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Wells Fargo Reports $5.9 Billion in Quarterly Net Income; Diluted EPS of $1.20

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Wells Fargo & Company (NYSE:WFC):

  • Financial results:
    • Net income of $5.9 billion, compared with $5.1 billion in first
      quarter 2018
    • Diluted earnings per share (EPS) of $1.20, compared with $0.96
    • Revenue of $21.6 billion, down from $21.9 billion
      • Net interest income of $12.3 billion, up $73 million
      • Noninterest income of $9.3 billion, down $398 million
    • Noninterest expense of $13.9 billion, down $1.1 billion
    • Average deposits of $1.3 trillion, down $35.1 billion, or 3%
    • Average loans of $950.1 billion, down $876 million
    • Return on assets (ROA) of 1.26%, return on equity (ROE) of 12.71%,
      and return on average tangible common equity (ROTCE) of 15.16%1
  • Credit quality:
    • Provision expense of $845 million, up $654 million from first
      quarter 2018
      • Net charge-offs of $695 million, down $46 million
        • Net charge-offs of 0.30% of average loans (annualized),
          down from 0.32%
      • Reserve build2 of $150 million, compared with $550
        million reserve release2
    • Nonaccrual loans of $6.9 billion, down $434 million, or 6%
  • Strong capital position while returning more capital to shareholders:
    • Common Equity Tier 1 ratio (fully phased-in) of 11.9%3
    • Returned $6.0 billion to shareholders through common stock
      dividends and net share repurchases, up 49% from $4.0 billion in
      first quarter 2018

a) Net share repurchases of $3.9 billion, up 86% from $2.1 billion in
first quarter 2018

b) Period-end common shares outstanding down 362 million shares, or 7%

c) Quarterly common stock dividend increased to $0.45 per share,
compared with $0.43 per share in fourth quarter 2018 and $0.39 per share
in first quarter 2018

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 March 31, 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
Mar 31,   Dec 31,   Mar 31,
    2019   2018   2018
Earnings
Diluted earnings per common share $ 1.20 1.21 0.96
Wells Fargo net income (in billions) 5.86 6.06 5.14
Return on assets (ROA) 1.26 % 1.28 1.09
Return on equity (ROE) 12.71 12.89 10.58
Return on average tangible common equity (ROTCE) (a) 15.16 15.39 12.62
Asset Quality
Net charge-offs (annualized) as a % of average total loans 0.30 % 0.30 0.32
Allowance for credit losses as a % of total loans 1.14 1.12 1.19
Allowance for credit losses as a % of annualized net charge-offs 384 374 376
Other
Revenue (in billions) $ 21.6 21.0 21.9
Efficiency ratio (b) 64.4 % 63.6 68.6
Average loans (in billions) $ 950.1 946.3 951.0
Average deposits (in billions) 1,262.1 1,268.9 1,297.2
Net interest margin   2.91 %   2.94     2.84

(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 34.

(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 $5.9 billion, or
$1.20 per diluted common share, for first quarter 2019, compared with
$5.1 billion, or $0.96 per share, for first quarter 2018, and
$6.1 billion, or $1.21 per share, for fourth quarter 2018.

Interim Chief Executive Officer Allen Parker said, "Since assuming this
role, I have been focused on leading our Company forward by emphasizing
my top priorities: serving our customers and supporting our Wells Fargo
team members; meeting and exceeding the expectations of our regulators;
and continuing the important transformation of the Company. We have more
work ahead of us, and our strong leadership team is dedicated to making
our Company the most customer-focused, efficient, and innovative Wells
Fargo ever. All these efforts are focused on creating a first-rate
organization that is characterized by a strong financial foundation, a
leading presence in our chosen markets, focused growth within a
responsible risk management framework, operational excellence, and
highly engaged team members. I want to thank our team members for their
continued commitment and tireless efforts, and I'm confident and
enthusiastic about the extraordinary opportunities we have in front of
us to build an even stronger Wells Fargo for all our stakeholders."

Chief Financial Officer John Shrewsberry said, "Wells Fargo reported
$5.9 billion of net income in the first quarter. Our financial results
included continued strong credit performance and high levels of
liquidity. In addition, our continued de-risking of the balance sheet
and consistent level of profitability have resulted in capital levels
well above our regulatory minimum. As a result, we returned $6.0 billion
to shareholders through common stock dividends and net share repurchases
in the first quarter, up 49% from a year ago. Returning excess capital
to shareholders remains a priority. While our expenses in the first
quarter included typically higher personnel expense, we remain committed
to, and are on track to achieving, our 2019 expense target."

Net Interest Income

Net interest income in the first quarter was $12.3 billion, down $333
million from fourth quarter 2018, driven primarily by two fewer days in
the quarter and balance sheet mix and repricing, including the impact of
a flattening yield curve. The net interest margin was 2.91%, down 3
basis points from the prior quarter due to balance sheet mix and
repricing.

Noninterest Income

Noninterest income in the first quarter was $9.3 billion, up $962
million from fourth quarter 2018. First quarter noninterest income
included higher market sensitive revenue4 and mortgage
banking income, partially offset by lower other income, trust and
investment fees, and other fees.

  • Trust and investment fees were $3.4 billion, down from $3.5 billion in
    fourth quarter 2018, driven by lower asset-based fees on retail
    brokerage advisory assets, reflecting lower market valuations at
    December 31, 2018.
  • Mortgage banking income was $708 million, up from $467 million in
    fourth quarter 2018. Net mortgage servicing income was $364 million,
    up from $109 million in the fourth quarter, which included negative
    mortgage servicing rights valuation adjustments. The production margin
    on residential held-for-sale mortgage loan originations5
    increased to 1.05%, from 0.89% in the fourth quarter, primarily due to
    an improvement in secondary market conditions. Residential mortgage
    loan originations in the first quarter were $33 billion, down from
    $38 billion in the fourth quarter primarily due to seasonality. The
    unclosed application pipeline at March 31, 2019, was $32 billion, up
    from $18 billion at December 31, 2018.
  • Market sensitive revenue4 was $1.3 billion, up from $40
    million in fourth quarter 2018, and included higher net gains from
    equity securities driven by a $797 million increase in deferred
    compensation plan investment results (P&L neutral, largely offset by
    higher employee benefits expense). Net gains from trading activities
    increased $347 million compared with the prior quarter, driven
    predominantly by strength in credit and asset-backed products. Net
    gains from debt securities increased $116 million compared with the
    prior quarter, predominantly due to the sale of non-agency residential
    mortgage-backed securities.

Noninterest Expense

Noninterest expense in the first quarter increased $577 million from the
prior quarter to $13.9 billion, predominantly due to $778 million of
seasonally higher employee benefits and incentive compensation expense,
as well as a $785 million increase in deferred compensation expense (P&L
neutral, largely offset by net gains from equity securities). These
increases were partially offset by lower core deposit and other
intangibles amortization, operating losses, other expense, outside
professional services, salaries, and operating lease expense. The
efficiency ratio was 64.4% in first quarter 2019, compared with 63.6% in
the fourth quarter.

