in our business composition and operating environment, growth in our businesses and/or acquisitions, and unexpected expenses relating to, among other things, litigation and regulatory matters;
  • the effect of the current interest rate environment or changes in interest rates on our net interest income, net interest margin and our mortgage originations, mortgage servicing rights and mortgage loans held for sale;
  • significant turbulence or a disruption in the capital or financial markets, which could result in, among other things, reduced investor demand for mortgage loans, a reduction in the availability of funding or increased funding costs, and declines in asset values and/or recognition of other-than-temporary impairment on securities held in our debt securities and equity securities portfolios;
  • the effect of a fall in stock market prices on our investment banking business and our fee income from our brokerage, asset and wealth management businesses;
  • negative effects from the retail banking sales practices matter and from other instances where customers may have experienced financial harm, including on our legal, operational and compliance costs, our ability to engage in certain business activities or offer certain products or services, our ability to keep and attract customers, our ability to attract and retain qualified team members, and our reputation;
  • resolution of regulatory matters, litigation, or other legal actions, which may result in, among other things, additional costs, fines, penalties, restrictions on our business activities, reputational harm, or other adverse consequences;
  • a failure in or breach of our operational or security systems or infrastructure, or those of our third-party vendors or other service providers, including as a result of cyber attacks;
  • the effect of changes in the level of checking or savings account deposits on our funding costs and net interest margin;
  • fiscal and monetary policies of the Federal Reserve Board; and
  • the other risk factors and uncertainties described under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2018.

In addition to the above factors, we also caution that the amount and timing of any future common stock dividends or repurchases will depend on the earnings, cash requirements and financial condition of the Company, market conditions, capital requirements (including under Basel capital standards), common stock issuance requirements, applicable law and regulations (including federal securities laws and federal banking regulations), and other factors deemed relevant by the Company’s Board of Directors, and may be subject to regulatory approval or conditions.

For more information about factors that could cause actual results to differ materially from our expectations, refer to our reports filed with the Securities and Exchange Commission, including the discussion under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2018, as filed with the Securities and Exchange Commission and available on its website at www.sec.gov.

Any forward-looking statement made by us speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

Forward-looking Non-GAAP Financial Measures. From time to time management may discuss forward-looking non-GAAP financial measures, such as forward-looking estimates or targets for return on average tangible common equity. We are unable to provide a reconciliation of forward-looking non-GAAP financial measures to their most directly comparable GAAP financial measures because we are unable to provide, without unreasonable effort, a meaningful or accurate calculation or estimation of amounts that would be necessary for the reconciliation due to the complexity and inherent difficulty in forecasting and quantifying future amounts or when they may occur. Such unavailable information could be significant to future results.

About Wells Fargo

Wells Fargo & Company (NYSE: WFC) is a diversified, community-based financial services company with $1.9 trillion in assets. Wells Fargo’s vision is to satisfy our customers’ financial needs and help them succeed financially. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, investment and mortgage products and services, as well as consumer and commercial finance, through 7,600 locations, more than 13,000 ATMs, the internet (wellsfargo.com) and mobile banking, and has offices in 32 countries and territories to support customers who conduct business in the global economy. With approximately 263,000 team members, Wells Fargo serves one in three households in the United States. Wells Fargo & Company was ranked No. 29 on Fortune’s 2019 rankings of America’s largest corporations.

Wells Fargo & Company and Subsidiaries

QUARTERLY FINANCIAL DATA

TABLE OF CONTENTS

 

 

Pages

 

 

Summary Information

 

Summary Financial Data

17

 

 

Income

 

Consolidated Statement of Income

19

Consolidated Statement of Comprehensive Income

21

Condensed Consolidated Statement of Changes in Total Equity

21

Average Balances, Yields and Rates Paid (Taxable-Equivalent Basis)

22

Five Quarter Average Balances, Yields and Rates Paid (Taxable-Equivalent Basis)

24

Noninterest Income and Noninterest Expense

25

Five Quarter Deferred Compensation Plan Investment Results

27

 

 

Balance Sheet

 

Consolidated Balance Sheet

28

Trading Activities

30

Debt Securities

30

Equity Securities

31

 

 

Loans

 

Loans

32

Nonperforming Assets

33

Loans 90 Days or More Past Due and Still Accruing

33

Changes in Allowance for Credit Losses

35

 

 

Equity

 

Tangible Common Equity

36

Common Equity Tier 1 Under Basel III

37

 

 

Operating Segments

 

Operating Segment Results

38

 

 

Other

 

Mortgage Servicing and other related data

40

Wells Fargo & Company and Subsidiaries

SUMMARY FINANCIAL DATA

 

Quarter ended

 

% Change
Jun 30, 2019 from

 

Six months ended

 

 

($ in millions, except per share amounts)

Jun 30,
2019

 

Mar 31,
2019

 

Jun 30,
2018

 

Mar 31,
2019

 

Jun 30,
2018

 

Jun 30,
2019

 

Jun 30,
2018

 

%
Change

For the Period

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wells Fargo net income

$

6,206

 

 

5,860

 

 

5,186

 

 

6

%

 

20

 

 

$

12,066

 

 

10,322

 

 

17

%

Wells Fargo net income applicable to common stock

5,848

 

 

5,507

 

 

4,792

 

 

6

 

 

22

 

 

11,355

 

 

9,525

 

 

19

 

Diluted earnings per common share

1.30

 

 

1.20

 

 

0.98

 

 

8

 

 

33

 

 

2.50

 

 

1.94

 

 

29

 

Profitability ratios (annualized):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wells Fargo net income to average assets (ROA)

1.31

%

 

1.26

 

 

1.10

 

 

4

 

 

19

 

 

1.29

%

 

1.10

 

 

17

 

Wells Fargo net income applicable to common stock to average Wells Fargo common stockholders’ equity (ROE)

13.26

 

 

12.71

 

 

10.60

 

 

4

 

 

25

 

 

12.99

 

 

10.59

 

 

23

 

Return on average tangible common equity (ROTCE)(1)

15.78

 

 

15.16

 

 

12.62

 

 

4

 

 

25

 

 

15.47

 

 

12.62

 

 

23

 

Efficiency ratio (2)

62.3

 

 

64.4

 

 

64.9

 

 

(3

)

 

(4

)

 

63.4

 

 

66.7

 

 

(5

)

Total revenue

$

21,584

 

 

21,609

 

 

21,553

 

 

 

 

 

 

$

43,193

 

 

43,487

 

 

(1

)

Pre-tax pre-provision profit (PTPP) (3)

8,135

 

 

7,693

 

 

7,571

 

 

6

 

 

7

 

 

15,828

 

 

14,463

 

 

9

 

Dividends declared per common share

0.45

 

 

0.45

 

 

0.39

 

 

 

 

15

 

 

0.90

 

 

0.78

 

 

15

 

Average common shares outstanding

4,469.4

 

 

4,551.5

 

 

4,865.8

 

 

(2

)

 

(8

)

 

4,510.2

 

 

4,875.7

 

 

(7

)

Diluted average common shares outstanding

4,495.0

 

 

4,584.0

 

 

4,899.8

 

 

(2

)

 

(8

)

 

4,540.1

 

 

4,916.1

 

 

(8

)

Average loans

$

947,460

 

 

950,010

 

 

944,079

 

 

 

 

 

 

$

948,728

 

 

947,532

 

 

 

Average assets

1,900,627

 

 

1,883,091

 

 

1,884,884

 

 

1

 

 

1

 

 

1,891,907

 

 

1,900,304

 

 

 

Average total deposits

1,268,979

 

 

1,262,062

 

 

1,271,339

 

 

1

 

 

 

 

1,265,539

 

 

1,284,187

 

 

(1

)

Average consumer and small business banking deposits (4)

742,671

 

 

739,654

 

 

754,047

 

 

 

 

(2

)

 

741,171

 

 

754,898

 

 

(2

)

Net interest margin

2.82

%

 

2.91

 

 

2.93

 

 

(3

)

 

(4

)

 

2.86

%

 

2.89

 

 

(1

)

At Period End

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities

$

482,067

 

 

483,467

 

 

475,495

 

 

 

 

1

 

 

$

482,067

 

 

475,495

 

 

1

 

Loans

949,878

 

 

948,249

 

 

944,265

 

 

 

 

1

 

 

949,878

 

 

944,265

 

 

1

 

Allowance for loan losses

9,692

 

 

9,900

 

 

10,193

 

 

(2

)

 

(5

)

 

9,692

 

 

10,193

 

 

(5

)

Goodwill

26,415

 

 

26,420

 

 

26,429

 

 

