EX-99.1 2 wfc1qer4-13x2017exx991.htm EXHIBIT 99.1 Exhibit
Exhibit 99.1


 
wfc011415ex991pg001aa10.jpg
wfc011415ex991pg001ba10.jpg
 
 
 
 
 
 
Media
 
Investors
 
 
 
 
Ancel Martinez
 
Jim Rowe
 
 
 
 
415-222-3858
 
415-396-8216
Thursday, April 13, 2017
WELLS FARGO REPORTS $5.5 BILLION IN QUARTERLY NET INCOME;
Diluted EPS of $1.00; Revenue of $22.0 billion

Solid financial results:
Net income of $5.5 billion, in line with first quarter 2016
Diluted earnings per share (EPS) of $1.00, compared with $0.99
Revenue of $22.0 billion
Net interest income of $12.3 billion, up $633 million, or 5 percent
Total average deposits of $1.3 trillion, up $79.8 billion, or 7 percent, from first quarter 2016
Total average loans of $963.6 billion, up $36.4 billion, or 4 percent
Quarter-end loans of $958.4 billion, up $11.1 billion, or 1 percent
Return on assets (ROA) of 1.15 percent and return on equity (ROE) of 11.54 percent
Improved credit quality:
Provision expense of $605 million, down $481 million, or 44 percent, from first quarter 2016
Net charge-offs of $805 million, down $81 million
Net charge-offs were 0.34 percent of average loans (annualized), down from 0.38 percent
Reserve release1 of $200 million
Nonaccrual loans of $9.8 billion, down $2.5 billion, or 20 percent
Strong capital position:
Common Equity Tier 1 ratio (fully phased-in) of 11.2 percent2
Period-end common shares outstanding down 79.2 million from first quarter 2016
Returned $3.1 billion to shareholders in the first quarter through common stock dividends and net share repurchases

1 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.
2 See table on page 33 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.




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Selected Financial Information
 
 
 
Quarter ended
 
 
Mar 31,
2017

 
Dec 31,
2016

 
Mar 31,
2016

Earnings
 
 
 
 
 
Diluted earnings per common share
$
1.00

 
0.96

 
0.99

Wells Fargo net income (in billions)
5.46

 
5.27

 
5.46

Return on assets (ROA)
1.15
%
 
1.08

 
1.21

Return on equity (ROE)
11.54

 
10.94

 
11.75

Return on average tangible common equity (ROTCE)(a)
13.85

 
13.16

 
14.15

Asset Quality
 
 
 
 
 
Net charge-offs (annualized) as a % of average total loans
0.34
%
 
0.37

 
0.38

Allowance for credit losses as a % of total loans
1.28

 
1.30

 
1.34

Allowance for credit losses as a % of annualized net charge-offs
376

 
348

 
355

Other
 
 
 
 
 
Revenue (in billions)
$
22.0

 
21.6

 
22.2

Efficiency ratio (b)
62.7
%
 
61.2

 
58.7

Average loans (in billions)
$
963.6

 
964.1

 
927.2

Average deposits (in billions)
1,299.2

 
1,284.2

 
1,219.4

Net interest margin
2.87
%
 
2.87

 
2.90

(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 investments 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 32.
(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 $5.5 billion, or $1.00 per diluted common share, for first quarter 2017, compared with $5.5 billion, or $0.99 per share, for first quarter 2016, and $5.3 billion, or $0.96 per share, for fourth quarter 2016.

Chief Executive Officer Tim Sloan said, "Wells Fargo continued to make meaningful progress in the first quarter in rebuilding trust with customers and other important stakeholders, while producing solid financial results. We have taken significant actions throughout the company to date and we are committed to building a better bank as we move Wells Fargo forward. Earlier this week, the independent directors of Wells Fargo’s Board of Directors issued a report on their investigation into the company's retail banking sales practices. The findings are valuable to us and beneficial in helping to identify areas for further improvement. While we have more work to do, I am pleased with all we have accomplished thus far. Our 273,000 team members have remained committed to helping our customers succeed financially, as reflected in improved retail customer service scores, record levels of deposits, more primary consumer checking customers, record client assets in Wealth and Investment Management, and industry-leading mortgage originations."