Income Taxes

The Company's effective income tax rate was 13.1% for first quarter 2019
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 effective income
tax rate in fourth quarter 2018 was 13.7% and included net discrete
income tax benefits related to the results of state income tax audits
and incremental state tax credits, as well as benefits related to
revisions to our full year 2018 effective income tax rate made during
the fourth quarter. 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 $950.1 billion in the first quarter, up $3.8 billion
from the fourth quarter. Period-end loan balances were $948.2 billion at
March 31, 2019, down $4.9 billion from December 31, 2018. Commercial
loans were down $1.2 billion compared with December 31, 2018,
predominantly due to a $1.1 billion decline in commercial and industrial
loans, partially offset by $460 million of growth in commercial real
estate loans. Consumer loans decreased $3.7 billion from the prior
quarter, reflecting the following:

  • Real estate 1-4 family first mortgage loans decreased $520 million, as
    $10.5 billion of held-for-investment nonconforming mortgage loan
    originations were more than offset by paydowns and $1.6 billion of
    sales of purchased credit-impaired (PCI) Pick-a-Pay mortgage loans.
    Additionally, $776 million of nonconforming mortgage loan originations
    that would have otherwise been included in 1-4 family first mortgage
    loan outstandings were designated as held-for-sale in first quarter
    2019 in anticipation of future securitizations.
  • Real estate 1-4 family junior lien mortgage loans decreased
    $1.3 billion, as paydowns continued to exceed originations
  • Credit card loans decreased $746 million primarily due to seasonality
  • Automobile loans declined $156 million, as paydowns outpaced
    originations of $5.4 billion
 

Period-End Loan Balances

  Mar 31,   Dec 31,   Sep 30,   Jun 30,   Mar 31,
(in millions)   2019   2018   2018   2018   2018
Commercial $ 512,226 513,405 501,886 503,105 503,396
Consumer   436,023     439,705     440,414     441,160     443,912  
Total loans   $ 948,249     953,110     942,300     944,265     947,308  
Change from prior quarter   $ (4,861 )   10,810     (1,965 )   (3,043 )   (9,462 )

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 $483.5 billion at March 31, 2019, down $1.2 billion from
the fourth quarter, predominantly due to a net decrease in
available-for-sale and held for trading debt securities. Debt securities
purchases of approximately $4.8 billion, primarily U.S. Treasury and
federal agency mortgage-backed securities (MBS) in the
available-for-sale portfolio, declined from the prior quarter primarily
reflecting less reinvestment due to lower long-term interest rates and
tighter credit spreads. These purchases were more than offset by runoff
and sales.

Net unrealized gains on available-for-sale debt securities were $853
million at March 31, 2019, compared with net unrealized losses of
$2.6 billion at December 31, 2018, due to lower long-term interest rates
and tighter credit spreads.

Period-end equity securities, which include marketable and
non-marketable equity securities, as well as equity securities held for
trading, were $58.4 billion at March 31, 2019, up $3.3 billion from the
fourth quarter.

Deposits

Total average deposits for first quarter 2019 were $1.3 trillion, down
$6.9 billion from the prior quarter primarily due to lower Wholesale
Banking and Wealth and Investment Management deposits, partially offset
by higher retail banking deposits. The average deposit cost for first
quarter 2019 was 65 basis points, up 10 basis points from the prior
quarter and 31 basis points from a year ago.

Capital

Our Common Equity Tier 1 ratio (fully phased-in) was 11.9%3
and continued to exceed both the regulatory minimum of 9% and our
current internal target of 10%. In first quarter 2019, the Company
repurchased 97.4 million shares of its common stock, which net of
issuances reduced period-end common shares outstanding by 69.3 million.
The Company increased its quarterly common stock dividend paid in the
quarter to $0.45 per share from $0.43 per share in the prior quarter.

As of March 31, 2019, our eligible external total loss absorbing
capacity (TLAC) as a percentage of total risk-weighted assets was 23.9%6,
compared with the required minimum of 22.0%.

Credit Quality

Net Loan Charge-offs

The quarterly loss rate in the first quarter was 0.30% (annualized),
unchanged from the prior quarter, and down from 0.32% a year ago.
Commercial and consumer losses were 0.11% and 0.51%, respectively. Total
credit losses were $695 million in first quarter 2019, down $26 million
from fourth quarter 2018. Commercial losses increased $13 million driven
by lower recoveries, while consumer losses decreased $39 million.

 

Net Loan Charge-Offs

  Quarter ended
    March 31, 2019   December 31, 2018   March 31, 2018
Net loan   As a % of   Net loan   As a % of   Net loan   As a % of
charge- average charge- average charge- average
($ in millions)   offs   loans (a)   offs   loans (a)   offs   loans (a)
Commercial:
Commercial and industrial $ 133 0.15 % $ 132 0.15 % $ 85 0.10 %
Real estate mortgage 6 0.02 (12 ) (0.04 ) (15 ) (0.05 )
Real estate construction (2 ) (0.04 ) (1 ) (0.01 ) (4 ) (0.07 )
Lease financing   8   0.17 13   0.26 12   0.25
Total commercial   145   0.11 132   0.10 78   0.06
Consumer:
Real estate 1-4 family first mortgage (12 ) (0.02 ) (22 ) (0.03 ) (18 ) (0.03 )
Real estate 1-4 family junior lien mortgage (9 ) (0.10 ) (10 ) (0.11 ) (8 ) (0.09 )
Credit card 352 3.73 338 3.54 332 3.69
Automobile 91 0.82 133 1.16 208 1.64
Other revolving credit and installment   128   1.47 150   1.64 149   1.60
Total consumer   550   0.51 589   0.53 663   0.60
Total   $ 695   0.30 % $ 721   0.30 % $ 741   0.32 %
 

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

 

Nonperforming Assets

Nonperforming assets increased $394 million, or 6%, from fourth quarter
2018 to $7.3 billion. Nonaccrual loans increased $409 million from
fourth quarter 2018 to $6.9 billion. Commercial nonaccrual loans
increased $609 million driven in part by a borrower in the utility
sector.

 

Nonperforming Assets (Nonaccrual Loans and Foreclosed Assets)

    March 31, 2019   December 31, 2018   March 31, 2018
        As a     As a
As a % of % of % of
Total total Total total Total total
($ in millions)   balances   loans   balances   loans   balances   loans
Commercial:
Commercial and industrial $ 1,986 0.57 % $ 1,486 0.42 % $ 1,516 0.45 %
Real estate mortgage 699 0.57 580 0.48 755 0.60
Real estate construction 36 0.16 32 0.14 45 0.19
Lease financing   76   0.40 90   0.46 93   0.48
Total commercial   2,797   0.55 2,188   0.43 2,409   0.48
Consumer:
Real estate 1-4 family first mortgage 3,026 1.06 3,183 1.12 3,673 1.30
Real estate 1-4 family junior lien mortgage 916 2.77 945 2.75 1,087 2.87
Automobile 116 0.26 130 0.29 117 0.24
Other revolving credit and installment   50   0.14 50   0.14 53   0.14
Total consumer   4,108   0.94 4,308   0.98 4,930   1.11
Total nonaccrual loans (a)   6,905   0.73 6,496   0.68 7,339   0.77
Foreclosed assets:
Government insured/guaranteed 75 88 103
Non-government insured/guaranteed   361   363   468  
Total foreclosed assets   436   451   571  
Total nonperforming assets   $ 7,341   0.77 % $ 6,947   0.73 % $ 7,910   0.83 %
Change from prior quarter:
Total nonaccrual loans (a) $ 409 $ (218 ) $ (307 )
Total nonperforming assets   394         (289 )       (378 )    

(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 32.

 

Allowance for Credit Losses

The allowance for credit losses, including the allowance for unfunded
commitments, totaled $10.8 billion at March 31, 2019, up $114 million
from December 31, 2018. First quarter 2019 included a $150 million
reserve build2, primarily due to a higher probability of
slightly less favorable economic conditions. The allowance coverage for
total loans was 1.14%, compared with 1.12% in fourth quarter 2018. The
allowance covered 3.8 times annualized first quarter net charge-offs,
compared with 3.7 times in the prior quarter. The allowance coverage for
nonaccrual loans was 157% at March 31, 2019, compared with 165% at
December 31, 2018.

