EX-99.1 2 wfc4qer1-14x2015exx991.htm EX-99.1 WFC.4Q.ER.1-14-2015 EX-99.1
Exhibit 99.1


 
 
 
 
  
Media
  
Investors
  
 
 
  
Mary Eshet
  
Jim Rowe
  
 
 
  
704-383-7777
  
415-396-8216
  
 
Wednesday, January 14, 2015
WELLS FARGO REPORTS RECORD FULL YEAR NET INCOME
2014 Net Income of $23.1 Billion, Up 5% from 2013; Diluted EPS of $4.10
Q4 Net Income of $5.7 Billion, Up 2% YoY; Diluted EPS of $1.02

Continued strong financial results:
Full year 2014:
Net income of $23.1 billion, up 5 percent from 2013
Diluted earnings per share (EPS) of $4.10, up 5 percent
Revenue of $84.3 billion, up 1 percent
Pre-tax pre-provision profit (PTPP)1 of $35.3 billion, up 1 percent
Return on assets (ROA) of 1.45 percent and return on equity (ROE) of 13.41 percent
Returned $12.5 billion to shareholders through dividends and net share repurchases, up from $7.2 billion in 2013
Fourth quarter 2014:
Net income of $5.7 billion, up 2 percent from fourth quarter 2013
Diluted EPS of $1.02, up 2 percent
Revenue of $21.4 billion, up 4 percent
PTPP1 of $8.8 billion, up 3 percent
ROA of 1.36 percent and ROE of 12.84 percent
Strong loan and deposit growth:
Total average loans of $849.4 billion, up $36.1 billion, or 4 percent, from fourth quarter 2013
Quarter-end loans of $862.6 billion, up $40.3 billion, or 5 percent
Quarter-end core loans of $801.8 billion, up $60.3 billion, or 8 percent2 
Total average deposits of $1.1 trillion, up $89.4 billion, or 8 percent
Continued strength in credit quality:
Net charge-offs of $735 million, down $228 million from fourth quarter 2013
Net charge-off rate of 0.34 percent (annualized), down from 0.47 percent
Nonaccrual loans down $2.8 billion, or 18 percent
$250 million reserve release3

Endnotes can be found on page 12


- 2 -

Maintained strong capital levels4 and increased share repurchases:
Common Equity Tier 1 ratio under Basel III (Advanced Approach, fully phased-in) of 10.44 percent
Period-end common shares outstanding down 44.7 million from third quarter 2014

Selected Financial Information
 
 
 
Quarter ended  
 
 
Year ended Dec. 31,
 
 
Dec 31,
2014

 
Sep 30,
2014

 
Dec 31,
2013

 
2014

 
2013

Earnings
 
 
 
 
 
 
 
 
 
Diluted earnings per common share
$
1.02

 
1.02

 
1.00

 
4.10

 
3.89

Wells Fargo net income (in billions)
5.71

 
5.73

 
5.61

 
23.06

 
21.88

Return on assets (ROA)
1.36
%
 
1.40

 
1.48

 
1.45

 
1.51

Return on equity (ROE)
12.84

 
13.10

 
13.81

 
13.41

 
13.87

Asset Quality
 
 
 
 
 
 
 
 
 
Net charge-offs (annualized) as a % of avg. total loans
0.34
%
 
0.32

 
0.47

 
0.35

 
0.56

Allowance for credit losses as a % of total loans
1.53

 
1.61

 
1.82

 
1.53

 
1.82

Allowance for credit losses as a % of annualized net charge-offs
452

 
509

 
392

 
447

 
332

Other
 
 
 
 
 
 
 
 
 
Revenue (in billions)
$
21.4

 
21.2

 
20.7

 
84.3

 
83.8

Efficiency ratio
59.0
%
 
57.7

 
58.5

 
58.1

 
58.3

Average loans (in billions)
$
849.4

 
833.2

 
813.3

 
834.4

 
802.7

Average core deposits (in billions)
1,036.0

 
1,012.2

 
965.8

 
1,003.6

 
942.1

Net interest margin
3.04
%
 
3.06

 
3.27

 
3.11

 
3.40


SAN FRANCISCO – Wells Fargo & Company (NYSE:WFC) reported diluted earnings per common share of $4.10 for 2014, up 5 percent from $3.89 in 2013. Full year net income was $23.1 billion, compared with $21.9 billion in 2013. For fourth quarter 2014, net income was $5.7 billion, or $1.02 per share, compared with $5.6 billion, or $1.00 per share, for fourth quarter 2013.

"Wells Fargo had another strong year in 2014, with continued strength in the fundamental drivers of long-term performance: growing customers, loans, deposits and capital," said Chairman and CEO John Stumpf. "As a result of this performance, we were able to return more capital to our shareholders during the year. Our success is the result of our 265,000 team members remaining focused on meeting the financial needs of our customers in the communities we serve. As the U.S. economy continues to build momentum, I'm optimistic that our diversified business model will continue to benefit all of our stakeholders in 2015.”

Chief Financial Officer John Shrewsberry said, “Our performance in the fourth quarter was a great example of the benefit of our diversified business model and reflected a continuation of the solid results we generated all year. Compared with the prior quarter, we increased deposits and grew commercial and consumer loans while maintaining our risk and pricing discipline. Revenue increased as net interest income benefited from loan growth and the prudent deployment of our liquidity. Fee income remained strong and diversified. Credit quality continued to improve. We also maintained strong capital and liquidity, and returned more capital to shareholders in the quarter."



- 3 -

Revenue
Revenue was $21.4 billion in the fourth quarter, up from $21.2 billion in third quarter 2014, driven by an increase in net interest income. Revenue sources remained balanced between spread and fee income and the sources of fee income were broad-based.

Net Interest Income
Net interest income in fourth quarter 2014 increased $239 million on a linked-quarter basis to $11.2 billion. The increase resulted primarily from loan growth, an increase in investment securities, higher trading assets and slightly higher income from variable sources, including purchased credit-impaired (PCI) loan resolutions and periodic dividends. This was partially offset by lower income from a reduction in loans held-for-sale and mortgages held-for-sale.