Chief Financial Officer John Shrewsberry said, “Our diversified business model generated higher revenue and net income compared with last quarter, as well as higher ROA and ROE. Expenses were elevated compared with last quarter, driven by typically-higher first quarter personnel-related expenses. Credit results improved, with lower net charge-offs and nonaccrual loans, and we benefited from lower income tax expense. The balance sheet remained strong with high levels of capital and liquidity, and record deposits. We ended first quarter with Common Equity



- 3 -

Tier 1 (fully phased-in) of $148.7 billion, or a Common Equity Tier 1 ratio (fully phased-in) of 11.2 percent2, and returned $3.1 billion to shareholders during the quarter, for a net payout ratio3 of 61 percent."

Net Interest Income
Net interest income in first quarter 2017 decreased $102 million from fourth quarter 2016 to $12.3 billion, primarily due to two fewer days in the quarter. The impact of balance declines in trading assets and mortgages held-for-sale, as well as lower income from variable sources, was offset by average balance growth in investment securities and the benefit from higher interest rates in the quarter.

Net interest margin was 2.87 percent, stable with fourth quarter 2016. The benefit of higher interest rates, a reduction in short-term market funding, and average balance growth in investment securities was offset by lower income from trading assets and mortgages held-for-sale, higher deposit and long-term debt balances, and lower income from variable sources.

Noninterest Income
Noninterest income in the first quarter was $9.7 billion, up from $9.2 billion in fourth quarter 2016, driven by higher other income and higher market-sensitive revenue, particularly in trading. These increases were partially offset by lower mortgage banking income, investment banking fees and commercial real estate brokerage commissions.
Net gain from trading activities was $439 million in the first quarter, compared with a net loss of $109 million in the fourth quarter. Results in the first quarter were driven by higher secondary trading, as well as higher deferred compensation plan investment results (offset in employee benefits expense).
Mortgage banking noninterest income was $1.2 billion, compared with $1.4 billion in fourth quarter 2016. As expected, residential mortgage loan originations declined in the first quarter, down to $44 billion, from $72 billion in the fourth quarter. The production margin on residential held-for-sale mortgage loan originations4 was 1.68 percent, in line with the fourth quarter. Mortgage servicing income increased to $456 million in the first quarter from $196 million in the fourth quarter, primarily due to lower unreimbursed servicing costs and lower prepayments.
Other income was $145 million, compared with $(382) million in the fourth quarter. First quarter 2017 included a $(193) million net hedge ineffectiveness accounting impact, resulting largely from foreign currency fluctuations, compared with a $(592) million net hedge ineffectiveness accounting impact in the fourth quarter, which reflected both an increase in interest rates and foreign currency fluctuations.

Noninterest Expense
Noninterest expense in the first quarter was $13.8 billion, compared with $13.2 billion in fourth quarter 2016. First quarter expenses included $790 million of seasonally higher employee benefits and incentive compensation expense, and an increase in deferred compensation expense (included in employee benefits expense and offset in revenue), partially offset by lower outside professional services, equipment, and advertising and promotion
3 Net payout ratio means the ratio of (i) common stock dividends and share repurchases less issuances and stock compensation-related items, divided by (ii) net income applicable to common stock.
4 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 38 for more information.



- 4 -

expenses, which typically decline in first quarter. The efficiency ratio increased to 62.7 percent in first quarter 2017, compared with 61.2 percent in the prior quarter. The Company currently expects the efficiency ratio to remain elevated.

Income Taxes
The Company’s effective income tax rate was 27.4 percent for first quarter 2017, compared with 30.0 percent in the prior quarter. The effective tax rate for the first quarter included discrete tax benefits totaling $197 million, of which $183 million resulted from tax benefits associated with stock compensation activity during the quarter which was subject to ASU 2016-09 accounting guidance adopted in first quarter 2017. The Company currently expects the full year 2017 tax rate to be approximately 30 percent.
Loans
Total average loans were $963.6 billion in the first quarter, down $502 million from the fourth quarter. Period-end loan balances were $958.4 billion at March 31, 2017, down $9.2 billion from December 31, 2016, driven by a decline in credit card balances due to seasonality, a slowdown in new credit card account openings, and a continued decline in junior lien mortgage loans. In addition, there was an expected decline in auto loans from the fourth quarter as continued proactive steps to tighten underwriting standards resulted in lower origination volume.
Period-End Loan Balances
(in millions)
Mar 31,
2017