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
Mar 31,   Dec 31,   Mar 31,
(in millions)   2019   2018   2018
Community Banking $ 2,823 3,169 1,913
Wholesale Banking 2,770 2,671 2,875
Wealth and Investment Management   577     689     714
 

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
Mar 31,   Dec 31,   Mar 31,
(in millions)   2019   2018   2018
Total revenue $ 11,750 11,461 11,830
Provision for credit losses 710 534 218
Noninterest expense 7,689 7,032 8,702
Segment net income 2,823 3,169 1,913
(in billions)
Average loans 458.2 459.7 470.5
Average assets 1,015.4 1,015.9 1,061.9
Average deposits   765.6     759.4     747.5
 

First Quarter 2019 vs. Fourth Quarter 2018

  • Net income of $2.8 billion, down $346 million, or 11%
  • Revenue was $11.8 billion, up $289 million, or 3%, driven by higher
    market sensitive revenue4 reflecting higher deferred
    compensation plan investment results (P&L neutral, largely offset by
    higher employee benefits expense) and higher mortgage banking income,
    partially offset by lower other income and net interest income
  • Noninterest expense of $7.7 billion increased $657 million, or 9%,
    predominantly driven by seasonally higher personnel expense and higher
    deferred compensation expense (P&L neutral, largely offset by net
    gains from equity securities), partially offset by lower other
    expense, operating losses, and core deposit and other intangibles
    amortization expense
  • Provision for credit losses increased $176 million, primarily due to a
    reserve build2 in first quarter 2019, reflecting a higher
    probability of slightly less favorable economic conditions, compared
    with a reserve release2 in fourth quarter 2018, partially
    offset by lower net charge-offs in the first quarter

First Quarter 2019 vs. First Quarter 2018

  • Net income was up $910 million, or 48%, driven in part by a lower
    effective income tax rate in first quarter 2019
  • Revenue declined $80 million, or 1%, predominantly due to lower
    mortgage banking income and trust and investment fees, partially
    offset by higher other income and net interest income
  • Noninterest expense decreased $1.0 billion, or 12%, driven by lower
    operating losses and core deposit and other intangibles amortization
    expense, partially offset by higher personnel expense
  • Provision for credit losses increased $492 million, due to a reserve
    build2 in first quarter 2019, reflecting a higher
    probability of slightly less favorable economic conditions, compared
    with a reserve release2 in first quarter 2018

Business Metrics and Highlights

  • Primary consumer checking customers7,8 of 23.9 million, up
    1.1% 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 0.5%
  • Branch customer experience surveys completed during first quarter 2019
    reflected higher scores from the previous quarter, with both ‘Customer
    Loyalty' and ‘Overall Satisfaction with Most Recent Visit' reaching
    their highest level in more than three years
  • Debit card point-of-sale purchase volume9 of $86.6 billion
    in the first quarter, up 6% year-over-year
  • General purpose credit card point-of-sale purchase volume of $18.3
    billion in the first quarter, up 5% year-over-year
  • 29.8 million digital (online and mobile) active customers, including
    23.3 million mobile active customers8,10
  • 5,479 retail bank branches as of the end of first quarter 2019,
    reflecting 40 branch consolidations in the quarter
  • Home Lending
  • Originations of $33 billion, down from $38 billion in the prior
    quarter, primarily due to seasonality
    • Originations of loans held-for-sale and loans held-for-investment
      were $22 billion and $11 billion, respectively
  • Applications of $64 billion, up from $48 billion in the prior quarter,
    driven primarily by lower mortgage interest rates
  • Unclosed application pipeline of $32 billion at quarter end, up from
    $18 billion at December 31, 2018, driven primarily by lower mortgage
    interest rates
  • Production margin on residential held-for-sale mortgage loan
    originations5 of 1.05%, up from 0.89% in the prior quarter,
    primarily due to an improvement in secondary market conditions
  • Automobile originations of $5.4 billion in the first quarter, up 24%
    from the prior year
  • Small Business Lending11originations of $621 million, up 6%
    from the prior year
  • Wells Fargo's mobile banking ranked #2 in Overall Performance and #1
    in Mobile Web, and tied for #1 in Functionality on the Dynatrace
    Mobile Banking Scorecard (March 2019)
  • Wells Fargo's Go FarTM Rewards mobile app tied for highest
    ranking (A-) on the Credit Card Monitor report (February 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
Mar 31,   Dec 31,   Mar 31,
(in millions)   2019   2018   2018
Total revenue $ 7,111 6,926 7,279
Provision (reversal of provision) for credit losses 134 (28 ) (20 )
Noninterest expense 3,838 4,025 3,978
Segment net income 2,770 2,671 2,875
(in billions)
Average loans 476.5 470.2 465.1
Average assets 844.6 839.1 829.2
Average deposits   409.8     421.6     446.0  

First Quarter 2019 vs. Fourth Quarter 2018

  • Net income of $2.8 billion, up $99 million, or 4%
  • Revenue of $7.1 billion increased $185 million, or 3%, driven by
    higher market sensitive revenue4, partially offset by lower
    net interest income, commercial real estate brokerage fees, and other
    fees
  • Noninterest expense of $3.8 billion decreased $187 million, or 5%,
    reflecting lower operating lease, core deposit and other intangibles
    amortization, and project related expenses, partially offset by
    seasonally higher personnel expense
  • Provision for credit losses increased $162 million, driven by a
    reserve build2 in first quarter 2019, reflecting higher
    nonaccrual loans, as well as lower recoveries in the first quarter

First Quarter 2019 vs. First Quarter 2018

  • Net income decreased $105 million, or 4%
  • Revenue decreased $168 million, or 2%, largely due to the impact of
    the sale of Wells Fargo Shareowner Services in first quarter 2018, as
    well as lower treasury management fees and mortgage banking income,
    partially offset by higher market sensitive revenue4
  • Noninterest expense decreased $140 million, or 4%, on lower FDIC, core
    deposit and other intangibles amortization, operating lease, and
    personnel expenses, partially offset by higher regulatory, risk, and
    technology expense
  • Provision for credit losses increased $154 million, primarily due to a
    reserve build2 in first quarter 2019, reflecting higher
    nonaccrual loans, compared with a reserve release2 in first
    quarter 2018, as well as lower recoveries in first quarter 2019

Business Metrics and Highlights

  • Commercial card spend volume12 of $8.5 billion, up 5% from
    the prior year on increased transaction volumes primarily reflecting
    customer growth, and down 2% compared with fourth quarter 2018
  • U.S. investment banking market share of 3.5% in first quarter 201913,
    compared with 3.1% in first quarter 201813

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
Mar 31,   Dec 31,   Mar 31,
(in millions)   2019   2018   2018
Total revenue $ 4,079 3,957 4,242
Provision (reversal of provision) for credit losses 4 (3 ) (6 )
Noninterest expense 3,303 3,044 3,290
Segment net income 577 689 714
(in billions)
Average loans 74.4 75.2 73.9
Average assets 83.2 83.6 84.2
Average deposits   153.2     155.5     177.9  
 

First Quarter 2019 vs. Fourth Quarter 2018

  • Net income of $577 million, down $112 million, or 16%
  • Revenue of $4.1 billion increased $122 million, or 3%, mostly due to
    higher net gains from equity securities on higher deferred
    compensation plan investment results of $307 million (P&L neutral,
    offset by higher employee benefits expense), partially offset by lower
    asset-based fees
  • Noninterest expense of $3.3 billion increased $259 million, or 9%,
    primarily driven by higher employee benefits expense from deferred
    compensation plan expense of $307 million (P&L neutral, offset by net
    gains from equity securities) and seasonally higher personnel expense,
    partially offset by lower broker commissions and lower core deposit
    and other intangibles amortization expense