 

 

 

 

26,415

 

 

26,429

 

 

 

Equity securities

61,537

 

 

58,440

 

 

57,505

 

 

5

 

 

7

 

 

61,537

 

 

57,505

 

 

7

 

Assets

1,923,388

 

 

1,887,792

 

 

1,879,700

 

 

2

 

 

2

 

 

1,923,388

 

 

1,879,700

 

 

2

 

Deposits

1,288,426

 

 

1,264,013

 

 

1,268,864

 

 

2

 

 

2

 

 

1,288,426

 

 

1,268,864

 

 

2

 

Common stockholders' equity

177,235

 

 

176,025

 

 

181,386

 

 

1

 

 

(2

)

 

177,235

 

 

181,386

 

 

(2

)

Wells Fargo stockholders’ equity

199,042

 

 

197,832

 

 

205,188

 

 

1

 

 

(3

)

 

199,042

 

 

205,188

 

 

(3

)

Total equity

200,037

 

 

198,733

 

 

206,069

 

 

1

 

 

(3

)

 

200,037

 

 

206,069

 

 

(3

)

Tangible common equity (1)

148,864

 

 

147,723

 

 

152,580

 

 

1

 

 

(2

)

 

148,864

 

 

152,580

 

 

(2

)

Common shares outstanding

4,419.6

 

 

4,511.9

 

 

4,849.1

 

 

(2

)

 

(9

)

 

4,419.6

 

 

4,849.1

 

 

(9

)

Book value per common share (5)

$

40.10

 

 

39.01

 

 

37.41

 

 

3

 

 

7

 

 

$

40.10

 

 

37.41

 

 

7

 

Tangible book value per common share (1)(5)

33.68

 

 

32.74

 

 

31.47

 

 

3

 

 

7

 

 

33.68

 

 

31.47

 

 

7

 

Team members (active, full-time equivalent)

262,800

 

 

262,100

 

 

264,500

 

 

 

 

(1

)

 

262,800

 

 

264,500

 

 

(1

)

(1) Tangible common equity is a non-GAAP financial measure and represents total equity less preferred equity, noncontrolling interests, and goodwill and certain identifiable intangible assets (including goodwill and intangible assets associated with certain of our nonmarketable equity securities but excluding mortgage servicing rights), net of applicable deferred taxes. The methodology of determining tangible common equity may differ among companies. Management believes that return on average tangible common equity and tangible book value per common share, which utilize tangible common equity, are useful financial measures because they enable investors and others to assess the Company's use of equity. For additional information, including a corresponding reconciliation to GAAP financial measures, see the “Tangible Common Equity” tables on page 36.

(2) The efficiency ratio is noninterest expense divided by total revenue (net interest income and noninterest income).
(3) Pre-tax pre-provision profit (PTPP) is total revenue less noninterest expense. Management believes that PTPP is a useful financial measure because it enables investors and others to assess the Company’s ability to generate capital to cover credit losses through a credit cycle.
(4) Consumer and small business banking deposits are total deposits excluding mortgage escrow and wholesale deposits.
(5) Book value per common share is common stockholders' equity divided by common shares outstanding. Tangible book value per common share is tangible common equity divided by common shares outstanding.

Wells Fargo & Company and Subsidiaries

FIVE QUARTER SUMMARY FINANCIAL DATA

 

Quarter ended

($ in millions, except per share amounts)

Jun 30,
2019

 

Mar 31,
2019

 

Dec 31,
2018

 

Sep 30,
2018

 

Jun 30,
2018

For the Quarter

 

 

 

 

 

 

 

 

 

Wells Fargo net income

$

6,206

 

 

5,860

 

 

6,064

 

 

6,007

 

 

5,186

 

Wells Fargo net income applicable to common stock

5,848

 

 

5,507

 

 

5,711

 

 

5,453

 

 

4,792

 

Diluted earnings per common share

1.30

 

 

1.20

 

 

1.21

 

 

1.13

 

 

0.98

 

Profitability ratios (annualized):

 

 

 

 

 

 

 

 

 

Wells Fargo net income to average assets (ROA)

1.31

%

 

1.26

 

 

1.28

 

 

1.27

 

 

1.10

 

Wells Fargo net income applicable to common stock to average Wells Fargo common stockholders’ equity (ROE)

13.26

 

 

12.71

 

 

12.89

 

 

12.04

 

 

10.60

 

Return on average tangible common equity (ROTCE)(1)

15.78

 

 

15.16

 

 

15.39

 

 

14.33

 

 

12.62

 

Efficiency ratio (2)

62.3

 

 

64.4

 

 

63.6

 

 

62.7

 

 

64.9

 

Total revenue

$

21,584

 

 

21,609

 

 

20,980

 

 

21,941

 

 

21,553

 

Pre-tax pre-provision profit (PTPP) (3)

8,135

 

 

7,693

 

 

7,641

 

 

8,178

 

 

7,571

 

Dividends declared per common share

0.45

 

 

0.45

 

 

0.43

 

 

0.43

 

 

0.39

 

Average common shares outstanding

4,469.4

 

 

4,551.5

 

 

4,665.8

 

 

4,784.0

 

 

4,865.8

 

Diluted average common shares outstanding

4,495.0

 

 

4,584.0

 

 

4,700.8

 

 

4,823.2

 

 

4,899.8

 

Average loans

$

947,460

 

 

950,010

 

 

946,336

 

 

939,462

 

 

944,079

 

Average assets

1,900,627

 

 

1,883,091

 

 

1,879,047

 

 

1,876,283

 

 

1,884,884

 

Average total deposits

1,268,979

 

 

1,262,062

 

 

1,268,948

 

 

1,266,378

 

 

1,271,339

 

Average consumer and small business banking deposits (4)

742,671

 

 

739,654

 

 

736,295

 

 

743,503

 

 

754,047

 

Net interest margin

2.82

%

 

2.91

 

 

2.94

 

 

2.94

 

 

2.93

 

At Quarter End

 

 

 

 

 

 

 

 

 

Debt securities

$

482,067

 

 

483,467

 

 

484,689

 

 

472,283

 

 

475,495

 

Loans

949,878

 

 

948,249

 

 

953,110

 

 

942,300

 

 

944,265

 

Allowance for loan losses

9,692

 

 

9,900

 

 

9,775

 

 

10,021

 

 

10,193

 

Goodwill

26,415

 

 

26,420

 

 

26,418

 

 

26,425

 

 

26,429

 

Equity securities

61,537

 

 

58,440

 

 

55,148

 

 

61,755

 

 

57,505

 

Assets

1,923,388

 

 

1,887,792

 

 

1,895,883

 

 

1,872,981

 

 

1,879,700

 

Deposits

1,288,426

 

 

1,264,013

 

 

1,286,170

 

 

1,266,594

 

 

1,268,864

 

Common stockholders' equity

177,235

 

 

176,025

 

 

174,359

 

 

176,934

 

 

181,386

 

Wells Fargo stockholders’ equity

199,042

 

 

197,832

 

 

196,166

 

 

198,741

 

 

205,188

 

Total equity

200,037

 

 

198,733

 

 

197,066

 

 

199,679

 

 

206,069

 

Tangible common equity (1)

148,864

 

 

147,723

 

 

145,980

 

 

148,391

 

 

152,580

 

Common shares outstanding

4,419.6

 

 

4,511.9

 

 

4,581.3

 

 

4,711.6

 

 

4,849.1

 

Book value per common share (5)

$

40.10

 

 

39.01

 

 

38.06

 

 

37.55

 

 

37.41

 

Tangible book value per common share (1)(5)

33.68

 

 

32.74

 

 

31.86

 

 

31.49

 

 

31.47

 

Team members (active, full-time equivalent)

262,800

 

 

262,100

 

 

258,700

 

 

261,700

 

 

264,500

 

(1) Tangible common equity is a non-GAAP financial measure and represents total equity less preferred equity, noncontrolling interests, and goodwill and certain identifiable intangible assets (including goodwill and intangible assets associated with certain of our nonmarketable equity securities but excluding mortgage servicing rights), net of applicable deferred taxes. The methodology of determining tangible common equity may differ among companies. Management believes that return on average tangible common equity and tangible book value per common share, which utilize tangible common equity, are useful financial measures because they enable investors and others to assess the Company's use of equity. For additional information, including a corresponding reconciliation to GAAP financial measures, see the “Tangible Common Equity” tables on page 36.

(2) The efficiency ratio is noninterest expense divided by total revenue (net interest income and noninterest income).