Net interest margin was 3.04 percent, down 2 basis points from third quarter 2014, predominantly due to an increase in the average balance of cash and short-term investments driven by strong customer deposit growth and higher average balances in liquidity-related funding. While the growth in these two categories had minimal impact to net interest income, the increased deposit balances diluted net interest margin by approximately 4 basis points and the liquidity actions diluted the margin by 2 basis points. The net impact of all other balance sheet growth and repricing resulted in 3 basis points of benefit linked quarter due to a larger loan and investment portfolio. Higher interest income from variable sources benefited net interest margin by 1 basis point.

Noninterest Income
Noninterest income in the fourth quarter was $10.3 billion. On a linked-quarter basis, noninterest income was stable as increases in trust and investment fees, card fees, and other income, which included a $217 million gain related to the sale of an $8.3 billion portfolio of government guaranteed student loans, were offset by lower deposit service charges, mortgage banking fees, and market sensitive revenue5, primarily equity gains.

Trust and investment fees were $3.7 billion, up $151 million from third quarter on higher investment banking revenue, including higher loan syndication fees, high-yield debt origination fees and equity underwriting.

Mortgage banking noninterest income was $1.5 billion, down $118 million from third quarter, primarily driven by a decrease in mortgage originations in the fourth quarter. Residential mortgage originations were $44 billion in the fourth quarter, down $4 billion linked quarter, due to the seasonal slowdown in the purchase market. The gain on sale margin was 1.80 percent, compared with 1.82 percent in third quarter.

Noninterest Expense
Noninterest expense of $12.6 billion increased $399 million from third quarter 2014. This increase reflected higher personnel costs, including expenses related to fourth quarter revenue, continued investment in our risk infrastructure and some typically elevated fourth quarter costs. Compared with third quarter, deferred compensation expense was $128 million higher (offset in revenue) due to changes in market levels. Additionally, revenue-driven incentive compensation increased $77 million from the prior quarter. Fourth quarter



- 4 -

expenses included typically higher outside professional services, which increased $116 million, equipment (up $124 million) and advertising and promotion (up $42 million). Operating losses were $108 million lower in fourth quarter, driven by lower litigation accruals in the quarter. The efficiency ratio for full year 2014 was 58.1 percent, and the Company expects to operate within its targeted efficiency ratio range of 55 to 59 percent for full year 2015.

Income Taxes
Our effective tax rate was 30.6 percent for fourth quarter 2014, compared with 31.6 percent for third quarter 2014. The lower effective tax rate in fourth quarter 2014 was due primarily to the passage of federal tax legislation renewing certain tax benefits and from the resolution of prior period matters with federal and state taxing authorities.

Loans
Total loans were $862.6 billion at December 31, 2014, up $23.7 billion from September 30, 2014, reflecting broad-based growth in our portfolios. Core loan growth was $26.0 billion, and our non-strategic/liquidating portfolios declined $2.3 billion in the quarter. Loan growth included the acquisition of the Dillard's credit card portfolio as well as $6.5 billion from the financing related to the sale of government guaranteed student loans.

 
December 31, 2014
 
 
September 30, 2014
 
(in millions)
Core

 
Non-strategic
and liquidating (a)

 
Total 

 
Core

 
Non-strategic
and liquidating

 
Total 

Commercial
$
413,701

 
1,125

 
414,826

 
394,894

 
1,465

 
396,359

Consumer
388,062

 
59,663

 
447,725

 
380,897

 
61,627

 
442,524

Total loans
$
801,763

 
60,788

 
862,551

 
775,791

 
63,092

 
838,883

Change from prior quarter:
$
25,972

 
(2,304
)
 
23,668

 
12,193

 
(2,252
)
 
9,941

 
(a)
See table on page 35 for additional information on non-strategic/liquidating loan portfolios. Management believes that the above information provides useful disclosure regarding the Company’s ongoing loan portfolios.

Investment Securities
Investment securities were $312.9 billion at December 31, 2014, up $23.9 billion from third quarter. Purchases of approximately $35 billion, primarily U.S. Treasury and federal agency securities, were partially offset by run-off and maturities.

The Company had net unrealized available-for-sale securities gains of $7.8 billion at December 31, 2014, up from $6.6 billion at September 30, 2014, primarily driven by marketable equity securities.

Deposits
Average total deposits for fourth quarter 2014 were $1.1 trillion, up 8 percent from a year ago and up 8 percent (annualized) from third quarter 2014, driven by both commercial and consumer growth. The average deposit cost for fourth quarter 2014 was 9 basis points, an improvement of 1 basis point from the prior quarter and 2 basis points from a year ago. Average core deposits were $1.0 trillion, up 7 percent from a year ago and up 9 percent (annualized) from third quarter 2014. Average mortgage escrow deposits were $29.2 billion, compared with $28.2 billion a year ago and $30.7 billion in third quarter 2014.



- 5 -

Capital
Capital levels continued to be strong in the fourth quarter, with Common Equity Tier 1 of $137.2 billion under Basel III (General Approach), or 11.04 percent of risk-weighted assets. The Common Equity Tier 1 ratio under Basel III (Advanced Approach, fully phased-in) was 10.44 percent4. In fourth quarter 2014, the Company purchased 61.6 million shares of its common stock and entered into a $750 million forward repurchase transaction for an additional estimated 14.3 million shares which is expected to settle in first quarter 2015. The Company also paid a quarterly common stock dividend of $0.35 per share, up from $0.30 per share a year ago.
 
 
Dec 31,
2014 (a)

 
Sep 30,
2014
 
Dec 31,
2013
Common Equity Tier 1 (b)
11.04
%
 
11.11
 
10.82
Tier 1 capital
12.45

 
12.55
 
12.33
Tier 1 leverage
9.45

 
9.64
 
9.60
 
(a)
December 31, 2014, ratios are preliminary.
(b)
See tables on page 38 for more information on Common Equity Tier 1.