 
Dec 31,
2016

 
Sep 30,
2016

 
Jun 30,
2016

 
Mar 31,
2016

Commercial
$
505,004

 
506,536

 
496,454

 
494,538

 
488,205

Consumer
453,401

 
461,068

 
464,872

 
462,619

 
459,053

Total loans
$
958,405

 
967,604

 
961,326

 
957,157

 
947,258

Change from prior quarter
$
(9,199
)
 
6,278

 
4,169

 
9,899

 
30,699


Cash, Cash Equivalents and Investment Securities
Cash, federal funds sold, securities purchased under resale agreements and other short-term investments reached an all-time high of $328.4 billion at March 31, 2017, up $41.7 billion from the fourth quarter, driven by deposit growth and a linked-quarter decline in the loan portfolio. Investment securities were $407.6 billion at March 31, 2017, down $387 million from the fourth quarter, as approximately $16 billion of purchases were more than offset by run-off and sales.

Net unrealized losses on available-for-sale securities were $1.2 billion at March 31, 2017, compared with net unrealized losses on available-for-sale securities of $1.8 billion at December 31, 2016, primarily due to tighter credit spreads during the quarter and a modest benefit from lower long-term interest rates.

Deposits
Total average deposits for first quarter 2017 were $1.3 trillion, up 1 percent from the prior quarter, driven by growth in consumer and small business, as well as commercial. The average deposit cost for first quarter 2017 was 17 basis points, up 5 basis points from the prior quarter and 7 basis points from a year ago, primarily driven by an increase in commercial deposit rates.



- 5 -

Capital
Capital levels remained strong in the first quarter, with a Common Equity Tier 1 ratio (fully phased-in) of 11.2 percent2, compared with 10.8 percent in the prior quarter. In first quarter 2017, the Company repurchased 53.1 million shares of its common stock, which reduced period-end common shares outstanding by 19.4 million after taking into account seasonally higher common stock issuances to employee benefit plans. The Company paid a quarterly common stock dividend of $0.38 per share, up from $0.375 per share a year ago.

Credit Quality
"First quarter credit results reflected strong performance in our commercial portfolios and consumer real estate portfolios," said Chief Risk Officer Mike Loughlin. "Improvement in the oil and gas portfolio, as well as continued improvement in residential real estate, drove a $200 million reserve release1 in the quarter."

Net Loan Charge-offs
The quarterly loss rate of 0.34 percent (annualized) reflected commercial losses of 0.11 percent and consumer losses of 0.59 percent. Credit losses were $805 million in first quarter 2017, down $100 million from fourth quarter 2016. Consumer losses increased $8 million, driven by higher credit card losses, predominantly offset by lower losses in 1-4 family junior lien mortgage and other revolving credit and installment portfolios. Commercial losses were down $108 million driven by lower oil and gas losses and increased recoveries.
Net Loan Charge-Offs
 
Quarter ended
 
 
March 31, 2017
 
 
December 31, 2016
 
 
September 30, 2016
 
($ 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
$
171

 
0.21
 %
 
$
256

 
0.31
 %
 
$
259

 
0.32
 %
Real estate mortgage
(25
)
 
(0.08
)
 
(12
)
 
(0.04
)
 
(28
)
 
(0.09
)
Real estate construction
(8
)
 
(0.15
)
 
(8
)
 
(0.13
)
 
(18
)
 
(0.32
)
Lease financing
5

 
0.11

 
15

 
0.32

 
2

 
0.04

Total commercial
143

 
0.11

 
251

 
0.20

 
215

 
0.17

Consumer:
 
 
 
 
 
 
 
 
 
 
 
Real estate 1-4 family first mortgage
7

 
0.01

 
(3
)
 

 
20

 
0.03

Real estate 1-4 family junior lien mortgage
23

 
0.21

 
44

 
0.38

 
49

 
0.40

Credit card
309

 
3.54

 
275

 
3.09

 
245

 
2.82

Automobile
167

 
1.10

 
166

 
1.05

 
137

 
0.87

Other revolving credit and installment
156

 
1.60

 
172

 
1.70

 
139

 
1.40

Total consumer
662

 
0.59

 
654

 
0.56

 
590

 
0.51

Total
$
805

 
0.34
 %
 
$
905

 
0.37
 %
 
$
805

 
0.33
 %
 
 
 
 
 
 
 
 
 
 
 
 
(a)
Quarterly net charge-offs as a percentage of average loans are annualized. See explanation on page 29 of the accounting for purchased credit-impaired (PCI) loans and the impact on selected financial ratios.