(3) Pre-tax pre-provision profit (PTPP) is total revenue less noninterest expense. Management believes that PTPP is a useful financial measure because it enables investors and others to assess the Company’s ability to generate capital to cover credit losses through a credit cycle.

(4) Consumer and small business banking deposits are total deposits excluding mortgage escrow and wholesale deposits.

(5) Book value per common share is common stockholders' equity divided by common shares outstanding. Tangible book value per common share is tangible common equity divided by common shares outstanding.

Wells Fargo & Company and Subsidiaries

CONSOLIDATED STATEMENT OF INCOME

 

Quarter ended June 30,

 

%

 

Six months ended June 30,

 

%

(in millions, except per share amounts)

2019

 

2018

 

Change

 

2019

 

2018

 

Change

Interest income

 

 

 

 

 

 

 

 

 

 

 

Debt securities

$

3,781

 

 

3,594

 

 

5

%

 

$

7,722

 

 

7,008

 

 

10

%

Mortgage loans held for sale

195

 

 

198

 

 

(2

)

 

347

 

 

377

 

 

(8

)

Loans held for sale

20

 

 

48

 

 

(58

)

 

44

 

 

72

 

 

(39

)

Loans

11,316

 

 

10,912

 

 

4

 

 

22,670

 

 

21,491

 

 

5

 

Equity securities

236

 

 

221

 

 

7

 

 

446

 

 

452

 

 

(1

)

Other interest income

1,438

 

 

1,042

 

 

38

 

 

2,760

 

 

1,962

 

 

41

 

Total interest income

16,986

 

 

16,015

 

 

6

 

 

33,989

 

 

31,362

 

 

8

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

Deposits

2,213

 

 

1,268

 

 

75

 

 

4,239

 

 

2,358

 

 

80

 

Short-term borrowings

646

 

 

398

 

 

62

 

 

1,242

 

 

709

 

 

75

 

Long-term debt

1,900

 

 

1,658

 

 

15

 

 

3,827

 

 

3,234

 

 

18

 

Other interest expense

132

 

 

150

 

 

(12

)

 

275

 

 

282

 

 

(2

)

Total interest expense

4,891

 

 

3,474

 

 

41

 

 

9,583

 

 

6,583

 

 

46

 

Net interest income

12,095

 

 

12,541

 

 

(4

)

 

24,406

 

 

24,779

 

 

(2

)

Provision for credit losses

503

 

 

452

 

 

11

 

 

1,348

 

 

643

 

 

110

 

Net interest income after provision for credit losses

11,592

 

 

12,089

 

 

(4

)

 

23,058

 

 

24,136

 

 

(4

)

Noninterest income

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

1,206

 

 

1,163

 

 

4

 

 

2,300

 

 

2,336

 

 

(2

)

Trust and investment fees

3,568

 

 

3,675

 

 

(3

)

 

6,941

 

 

7,358

 

 

(6

)

Card fees

1,025

 

 

1,001

 

 

2

 

 

1,969

 

 

1,909

 

 

3

 

Other fees

800

 

 

846

 

 

(5

)

 

1,570

 

 

1,646

 

 

(5

)

Mortgage banking

758

 

 

770

 

 

(2

)

 

1,466

 

 

1,704

 

 

(14

)

Insurance

93

 

 

102

 

 

(9

)

 

189

 

 

216

 

 

(13

)

Net gains from trading activities

229

 

 

191

 

 

20

 

 

586

 

 

434

 

 

35

 

Net gains on debt securities

20

 

 

41

 

 

(51

)

 

145

 

 

42

 

 

245

 

Net gains from equity securities

622

 

 

295

 

 

111

 

 

1,436

 

 

1,078

 

 

33

 

Lease income

424

 

 

443

 

 

(4

)

 

867

 

 

898

 

 

(3

)

Other

744

 

 

485

 

 

53

 

 

1,318

 

 

1,087

 

 

21

 

Total noninterest income

9,489

 

 

9,012

 

 

5

 

 

18,787

 

 

18,708

 

 

 

Noninterest expense

 

 

 

 

 

 

 

 

 

 

 

Salaries

4,541

 

 

4,465

 

 

2

 

 

8,966

 

 

8,828

 

 

2

 

Commission and incentive compensation

2,597

 

 

2,642

 

 

(2

)

 

5,442

 

 

5,410

 

 

1

 

Employee benefits

1,336

 

 

1,245

 

 

7

 

 

3,274

 

 

2,843

 

 

15

 

Equipment

607

 

 

550

 

 

10

 

 

1,268

 

 

1,167

 

 

9

 

Net occupancy

719

 

 

722

 

 

 

 

1,436

 

 

1,435

 

 

 

Core deposit and other intangibles

27

 

 

265

 

 

(90

)

 

55

 

 

530

 

 

(90

)

FDIC and other deposit assessments

144

 

 

297

 

 

(52

)

 

303

 

 

621

 

 

(51

)

Other

3,478

 

 

3,796

 

 

(8

)

 

6,621

 

 

8,190

 

 

(19

)

Total noninterest expense

13,449

 

 

13,982

 

 

(4

)

 

27,365

 

 

29,024

 

 

(6

)

Income before income tax expense

7,632

 

 

7,119

 

 

7

 

 

14,480

 

 

13,820

 

 

5

 

Income tax expense

1,294

 

 

1,810

 

 

(29

)

 

2,175

 

 

3,184

 

 

(32

)

Net income before noncontrolling interests

6,338

 

 

5,309

 

 

19

 

 

12,305

 

 

10,636

 

 

16

 

Less: Net income from noncontrolling interests

132

 

 

123

 

 

7

 

 

239

 

 

314

 

 

(24

)

Wells Fargo net income

$

6,206

 

 

5,186

 

 

20

 

 

$

12,066

 

 

10,322

 

 

17

 

Less: Preferred stock dividends and other

358

 

 

394

 

 

(9

)

 

711

 

 

797

 

 

(11

)

Wells Fargo net income applicable to common stock

$

5,848

 

 

4,792

 

 

22

 

 

$

11,355

 

 

9,525

 

 

19

 

Per share information

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share

$

1.31

 

 

0.98

 

 

34

 

 

$

2.52

 

 

1.95

 

 

29

 

Diluted earnings per common share

1.30

 

 

0.98

 

 

33

 

 

2.50

 

 

1.94

 

 

29

 

Average common shares outstanding

4,469.4

 

 

4,865.8

 

 

(8

)

 

4,510.2

 

 

4,875.7

 

 

(7

)

Diluted average common shares outstanding

4,495.0

 

 

4,899.8

 

 

(8

)

 

4,540.1

 

 

4,916.1

 

 

(8

)

Wells Fargo & Company and Subsidiaries

FIVE QUARTER CONSOLIDATED STATEMENT OF INCOME

 

Quarter ended

(in millions, except per share amounts)

Jun 30,
2019

 

Mar 31,
2019

 

Dec 31,
2018

 

Sep 30,
2018

 

Jun 30,
2018

Interest income

 

 

 

 

 

 

 

 

 

Debt securities

$

3,781

 

 

3,941

 

 

3,803

 

 

3,595

 

 

3,594

 

Mortgage loans held for sale

195

 

 

152

 

 

190

 

 

210

 

 

198

 

Loans held for sale

20

 

 

24

 

 

33

 

 

35

 

 

48

 

Loans

11,316

 

 

11,354

 

 

11,367

 

 

11,116

 

 

10,912

 

Equity securities

236

 

 

210

 

 

260

 

 

280

 

 

221

 

Other interest income

1,438

 

 

1,322

 

 

1,268

 

 

1,128

 

 

1,042

 

Total interest income

16,986

 

 

17,003

 

 

16,921

 

 

16,364

 

 

16,015

 

Interest expense

 

 

 

 

 

 

 

 

 

Deposits

2,213

 

 

2,026

 

 

1,765

 

 

1,499

 

 

1,268

 

Short-term borrowings

646

 

 

596

 

 

546

 

 

462

 

 

398

 

Long-term debt

1,900

 

 

1,927

 

 

1,802

 

 

1,667

 

 

1,658

 

Other interest expense

132

 

 

143

 

 

164

 

 

164

 

 

150

 

Total interest expense

4,891

 

 

4,692

 

 

4,277

 

 

3,792

 

 

3,474

 

Net interest income

12,095

 

 

12,311

 

 

12,644

 

 

12,572

 

 

12,541

 

Provision for credit losses

503

 

 

845

 

 

521

 

 

580

 

 

452

 

Net interest income after provision for credit losses

11,592

 

 

11,466

 

 

12,123

 

 

11,992

 

 

12,089

 

Noninterest income

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

1,206

 

 

1,094

 

 

1,176

 

 