Credit Quality
“Credit losses were 0.35 percent of average loans in 2014 and remained near historic lows. In the fourth quarter, loan losses remained low, nonperforming assets decreased, and delinquency rates were stable compared with the prior quarter, and we continued to grow the portfolio with high quality loans,” said Chief Risk Officer Mike Loughlin. “Credit losses were $735 million in fourth quarter 2014, compared with $963 million in fourth quarter 2013, a 24 percent improvement. The quarterly loss rate (annualized) was 0.34 percent with commercial losses of 0.03 percent and consumer losses of 0.63 percent. Nonperforming assets declined by $739 million, or 18 percent (annualized), from the prior quarter. We released $250 million from the allowance for credit losses in the fourth quarter, reflecting continued credit quality improvement. Future allowance levels may increase or decrease based on a variety of factors, including loan growth, portfolio performance and general economic conditions."




- 6 -

Net Loan Charge-offs
Net loan charge-offs were $735 million in fourth quarter 2014, or 0.34 percent (annualized) of average loans, compared with $668 million in third quarter 2014, or 0.32 percent (annualized) of average loans.
Net Loan Charge-Offs
 
Quarter ended  
 
 
December 31, 2014
 
 
September 30, 2014
 
 
June 30, 2014
 
($ 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
$
82

 
0.12
 %
 
$
67

 
0.11
 %
 
$
60

 
0.10
 %
Real estate mortgage
(25
)
 
(0.09
)
 
(37
)
 
(0.13
)
 
(10
)
 
(0.04
)
Real estate construction
(26
)
 
(0.56
)
 
(58
)
 
(1.27
)
 
(20
)
 
(0.47
)
Lease financing
1

 
0.05

 
4

 
0.10

 
1

 
0.05

Total commercial
32

 
0.03

 
(24
)
 
(0.02
)
 
31

 
0.03

Consumer:
 
 
 
 
 
 
 
 
 
 

Real estate 1-4 family first mortgage
88

 
0.13

 
114

 
0.17

 
137

 
0.21

Real estate 1-4 family junior lien mortgage
134

 
0.88

 
140

 
0.90

 
160

 
1.02

Credit card
221

 
2.97

 
201

 
2.87

 
211

 
3.20

Automobile
132

 
0.94

 
112

 
0.81

 
46

 
0.35

Other revolving credit and installment
128

 
1.45

 
125

 
1.46

 
132

 
1.22

Total consumer
703

 
0.63

 
692

 
0.62

 
686

 
0.62

Total
$
735

 
0.34
 %
 
$
668

 
0.32
 %
 
$
717

 
0.35
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)
Quarterly net charge-offs as a percentage of average loans are annualized. See explanation on page 32 of the accounting for purchased credit-impaired (PCI) loans and the impact on selected financial ratios.

Nonperforming Assets
Nonperforming assets decreased by $739 million from third quarter to $15.5 billion. Nonaccrual loans decreased $517 million to $12.8 billion. Foreclosed assets were $2.6 billion, down from $2.8 billion in third quarter 2014 on lower government insured/guaranteed and commercial balances.




- 7 -

Nonperforming Assets (Nonaccrual Loans and Foreclosed Assets)
 
 
December 31, 2014
 
 
September 30, 2014
 
 
June 30, 2014
 
($ 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
$
538

 
0.20
%
 
$
614

 
0.24
%
 
$
724

 
0.29
%
Real estate mortgage
1,490

 
1.33

 
1,636

 
1.46

 
1,805

 
1.59

Real estate construction
187

 
1.00

 
217

 
1.20

 
239

 
1.38

Lease financing
24

 
0.20

 
27

 
0.22

 
29

 
0.24

Total commercial
2,239

 
0.54

 
2,494

 
0.63

 
2,797

 
0.71

Consumer:
 
 
 
 
 
 
 
 
 
 

Real estate 1-4 family first mortgage
8,583

 
3.23

 
8,785

 
3.34

 
9,026

 
3.47

Real estate 1-4 family junior lien mortgage
1,848

 
3.09

 
1,903

 
3.13

 
1,965

 
3.14

Automobile
137

 
0.25

 
143

 
0.26

 
150

 
0.28

Other revolving credit and installment
41

 
0.11

 
40

 
0.11

 
34

 
0.10

Total consumer
10,609

 
2.37

 
10,871

 
2.46

 
11,175

 
2.55

Total nonaccrual loans
12,848

 
1.49

 
13,365

 
1.59

 
13,972

 
1.69

Foreclosed assets:
 
 
 
 
 
 
 
 
 
 
 
Government insured/guaranteed (a)
982

 
 
 
1,140

 
 
 
1,257

 
 
Non-government insured/guaranteed
1,627

 
 
 
1,691

 
 
 
1,748

 
 
Total foreclosed assets
2,609

 
 
 
2,831

 
 
 
3,005

 
 
Total nonperforming assets
$
15,457

 
1.79
%
 
$
16,196

 
1.93
%
 
$
16,977

 
2.05
%
Change from prior quarter:
 
 
 
 
 
 
 
 
 
 
 
Total nonaccrual loans
$
(517
)
 
 
 
$
(607
)
 
 
 
$
(1,095
)
 
 
Total nonperforming assets
(739
)
 
 
 
(781
)
 
 
 
(678
)
 
 
 
(a)
During fourth quarter 2014, we adopted Accounting Standards Update (ASU) 2014-14, Classification of Certain Government-Guaranteed Mortgage Loans Upon Foreclosure, effective as of January 1, 2014. This ASU requires that government guaranteed real estate mortgage loans that meet specific criteria be recognized as other receivables upon foreclosure; previously, these assets were included in foreclosed assets. Government guaranteed residential real estate mortgage loans that completed foreclosure during 2014 and met the criteria specified by ASU 2014-14 are excluded from this table and included in Accounts Receivable in Other Assets.

Loans 90 Days or More Past Due and Still Accruing
Loans 90 days or more past due and still accruing (excluding government insured/guaranteed) totaled $920 million at December 31, 2014, compared with $946 million at September 30, 2014. Loans 90 days or more past due and still accruing with repayments insured by the Federal Housing Administration (FHA) or predominantly guaranteed by the Department of Veterans Affairs (VA) for mortgages and the U.S. Department of Education for student loans under the Federal Family Education Loan Program were $16.9 billion at December 31, 2014, down from $17.3 billion at September 30, 2014.