- 6 -

Nonperforming Assets
Nonperforming assets decreased $698 million from fourth quarter 2016 to $10.7 billion. Nonaccrual loans decreased $625 million from fourth quarter to $9.8 billion reflecting declines across all major commercial asset classes, as well as continued lower consumer real estate nonaccruals.

Nonperforming Assets (Nonaccrual Loans and Foreclosed Assets)
 
March 31, 2017
 
 
December 31, 2016
 
 
September 30, 2016
 
($ 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
$
2,898

 
0.88
%
 
$
3,216

 
0.97
%
 
$
3,331

 
1.03
%
Real estate mortgage
672

 
0.51

 
685

 
0.52

 
780

 
0.60

Real estate construction
40

 
0.16

 
43

 
0.18

 
59

 
0.25

Lease financing
96

 
0.50

 
115

 
0.60

 
92

 
0.49

Total commercial
3,706

 
0.73

 
4,059

 
0.80

 
4,262

 
0.86

Consumer:
 
 
 
 
 
 
 
 
 
 
 
Real estate 1-4 family first mortgage
4,743

 
1.73

 
4,962

 
1.80

 
5,310

 
1.91

Real estate 1-4 family junior lien mortgage
1,153

 
2.60

 
1,206

 
2.61

 
1,259

 
2.62

Automobile
101

 
0.17

 
106

 
0.17

 
108

 
0.17

Other revolving credit and installment
56

 
0.14

 
51

 
0.13

 
47

 
0.12

Total consumer
6,053

 
1.34

 
6,325

 
1.37

 
6,724

 
1.45

Total nonaccrual loans
9,759

 
1.02

 
10,384

 
1.07

 
10,986

 
1.14

Foreclosed assets:
 
 
 
 
 
 
 
 
 
 
 
Government insured/guaranteed
179

 
 
 
197

 
 
 
282

 
 
Non-government insured/guaranteed
726

 
 
 
781

 
 
 
738

 
 
Total foreclosed assets
905

 
 
 
978

 
 
 
1,020

 
 
Total nonperforming assets
$
10,664

 
1.11
%
 
$
11,362

 
1.17
%
 
$
12,006

 
1.25
%
Change from prior quarter:
 
 
 
 
 
 
 
 
 
 
 
Total nonaccrual loans
$
(625
)
 
 
 
$
(602
)
 
 
 
$
(977
)
 
 
Total nonperforming assets
(698
)
 
 
 
(644
)
 
 
 
(1,074
)
 
 
 

Allowance for Credit Losses
The allowance for credit losses, including the allowance for unfunded commitments, totaled $12.3 billion at March 31, 2017, which was down $253 million from December 31, 2016. The allowance coverage for total loans was 1.28 percent, compared with 1.30 percent in fourth quarter 2016. The allowance covered 3.8 times annualized first quarter net charge-offs, compared with 3.5 times in the prior quarter. The allowance coverage for nonaccrual loans was 126 percent at March 31, 2017, compared with 121 percent at December 31, 2016. “We believe the allowance was appropriate for losses inherent in the loan portfolio at March 31, 2017,” said Loughlin.

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)
Mar 31,
2017

 
Dec 31,
2016

 
Mar 31,
2016

Community Banking
$
3,009

 
2,733

 
3,296

Wholesale Banking
2,115

 
2,194

 
1,921

Wealth and Investment Management
623

 
653

 
512




- 7 -

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)
Mar 31,
2017

 
Dec 31,
2016

 
Mar 31,
2016

Total revenue
$
12,093

 
11,661

 
12,614

Provision for credit losses
646

 
631

 
720

Noninterest expense
7,221

 
6,985

 
6,836

Segment net income
3,009

 
2,733

 
3,296

(in billions)
 
 
 
 
 