1,204

 

 

1,163

 

Trust and investment fees

3,568

 

 

3,373

 

 

3,520

 

 

3,631

 

 

3,675

 

Card fees

1,025

 

 

944

 

 

981

 

 

1,017

 

 

1,001

 

Other fees

800

 

 

770

 

 

888

 

 

850

 

 

846

 

Mortgage banking

758

 

 

708

 

 

467

 

 

846

 

 

770

 

Insurance

93

 

 

96

 

 

109

 

 

104

 

 

102

 

Net gains from trading activities

229

 

 

357

 

 

10

 

 

158

 

 

191

 

Net gains on debt securities

20

 

 

125

 

 

9

 

 

57

 

 

41

 

Net gains from equity securities

622

 

 

814

 

 

21

 

 

416

 

 

295

 

Lease income

424

 

 

443

 

 

402

 

 

453

 

 

443

 

Other

744

 

 

574

 

 

753

 

 

633

 

 

485

 

Total noninterest income

9,489

 

 

9,298

 

 

8,336

 

 

9,369

 

 

9,012

 

Noninterest expense

 

 

 

 

 

 

 

 

 

Salaries

4,541

 

 

4,425

 

 

4,545

 

 

4,461

 

 

4,465

 

Commission and incentive compensation

2,597

 

 

2,845

 

 

2,427

 

 

2,427

 

 

2,642

 

Employee benefits

1,336

 

 

1,938

 

 

706

 

 

1,377

 

 

1,245

 

Equipment

607

 

 

661

 

 

643

 

 

634

 

 

550

 

Net occupancy

719

 

 

717

 

 

735

 

 

718

 

 

722

 

Core deposit and other intangibles

27

 

 

28

 

 

264

 

 

264

 

 

265

 

FDIC and other deposit assessments

144

 

 

159

 

 

153

 

 

336

 

 

297

 

Other

3,478

 

 

3,143

 

 

3,866

 

 

3,546

 

 

3,796

 

Total noninterest expense

13,449

 

 

13,916

 

 

13,339

 

 

13,763

 

 

13,982

 

Income before income tax expense

7,632

 

 

6,848

 

 

7,120

 

 

7,598

 

 

7,119

 

Income tax expense

1,294

 

 

881

 

 

966

 

 

1,512

 

 

1,810

 

Net income before noncontrolling interests

6,338

 

 

5,967

 

 

6,154

 

 

6,086

 

 

5,309

 

Less: Net income from noncontrolling interests

132

 

 

107

 

 

90

 

 

79

 

 

123

 

Wells Fargo net income

$

6,206

 

 

5,860

 

 

6,064

 

 

6,007

 

 

5,186

 

Less: Preferred stock dividends and other

358

 

 

353

 

 

353

 

 

554

 

 

394

 

Wells Fargo net income applicable to common stock

$

5,848

 

 

5,507

 

 

5,711

 

 

5,453

 

 

4,792

 

Per share information

 

 

 

 

 

 

 

 

 

Earnings per common share

$

1.31

 

 

1.21

 

 

1.22

 

 

1.14

 

 

0.98

 

Diluted earnings per common share

1.30

 

 

1.20

 

 

1.21

 

 

1.13

 

 

0.98

 

Average common shares outstanding

4,469.4

 

 

4,551.5

 

 

4,665.8

 

 

4,784.0

 

 

4,865.8

 

Diluted average common shares outstanding

4,495.0

 

 

4,584.0

 

 

4,700.8

 

 

4,823.2

 

 

4,899.8

 

Wells Fargo & Company and Subsidiaries

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 

Quarter ended June 30,

 

%

 

Six months ended June 30,

 

%

(in millions)

2019

 

2018

 

Change

 

2019

 

2018

 

Change

Wells Fargo net income

$

6,206

 

 

5,186

 

 

20

%

 

$

12,066

 

 

10,322

 

 

17

%

Other comprehensive income (loss), before tax:

 

 

 

 

 

 

 

 

 

 

 

Debt securities:

 

 

 

 

 

 

 

 

 

 

 

Net unrealized gains (losses) arising during the period

 

1,709

 

 

(617

)

 

NM

 

 

 

4,540

 

 

(4,060

)

 

NM

 

Reclassification of net (gains) losses to net income

 

39

 

 

49

 

 

(20

)

 

 

(42

)

 

117

 

 

NM

 

Derivative and hedging activities:

 

 

 

 

 

 

 

 

 

 

 

Net unrealized gains (losses) arising during the period

 

57

 

 

(150

)

 

NM

 

 

 

22

 

 

(392

)

 

NM

 

Reclassification of net losses to net income

 

79

 

 

77

 

 

3

 

 

 

158

 

 

137

 

 

15

 

Defined benefit plans adjustments:

 

 

 

 

 

 

 

 

 

 

 

Net actuarial and prior service gains (losses) arising during the period

 

 

 

 

 

 

(4

)

 

6

 

 

NM

 

Amortization of net actuarial loss, settlements and other to net income

 

33

 

 

29

 

 

14

 

 

 

68

 

 

61

 

 

11

 

Foreign currency translation adjustments:

 

 

 

 

 

 

 

 

 

 

 

Net unrealized gains (losses) arising during the period

 

14

 

 

(83

)

 

NM

 

 

 

56

 

 

(85

)

 

NM

 

Other comprehensive income (loss), before tax

 

1,931

 

 

(695

)

 

NM

 

 

 

4,798

 

 

(4,216

)

 

NM

 

Income tax benefit (expense) related to other comprehensive income

 

(473

)

 

154

 

 

NM

 

 

 

(1,167

)

 

1,016

 

 

NM

 

Other comprehensive income (loss), net of tax

 

1,458

 

 

(541

)

 

NM

 

 

 

3,631

 

 

(3,200

)

 

NM

 

Less: Other comprehensive loss from noncontrolling interests

 

 

(1

)

 

(100

)

 

 

 

(1

)

 

(100

)

Wells Fargo other comprehensive income (loss), net of tax

 

1,458

 

 

(540

)

 

NM

 

 

 

3,631

 

 

(3,199

)

 

NM

 

Wells Fargo comprehensive income

 

7,664

 

 

4,646

 

 

65

 

 

 

15,697

 

 

7,123

 

 

120

 

Comprehensive income from noncontrolling interests

 

132

 

 

122

 

 

8

 

 

 

239

 

 

313

 

 

(24

)

Total comprehensive income

$

7,796

 

 

4,768

 

 

64

 

 

$

15,936

 

 

7,436

 

 

114

 

NM – Not meaningful

FIVE QUARTER CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN TOTAL EQUITY

 

Quarter ended

(in millions)

Jun 30,
2019

 

Mar 31,
2019

 

Dec 31,
2018

 

Sep 30,
2018

 

Jun 30,
2018

Balance, beginning of period

$

198,733

 

 

197,066

 

 

199,679

 

 

206,069

 

 

205,910

 

Cumulative effect from change in accounting policies (1)

 

 

(11

)

 

 

 

 

 

 

Wells Fargo net income

6,206

 

 

5,860

 

 

6,064

 

 

6,007

 

 

5,186

 

Wells Fargo other comprehensive income (loss), net of tax

1,458

 

 

2,173

 

 

537

 

 

(1,012

)

 

(540

)

Noncontrolling interests

94

 

 

1

 

 

(38

)

 

57

 

 

(77

)

Common stock issued

399

 

 

1,139

 

 

239

 

 

156

 

 

73

 

Common stock repurchased (2)

(4,898

)

 

(4,820

)

 

(7,299

)

 

(7,382

)

 

(2,923

)

Preferred stock redeemed (3)

 

 

 

 

 

 

(2,150

)

 

 

Preferred stock released by ESOP

193

 

 

 

 

268

 

 

260

 

 

490

 

Common stock warrants repurchased/exercised

 

 

 

 

(131

)

 

(36

)

 

(1

)

Common stock dividends

(2,015

)

 

(2,054

)

 

(2,016

)

 

(2,062

)

 

(1,900

)

Preferred stock dividends

(358

)

 

(353

)

 

(353

)

 

(399

)

 

(394

)

Stock incentive compensation expense

247

 

 

544

 

 

144

 

 

202

 

 

258

 

Net change in deferred compensation and related plans

(22

)

 

(812

)

 

(28

)

 

(31

)

 

(13

)

Balance, end of period

$

200,037

 

 

198,733

 

 

197,066

 

 

199,679

 

 

206,069

 

(1) Effective January 1, 2019, we adopted ASU 2016-02 – Leases (Topic 842) and subsequent related Updates and ASU 2017-08 – Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities.