Allowance for Credit Losses
The allowance for credit losses, including the allowance for unfunded commitments, totaled $13.2 billion at December 31, 2014, down from $13.5 billion at September 30, 2014. The allowance coverage to total loans was 1.53 percent, compared with 1.61 percent in third quarter 2014. The allowance covered 4.5 times annualized fourth quarter net charge-offs, compared with 5.1 times in the prior quarter. The allowance coverage to nonaccrual loans was 103 percent at December 31, 2014, compared with 101 percent at September 30, 2014. “We believe the allowance was appropriate for losses inherent in the loan portfolio at December 31, 2014,” said Loughlin.



- 8 -

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)
Dec 31,
2014

 
Sep 30,
2014

 
Dec 31,
2013

Community Banking
$
3,435

 
3,470

 
3,222

Wholesale Banking
1,970

 
1,920

 
2,111

Wealth, Brokerage and Retirement
514

 
550

 
491


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 auto, student, and small business lending. Community Banking also offers investment, insurance and trust services in 39 states and D.C., and mortgage and home equity loans in all 50 states and D.C. through its Regional Banking and Wells Fargo Home Lending business units.
Selected Financial Information
 
Quarter ended  
 
(in millions)
Dec 31,
2014

 
Sep 30,
2014

 
Dec 31,
2013

Total revenue
$
12,835

 
12,828

 
12,254

Provision for credit losses
518

 
465

 
490

Noninterest expense
7,281

 
7,051

 
7,073

Segment net income
3,435

 
3,470

 
3,222

(in billions)
 
 
 
 
 
Average loans
503.8

 
498.6

 
502.5

Average assets
974.9

 
950.2

 
883.6

Average core deposits
655.6

 
646.9

 
620.2


Community Banking reported net income of $3.4 billion, down $35 million, or 1 percent, from third quarter 2014. Revenue of $12.8 billion was up slightly as higher net interest income, credit card fees, gains on deferred compensation plan investments (offset in employee benefits expense), and a gain on sale of government guaranteed student loans were largely offset by lower market sensitive revenue, mainly lower gains on sale of debt securities and equity investments. Noninterest expense increased $230 million, or 3 percent, from the prior quarter due to higher equipment expense, project spending, and deferred compensation plan expense (offset in trading revenue), partially offset by lower operating losses. The provision for credit losses increased $53 million from the prior quarter.

Net income was up $213 million, or 7 percent, from fourth quarter 2013. Revenue increased $581 million, or 5 percent, from a year ago primarily due to higher net interest income, trust and investment fees, revenue from debit and credit card volumes, gains on sale of debt securities, and a gain on sale of government guaranteed student loans, partially offset by lower gains on equity investments. Noninterest expense increased $208 million, or 3 percent, from a year ago driven by higher personnel expenses and operating losses, partially offset by lower FDIC expense. The provision for credit losses increased $28 million from a year ago as the $232 million improvement in net charge-offs was more than offset by a lower reserve release.



- 9 -

Regional Banking
Retail banking
Primary consumer checking customers6 up 5.2 percent year-over-year7 
Retail Bank household cross-sell ratio of 6.17 products per household, up from 6.16 year-over-year7 
Small Business/Business Banking
Primary business checking customers6 up 5.4 percent year-over-year7 
Combined Business Direct credit card, lines of credit and loan product solutions (primarily under $100,000 sold through our retail banking stores) in 2014 were up 22 percent from 2013
$18 billion in new loan commitments to small business customers (primarily with annual revenues less than $20 million) in 2014
For sixth consecutive year, Wells Fargo was nation's #1 SBA 7(a) small business lender in dollars8 
Online and Mobile Banking
24.8 million active online customers, up 8 percent year-over-year7 
14.1 million active mobile customers, up 19 percent year-over-year7 
Wells Fargo named "Best App" in Money magazine's "Best Banks in America" annual list (October 2014)
Consumer Lending Group
Home Lending
Originations of $44 billion, down from $48 billion in prior quarter
Applications of $66 billion, up from $64 billion in prior quarter
Application pipeline of $26 billion at quarter end, up from $25 billion at September 30, 2014
Residential mortgage servicing portfolio of $1.8 trillion; ratio of MSRs to related loans serviced for others was 75 basis points, compared with 82 basis points in prior quarter
Average note rate on the servicing portfolio was 4.45 percent, compared with 4.47 percent in prior quarter
Consumer Credit
Credit card penetration in retail banking households rose to 41.5 percent7, up from 37.0 percent in prior year
Auto originations of $6.7 billion in fourth quarter, down 1 percent from prior year



- 10 -

Wholesale Banking provides financial solutions to businesses across the United States and globally with annual sales generally in excess of $20 million. Products and business segments include Middle Market Commercial Banking, Government and Institutional Banking, Corporate Banking, Commercial Real Estate, Treasury Management, Wells Fargo Capital Finance, Insurance, International, Real Estate Capital Markets, Commercial Mortgage Servicing, Corporate Trust, Equipment Finance, Wells Fargo Securities, Principal Investments, Asset Backed Finance, and Asset Management.
Selected Financial Information
 
Quarter ended  
 
(in millions)
Dec 31,
2014

 
Sep 30,
2014

 
Dec 31,
2013

Total revenue
$
6,054

 
5,902

 
5,972

Reversal of provision for credit losses
(39
)
 
(85
)
 
(125
)
Noninterest expense
3,307

 
3,250

 
3,020

Segment net income
1,970

 
1,920

 
2,111

(in billions)
 
 
 
 
 
Average loans
326.8

 
316.5

 
294.6

Average assets
573.3

 
553.0

 
509.0

Average core deposits
292.4

 
278.4

 
258.5


Wholesale Banking reported net income of $2.0 billion, up $50 million, or 3 percent, from third quarter 2014. Revenue of $6.1 billion increased $152 million, or 3 percent, from prior quarter. Net interest income increased $97 million, or 3 percent, due to higher loan and other earning asset balances. Noninterest income increased $55 million, or 2 percent, driven by growth in investment banking fees, loan fees and commercial real estate brokerage fees. Noninterest expense increased $57 million, or 2 percent, linked quarter as seasonally higher project spending as well as higher personnel costs were partially offset by seasonally lower insurance commissions. The provision for credit losses increased $46 million from prior quarter due to a reduced level of net recoveries and lower reserve release.