Average loans
482.7

 
488.1

 
484.3

Average assets
990.7

 
1,000.7

 
947.4

Average deposits
717.2

 
709.8

 
683.0


Community Banking reported net income of $3.0 billion, up $276 million, or 10 percent, from fourth quarter 2016. Revenue of $12.1 billion increased $432 million, or 4 percent, from fourth quarter 2016, driven by higher other income (reflecting the accounting impact of net hedge ineffectiveness), gains on equity investments, and net interest income, partially offset by lower mortgage banking revenue and gains on sales of debt securities. Noninterest expense increased $236 million, compared with fourth quarter 2016, due to seasonally higher personnel expense and higher deferred compensation plan expense (offset in trading revenue), partially offset by lower professional services, equipment, and advertising expense.
Net income was down $287 million, or 9 percent, from first quarter 2016. Revenue decreased $521 million, or 4 percent, compared with a year ago due to lower other income (reflecting the accounting impact of net hedge ineffectiveness), mortgage banking revenue, and gains on sales of debt securities, partially offset by higher gains on equity investments, net interest income, and deferred compensation plan investments (offset in employee benefits expense). Noninterest expense increased $385 million, or 6 percent, from a year ago driven by higher personnel, deferred compensation plan expense (offset in trading revenue), professional services, and equipment expense, partially offset by lower operating losses and other expense. The provision for credit losses decreased $74 million from a year ago primarily due to improvement in the consumer real estate portfolios.

Retail Banking and Consumer Payments
With over 400,000 branch customer experience surveys completed, ‘Overall Satisfaction with Most Recent Visit’ and ‘Loyalty’ scores continued to improve each month in the first quarter
Primary consumer checking customers5 in March up 1.6 percent year-over-year
Debit card purchase volume6 of $75.7 billion in first quarter, up 4 percent year-over-year
Credit card purchase volume of $17.9 billion in first quarter, up 3 percent year-over-year
5 Customers who actively use their checking account with transactions such as debit card purchases, online bill payments, and direct deposit.
6 Combined consumer and business debit card purchase volume dollars.



- 8 -

Credit card penetration in retail banking households rose to 45.5 percent, up 19 basis points year-over-year7,8
28.1 million digital (online and mobile) active customers in March, including 20.3 million mobile active users9
#1 overall performance in Keynote Mobile Banking Scorecard; also best in “Functionality,” “Quality & Availability” and “Best App & Mobile Web Experiences” (March 2017)
First large bank in the U.S. to offer card-free account access through One-Time Access Code mobile technology at all 13,000 ATMs
Consumer Lending
Auto originations of $5.5 billion in first quarter, down 15 percent from prior quarter and down 29 percent from prior year, as continued proactive steps to tighten underwriting standards resulted in lower origination volume
Home Lending
Originations of $44 billion, down from $72 billion in prior quarter
Applications of $59 billion, down from $75 billion in prior quarter
Application pipeline of $28 billion at quarter end, down from $30 billion at December 31, 2016

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 Business Banking, 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 and Asset Backed Finance.
Selected Financial Information
 
Quarter ended
 
(in millions)
Mar 31,
2017

 
Dec 31,
2016

 
Mar 31,
2016

Total revenue
$
7,038

 
7,153

 
6,958

Provision (reversal of provision) for credit losses
(43
)
 
168

 
363

Noninterest expense
4,225

 
4,002

 
3,968

Segment net income
2,115

 
2,194

 
1,921

(in billions)
 
 
 
 
 
Average loans
466.3

 
461.5

 
429.8

Average assets
807.8

 
811.9

 
748.6

Average deposits
466.0

 
459.2

 
428.0


Wholesale Banking reported net income of $2.1 billion, down $79 million, or 4 percent, from fourth quarter 2016. Revenue of $7.0 billion decreased $115 million, or 2 percent, from the prior quarter. Net interest income decreased $175 million, or 4 percent, as loan growth was more than offset by lower trading-related interest income as well as the impact of two fewer days in the quarter. Noninterest income increased $60 million, or 2 percent, as strong customer accommodation trading results were partially offset by lower investment banking and commercial real estate brokerage fees. Noninterest expense increased $223 million, or 6 percent, from the prior quarter due to
7 Data as of February 2017, comparisons with February 2016.
8 Credit card penetration defined as the percentage of Retail Banking households that have a credit card with Wells Fargo. Effective second
quarter 2016, Retail Banking households reflect only those households that maintain a retail checking account, which we believe provides the
foundation for long-term retail banking relationships. Prior period metrics have been revised to conform with the updated definition of Retail Banking households. Credit card household penetration rates have not been adjusted to reflect the impact of the approximately 565,000 potentially unauthorized accounts identified by an independent consulting firm because the maximum impact in any one quarter was not greater than 86 basis points, or approximately 2 percent.
9 Primarily includes retail banking, consumer lending, small business and business banking customers.