First Quarter 2019 vs. First Quarter 2018

  • Net income down $137 million, or 19%
  • Revenue decreased $163 million, or 4%, primarily driven by lower
    asset-based fees and brokerage transaction revenue, partially offset
    by higher net gains from equity securities on higher deferred
    compensation plan investment results of $133 million (P&L neutral,
    offset by higher employee benefits expense)
  • Noninterest expense increased $13 million, primarily due to higher
    employee benefits expense from deferred compensation plan expense of
    $133 million (P&L neutral, offset by net gains from equity securities)
    and higher regulatory, risk, and technology expense, partially offset
    by lower broker commissions and core deposit and other intangibles
    amortization expense

Business Metrics and Highlights

Total WIM Segment

  • WIM total client assets of $1.8 trillion, down 2% from a year ago,
    driven primarily by net outflows, partially offset by higher market
    valuations
  • Average loan balances up 1% from a year ago largely due to growth in
    nonconforming mortgage loans
  • First quarter 2019 closed referred investment assets (referrals
    resulting from the WIM/Community Banking partnership) down 8% compared
    with first quarter 2018

Retail Brokerage

  • Client assets of $1.6 trillion, down 1% from prior year, driven
    primarily by net outflows, partially offset by higher market valuations
  • Advisory assets of $547 billion, up 1% from prior year, driven
    primarily by higher market valuations, partially offset by net outflows

Wealth Management

  • Client assets of $232 billion, down 4% from prior year, driven
    primarily by net outflows, partially offset by higher market valuations

Asset Management

  • Total assets under management (AUM) of $476 billion, down 4% from
    prior year, primarily due to equity and fixed income net outflows and
    the sale of Wells Fargo Asset Management's ownership stake in The Rock
    Creek Group, LP and removal of the associated AUM, partially offset by
    higher market valuations and higher money market fund net inflows

Retirement

  • IRA assets of $404 billion, flat compared with the prior year
  • Institutional Retirement plan assets of $379 billion, down 2% from
    prior year
  • On April 9, 2019, we announced an agreement to sell our Institutional
    Retirement and Trust business. This transaction is expected to close
    in third quarter 2019.

Conference Call

The Company will host a live conference call on Friday, April 12, 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~5287428.

A replay of the conference call will be available beginning at 11:00
a.m. PT (2:00 p.m. ET) on Friday, April 12 through Friday, April 26.
Please dial 855-859-2056 (U.S. and Canada) or 404-537-3406
(International) and enter Conference ID #5287428. 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~5287428.

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
34.

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 35 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 40 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 February 2019, comparisons with February 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 Small Business Lending includes credit card, lines of
credit and loan products (primarily under $100,000 sold through our
retail banking branches).

12 Includes commercial card volume for the entire company.

13 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 7,700
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 262,000 team members, Wells Fargo serves one in three
households in the United States. Wells Fargo & Company was ranked No. 26
on Fortune's 2018 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)
23
Noninterest Income and Noninterest Expense 24
Five Quarter Deferred Compensation Plan Investment Results 26
 

Balance Sheet

Consolidated Balance Sheet 27
Trading Activities 29
Debt Securities 29
Equity Securities 30
 

Loans

Loans 31
Nonperforming Assets 32
Loans 90 Days or More Past Due and Still Accruing 32
Changes in Allowance for Credit Losses 33
 

Equity

Tangible Common Equity 34
Common Equity Tier 1 Under Basel III 35
 

Operating Segments

Operating Segment Results 36
 

Other

Mortgage Servicing and other related data 38
 

Wells Fargo & Company and Subsidiaries

SUMMARY FINANCIAL DATA
    % Change
Quarter ended Mar 31, 2019 from
Mar 31,   Dec 31,   Mar 31, Dec 31,   Mar 31,
($ in millions, except per share amounts)   2019   2018   2018   2018   2018
For the Period
Wells Fargo net income $ 5,860 6,064 5,136 (3 )% 14
Wells Fargo net income applicable to common stock 5,507 5,711 4,733 (4 ) 16
Diluted earnings per common share 1.20 1.21 0.96 (1 ) 25
Profitability ratios (annualized):
Wells Fargo net income to average assets (ROA) 1.26 % 1.28 1.09 (2 ) 16
Wells Fargo net income applicable to common stock to average Wells
Fargo common stockholders' equity (ROE)
12.71 12.89 10.58 (1 ) 20
Return on average tangible common equity (ROTCE)(1) 15.16 15.39 12.62 (1 ) 20
Efficiency ratio (2) 64.4 63.6 68.6 1 (6 )
Total revenue $ 21,609 20,980 21,934 3 (1 )
Pre-tax pre-provision profit (PTPP) (3) 7,693 7,641 6,892 1 12
Dividends declared per common share 0.45 0.43 0.39 5 15
Average common shares outstanding 4,551.5 4,665.8 4,885.7 (2 ) (7 )
Diluted average common shares outstanding 4,584.0 4,700.8 4,930.7 (2 ) (7 )
Average loans $ 950,148 946,336 951,024
Average assets 1,883,229 1,879,047 1,915,896 (2 )
Average total deposits 1,262,062 1,268,948 1,297,178 (1 ) (3 )
Average consumer and small business banking deposits (4) 739,654 736,295 755,483 (2 )
Net interest margin 2.91 % 2.94 2.84 (1 ) 2
At Period End
Debt securities $ 483,467 484,689 472,968 2
Loans 948,249 953,110 947,308 (1 )
Allowance for loan losses 9,900 9,775 10,373 1 (5 )
Goodwill 26,420 26,418 26,445
Equity securities 58,440 55,148 58,935 6 (1 )
Assets 1,887,792 1,895,883 1,915,388 (1 )
Deposits 1,264,013 1,286,170 1,303,689 (2 ) (3 )
Common stockholders' equity 176,025 174,359 181,150 1 (3 )
Wells Fargo stockholders' equity 197,832 196,166 204,952 1 (3 )
Total equity 198,733 197,066 205,910 1 (3 )
Tangible common equity (1) 147,723 145,980 151,878 1 (3 )
Common shares outstanding 4,511.9 4,581.3 4,873.9 (2 ) (7 )
Book value per common share (5) $ 39.01 38.06 37.17 2 5
Tangible book value per common share (1)(5) 32.74 31.86 31.16 3 5
Team members (active, full-time equivalent)   262,100     258,700     265,700     1     (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 34.

(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
Mar 31,   Dec 31,   Sep 30,   Jun 30,   Mar 31,
($ in millions, except per share amounts)   2019   2018   2018   2018   2018
For the Quarter
Wells Fargo net income $ 5,860 6,064 6,007 5,186 5,136
Wells Fargo net income applicable to common stock 5,507 5,711 5,453 4,792 4,733
Diluted earnings per common share 1.20 1.21 1.13 0.98 0.96
Profitability ratios (annualized):
Wells Fargo net income to average assets (ROA) 1.26 % 1.28 1.27 1.10 1.09
Wells Fargo net income applicable to common stock to average Wells
Fargo common stockholders' equity (ROE)
12.71 12.89 12.04 10.60 10.58
Return on average tangible common equity (ROTCE)(1) 15.16 15.39 14.33 12.62 12.62
Efficiency ratio (2) 64.4 63.6 62.7 64.9 68.6
Total revenue $ 21,609 20,980 21,941 21,553 21,934
Pre-tax pre-provision profit (PTPP) (3) 7,693 7,641 8,178 7,571 6,892
Dividends declared per common share 0.45 0.43 0.43 0.39 0.39
Average common shares outstanding 4,551.5 4,665.8 4,784.0 4,865.8 4,885.7
Diluted average common shares outstanding 4,584.0 4,700.8 4,823.2 4,899.8 4,930.7
Average loans $ 950,148 946,336 939,462 944,079 951,024
Average assets 1,883,229 1,879,047 1,876,283 1,884,884 1,915,896
Average total deposits 1,262,062 1,268,948 1,266,378 1,271,339 1,297,178
Average consumer and small business banking deposits (4) 739,654 736,295 743,503 754,047 755,483
Net interest margin 2.91 % 2.94 2.94 2.93 2.84
At Quarter End
Debt securities $ 483,467 484,689 472,283 475,495 472,968
Loans 948,249 953,110 942,300 944,265 947,308
Allowance for loan losses 9,900 9,775 10,021 10,193 10,373
Goodwill 26,420 26,418 26,425 26,429 26,445
Equity securities 58,440 55,148 61,755 57,505 58,935
Assets 1,887,792 1,895,883 1,872,981 1,879,700 1,915,388
Deposits 1,264,013 1,286,170 1,266,594 1,268,864 1,303,689
Common stockholders' equity 176,025 174,359 176,934 181,386 181,150
Wells Fargo stockholders' equity 197,832 196,166 198,741 205,188 204,952
Total equity 198,733 197,066 199,679 206,069 205,910
Tangible common equity (1) 147,723 145,980 148,391 152,580 151,878
Common shares outstanding 4,511.9 4,581.3 4,711.6 4,849.1 4,873.9
Book value per common share (5) $ 39.01 38.06 37.55 37.41 37.17
Tangible book value per common share (1)(5) 32.74 31.86 31.49 31.47 31.16
Team members (active, full-time equivalent)   262,100     258,700     261,700     264,500     265,700