Net income was down $141 million, or 7 percent, from fourth quarter 2013. Revenue increased $82 million, or 1 percent, from fourth quarter 2013 on strong loan and deposit growth, and higher investment banking, treasury management, commercial real estate brokerage and foreign exchange fees, as well as increased gains on equity investments. Noninterest expense increased $287 million, or 10 percent, from a year ago primarily due to expenses related to growth initiatives, compliance, and regulatory requirements. The provision for credit losses increased $86 million from a year ago primarily due to a $72 million lower reserve release.

Average loans increased 11 percent in fourth quarter 2014, compared with fourth quarter 2013, on broad-based growth, including asset-backed finance, capital finance, commercial banking, commercial real estate, corporate banking, equipment finance, government and institutional banking, and real estate capital markets
Cross-sell of 7.2 products per relationship, up from 7.1 in fourth quarter 2013 driven by new product sales to existing customers
Treasury management revenue up 11 percent from fourth quarter 2013
Assets under management of $496 billion, up $9 billion from fourth quarter 2013, including a $5 billion increase in fixed income assets under management reflecting increased market valuations and net inflows
Wells Fargo Insurance was named Best Insurance Broker in North America by Global Finance magazine (January 2015)



- 11 -

Wealth, Brokerage and Retirement provides a full range of financial advisory services to clients using a planning approach to meet each client’s financial needs. Wealth Management provides affluent and high net worth clients with a complete range of wealth management solutions, including financial planning, private banking, credit, investment management and fiduciary services. Abbot Downing, a Wells Fargo business, provides comprehensive wealth management services to ultra high net worth families and individuals as well as endowments and foundations. Brokerage serves customers’ advisory, brokerage and financial needs as part of one of the largest full-service brokerage firms in the United States. Retirement is a national leader in providing institutional retirement and trust services (including 401(k) and pension plan record keeping) for businesses and reinsurance services for the life insurance industry.
Selected Financial Information
 
Quarter ended  
 
(in millions)
Dec 31,
2014

 
Sep 30,
2014

 
Dec 31,
2013

Total revenue
$
3,647

 
3,553

 
3,438

Provision (reversal of provision) for credit losses
8

 
(25
)
 
(11
)
Noninterest expense
2,811

 
2,690

 
2,655

Segment net income
514

 
550

 
491

(in billions)
 
 
 
 
 
Average loans
54.8

 
52.6

 
48.4

Average assets
192.2

 
188.8

 
185.3

Average core deposits
157.0

 
153.6

 
153.9


Wealth, Brokerage and Retirement (WBR) reported net income of $514 million, down $36 million, or 7 percent, from third quarter 2014. Revenue of $3.6 billion increased $94 million from the prior quarter, driven largely by increased net interest income and higher gains on deferred compensation plan investments (offset in compensation expense). Noninterest expense increased $121 million, or 4 percent, from the prior quarter driven primarily by higher deferred compensation plan expense (offset in trading revenue) and higher project spend for technology platform enhancements. The provision for credit losses increased $33 million from third quarter 2014.

Net income was up $23 million, or 5 percent, from fourth quarter 2013. Revenue increased $209 million, or 6 percent, from a year ago as strong growth in asset-based fees and higher net interest income were partially offset by lower gains on deferred compensation plan investments (offset in compensation expense) and lower brokerage transaction revenue. Noninterest expense increased $156 million, or 6 percent, from a year ago primarily due to increased non-personnel expenses, primarily higher FDIC expense, as well as increased broker commissions, partially offset by lower deferred compensation plan expense (offset in trading revenue). The provision for credit losses was up $19 million from a year ago.
Retail Brokerage 
Client assets of $1.4 trillion, up 4 percent from prior year
Managed account assets of $423 billion, increased $48 billion, or 13 percent, from prior year, reflecting net flows and increased market valuations
Strong loan growth, with average balances up 21 percent from prior year largely due to growth in non-conforming mortgages and security-based lending

Wealth Management
Client assets of $225 billion, up 5 percent from prior year



- 12 -

Loan growth, with average balances up 10 percent over prior year predominantly driven by growth in non-conforming mortgages
Retirement
IRA assets of $359 billion, up 5 percent from prior year
Institutional Retirement plan assets of $341 billion, up 2 percent from prior year
WBR cross-sell ratio of 10.49 products per household, up from 10.42 a year ago

Conference Call
The Company will host a live conference call on Wednesday, January 14, at 7 a.m. PST (10 a.m. EST). You may participate by dialing 866-872-5161 (U.S. and Canada) or 706-643-1962 (International). The call will also be available online at wellsfargo.com/invest_relations/earnings and at https://engage.vevent.com/rt/wells_fargo_ao~011415.

A replay of the conference call will be available beginning at 10 a.m. PST (1 p.m. EST) on January 14 through Wednesday, January 21. Please dial 855-859-2056 (U.S. and Canada) or 404-537-3406 (International) and enter Conference ID #36848763. The replay will also be available online at wellsfargo.com/invest_relations/earnings and at https://engage.vevent.com/rt/wells_fargo_ao~011415.



Endnotes
1
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.
2
See table on page 4 for more information on core and non-strategic/liquidating loan portfolios.
3
Reserve release represents the amount by which net charge-offs exceed the provision for credit losses.
4
See tables on page 38 for more information on Common Equity Tier 1. Common Equity Tier 1 (Advanced Approach, fully phased-in) is estimated based on final rules adopted July 2, 2013, by the Federal Reserve Board establishing a new comprehensive capital framework for U.S. banking organizations that would implement the Basel III capital framework and certain provisions of the Dodd-Frank Act.
5
Consists of net gains from trading activities, debt securities and equity investments.
6
Customers who actively use their checking account with transactions such as debit card purchases, online bill payments, and direct deposit.
7
Data as of November 2014, comparisons with November 2013; November 2014 Retail Bank household cross-sell ratio includes the Dillard's credit card portfolio acquisition.
8
U.S. SBA data, federal fiscal years 2009-2014 (year-ending September).