(2) For the quarter ended June 30, 2018, includes $1.0 billion related to a private forward repurchase transaction that settled in third quarter 2018 for 18.8 million shares of common stock.

(3) Represents the impact of the redemption of preferred stock, Series J, in third quarter 2018.

Wells Fargo & Company and Subsidiaries

AVERAGE BALANCES, YIELDS AND RATES PAID (TAXABLE-EQUIVALENT BASIS) (1)(2)

 

Quarter ended June 30,

 

2019

 

2018

(in millions)

Average

balance

 

Yields/

rates

 

Interest

income/

expense

 

Average

balance

 

Yields/

rates

 

Interest

income/

expense

Earning assets

 

 

 

 

 

 

 

 

 

 

 

Interest-earning deposits with banks

$

141,045

 

 

2.33

%

 

$

819

 

 

154,846

 

 

1.75

%

 

$

676

 

Federal funds sold and securities purchased under resale agreements

98,130

 

 

2.44

 

 

598

 

 

80,020

 

 

1.73

 

 

344

 

Debt securities (3):

 

 

 

 

 

 

 

 

 

 

 

Trading debt securities

86,514

 

 

3.45

 

 

746

 

 

80,661

 

 

3.45

 

 

695

 

Available-for-sale debt securities:

 

 

 

 

 

 

 

 

 

 

 

Securities of U.S. Treasury and federal agencies

15,402

 

 

2.21

 

 

85

 

 

6,425

 

 

1.66

 

 

27

 

Securities of U.S. states and political subdivisions

45,769

 

 

4.02

 

 

460

 

 

47,388

 

 

3.91

 

 

464

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

Federal agencies

149,761

 

 

2.99

 

 

1,120

 

 

154,929

 

 

2.75

 

 

1,065

 

Residential and commercial

5,562

 

 

4.02

 

 

56

 

 

8,248

 

 

4.86

 

 

101

 

Total mortgage-backed securities

155,323

 

 

3.03

 

 

1,176

 

 

163,177

 

 

2.86

 

 

1,166

 

Other debt securities

45,063

 

 

4.40

 

 

494

 

 

47,009

 

 

4.33

 

 

506

 

Total available-for-sale debt securities

261,557

 

 

3.39

 

 

2,215

 

 

263,999

 

 

3.28

 

 

2,163

 

Held-to-maturity debt securities:

 

 

 

 

 

 

 

 

 

 

 

Securities of U.S. Treasury and federal agencies

44,762

 

 

2.19

 

 

244

 

 

44,731

 

 

2.19

 

 

244

 

Securities of U.S. states and political subdivisions

6,958

 

 

4.06

 

 

71

 

 

6,255

 

 

4.34

 

 

68

 

Federal agency and other mortgage-backed securities

95,506

 

 

2.64

 

 

632

 

 

94,964

 

 

2.33

 

 

552

 

Other debt securities

58

 

 

3.86

 

 

 

 

584

 

 

4.66

 

 

7

 

Total held-to-maturity debt securities

147,284

 

 

2.57

 

 

947

 

 

146,534

 

 

2.38

 

 

871

 

Total debt securities

495,355

 

 

3.16

 

 

3,908

 

 

491,194

 

 

3.04

 

 

3,729

 

Mortgage loans held for sale (4)

18,464

 

 

4.22

 

 

195

 

 

18,788

 

 

4.22

 

 

198

 

Loans held for sale (4)

1,642

 

 

4.80

 

 

20

 

 

3,481

 

 

5.48

 

 

48

 

Commercial loans:

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial - U.S.

285,084

 

 

4.47

 

 

3,176

 

 

275,259

 

 

4.16

 

 

2,851

 

Commercial and industrial - Non U.S.

62,905

 

 

3.90

 

 

611

 

 

59,716

 

 

3.51

 

 

524

 

Real estate mortgage

121,869

 

 

4.58

 

 

1,390

 

 

123,982

 

 

4.27

 

 

1,319

 

Real estate construction

21,568

 

 

5.36

 

 

288

 

 

23,637

 

 

4.88

 

 

287

 

Lease financing

19,133

 

 

4.71

 

 

226

 

 

19,266

 

 

4.48

 

 

216

 

Total commercial loans

510,559

 

 

4.47

 

 

5,691

 

 

501,860

 

 

4.15

 

 

5,197

 

Consumer loans:

 

 

 

 

 

 

 

 

 

 

 

Real estate 1-4 family first mortgage

286,169

 

 

3.88

 

 

2,776

 

 

283,101

 

 

4.06

 

 

2,870

 

Real estate 1-4 family junior lien mortgage

32,609

 

 

5.75

 

 

468

 

 

37,249

 

 

5.32

 

 

495

 

Credit card

38,154

 

 

12.65

 

 

1,204

 

 

35,883

 

 

12.66

 

 

1,133

 

Automobile

45,179

 

 

5.23

 

 

589

 

 

48,568

 

 

5.18

 

 

628

 

Other revolving credit and installment

34,790

 

 

7.12

 

 

617

 

 

37,418

 

 

6.62

 

 

617

 

Total consumer loans

436,901

 

 

5.18

 

 

5,654

 

 

442,219

 

 

5.20

 

 

5,743

 

Total loans (4)

947,460

 

 

4.80

 

 

11,345

 

 

944,079

 

 

4.64

 

 

10,940

 

Equity securities

35,215

 

 

2.70

 

 

237

 

 

37,330

 

 

2.38

 

 

222

 

Other

4,693

 

 

1.76

 

 

20

 

 

5,518

 

 

1.48

 

 

21

 

Total earning assets

$

1,742,004

 

 

3.94

%

 

$

17,142

 

 

1,735,256

 

 

3.73

%

 

$

16,178

 

Funding sources

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing checking

$

57,549

 

 

1.46

%

 

$

210

 

 

80,324

 

 

0.90

%

 

$

181

 

Market rate and other savings

690,677

 

 

0.59

 

 

1,009

 

 

676,668

 

 

0.26

 

 

434

 

Savings certificates

30,620

 

 

1.62

 

 

124

 

 

20,033

 

 

0.43

 

 

21

 

Other time deposits

96,887

 

 

2.61

 

 

630

 

 

82,061

 

 

2.26

 

 

465

 

Deposits in foreign offices

51,875

 

 

1.86

 

 

240

 

 

51,474

 

 

1.30

 

 

167

 

Total interest-bearing deposits

927,608

 

 

0.96

 

 

2,213

 

 

910,560

 

 

0.56

 

 

1,268

 

Short-term borrowings

114,754

 

 

2.26

 

 

646

 

 

103,795

 

 

1.54

 

 

398

 

Long-term debt

236,734

 

 

3.21

 

 

1,900

 

 

223,800

 

 

2.97

 

 

1,658

 

Other liabilities

24,314

 

 

2.18

 

 

132

 

 

28,202

 

 

2.12

 

 

150

 

Total interest-bearing liabilities

1,303,410

 

 

1.50

 

 

4,891

 

 

1,266,357

 

 

1.10

 

 

3,474

 

Portion of noninterest-bearing funding sources

438,594

 

 

 

 

 

 

468,899

 

 

 

 

 

Total funding sources

$

1,742,004

 

 

1.12

 

 

4,891

 

 

1,735,256

 

 

0.80

 

 

3,474

 

Net interest margin and net interest income on a taxable-equivalent basis (5)

 

 

2.82

%

 

$

12,251

 

 

 

 

2.93

%

 

$

12,704

 

Noninterest-earning assets

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

$

19,475

 

 

 

 

 

 

18,609

 

 

 

 

 

Goodwill

26,415

 

 

 

 

 

 

26,444

 

 

 

 

 

Other

112,733

 

 

 

 

 

 

104,575

 

 

 

 

 

Total noninterest-earning assets

$

158,623

 

 

 

 

 

 

149,628

 

 

 

 

 

Noninterest-bearing funding sources

 

 

 

 

 

 

 

 

 

 

 

Deposits

$

341,371

 

 

 

 

 

 

360,779

 

 

 

 

 

Other liabilities

56,161

 

 

 

 

 

 

51,681

 

 

 

 

 

Total equity

199,685

 

 

 

 

 

 

206,067

 

 

 

 

 

Noninterest-bearing funding sources used to fund earning assets

(438,594

)

 

 

 

 

 

(468,899

)

 

 

 

 

Net noninterest-bearing funding sources

$

158,623

 

 

 

 

 

 

149,628

 

 

 

 

 

Total assets

$

1,900,627

 

 

 

 

 

 

1,884,884

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Our average prime rate was 5.50% and 4.80% for the quarters ended June 30, 2019 and 2018, respectively. The average three-month London Interbank Offered Rate (LIBOR) was 2.51% and 2.34% for the same quarters, respectively.