(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 34.

(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 March 31,   %
(in millions, except per share amounts)   2019   2018   Change
Interest income  
Debt securities $ 3,941 3,414 15 %
Mortgage loans held for sale 152 179 (15 )
Loans held for sale 24 24
Loans 11,354 10,579 7
Equity securities 210 231 (9 )
Other interest income   1,322     920   44
Total interest income   17,003     15,347   11
Interest expense
Deposits 2,026 1,090 86
Short-term borrowings 596 311 92
Long-term debt 1,927 1,576 22
Other interest expense   143     132   8
Total interest expense   4,692     3,109   51
Net interest income 12,311 12,238 1
Provision for credit losses   845     191   342
Net interest income after provision for credit losses   11,466     12,047   (5 )
Noninterest income
Service charges on deposit accounts 1,094 1,173 (7 )
Trust and investment fees 3,373 3,683 (8 )
Card fees 944 908 4
Other fees 770 800 (4 )
Mortgage banking 708 934 (24 )
Insurance 96 114 (16 )
Net gains from trading activities 357 243 47
Net gains on debt securities 125 1 NM
Net gains from equity securities 814 783 4
Lease income 443 455 (3 )
Other   574     602   (5 )
Total noninterest income   9,298     9,696   (4 )
Noninterest expense
Salaries 4,425 4,363 1
Commission and incentive compensation 2,845 2,768 3
Employee benefits 1,938 1,598 21
Equipment 661 617 7
Net occupancy 717 713 1
Core deposit and other intangibles 28 265 (89 )
FDIC and other deposit assessments 159 324 (51 )
Other   3,143     4,394   (28 )
Total noninterest expense   13,916     15,042   (7 )
Income before income tax expense 6,848 6,701 2
Income tax expense   881     1,374   (36 )
Net income before noncontrolling interests 5,967 5,327 12
Less: Net income from noncontrolling interests   107     191   (44 )
Wells Fargo net income   $ 5,860     5,136   14
Less: Preferred stock dividends and other   353     403   (12 )
Wells Fargo net income applicable to common stock   $ 5,507     4,733   16
Per share information
Earnings per common share $ 1.21 0.97 25
Diluted earnings per common share 1.20 0.96 25
Average common shares outstanding 4,551.5 4,885.7 (7 )
Diluted average common shares outstanding   4,584.0     4,930.7     (7 )

NM - Not meaningful

 
 

Wells Fargo & Company and Subsidiaries

FIVE QUARTER CONSOLIDATED STATEMENT OF INCOME
  Quarter ended
Mar 31,   Dec 31,   Sep 30,   Jun 30,   Mar 31,
(in millions, except per share amounts)   2019   2018   2018   2018   2018
Interest income
Debt securities $ 3,941 3,803 3,595 3,594 3,414
Mortgage loans held for sale 152 190 210 198 179
Loans held for sale 24 33 35 48 24
Loans 11,354 11,367 11,116 10,912 10,579
Equity securities 210 260 280 221 231
Other interest income   1,322     1,268     1,128     1,042     920
Total interest income   17,003     16,921     16,364     16,015     15,347
Interest expense
Deposits 2,026 1,765 1,499 1,268 1,090
Short-term borrowings 596 546 462 398 311
Long-term debt 1,927 1,802 1,667 1,658 1,576
Other interest expense   143     164     164     150     132
Total interest expense   4,692     4,277     3,792     3,474     3,109
Net interest income 12,311 12,644 12,572 12,541 12,238
Provision for credit losses   845     521     580     452     191
Net interest income after provision for credit losses   11,466     12,123     11,992     12,089     12,047
Noninterest income
Service charges on deposit accounts 1,094 1,176 1,204 1,163 1,173
Trust and investment fees 3,373 3,520 3,631 3,675 3,683
Card fees 944 981 1,017 1,001 908
Other fees 770 888 850 846 800
Mortgage banking 708 467 846 770 934
Insurance 96 109 104 102 114
Net gains from trading activities 357 10 158 191 243
Net gains on debt securities 125 9 57 41 1
Net gains from equity securities 814 21 416 295 783
Lease income 443 402 453 443 455
Other   574     753     633     485     602
Total noninterest income   9,298     8,336     9,369     9,012     9,696
Noninterest expense
Salaries 4,425 4,545 4,461 4,465 4,363
Commission and incentive compensation 2,845 2,427 2,427 2,642 2,768
Employee benefits 1,938 706 1,377 1,245 1,598
Equipment 661 643 634 550 617
Net occupancy 717 735 718 722 713
Core deposit and other intangibles 28 264 264 265 265
FDIC and other deposit assessments 159 153 336 297 324
Other   3,143     3,866     3,546     3,796     4,394
Total noninterest expense   13,916     13,339     13,763     13,982     15,042
Income before income tax expense 6,848 7,120 7,598 7,119 6,701
Income tax expense   881     966     1,512     1,810     1,374
Net income before noncontrolling interests 5,967 6,154 6,086 5,309 5,327
Less: Net income from noncontrolling interests   107     90     79     123     191
Wells Fargo net income   $ 5,860     6,064     6,007     5,186     5,136
Less: Preferred stock dividends and other   353     353     554     394     403
Wells Fargo net income applicable to common stock   $ 5,507     5,711     5,453     4,792     4,733
Per share information
Earnings per common share $ 1.21 1.22 1.14 0.98 0.97
Diluted earnings per common share 1.20 1.21 1.13 0.98 0.96
Average common shares outstanding 4,551.5 4,665.8 4,784.0 4,865.8 4,885.7
Diluted average common shares outstanding   4,584.0     4,700.8     4,823.2     4,899.8     4,930.7
 

 

Wells Fargo & Company and Subsidiaries

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
  Quarter ended March 31,   %
(in millions)   2019   2018   Change
Wells Fargo net income   $ 5,860     5,136   14%
Other comprehensive income (loss), before tax:  
Debt securities:
Net unrealized gains (losses) arising during the period 2,831 (3,443 ) NM
Reclassification of net (gains) losses to net income (81 ) 68 NM
Derivatives and hedging activities:
Net unrealized losses arising during the period (35 ) (242 ) (86)
Reclassification of net losses to net income 79 60 32
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
35 32 9
Foreign currency translation adjustments:
Net unrealized gains (losses) arising during the period   42     (2 ) NM
Other comprehensive income (loss), before tax 2,867 (3,521 ) NM
Income tax benefit (expense) related to other comprehensive income   (694 )   862   NM
Other comprehensive income (loss), net of tax 2,173 (2,659 ) NM
Less: Other comprehensive income from noncontrolling interests        
Wells Fargo other comprehensive income (loss), net of tax   2,173     (2,659 ) NM
Wells Fargo comprehensive income 8,033 2,477 224
Comprehensive income from noncontrolling interests   107     191   (44)
Total comprehensive income   $ 8,140     2,668     205