- 13 -

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 releases; (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 levels 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 and return on 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, and the overall 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;
the extent of our success in our loan modification efforts, as well as the effects of regulatory requirements or guidance regarding loan modifications;
the amount of mortgage loan repurchase demands that we receive and our ability to satisfy any such demands without having to repurchase loans related thereto or otherwise indemnify or reimburse third parties, and the credit quality of or losses on such repurchased mortgage loans;
negative effects relating to our mortgage servicing and foreclosure practices, including our obligations under the settlement with the Department of Justice and other federal and state government entities, as well as changes in industry standards or practices, regulatory or judicial requirements, penalties or fines, increased servicing and other costs or obligations, including loan modification requirements, or delays or moratoriums on foreclosures;
our ability to realize our efficiency ratio 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;



- 14 -

the effect of the current low interest rate environment or changes in interest rates on our net interest income, net interest margin and our mortgage originations, mortgage servicing rights and mortgages held for sale;
a recurrence of significant turbulence or 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 investment securities portfolio;
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;
reputational damage from negative publicity, protests, fines, penalties and other negative consequences from regulatory violations and legal actions;
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, 2013.
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, 2013, 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.




- 15 -

About Wells Fargo
Wells Fargo & Company (NYSE: WFC) is a nationwide, diversified, community-based financial services company with $1.7 trillion in assets. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance through more than 8,700 locations, 12,500 ATMs, and the internet (wellsfargo.com), and has offices in 36 countries to support customers who conduct business in the global economy. With approximately 265,000 team members, Wells Fargo serves one in three households in the United States. Wells Fargo & Company was ranked No. 29 on Fortune’s 2014 rankings of America’s largest corporations. Wells Fargo’s vision is to satisfy all our customers’ financial needs and help them succeed financially.
# # #



- 16 -

Wells Fargo & Company and Subsidiaries
QUARTERLY FINANCIAL DATA
TABLE OF CONTENTS
 
 
 
 
Pages
 
 
Summary Information
 
 
 
Income
 
 
 
Balance Sheet
 
 
 
Loans
 
 
 
Equity
 
 
 
Operating Segments
 
 
 
Other
 



- 17 -

Wells Fargo & Company and Subsidiaries
SUMMARY FINANCIAL DATA
 
Quarter ended
 
 
% Change
Dec 31, 2014 from
 
 
Year ended
 
 
 
($ in millions, except per share amounts)
Dec 31,
2014

 
Sep 30,
2014

 
Dec 31,
2013

 
Sep 30,
2014

 
Dec 31,
2013

 
Dec 31,
2014

 
Dec 31,
2013

 
%
Change

For the Period
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Wells Fargo net income
$
5,709

 
5,729

 
5,610

 
 %
 
2

 
$
23,057

 
21,878

 
5
 %
Wells Fargo net income applicable to common stock
5,382

 
5,408

 
5,369

 

 

 
21,821

 
20,889

 
4

Diluted earnings per common share
1.02

 
1.02

 
1.00

 

 
2

 
4.10

 
3.89

 
5

Profitability ratios (annualized):

 
 
 
 
 
 
 
 
 

 
 
 
 
Wells Fargo net income to average assets (ROA) (1)
1.36
%
 
1.40

 
1.48

 
(3
)
 
(8
)
 
1.45

 
1.51

 
(4
)
Wells Fargo net income applicable to common stock to average Wells Fargo common stockholders’ equity (ROE)
12.84

 
13.10

 
13.81

 
(2
)
 
(7
)
 
13.41

 
13.87

 
(3
)
Efficiency ratio (2)
59.0

 
57.7

 
58.5

 
2

 
1

 
58.1

 
58.3

 

Total revenue
$
21,443

 
21,213

 
20,665

 
1

 
4

 
$
84,347

 
83,780

 
1

Pre-tax pre-provision profit (PTPP) (3)
8,796

 
8,965

 
8,580

 
(2
)
 
3

 
35,310

 
34,938

 
1

Dividends declared per common share
0.35

 
0.35

 
0.30

 

 
17

 
1.35

 
1.15

 
17

Average common shares outstanding
5,192.5

 
5,225.9

 
5,270.3

 
(1
)
 
(1
)
 
5,237.2

 
5,287.3

 
(1
)
Diluted average common shares outstanding
5,279.2

 
5,310.4

 
5,358.6

 
(1
)
 
(1
)
 
5,324.4

 
5,371.2

 
(1
)
Average loans (1)
$
849,429

 
833,199

 
813,318

 
2

 
4

 
$
834,432

 
802,670

 
4

Average assets (1)
1,663,760

 
1,617,942

 
1,505,766

 
3

 
10

 
1,593,349

 
1,445,983

 
10

Average core deposits (4)
1,035,999

 
1,012,219

 
965,828

 
2

 
7

 
1,003,631

 
942,120

 
7

Average retail core deposits (5)
714,572

 
703,062

 
679,355

 
2

 
5

 
701,829

 
669,657

 
5

Net interest margin (1)
3.04
%
 
3.06

 
3.27

 
(1
)
 
(7
)
 
3.11

 
3.40

 
(9
)
At Period End
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment securities
$
312,925

 
289,009

 
264,353

 
8

 
18

 
$
312,925

 
264,353

 
18

Loans (1)
862,551

 
838,883

 
822,286

 
3

 
5

 
862,551

 
822,286

 
5

Allowance for loan losses
12,319

 
12,681

 
14,502

 
(3
)
 
(15
)
 
12,319

 
14,502

 
(15
)
Goodwill
25,705

 
25,705

 
25,637

 

 

 
25,705

 
25,637

 

Assets (1)
1,687,155

 
1,636,855

 
1,523,502

 
3

 
11

 
1,687,155

 
1,523,502

 
11

Core deposits (4)
1,054,348

 
1,016,478

 
980,063

 
4

 
8

 
1,054,348

 
980,063

 
8

Wells Fargo stockholders’ equity
184,394

 
182,481

 
170,142

 
1

 
8

 
184,394

 
170,142

 
8

Total equity
185,262

 
182,990

 
171,008

 
1

 
8

 
185,262

 
171,008

 
8

Capital ratios:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total equity to assets (1) 
10.98
%
 
11.18

 
11.22

 
(2
)
 
(2
)
 
10.98

 
11.22

 
(2
)
Risk-based capital (6):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tier 1 capital
12.45

 
12.55

 
12.33

 
(1
)
 