(2) Yields/rates and amounts include the effects of hedge and risk management activities associated with the respective asset and liability categories.

(3) Yields and rates are based on interest income/expense amounts for the period, annualized based on the accrual basis for the respective accounts. The average balance amounts represent amortized cost for the periods presented.

(4) Nonaccrual loans and related income are included in their respective loan categories.

(5) Includes taxable-equivalent adjustments of $156 million and $163 million for the quarters ended June 30, 2019 and 2018, respectively, predominantly related to tax-exempt income on certain loans and securities. The federal statutory tax rate utilized was 21% for the periods presented.

Wells Fargo & Company and Subsidiaries

AVERAGE BALANCES, YIELDS AND RATES PAID (TAXABLE-EQUIVALENT BASIS) (1)(2)

 

Six months ended June 30,

 

2019

 

2018

(in millions)

Average

balance

 

Yields/

rates

 

Interest

income/

expense

 

Average

balance

 

Yields/

rates

 

Interest

income/

expense

Earning assets

 

 

 

 

 

 

 

 

 

 

 

Interest-earning deposits with banks

$

140,915

 

 

2.33

%

 

$

1,629

 

 

163,520

 

 

1.61

%

 

$

1,308

 

Federal funds sold and securities purchased under resale agreements

90,875

 

 

2.42

 

 

1,093

 

 

79,083

 

 

1.57

 

 

615

 

Debt securities (3):

 

 

 

 

 

 

 

 

 

 

 

Trading debt securities

87,938

 

 

3.52

 

 

1,544

 

 

79,693

 

 

3.35

 

 

1,332

 

Available-for-sale debt securities:

 

 

 

 

 

 

 

 

 

 

 

Securities of U.S. Treasury and federal agencies

14,740

 

 

2.18

 

 

159

 

 

6,426

 

 

1.66

 

 

53

 

Securities of U.S. states and political subdivisions

47,049

 

 

4.02

 

 

946

 

 

48,665

 

 

3.64

 

 

885

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

Federal agencies

150,623

 

 

3.04

 

 

2,293

 

 

156,690

 

 

2.73

 

 

2,141

 

Residential and commercial

5,772

 

 

4.17

 

 

120

 

 

8,558

 

 

4.48

 

 

192

 

Total mortgage-backed securities

156,395

 

 

3.09

 

 

2,413

 

 

165,248

 

 

2.82

 

 

2,333

 

Other debt securities

45,920

 

 

4.43

 

 

1,011

 

 

47,549

 

 

4.02

 

 

950

 

Total available-for-sale debt securities

264,104

 

 

3.44

 

 

4,529

 

 

267,888

 

 

3.16

 

 

4,221

 

Held-to-maturity debt securities:

 

 

 

 

 

 

 

 

 

 

 

Securities of U.S. Treasury and federal agencies

44,758

 

 

2.20

 

 

487

 

 

44,727

 

 

2.20

 

 

487

 

Securities of U.S. states and political subdivisions

6,560

 

 

4.05

 

 

133

 

 

6,257

 

 

4.34

 

 

136

 

Federal agency and other mortgage-backed securities

95,753

 

 

2.69

 

 

1,288

 

 

92,888

 

 

2.35

 

 

1,093

 

Other debt securities

60

 

 

3.91

 

 

1

 

 

639

 

 

3.89

 

 

12

 

Total held-to-maturity debt securities

147,131

 

 

2.60

 

 

1,909

 

 

144,511

 

 

2.40

 

 

1,728

 

Total debt securities

499,173

 

 

3.20

 

 

7,982

 

 

492,092

 

 

2.96

 

 

7,281

 

Mortgage loans held for sale (4)

16,193

 

 

4.28

 

 

347

 

 

18,598

 

 

4.06

 

 

377

 

Loans held for sale (4)

1,752

 

 

5.04

 

 

44

 

 

2,750

 

 

5.28

 

 

72

 

Commercial loans:

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial - U.S.

285,827

 

 

4.47

 

 

6,345

 

 

273,658

 

 

4.00

 

 

5,435

 

Commercial and industrial - Non U.S.

62,863

 

 

3.90

 

 

1,215

 

 

59,964

 

 

3.37

 

 

1,003

 

Real estate mortgage

121,644

 

 

4.58

 

 

2,763

 

 

125,085

 

 

4.16

 

 

2,581

 

Real estate construction

21,999

 

 

5.40

 

 

589

 

 

24,041

 

 

4.70

 

 

561

 

Lease financing

19,261

 

 

4.66

 

 

450

 

 

19,266

 

 

4.89

 

 

471

 

Total commercial loans

511,594

 

 

4.48

 

 

11,362

 

 

502,014

 

 

4.03

 

 

10,051

 

Consumer loans:

 

 

 

 

 

 

 

 

 

 

 

Real estate 1-4 family first mortgage

285,694

 

 

3.92

 

 

5,597

 

 

283,651

 

 

4.04

 

 

5,722

 

Real estate 1-4 family junior lien mortgage

33,197

 

 

5.75

 

 

949

 

 

38,042

 

 

5.23

 

 

988

 

Credit card

38,168

 

 

12.76

 

 

2,416

 

 

36,174

 

 

12.71

 

 

2,280

 

Automobile

45,007

 

 

5.21

 

 

1,163

 

 

50,010

 

 

5.17

 

 

1,283

 

Other revolving credit and installment

35,068

 

 

7.13

 

 

1,240

 

 

37,641

 

 

6.54

 

 

1,221

 

Total consumer loans

437,134

 

 

5.22

 

 

11,365

 

 

445,518

 

 

5.18

 

 

11,494

 

Total loans (4)

948,728

 

 

4.82

 

 

22,727

 

 

947,532

 

 

4.57

 

 

21,545

 

Equity securities

34,154

 

 

2.63

 

 

448

 

 

38,536

 

 

2.37

 

 

455

 

Other

4,555

 

 

1.69

 

 

38

 

 

5,765

 

 

1.34

 

 

40

 

Total earning assets

$

1,736,345

 

 

3.97

%

 

$

34,308

 

 

1,747,876

 

 

3.64

%

 

$

31,693

 

Funding sources

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing checking

$

56,905

 

 

1.44

%

 

$

407

 

 

74,084

 

 

0.84

%

 

$

310

 

Market rate and other savings

689,628

 

 

0.54

 

 

1,856

 

 

677,861

 

 

0.24

 

 

802

 

Savings certificates

27,940

 

 

1.46

 

 

202

 

 

20,025

 

 

0.38

 

 

38

 

Other time deposits

97,356

 

 

2.64

 

 

1,275

 

 

79,340

 

 

2.06

 

 

812

 

Deposits in foreign offices

53,649

 

 

1.88

 

 

499

 

 

73,023

 

 

1.09

 

 

396

 

Total interest-bearing deposits

925,478

 

 

0.92

 

 

4,239

 

 

924,333

 

 

0.51

 

 

2,358

 

Short-term borrowings

111,719

 

 

2.24

 

 

1,243

 

 

102,793

 

 

1.39

 

 

710

 

Long-term debt

234,963

 

 

3.27

 

 

3,827

 

 

224,924

 

 

2.88

 

 

3,234

 

Other liabilities

24,801

 

 

2.23

 

 

275

 

 

28,065

 

 

2.02

 

 

282

 

Total interest-bearing liabilities

1,296,961

 

 

1.49

 

 

9,584

 

 

1,280,115

 

 

1.03

 

 

6,584

 

Portion of noninterest-bearing funding sources

439,384

 

 

 

 

 

 

467,761

 

 

 

 

 

Total funding sources

$

1,736,345

 

 

1.11

 

 

9,584

 

 

1,747,876

 

 

0.75

 

 

6,584

 

Net interest margin and net interest income on a taxable-equivalent basis (5)

 

 

2.86

%

 

$

24,724

 

 

 

 

2.89

%

 

$

25,109

 

Noninterest-earning assets

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

$

19,544

 

 

 

 

 

 

18,730

 

 

 

 

 

Goodwill

26,417

 

 

 

 

 

 

26,480

 

 

 

 

 

Other

109,601

 

 

 

 

 

 

107,218

 

 

 

 

 

Total noninterest-earning assets

$

155,562

 

 

 

 

 

 

152,428

 

 

 

 

 

Noninterest-bearing funding sources

 

 

 

 

 

 

 

 

 

 

 

Deposits

$

340,061

 

 

 

 

 

 

359,854

 

 

 

 

 

Other liabilities

55,864

 

 

 

 

 

 

54,212

 

 

 

 

 

Total equity

199,021

 

 

 

 

 

 

206,123

 

 

 

 

 

Noninterest-bearing funding sources used to fund earning assets

(439,384

)

 

 

 

 

 

(467,761

)

 

 

 

 

Net noninterest-bearing funding sources

$

155,562

 

 

 

 

 

 

152,428

 

 

 

 

 

Total assets

$

1,891,907

 

 

 

 

 

 

1,900,304

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Our average prime rate was 5.50% and 4.66% for first half of 2019 and 2018, respectively. The average three-month London Interbank Offered Rate (LIBOR) was 2.60% and 2.13% for the same periods, respectively.
(2) Yields/rates and amounts include the effects of hedge and risk management activities associated with the respective asset and liability categories.
(3) Yields and rates are based on interest income/expense amounts for the period. The average balance amounts represent amortized cost for the periods presented.
(4) Nonaccrual loans and related income are included in their respective loan categories.
(5) Includes taxable-equivalent adjustments of $318 million and $330 million for the first half of 2019 and 2018, respectively, predominantly related to tax-exempt income on certain loans and securities. The federal statutory tax rate utilized was 21% for the periods presented.