- 9 -

seasonally higher personnel expenses. The provision for credit losses decreased $211 million from the prior quarter, primarily due to improvements in the oil and gas portfolio.
Net income increased $194 million, or 10 percent, from first quarter 2016. Revenue increased $80 million, or 1 percent, from first quarter 2016, driven by a $400 million increase in net interest income primarily related to loan growth including the GE Capital portfolio acquisitions. Noninterest income decreased $320 million, or 10 percent, primarily due to the first quarter 2016 sale of our crop insurance business which resulted in lower insurance and gain on sale income, partially offset by higher investment banking fees, customer accommodation trading, and lease income related to the GE Capital portfolio acquisitions. Noninterest expense increased $257 million, or 6 percent, from a year ago primarily due to the GE Capital portfolio acquisitions and higher expenses related to growth initiatives, compliance, and regulatory requirements. The provision for credit losses decreased $406 million from a year ago primarily due to improvements in the oil and gas portfolio.

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 customers’ brokerage needs, supply retirement and trust services to institutional clients and provide investment management capabilities delivered to global institutional clients through separate accounts and the Wells Fargo Funds.
Selected Financial Information
 
Quarter ended
 
(in millions)
Mar 31,
2017

 
Dec 31,
2016

 
Mar 31,
2016

Total revenue
$
4,193

 
4,074

 
3,854

Provision (reversal of provision) for credit losses
(4
)
 
3

 
(14
)
Noninterest expense
3,206

 
3,042

 
3,042

Segment net income
623

 
653

 
512

(in billions)
 
 
 
 
 
Average loans
70.7

 
70.0

 
64.1

Average assets
221.9

 
220.4

 
208.1

Average deposits
195.6

 
194.9

 
184.5


Wealth and Investment Management reported net income of $623 million, down $30 million, or 5 percent, from fourth quarter 2016. Revenue of $4.2 billion increased $119 million, or 3 percent, from the prior quarter, primarily due to higher gains on deferred compensation plan investments (offset in employee benefits expense), other fee income, and net interest income. Noninterest expense increased $164 million, or 5 percent, from the prior quarter, primarily driven by seasonally higher personnel expenses and deferred compensation plan expense (offset in trading revenue).
Net income was up $111 million, or 22 percent, from first quarter 2016. Revenue increased $339 million, or 9 percent, from a year ago primarily driven by higher net interest income, asset-based fees, deferred compensation plan investments (offset in employee benefits expense), and other fee income. Noninterest expense increased $164 million, or 5 percent, from a year ago, primarily due to higher non-personnel expenses, deferred compensation plan expense (offset in trading revenue), and broker commissions.



- 10 -

March closed referred investment assets (referrals resulting from the WIM/Community Banking partnership) totaled $1 billion for the first time since the month of the sales practices settlement announcement
WIM total client assets reached a record-high of $1.8 trillion in the first quarter, up 9 percent from a year ago, driven by higher market valuations and continued positive net flows

Retail Brokerage 
Client assets of $1.6 trillion, up 10 percent from prior year
Advisory assets of $490 billion, up 14 percent from prior year, primarily driven by higher market valuations and positive net flows
Strong loan growth, with average balances up 15 percent from prior year largely due to continued growth in non-conforming mortgage loans
Wealth Management
Client assets of $237 billion, up 5 percent from prior year
Average loan balances up 8 percent from prior year primarily driven by continued growth in non-conforming mortgage loans
Retirement
IRA assets of $383 billion, up 7 percent from prior year
Institutional Retirement plan assets of $361 billion, up 9 percent from prior year
Asset Management
Total assets under management of $481 billion, flat from prior year as higher market valuations, positive fixed income net flows and assets acquired during the prior year, were offset by equity and money market net outflows.