1

 
12.45

 
12.33

 
1

Total capital
15.54

 
15.58

 
15.43

 

 
1

 
15.54

 
15.43

 
1

Tier 1 leverage (6)
9.45

 
9.64

 
9.60

 
(2
)
 
(2
)
 
9.45

 
9.60

 
(2
)
Common Equity Tier 1 (6)(7)
11.04

 
11.11

 
10.82

 
(1
)
 
2

 
11.04

 
10.82

 
2

Common shares outstanding
5,170.3

 
5,215.0

 
5,257.2

 
(1
)
 
(2
)
 
5,170.3

 
5,257.2

 
(2
)
Book value per common share
$
32.19

 
31.55

 
29.48

 
2

 
9

 
$
32.19

 
29.48

 
9

Common stock price:

 
 
 
 
 
 
 
 
 
 
 
 
 
 
High
55.95

 
53.80

 
45.64

 
4

 
23

 
55.95

 
45.64

 
23

Low
46.44

 
49.47

 
40.07

 
(6
)
 
16

 
44.17

 
34.43

 
28

Period end
54.82

 
51.87

 
45.40

 
6

 
21

 
54.82

 
45.40

 
21

Team members (active, full-time equivalent)
264,500

 
263,900

 
264,900

 

 

 
264,500

 
264,900

 

 
(1)
Financial information for certain periods prior to 2014 was revised to reflect our determination that certain factoring arrangements did not qualify as loans. Accordingly, we revised our commercial loan balances for year-end 2012 and each of the quarters in 2013 in order to present the Company’s lending trends on a comparable basis over this period. This revision, which resulted in a reduction to total commercial loans and a corresponding decrease to other liabilities, did not impact the Company’s consolidated net income or total cash flows. We reduced our commercial loans by $3.5 billion, $3.2 billion, $2.1 billion, $1.6 billion, and $1.2 billion at December 31, September 30, June 30, and March 31, 2013, and December 31, 2012, respectively, which represented less than 1% of total commercial loans and less than 0.5% of our total loan portfolio. Other affected financial information, including financial guarantees and financial ratios, has been appropriately revised to reflect this revision.
(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)
Core deposits are noninterest-bearing deposits, interest-bearing checking, savings certificates, certain market rate and other savings, and certain foreign deposits (Eurodollar sweep balances).
(5)
Retail core deposits are total core deposits excluding Wholesale Banking core deposits and retail mortgage escrow deposits.
(6)
The December 31, 2014, ratios are preliminary.
(7)
See the “Five Quarter Risk-Based Capital Components” table for additional information.



- 18 -

Wells Fargo & Company and Subsidiaries
FIVE QUARTER SUMMARY FINANCIAL DATA
 
Quarter ended
 
($ in millions, except per share amounts)
Dec 31,
2014

 
Sep 30,
2014

 
Jun 30,
2014

 
Mar 31,
2014

 
Dec 31,
2013

For the Quarter
 
 
 
 
 
 
 
 
 
Wells Fargo net income
$
5,709

 
5,729

 
5,726

 
5,893

 
5,610

Wells Fargo net income applicable to common stock
5,382

 
5,408

 
5,424

 
5,607

 
5,369

Diluted earnings per common share
1.02

 
1.02

 
1.01

 
1.05

 
1.00

Profitability ratios (annualized):

 

 

 

 

Wells Fargo net income to average assets (ROA) (1)
1.36
%
 
1.40

 
1.47

 
1.57

 
1.48

Wells Fargo net income applicable to common stock to average Wells Fargo common stockholders’ equity (ROE)
12.84

 
13.10

 
13.40

 
14.35

 
13.81

Efficiency ratio (2)
59.0

 
57.7

 
57.9

 
57.9

 
58.5

Total revenue
$
21,443

 
21,213

 
21,066

 
20,625

 
20,665

Pre-tax pre-provision profit (PTPP) (3)
8,796

 
8,965

 
8,872

 
8,677

 
8,580

Dividends declared per common share
0.35

 
0.35

 
0.35

 
0.30

 
0.30

Average common shares outstanding
5,192.5

 
5,225.9

 
5,268.4

 
5,262.8

 
5,270.3

Diluted average common shares outstanding
5,279.2

 
5,310.4

 
5,350.8

 
5,353.3

 
5,358.6

Average loans (1)
849,429

 
833,199

 
831,043

 
823,790

 
813,318

Average assets (1)
1,663,760

 
1,617,942

 
1,564,003

 
1,525,905

 
1,505,766

Average core deposits (4)
1,035,999

 
1,012,219

 
991,727

 
973,801

 
965,828

Average retail core deposits (5)
714,572

 
703,062

 
698,763

 
690,643

 
679,355

Net interest margin (1)
3.04
%
 
3.06

 
3.15

 
3.20

 
3.27

At Quarter End
 
 
 
 
 
 
 
 
 
Investment securities
$
312,925

 
289,009

 
279,069

 
270,327

 
264,353

Loans (1)
862,551

 
838,883

 
828,942

 
826,443

 
822,286

Allowance for loan losses
12,319

 
12,681

 
13,101

 
13,695

 
14,502

Goodwill
25,705

 
25,705

 
25,705

 
25,637

 
25,637

Assets (1)
1,687,155

 
1,636,855

 
1,598,874

 
1,546,707

 
1,523,502

Core deposits (4)
1,054,348

 
1,016,478

 
1,007,485

 
994,185

 
980,063

Wells Fargo stockholders’ equity
184,394

 
182,481

 
180,859

 
175,654

 
170,142

Total equity
185,262

 
182,990

 
181,549

 
176,469

 
171,008

Capital ratios:
 
 
 
 
 
 
 
 
 
Total equity to assets (1)
10.98
%
 
11.18

 
11.35

 
11.41

 
11.22

Risk-based capital (6):
 
 
 
 
 
 
 
 
 
Tier 1 capital
12.45

 
12.55

 
12.72

 
12.63

 
12.33

Total capital
15.54

 
15.58

 
15.89

 
15.71

 
15.43

Tier 1 leverage (6)
9.45

 
9.64

 
9.86

 
9.84

 
9.60

Common Equity Tier 1 (6)(7)
11.04

 
11.11

 
11.31

 
11.36

 
10.82

Common shares outstanding
5,170.3

 
5,215.0

 
5,249.9

 
5,265.7

 
5,257.2

Book value per common share
$
32.19

 
31.55

 
31.18

 
30.48

 
29.48

Common stock price:
 