NM – Not meaningful

 
 

FIVE QUARTER CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN
TOTAL EQUITY

  Quarter ended
Mar 31,   Dec 31,   Sep 30,   Jun 30,   Mar 31,
(in millions)   2019   2018   2018   2018   2018
Balance, beginning of period $ 197,066 199,679 206,069 205,910 208,079
Cumulative effect from change in accounting policies (1) (11 ) (24 )
Wells Fargo net income 5,860 6,064 6,007 5,186 5,136
Wells Fargo other comprehensive income (loss), net of tax 2,173 537 (1,012 ) (540 ) (2,659 )
Noncontrolling interests 1 (38 ) 57 (77 ) (178 )
Common stock issued 1,139 239 156 73 1,208
Common stock repurchased (2) (4,820 ) (7,299 ) (7,382 ) (2,923 ) (3,029 )
Preferred stock redeemed (3) (2,150 )
Preferred stock released by ESOP 268 260 490 231
Common stock warrants repurchased/exercised (131 ) (36 ) (1 ) (157 )
Common stock dividends (2,054 ) (2,016 ) (2,062 ) (1,900 ) (1,911 )
Preferred stock dividends (353 ) (353 ) (399 ) (394 ) (410 )
Stock incentive compensation expense 544 144 202 258 437
Net change in deferred compensation and related plans   (812 )   (28 )   (31 )   (13 )   (813 )
Balance, end of period   $ 198,733     197,066     199,679     206,069     205,910  

(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
. Effective January 1, 2018, we adopted ASU 2016-04
– Liabilities – Extinguishments of Liabilities (Subtopic 405-20): Recognition
of Breakage for Certain Prepaid Stored-Value Products,
ASU
2016-01 – Financial Instruments – Overall (Subtopic 825-10):
Recognition and Measurement of Financial Assets and Financial
Liabilities
, and ASU 2014-09 – Revenue from Contracts
With Customers (Topic 606) and subsequent related Updates.

(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 March 31,
2019   2018
    Interest     Interest
Average Yields/ income/ Average Yields/ income/
(in millions)   balance   rates   expense   balance   rates   expense
Earning assets
Interest-earning deposits with banks $ 140,784 2.33 % $ 810 172,291 1.49 % $ 632
Federal funds sold and securities purchased under resale agreements 83,539 2.40 495 78,135 1.40 271
Debt securities (3):
Trading debt securities 89,378 3.58 798 78,715 3.24 637
Available-for-sale debt securities:
Securities of U.S. Treasury and federal agencies 14,070 2.14 74 6,426 1.66 26
Securities of U.S. states and political subdivisions 48,342 4.02 486 49,956 3.37 421
Mortgage-backed securities:
Federal agencies 151,494 3.10 1,173 158,472 2.72 1,076
Residential and commercial   5,984   4.31 64   8,871   4.12 91
Total mortgage-backed securities 157,478 3.14 1,237 167,343 2.79 1,167
Other debt securities   46,788   4.46 517   48,094   3.73 444
Total available-for-sale debt securities   266,678   3.48 2,314   271,819   3.04 2,058
Held-to-maturity debt securities:
Securities of U.S. Treasury and federal agencies 44,754 2.20 243 44,723 2.20 243
Securities of U.S. states and political subdivisions 6,158 4.03 62 6,259 4.34 68
Federal agency and other mortgage-backed securities 96,004 2.74 656 90,789 2.38 541
Other debt securities   61   3.96 1   695   3.23 5
Total held-to-maturity debt securities   146,977   2.63 962   142,466   2.42 857
Total debt securities 503,033 3.25 4,074 493,000 2.89 3,552
Mortgage loans held for sale (4) 13,898 4.37 152 18,406 3.89 179
Loans held for sale (4) 1,862 5.25 24 2,011 4.92 24
Commercial loans:
Commercial and industrial - U.S. 286,579 4.48 3,169 272,040 3.85 2,584
Commercial and industrial - Non U.S. 62,957 3.89 604 60,216 3.23 479
Real estate mortgage 121,417 4.58 1,373 126,200 4.05 1,262
Real estate construction 22,435 5.43 301 24,449 4.54 274
Lease financing   19,391   4.61 224   19,265   5.30 255
Total commercial loans   512,779   4.48 5,671   502,170   3.91 4,854
Consumer loans:
Real estate 1-4 family first mortgage 285,214 3.96 2,821 284,207 4.02 2,852
Real estate 1-4 family junior lien mortgage 33,791 5.75 481 38,844 5.13 493
Credit card 38,182 12.88 1,212 36,468 12.75 1,147
Automobile 44,833 5.19 574 51,469 5.16 655
Other revolving credit and installment   35,349   7.14 623   37,866   6.46 604
Total consumer loans   437,369   5.26 5,711   448,854   5.16 5,751
Total loans (4) 950,148 4.84 11,382 951,024 4.50 10,605
Equity securities 33,080 2.56 211 39,754 2.35 233
Other   4,416   1.63 18   6,015   1.21 19
Total earning assets   $ 1,730,760   4.00 % $ 17,166   1,760,636   3.55 % $ 15,515
Funding sources
Deposits:
Interest-bearing checking $ 56,253 1.42 % $ 197 67,774 0.77 % $ 129
Market rate and other savings 688,568 0.50 847 679,068 0.22 368
Savings certificates 25,231 1.26 78 20,018 0.34 17
Other time deposits 97,830 2.67 645 76,589 1.84 347
Deposits in foreign offices   55,443   1.89 259   94,810   0.98 229
Total interest-bearing deposits 923,325 0.89 2,026 938,259 0.47 1,090
Short-term borrowings 108,789 2.22 597 101,779 1.24 312
Long-term debt 233,172 3.32 1,927 226,062 2.80 1,576
Other liabilities   25,292   2.28 143   27,927   1.92 132
Total interest-bearing liabilities 1,290,578 1.47 4,693 1,294,027 0.97 3,110
Portion of noninterest-bearing funding sources   440,182     466,609  
Total funding sources   $ 1,730,760   1.09   4,693   1,760,636   0.71   3,110
Net interest margin and net interest income on a
taxable-equivalent basis (5)
2.91 %   $ 12,473   2.84 %   $ 12,405
Noninterest-earning assets
Cash and due from banks $ 19,614 18,853
Goodwill 26,420 26,516
Other   106,435   109,891  
Total noninterest-earning assets   $ 152,469   155,260  
Noninterest-bearing funding sources
Deposits $ 338,737 358,919
Other liabilities 55,565 56,770
Total equity 198,349 206,180
Noninterest-bearing funding sources used to fund earning assets   (440,182 ) (466,609 )
Net noninterest-bearing funding sources   $ 152,469   155,260  
Total assets   $ 1,883,229   1,915,896  
 