Conference Call
The Company will host a live conference call on Thursday, April 13, at 7:00 a.m. PT (10:00 a.m. ET). 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 https://www.wellsfargo.com/about/investor-relations/quarterly-earnings/ and https://engage.vevent.com/rt/wells_fargo_ao~56300037.

A replay of the conference call will be available beginning at 10:00 a.m. PT (1:00 p.m. ET) on Thursday, April 13 through Friday, April 28. Please dial 855-859-2056 (U.S. and Canada) or 404-537-3406 (International) and enter Conference ID #56300037. 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~56300037.






- 11 -

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 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 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, geopolitical 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, 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;
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;
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



- 12 -

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;
negative effects from the retail banking sales practices matter, 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;
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, 2016.
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, 2016, 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.



- 13 -

About Wells Fargo
Wells Fargo & Company (NYSE: WFC) is a diversified, community-based financial services company with $2.0 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 8,500 locations, 13,000 ATMs, the internet (wellsfargo.com) and mobile banking, and has offices in 42 countries and territories to support customers who conduct business in the global economy. With approximately 273,000 team members, Wells Fargo serves one in three households in the United States. Wells Fargo & Company was ranked No. 27 on Fortune’s 2016 rankings of America’s largest corporations. Wells Fargo’s vision is to satisfy our customers’ financial needs and help them succeed financially.

# # #





- 14 -

Wells Fargo & Company and Subsidiaries
QUARTERLY FINANCIAL DATA
TABLE OF CONTENTS
 
 
 
 
Pages
 
 
Summary Information
 
 
 
Income
 
 
 
Balance Sheet
 
 
 
Loans
 
Changes in Allowance for Credit Losses
 
 
Equity
 
Tangible Common Equity
 
 
Operating Segments
 
 
 
Other
 



- 15 -

Wells Fargo & Company and Subsidiaries
SUMMARY FINANCIAL DATA
 
Quarter ended
 
 
% Change
Mar 31, 2017 from
 
($ in millions, except per share amounts)
Mar 31,
2017

 
Dec 31,
2016

 
Mar 31,
2016

 
Dec 31,
2016

 
Mar 31,
2016

For the Period
 
 
 
 
 
 
 
 
 
Wells Fargo net income
$
5,457

 
5,274

 
5,462

 
3
 %
 

Wells Fargo net income applicable to common stock
5,056

 
4,872

 
5,085

 
4

 
(1
)
Diluted earnings per common share
1.00

 
0.96

 
0.99

 
4

 
1

Profitability ratios (annualized):
 
 
 
 
 
 


 


Wells Fargo net income to average assets (ROA)
1.15
%
 
1.08

 
1.21

 
6

 
(5
)
Wells Fargo net income applicable to common stock to average Wells Fargo common stockholders’ equity (ROE)
11.54

 
10.94

 
11.75

 
5

 
(2
)
Return on average tangible common equity (ROTCE)(1)
13.85

 
13.16

 
14.15

 
5

 
(2
)
Efficiency ratio (2)
62.7

 
61.2

 
58.7

 
2

 
7

Total revenue
$
22,002

 
21,582

 
22,195

 
2

 
(1
)
Pre-tax pre-provision profit (PTPP) (3)
8,210

 
8,367

 
9,167

 
(2
)
 
(10
)
Dividends declared per common share
0.380

 
0.380

 
0.375

 

 
1

Average common shares outstanding
5,008.6

 
5,025.6

 
5,075.7

 

 
(1
)
Diluted average common shares outstanding
5,070.4

 
5,078.2

 
5,139.4

 

 
(1
)
Average loans
$
963,645

 
964,147

 
927,220

 

 
4

Average assets
1,931,041

 
1,944,250

 
1,819,875

 
(1
)
 
6

Average total deposits
1,299,191

 
1,284,158

 
1,219,430

 
1

 
7

Average consumer and small business banking deposits (4)
758,754

 
749,946

 
714,837

 
1

 
6

Net interest margin
2.87
%
 
2.87

 
2.90

 

 
(1
)
At Period End
 
 
 
 
 
 


 


Investment securities
$
407,560

 
407,947

 
334,899

 