 
 
 
 
 
 
 
 
High
55.95

 
53.80

 
53.05

 
49.97

 
45.64

Low
46.44

 
49.47

 
46.72

 
44.17

 
40.07

Period end
54.82

 
51.87

 
52.56

 
49.74

 
45.40

Team members (active, full-time equivalent)
264,500

 
263,900

 
263,500

 
265,300

 
264,900

 
(1)
Financial information for certain periods prior to 2014 was revised to reflect our determination that certain factoring arrangements did not qualify as loans. See footnote (1) to the Summary Financial Data table on page 17 for more information.
(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)
Core deposits are noninterest-bearing deposits, interest-bearing checking, savings certificates, certain market rate and other savings, and certain foreign deposits (Eurodollar sweep balances).
(5)
Retail core deposits are total core deposits excluding Wholesale Banking core deposits and retail mortgage escrow deposits.
(6)
The December 31, 2014, ratios are preliminary.
(7)
See the “Five Quarter Risk-Based Capital Components” table for additional information.



- 19 -

Wells Fargo & Company and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
 
Quarter ended Dec 31,
 
 
%

 
Year ended Dec 31,
 
 
%

(in millions, except per share amounts)
2014

 
2013

 
Change

 
2014

 
2013

 
Change

Interest income
 
 
 
 
 
 
 
 
 
 
 
Trading assets
$
477

 
378

 
26
 %
 
$
1,685

 
1,376

 
22
 %
Investment securities
2,150

 
2,119

 
1

 
8,438

 
8,116

 
4

Mortgages held for sale
187

 
221

 
(15
)
 
767

 
1,290

 
(41
)
Loans held for sale
25

 
3

 
733

 
78

 
13

 
500

Loans
9,091

 
8,907

 
2

 
35,652

 
35,571

 

Other interest income
253

 
208

 
22

 
932

 
723

 
29

Total interest income
12,183

 
11,836

 
3

 
47,552

 
47,089

 
1

Interest expense
 
 
 
 
 
 
 
 
 
 
 
Deposits
269

 
297

 
(9
)
 
1,096

 
1,337

 
(18
)
Short-term borrowings
18

 
14

 
29

 
59

 
60

 
(2
)
Long-term debt
620

 
635

 
(2
)
 
2,488

 
2,585

 
(4
)
Other interest expense
96

 
87

 
10

 
382

 
307

 
24

Total interest expense
1,003

 
1,033

 
(3
)
 
4,025

 
4,289

 
(6
)
Net interest income
11,180

 
10,803

 
3

 
43,527

 
42,800

 
2

Provision for credit losses
485

 
363

 
34

 
1,395

 
2,309

 
(40
)
Net interest income after provision for credit losses
10,695

 
10,440

 
2

 
42,132

 
40,491

 
4

Noninterest income
 
 
 
 
 
 
 
 
 
 
 
Service charges on deposit accounts
1,241

 
1,283

 
(3
)
 
5,050

 
5,023

 
1

Trust and investment fees
3,705

 
3,458

 
7

 
14,280

 
13,430

 
6

Card fees
925

 
827

 
12

 
3,431

 
3,191

 
8

Other fees
1,124

 
1,119

 

 
4,349

 
4,340

 

Mortgage banking
1,515

 
1,570

 
(4
)
 
6,381

 
8,774

 
(27
)
Insurance
382

 
453

 
(16
)
 
1,655

 
1,814

 
(9
)
Net gains from trading activities
179

 
325

 
(45
)
 
1,161

 
1,623

 
(28
)
Net gains (losses) on debt securities
186

 
(14
)
 
NM

 
593

 
(29
)
 
NM

Net gains from equity investments
372

 
654

 
(43
)
 
2,380

 
1,472

 
62

Lease income
127

 
148

 
(14
)
 
526

 
663

 
(21
)
Other
507

 
39

 
NM

 
1,014

 
679

 
49

Total noninterest income
10,263

 
9,862

 
4

 
40,820

 
40,980

 

Noninterest expense
 
 
 
 
 
 
 
 
 
 
 
Salaries
3,938

 
3,811

 
3

 
15,375

 
15,152

 
1

Commission and incentive compensation
2,582

 
2,347

 
10

 
9,970

 
9,951

 

Employee benefits
1,124

 
1,160

 
(3
)
 
4,597

 
5,033

 
(9
)
Equipment
581

 
567

 
2

 
1,973

 
1,984

 
(1
)
Net occupancy
730

 
732

 

 
2,925

 
2,895

 
1

Core deposit and other intangibles
338

 
375

 
(10
)
 
1,370

 
1,504

 
(9
)
FDIC and other deposit assessments
231

 
196

 
18

 
928

 
961

 
(3
)
Other
3,123

 
2,897

 
8

 
11,899

 
11,362

 
5

Total noninterest expense
12,647

 
12,085

 
5

 
49,037

 
48,842

 

Income before income tax expense
8,311

 
8,217

 
1

 
33,915

 
32,629

 
4

Income tax expense
2,519

 
2,504

 
1

 
10,307

 
10,405

 
(1
)
Net income before noncontrolling interests
5,792

 
5,713

 
1

 
23,608

 
22,224

 
6

Less: Net income from noncontrolling interests
83

 
103

 
(19
)
 
551

 
346

 
59

Wells Fargo net income
$
5,709

 
5,610

 
2

 
$
23,057

 
21,878

 
5

Less: Preferred stock dividends and other
327

 
241

 
36

 
1,236

 
989

 
25

Wells Fargo net income applicable to common stock
$
5,382

 
5,369

 

 
$
21,821

 
20,889

 
4

Per share information
 
 
 
 
 
 
 
 
 
 
 
Earnings per common share
$
1.04

 
1.02

 
2

 
$
4.17

 
3.95

 
6

Diluted earnings per common share
1.02

 
1.00

 
2

 
4.10

 
3.89

 
5

Dividends declared per common share
0.35

 
0.30