Wells Fargo & Company and Subsidiaries

FIVE QUARTER AVERAGE BALANCES, YIELDS AND RATES PAID (TAXABLE-EQUIVALENT BASIS) (1)(2)

 

Quarter ended

 

Jun 30, 2019

 

Mar 31, 2019

 

Dec 31, 2018

 

Sep 30, 2018

 

Jun 30, 2018

($ in billions)

Average

balance

 

Yields/

rates

 

Average

balance

 

Yields/

rates

 

Average

balance

 

Yields/

rates

 

Average

balance

 

Yields/

rates

 

Average

balance

 

Yields/

rates

Earning assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning deposits with banks

$

141.0

 

 

2.33

%

 

$

140.8

 

 

2.33

%

 

$

150.1

 

 

2.18

%

 

$

148.6

 

 

1.93

%

 

$

154.8

 

 

1.75

%

Federal funds sold and securities purchased under resale agreements

98.1

 

 

2.44

 

 

83.5

 

 

2.40

 

 

76.1

 

 

2.22

 

 

79.9

 

 

1.93

 

 

80.0

 

 

1.73

 

Debt securities (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trading debt securities

86.5

 

 

3.45

 

 

89.4

 

 

3.58

 

 

90.1

 

 

3.52

 

 

84.5

 

 

3.45

 

 

80.7

 

 

3.45

 

Available-for-sale debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities of U.S. Treasury and federal agencies

15.4

 

 

2.21

 

 

14.1

 

 

2.14

 

 

7.2

 

 

1.80

 

 

6.4

 

 

1.65

 

 

6.4

 

 

1.66

 

Securities of U.S. states and political subdivisions

45.8

 

 

4.02

 

 

48.3

 

 

4.02

 

 

47.6

 

 

4.05

 

 

46.6

 

 

3.76

 

 

47.4

 

 

3.91

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal agencies

149.8

 

 

2.99

 

 

151.5

 

 

3.10

 

 

155.3

 

 

2.91

 

 

155.5

 

 

2.77

 

 

154.9

 

 

2.75

 

Residential and commercial

5.6

 

 

4.02

 

 

6.0

 

 

4.31

 

 

6.7

 

 

4.87

 

 

7.3

 

 

4.68

 

 

8.2

 

 

4.86

 

Total mortgage-backed securities

155.4

 

 

3.03

 

 

157.5

 

 

3.14

 

 

162.0

 

 

2.99

 

 

162.8

 

 

2.86

 

 

163.1

 

 

2.86

 

Other debt securities

45.0

 

 

4.40

 

 

46.8

 

 

4.46

 

 

46.1

 

 

4.46

 

 

46.4

 

 

4.39

 

 

47.1

 

 

4.33

 

Total available-for-sale debt securities

261.6

 

 

3.39

 

 

266.7

 

 

3.48

 

 

262.9

 

 

3.41

 

 

262.2

 

 

3.26

 

 

264.0

 

 

3.28

 

Held-to-maturity debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities of U.S. Treasury and federal agencies

44.8

 

 

2.19

 

 

44.7

 

 

2.20

 

 

44.7

 

 

2.19

 

 

44.7

 

 

2.18

 

 

44.7

 

 

2.19

 

Securities of U.S. states and political subdivisions

7.0

 

 

4.06

 

 

6.2

 

 

4.03

 

 

6.2

 

 

4.34

 

 

6.3

 

 

4.33

 

 

6.3

 

 

4.34

 

Federal agency and other mortgage-backed securities

95.4

 

 

2.64

 

 

95.9

 

 

2.74

 

 

95.8

 

 

2.46

 

 

95.3

 

 

2.27

 

 

94.9

 

 

2.33

 

Other debt securities

0.1

 

 

3.86

 

 

0.1

 

 

3.96

 

 

0.1

 

 

3.65

 

 

0.1

 

 

5.61

 

 

0.6

 

 

4.66

 

Total held-to-maturity debt securities

147.3

 

 

2.57

 

 

146.9

 

 

2.63

 

 

146.8

 

 

2.46

 

 

146.4

 

 

2.33

 

 

146.5

 

 

2.38

 

Total debt securities

495.4

 

 

3.16

 

 

503.0

 

 

3.25

 

 

499.8

 

 

3.15

 

 

493.1

 

 

3.02

 

 

491.2

 

 

3.04

 

Mortgage loans held for sale

18.5

 

 

4.22

 

 

13.9

 

 

4.37

 

 

17.0

 

 

4.46

 

 

19.3

 

 

4.33

 

 

18.8

 

 

4.22

 

Loans held for sale

1.6

 

 

4.80

 

 

1.9

 

 

5.25

 

 

2.0

 

 

6.69

 

 

2.6

 

 

5.28

 

 

3.5

 

 

5.48

 

Commercial loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial - U.S.

285.1

 

 

4.47

 

 

286.6

 

 

4.48

 

 

281.4

 

 

4.40

 

 

273.8

 

 

4.22

 

 

275.3

 

 

4.16

 

Commercial and industrial - Non U.S.

62.9

 

 

3.90

 

 

62.8

 

 

3.90

 

 

62.0

 

 

3.73

 

 

60.9

 

 

3.63

 

 

59.7

 

 

3.51

 

Real estate mortgage

121.9

 

 

4.58

 

 

121.4

 

 

4.58

 

 

120.4

 

 

4.51

 

 

121.3

 

 

4.35

 

 

124.0

 

 

4.27

 

Real estate construction

21.6

 

 

5.36

 

 

22.4

 

 

5.43

 

 

23.1

 

 

5.32

 

 

23.3

 

 

5.05

 

 

23.6

 

 

4.88

 

Lease financing

19.1

 

 

4.71

 

 

19.4

 

 

4.61

 

 

19.5

 

 

4.48

 

 

19.5

 

 

4.69

 

 

19.3

 

 

4.48

 

Total commercial loans

510.6

 

 

4.47

 

 

512.6

 

 

4.48

 

 

506.4

 

 

4.39

 

 

498.8

 

 

4.24

 

 

501.9

 

 

4.15

 

Consumer loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate 1-4 family first mortgage

286.2

 

 

3.88

 

 

285.2

 

 

3.96

 

 

285.3

 

 

4.02

 

 

284.1

 

 

4.07

 

 

283.1

 

 

4.06

 

Real estate 1-4 family junior lien mortgage

32.6

 

 

5.75

 

 

33.8

 

 

5.75

 

 

34.8

 

 

5.60

 

 

35.9

 

 

5.50

 

 

37.2

 

 

5.32

 

Credit card

38.2

 

 

12.65

 

 

38.2

 

 

12.88

 

 

37.9

 

 

12.69

 

 

36.9

 

 

12.77

 

 

35.9

 

 

12.66

 

Automobile

45.2

 

 

5.23

 

 

44.8

 

 

5.19

 

 

45.5

 

 

5.16

 

 

47.0

 

 

5.20

 

 

48.6

 

 

5.18

 

Other revolving credit and installment

34.7

 

 

7.12

 

 

35.4

 

 

7.14

 

 

36.4

 

 

6.95

 

 

36.8

 

 

6.78

 

 

37.4

 

 

6.62

 

Total consumer loans

436.9

 

 

5.18

 

 

437.4

 

 

5.26

 

 

439.9

 

 

5.25

 

 

440.7

 

 