(1) Our average prime rate was 5.50% and 4.52% for the quarters
ended March 31, 2019 and 2018, respectively. The average
three-month London Interbank Offered Rate (LIBOR) was 2.69% and
1.93% 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 $162 million and
$167 million for the quarters ended March 31, 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
    Mar 31, 2019   Dec 31, 2018   Sep 30, 2018   Jun 30, 2018   Mar 31, 2018
Average   Yields/   Average   Yields/   Average   Yields/   Average   Yields/   Average   Yields/
($ in billions)   balance   rates   balance   rates   balance   rates   balance   rates balance rates
Earning assets
Interest-earning deposits with banks $ 140.8 2.33 % $ 150.1 2.18 % $ 148.6 1.93 % $ 154.8 1.75 % $ 172.3 1.49 %
Federal funds sold and securities purchased under resale agreements 83.5 2.40 76.1 2.22 79.9 1.93 80.0 1.73 78.1 1.40
Debt securities (3):
Trading debt securities 89.4 3.58 90.1 3.52 84.5 3.45 80.7 3.45 78.7 3.24
Available-for-sale debt securities:
Securities of U.S. Treasury and federal agencies 14.1 2.14 7.2 1.80 6.4 1.65 6.4 1.66 6.4 1.66
Securities of U.S. states and political subdivisions 48.3 4.02 47.6 4.05 46.6 3.76 47.4 3.91 50.0 3.37
Mortgage-backed securities:
Federal agencies 151.5 3.10 155.3 2.91 155.5 2.77 154.9 2.75 158.4 2.72
Residential and commercial   6.0   4.31 6.7   4.87 7.3   4.68 8.2   4.86 8.9   4.12
Total mortgage-backed securities 157.5 3.14 162.0 2.99 162.8 2.86 163.1 2.86 167.3 2.79
Other debt securities   46.8   4.46 46.1   4.46 46.4   4.39 47.1   4.33 48.1   3.73
Total available-for-sale debt securities   266.7   3.48 262.9   3.41 262.2   3.26 264.0   3.28 271.8   3.04
Held-to-maturity debt securities:
Securities of U.S. Treasury and federal agencies 44.7 2.20 44.7 2.19 44.7 2.18 44.7 2.19 44.7 2.20
Securities of U.S. states and political subdivisions 6.2 4.03 6.2 4.34 6.3 4.33 6.3 4.34 6.3 4.34
Federal agency and other mortgage-backed securities 95.9 2.74 95.8 2.46 95.3 2.27 94.9 2.33 90.8 2.38
Other debt securities   0.1   3.96 0.1   3.65 0.1   5.61 0.6   4.66 0.7   3.23
Total held-to-maturity debt securities   146.9   2.63 146.8   2.46 146.4   2.33 146.5   2.38 142.5   2.42
Total debt securities 503.0 3.25 499.8 3.15 493.1 3.02 491.2 3.04 493.0 2.89
Mortgage loans held for sale 13.9 4.37 17.0 4.46 19.3 4.33 18.8 4.22 18.4 3.89
Loans held for sale 1.9 5.25 2.0 6.69 2.6 5.28 3.5 5.48 2.0 4.92
Commercial loans:
Commercial and industrial - U.S. 286.6 4.48 281.4 4.40 273.8 4.22 275.3 4.16 272.0 3.85
Commercial and industrial - Non U.S. 63.0 3.89 62.0 3.73 60.9 3.63 59.7 3.51 60.2 3.23
Real estate mortgage 121.4 4.58 120.4 4.51 121.3 4.35 124.0 4.27 126.2 4.05
Real estate construction 22.4 5.43 23.1 5.32 23.3 5.05 23.6 4.88 24.4 4.54
Lease financing   19.4   4.61 19.5   4.48 19.5   4.69 19.3   4.48 19.4   5.30
Total commercial loans   512.8   4.48 506.4   4.39 498.8   4.24 501.9   4.15 502.2   3.91
Consumer loans:
Real estate 1-4 family first mortgage 285.2 3.96 285.3 4.02 284.1 4.07 283.1 4.06 284.2 4.02
Real estate 1-4 family junior lien mortgage 33.8 5.75 34.8 5.60 35.9 5.50 37.2 5.32 38.8 5.13
Credit card 38.2 12.88 37.9 12.69 36.9 12.77 35.9 12.66 36.4 12.75
Automobile 44.8 5.19 45.5 5.16 47.0 5.20 48.6 5.18 51.5 5.16
Other revolving credit and installment   35.3   7.14 36.4   6.95 36.8   6.78 37.4   6.62 37.9   6.46
Total consumer loans   437.3   5.26 439.9   5.25 440.7   5.26 442.2   5.20 448.8   5.16
Total loans 950.1 4.84 946.3 4.79 939.5 4.72 944.1 4.64 951.0 4.50
Equity securities 33.1 2.56 37.4 2.79 37.9 2.98 37.3 2.38 39.8 2.35
Other   4.5   1.63 4.2   1.78 4.7   1.47 5.6   1.48 6.0   1.21
Total earning assets   $ 1,730.8   4.00 % $ 1,732.9   3.93 % $ 1,725.6   3.81 % $ 1,735.3   3.73 % $ 1,760.6   3.55 %
Funding sources
Deposits:
Interest-bearing checking $ 56.3 1.42 % $ 54.0 1.21 % $ 51.2 1.01 % $ 80.3 0.90 % $ 67.8 0.77 %
Market rate and other savings 688.6 0.50 689.6 0.43 693.9 0.35 676.7 0.26 679.1 0.22
Savings certificates 25.2 1.26 22.0 0.87 20.6 0.62 20.0 0.43 20.0 0.34
Other time deposits 97.8 2.67 92.6 2.46 87.8 2.35 82.1 2.26 76.6 1.84
Deposits in foreign offices   55.4   1.89 56.1   1.66 53.9   1.50 51.5   1.30 94.8   0.98
Total interest-bearing deposits 923.3 0.89 914.3 0.77 907.4 0.66 910.6 0.56 938.3 0.47
Short-term borrowings 108.8 2.22 106.0 2.04 105.5 1.74 103.8 1.54 101.8 1.24
Long-term debt 233.2 3.32 226.6 3.17 220.7 3.02 223.8 2.97 226.0 2.80
Other liabilities   25.3   2.28 27.4   2.41 27.0   2.40 28.2   2.12 27.9   1.92
Total interest-bearing liabilities 1,290.6 1.47 1,274.3 1.34 1,260.6 1.20 1,266.4 1.10 1,294.0 0.97
Portion of noninterest-bearing funding sources   440.2   458.6   465.0   468.9   466.6  
Total funding sources   $ 1,730.8   1.09   $ 1,732.9   0.99   $ 1,725.6   0.87   $ 1,735.3   0.80   $ 1,760.6   0.71  
Net interest margin on a taxable-equivalent basis 2.91 % 2.94 % 2.94 % 2.93 % 2.84 %
Noninterest-earning assets
Cash and due from banks $ 19.6 19.3 18.4 18.6 18.9
Goodwill 26.4 26.4 26.4 26.4 26.5
Other   106.4   100.4   105.9   104.6   109.9  
Total noninterest-earnings assets   $ 152.4   146.1   150.7   149.6   155.3  
Noninterest-bearing funding sources
Deposits $ 338.8 354.6 359.0 360.7 358.9
Other liabilities 55.5 51.7 53.9 51.7 56.8
Total equity 198.3 198.4 202.8 206.1 206.2
Noninterest-bearing funding sources used to fund earning assets   (440.2 ) (458.6 ) (465.0 ) (468.9 ) (466.6 )
Net noninterest-bearing funding sources   $ 152.4   146.1   150.7   149.6   155.3  
Total assets   $ 1,883.2   1,879.0   1,876.3   1,884.9   1,915.9  
 

(1) Our average prime rate was 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, 4.80% for the
quarter ended June 30, 2018 and 4.52% for the quarter ended March
31, 2018. The average three-month London Interbank Offered Rate
(LIBOR) was 2.69%, 2.62%, 2.34%, 2.34% and 1.93% 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 March 31,   %
(in millions)   2019   2018   Change
Service charges on deposit accounts $ 1,094   1,173 (7 )%
Trust and investment fees:
Brokerage advisory, commissions and other fees 2,193 2,403 (9 )
Trust and investment management 786 850 (8 )
Investment banking   394     430   (8 )
Total trust and investment fees   3,373     3,683   (8 )
Card fees 944 908 4
Other fees:
Lending related charges and fees (1) 347 380 (9 )
Cash network fees 109 126 (13 )
Commercial real estate brokerage commissions 81 85 (5 )
Wire transfer and other remittance fees 113 116 (3 )
All other fees   120     93   29
Total other fees   770     800   (4 )
Mortgage banking:
Servicing income, net 364 468 (22 )
Net gains on mortgage loan origination/sales activities   344     466   (26 )
Total mortgage banking   708     934   (24 )
Insurance 96 114 (16 )
Net gains from trading activities 357 243 47
Net gains on debt securities 125 1 NM
Net gains from equity securities 814 783 4
Lease income 443 455 (3 )
Life insurance investment income 159 164 (3 )
All other   415     438   (5 )
Total   $ 9,298     9,696     (4 )

NM - Not meaningful

(1) Represents combined amount of previously reported "Charges and
fees on loans" and "Letters of credit fees".