5.26

 

 

442.2

 

 

5.20

 

Total loans

947.5

 

 

4.80

 

 

950.0

 

 

4.84

 

 

946.3

 

 

4.79

 

 

939.5

 

 

4.72

 

 

944.1

 

 

4.64

 

Equity securities

35.2

 

 

2.70

 

 

33.1

 

 

2.56

 

 

37.4

 

 

2.79

 

 

37.9

 

 

2.98

 

 

37.3

 

 

2.38

 

Other

4.7

 

 

1.76

 

 

4.4

 

 

1.63

 

 

4.2

 

 

1.78

 

 

4.7

 

 

1.47

 

 

5.6

 

 

1.48

 

Total earning assets

$

1,742.0

 

 

3.94

%

 

$

1,730.6

 

 

4.00

%

 

$

1,732.9

 

 

3.93

%

 

$

1,725.6

 

 

3.81

%

 

$

1,735.3

 

 

3.73

%

Funding sources

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing checking

$

57.5

 

 

1.46

%

 

$

56.3

 

 

1.42

%

 

$

54.0

 

 

1.21

%

 

$

51.2

 

 

1.01

%

 

$

80.3

 

 

0.90

%

Market rate and other savings

690.7

 

 

0.59

 

 

688.6

 

 

0.50

 

 

689.6

 

 

0.43

 

 

693.9

 

 

0.35

 

 

676.7

 

 

0.26

 

Savings certificates

30.6

 

 

1.62

 

 

25.2

 

 

1.26

 

 

22.0

 

 

0.87

 

 

20.6

 

 

0.62

 

 

20.0

 

 

0.43

 

Other time deposits

96.9

 

 

2.61

 

 

97.8

 

 

2.67

 

 

92.6

 

 

2.46

 

 

87.8

 

 

2.35

 

 

82.1

 

 

2.26

 

Deposits in foreign offices

51.9

 

 

1.86

 

 

55.4

 

 

1.89

 

 

56.1

 

 

1.66

 

 

53.9

 

 

1.50

 

 

51.5

 

 

1.30

 

Total interest-bearing deposits

927.6

 

 

0.96

 

 

923.3

 

 

0.89

 

 

914.3

 

 

0.77

 

 

907.4

 

 

0.66

 

 

910.6

 

 

0.56

 

Short-term borrowings

114.8

 

 

2.26

 

 

108.6

 

 

2.23

 

 

106.0

 

 

2.04

 

 

105.5

 

 

1.74

 

 

103.8

 

 

1.54

 

Long-term debt

236.7

 

 

3.21

 

 

233.2

 

 

3.32

 

 

226.6

 

 

3.17

 

 

220.7

 

 

3.02

 

 

223.8

 

 

2.97

 

Other liabilities

24.3

 

 

2.18

 

 

25.3

 

 

2.28

 

 

27.4

 

 

2.41

 

 

27.0

 

 

2.40

 

 

28.2

 

 

2.12

 

Total interest-bearing liabilities

1,303.4

 

 

1.50

 

 

1,290.4

 

 

1.47

 

 

1,274.3

 

 

1.34

 

 

1,260.6

 

 

1.20

 

 

1,266.4

 

 

1.10

 

Portion of noninterest-bearing funding sources

438.6

 

 

 

 

440.2

 

 

 

 

458.6

 

 

 

 

465.0

 

 

 

 

468.9

 

 

 

Total funding sources

$

1,742.0

 

 

1.12

 

 

$

1,730.6

 

 

1.09

 

 

$

1,732.9

 

 

0.99

 

 

$

1,725.6

 

 

0.87

 

 

$

1,735.3

 

 

0.80

 

Net interest margin on a taxable-equivalent basis

 

 

2.82

%

 

 

 

2.91

%

 

 

 

2.94

%

 

 

 

2.94

%

 

 

 

2.93

%

Noninterest-earning assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

$

19.5

 

 

 

 

19.6

 

 

 

 

19.3

 

 

 

 

18.4

 

 

 

 

18.6

 

 

 

Goodwill

26.4

 

 

 

 

26.4

 

 

 

 

26.4

 

 

 

 

26.4

 

 

 

 

26.4

 

 

 

Other

112.7

 

 

 

 

106.5

 

 

 

 

100.4

 

 

 

 

105.9

 

 

 

 

104.6

 

 

 

Total noninterest-earnings assets

$

158.6

 

 

 

 

152.5

 

 

 

 

146.1

 

 

 

 

150.7

 

 

 

 

149.6

 

 

 

Noninterest-bearing funding sources

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

$

341.4

 

 

 

 

338.8

 

 

 

 

354.6

 

 

 

 

359.0

 

 

 

 

360.7

 

 

 

Other liabilities

56.1

 

 

 

 

55.6

 

 

 

 

51.7

 

 

 

 

53.9

 

 

 

 

51.7

 

 

 

Total equity

199.7

 

 

 

 

198.3

 

 

 

 

198.4

 

 

 

 

202.8

 

 

 

 

206.1

 

 

 

Noninterest-bearing funding sources used to fund earning assets

(438.6

)

 

 

 

(440.2

)

 

 

 

(458.6

)

 

 

 

(465.0

)

 

 

 

(468.9

)

 

 

Net noninterest-bearing funding sources

$

158.6

 

 

 

 

152.5

 

 

 

 

146.1

 

 

 

 

150.7

 

 

 

 

149.6

 

 

 

Total assets

$

1,900.6

 

 

 

 

1,883.1

 

 

 

 

1,879.0

 

 

 

 

1,876.3

 

 

 

 

1,884.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Our average prime rate was 5.50% for the quarter ended June 30, 2019, 5.50% for the quarter ended March 31, 2019, 5.28% for the quarter ended December 31, 2018, 5.01% for the quarter ended September 30, 2018, and 4.80% for the quarter ended June 30, 2018. The average three-month London Interbank Offered Rate (LIBOR) was 2.51%, 2.69%, 2.62%, 2.34% and 2.34% for the same quarters, respectively.

(2) Yields/rates include the effects of hedge and risk management activities associated with the respective asset and liability categories.
(3) Yields and rates are based on interest income/expense amounts for the period, annualized based on the accrual basis for the respective accounts. The average balance amounts represent amortized cost for the periods presented.

Wells Fargo & Company and Subsidiaries

NONINTEREST INCOME

 

Quarter ended June 30,

 

%

 

Six months ended June 30,

 

%

(in millions)

2019

 

2018

 

Change

 

2019

 

2018

 

Change

Service charges on deposit accounts

$

1,206

 

 

1,163

 

 

4

%

 

$

2,300

 

 

2,336

 

 

(2

)%

Trust and investment fees:

 

 

 

 

 

 

 

 

 

 

 

Brokerage advisory, commissions and other fees

2,318

 

 

2,354

 

 

(2

)

 

4,511

 

 

4,757

 

 

(5

)

Trust and investment management

795

 

 

835

 

 

(5

)

 

1,581

 

 

1,685

 

 

(6

)

Investment banking

455

 

 

486

 

 

(6

)

 

849

 

 

916

 

 

(7

)

Total trust and investment fees

3,568

 

 

3,675

 

 

(3

)

 

6,941

 

 

7,358

 

 

(6

)

Card fees

1,025

 

 

1,001

 

 

2

 

 

1,969

 

 

1,909

 

 

3

 

Other fees:

 

 

 

 

 

 

 

 

 

 

 

Lending related charges and fees (1)

349

 

 

376

 

 

(7

)

 

696

 

 

756

 

 

(8

)

Cash network fees

117

 

 

120

 

 

(3

)

 

226

 

 

246

 

 

(8

)

Commercial real estate brokerage commissions

105

 

 

109

 

 

(4

)

 

186

 

 

194

 

 

(4

)

Wire transfer and other remittance fees

121

 

 

121

 

 

 

 

234

 

 

237

 

 

(1

)

All other fees

108

 

 

120

 

 

(10

)

 

228

 

 

213

 

 

7

 

Total other fees

800

 

 

846

 

 

(5

)

 

1,570

 

 

1,646

 

 

(5

)

Mortgage banking:

 

 

 

 

 

 

 

 

 

 

 

Servicing income, net

277

 

 

406

 

 

(32

)

 

641

 

 

874

 

 

(27

)

Net gains on mortgage loan origination/sales activities

481

 

 

364

 

 

32

 

 

825

 

 

830

 

 

(1

)

Total mortgage banking

758

 

 

770

 

 

(2

)

 

1,466

 

 

1,704

 

 

(14

)

Insurance

93

 

 

102

 

 

(9

)

 

189

 

 

216