 

NONINTEREST EXPENSE

  Quarter ended March 31,   %
(in millions)   2019   2018   Change
Salaries $ 4,425   4,363 1 %
Commission and incentive compensation 2,845 2,768 3
Employee benefits 1,938 1,598 21
Equipment 661 617 7
Net occupancy (1) 717 713 1
Core deposit and other intangibles 28 265 (89 )
FDIC and other deposit assessments 159 324 (51 )
Outside professional services 678 821 (17 )
Operating losses 238 1,468 (84 )
Contract services 563 447 26
Operating leases (2) 286 320 (11 )
Advertising and promotion 237 153 55
Outside data processing 167 162 3
Travel and entertainment 147 152 (3 )
Postage, stationery and supplies 122 142 (14 )
Telecommunications 91 92 (1 )
Foreclosed assets 37 38 (3 )
Insurance 25 26 (4 )
All other   552     573   (4 )
Total   $ 13,916     15,042     (7 )

(1) Represents expenses for both leased and owned properties.

(2) Represents expenses for assets we lease to customers.

 
 

Wells Fargo & Company and Subsidiaries

FIVE QUARTER NONINTEREST INCOME
  Quarter ended
Mar 31,   Dec 31,   Sep 30,   Jun 30,   Mar 31,
(in millions)   2019   2018   2018   2018   2018
Service charges on deposit accounts $ 1,094 1,176 1,204 1,163 1,173
Trust and investment fees:
Brokerage advisory, commissions and other fees 2,193 2,345 2,334 2,354 2,403
Trust and investment management 786 796 835 835 850
Investment banking   394     379     462     486     430
Total trust and investment fees   3,373     3,520     3,631     3,675     3,683
Card fees 944 981 1,017 1,001 908
Other fees:
Lending related charges and fees (1) 347 400 370 376 380
Cash network fees 109 114 121 120 126
Commercial real estate brokerage commissions 81 145 129 109 85
Wire transfer and other remittance fees 113 120 120 121 116
All other fees   120     109     110     120     93
Total other fees   770     888     850     846     800
Mortgage banking:
Servicing income, net 364 109 390 406 468
Net gains on mortgage loan origination/sales activities   344     358     456     364     466
Total mortgage banking   708     467     846     770     934
Insurance 96 109 104 102 114
Net gains from trading activities 357 10 158 191 243
Net gains on debt securities 125 9 57 41 1
Net gains from equity securities 814 21 416 295 783
Lease income 443 402 453 443 455
Life insurance investment income 159 158 167 162 164
All other   415     595     466     323     438
Total   $ 9,298     8,336     9,369     9,012     9,696

(1)  Represents combined amount of previously reported "Charges
and fees on loans" and "Letters of credit fees".

 
 

FIVE QUARTER NONINTEREST EXPENSE

  Quarter ended
Mar 31,   Dec 31,   Sep 30,   Jun 30,   Mar 31,
(in millions)   2019   2018   2018   2018   2018
Salaries $ 4,425 4,545 4,461 4,465 4,363
Commission and incentive compensation 2,845 2,427 2,427 2,642 2,768
Employee benefits 1,938 706 1,377 1,245 1,598
Equipment 661 643 634 550 617
Net occupancy (1) 717 735 718 722 713
Core deposit and other intangibles 28 264 264 265 265
FDIC and other deposit assessments 159 153 336 297 324
Outside professional services 678 843 761 881 821
Operating losses 238 432 605 619 1,468
Contract services 563 616 593 536 447
Operating leases (2) 286 392 311 311 320
Advertising and promotion 237 254 223 227 153
Outside data processing 167 168 166 164 162
Travel and entertainment 147 168 141 157 152
Postage, stationery and supplies 122 132 120 121 142
Telecommunications 91 91 90 88 92
Foreclosed assets 37 47 59 44 38
Insurance 25 25 26 24 26
All other   552     698     451     624     573
Total   $ 13,916     13,339     13,763     13,982     15,042

(1)  Represents expenses for both leased and owned properties.

(2)  Represents expenses for assets we lease to customers.

 
 

Wells Fargo & Company and Subsidiaries

FIVE QUARTER DEFERRED COMPENSATION PLAN INVESTMENT RESULTS

  Quarter ended
(in millions)   Mar 31,
2019
  Dec 31,
2018
  Sep 30,
2018
  Jun 30,
2018
  Mar 31,
2018
Net interest income $ 13   23   14   13   10
Net gains (losses) from equity securities   345     (452 )   118     37     (6 )
Total revenue (losses) from deferred compensation plan investments 358 (429 ) 132 50 4
Employee benefits expense   357     (428 )   129     53     4  
Income (loss) before income tax expense   $ 1     (1 )   3     (3 )    
 
 

Wells Fargo & Company and Subsidiaries

CONSOLIDATED BALANCE SHEET

(in millions, except shares)   Mar 31,
2019
 

Dec 31,
2018

 

%
Change

Assets      
Cash and due from banks $ 20,650 23,551 (12

)%

Interest-earning deposits with banks   128,318     149,736   (14 )
Total cash, cash equivalents, and restricted cash   148,968     173,287   (14 )
Federal funds sold and securities purchased under resale agreements 98,621 80,207 23
Debt securities:
Trading, at fair value 70,378 69,989 1
Available-for-sale, at fair value 268,099 269,912 (1 )
Held-to-maturity, at cost 144,990 144,788
Mortgage loans held for sale 15,016 15,126 (1 )
Loans held for sale 1,018 2,041 (50 )
Loans 948,249 953,110 (1 )
Allowance for loan losses   (9,900 )   (9,775 ) 1
Net loans   938,349     943,335   (1 )
Mortgage servicing rights:
Measured at fair value 13,336 14,649 (9 )
Amortized 1,427 1,443 (1 )
Premises and equipment, net 8,825 8,920 (1 )
Goodwill 26,420 26,418
Derivative assets 11,238 10,770 4
Equity securities 58,440 55,148 6
Other assets   82,667     79,850   4
Total assets   $ 1,887,792     1,895,883  
Liabilities
Noninterest-bearing deposits $ 341,399 349,534 (2 )
Interest-bearing deposits   922,614     936,636   (1 )
Total deposits 1,264,013 1,286,170 (2 )
Short-term borrowings 106,597 105,787 1
Derivative liabilities 7,393 8,499 (13 )
Accrued expenses and other liabilities 74,717 69,317 8
Long-term debt   236,339     229,044     3
Total liabilities   1,689,059     1,698,817     (1 )
Equity
Wells Fargo stockholders' equity:
Preferred stock 23,214 23,214
Common stock – $1-2/3 par value, authorized 9,000,000,000 shares;
issued 5,481,811,474 shares
9,136 9,136
Additional paid-in capital 60,409 60,685
Retained earnings 160,776 158,163 2
Cumulative other comprehensive income (loss) (3,682 ) (6,336 ) (42 )
Treasury stock – 969,863,644 shares and 900,557,866 shares