 
22

Loans
958,405

 
967,604

 
947,258

 
(1
)
 
1

Allowance for loan losses
11,168

 
11,419

 
11,621

 
(2
)
 
(4
)
Goodwill
26,666

 
26,693

 
27,003

 

 
(1
)
Assets
1,951,564

 
1,930,115

 
1,849,182

 
1

 
6

Deposits
1,325,444

 
1,306,079

 
1,241,490

 
1

 
7

Common stockholders' equity
178,388

 
176,469

 
175,534

 
1

 
2

Wells Fargo stockholders’ equity
201,500

 
199,581

 
197,496

 
1

 
2

Total equity
202,489

 
200,497

 
198,504

 
1

 
2

Tangible common equity (1)
148,850

 
146,737

 
144,679

 
1

 
3

Common shares outstanding
4,996.7

 
5,016.1

 
5,075.9

 

 
(2
)
Book value per common share (5)
$
35.70

 
35.18

 
34.58

 
1

 
3

Tangible book value per common share (1)(5)
29.79

 
29.25

 
28.50

 
2

 
5

Common stock price:

 
 
 
 
 


 


High
59.99

 
58.02

 
53.27

 
3

 
13

Low
53.35

 
43.55

 
44.50

 
23

 
20

Period end
55.66

 
55.11

 
48.36

 
1

 
15

Team members (active, full-time equivalent)
272,800

 
269,100

 
268,600

 
1

 
2

(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 investments 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 32.
(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.




- 16 -

Wells Fargo & Company and Subsidiaries
FIVE QUARTER SUMMARY FINANCIAL DATA
 
Quarter ended
 
($ in millions, except per share amounts)
Mar 31,
2017

 
Dec 31,
2016

 
Sep 30,
2016

 
Jun 30,
2016

 
Mar 31,
2016

For the Quarter
 
 
 
 
 
 
 
 
 
Wells Fargo net income
$
5,457

 
5,274

 
5,644

 
5,558

 
5,462

Wells Fargo net income applicable to common stock
5,056

 
4,872

 
5,243

 
5,173

 
5,085

Diluted earnings per common share
1.00

 
0.96

 
1.03

 
1.01

 
0.99

Profitability ratios (annualized):
 
 
 
 
 
 
 
 
 
Wells Fargo net income to average assets (ROA)
1.15
%
 
1.08

 
1.17

 
1.20

 
1.21

Wells Fargo net income applicable to common stock to average Wells Fargo common stockholders’ equity (ROE)
11.54

 
10.94

 
11.60

 
11.70

 
11.75

Return on average tangible common equity (ROTCE)(1)
13.85

 
13.16

 
13.96

 
14.15

 
14.15

Efficiency ratio (2)
62.7

 
61.2

 
59.4

 
58.1

 
58.7

Total revenue
$
22,002

 
21,582

 
22,328

 
22,162

 
22,195

Pre-tax pre-provision profit (PTPP) (3)
8,210

 
8,367

 
9,060

 
9,296

 
9,167

Dividends declared per common share
0.380

 
0.380

 
0.380

 
0.380

 
0.375

Average common shares outstanding
5,008.6

 
5,025.6

 
5,043.4

 
5,066.9

 
5,075.7

Diluted average common shares outstanding
5,070.4

 
5,078.2

 
5,094.6

 
5,118.1

 
5,139.4

Average loans
$
963,645

 
964,147

 
957,484

 
950,751

 
927,220

Average assets
1,931,041

 
1,944,250

 
1,914,586

 
1,862,084

 
1,819,875

Average total deposits
1,299,191

 
1,284,158

 
1,261,527

 
1,236,658

 
1,219,430

Average consumer and small business banking deposits (4)
758,754

 
749,946

 
739,066

 
726,359

 
714,837

Net interest margin
2.87
%
 
2.87

 
2.82

 
2.86

 
2.90

At Quarter End
 
 
 
 
 
 
 
 
 
Investment securities
$
407,560

 
407,947

 
390,832

 
353,426

 
334,899

Loans
958,405

 
967,604

 
961,326

 
957,157

 
947,258

Allowance for loan losses
11,168

 
11,419

 
11,583

 
11,664

 
11,621

Goodwill
26,666

 
26,693

 
26,688

 
26,963

 
27,003

Assets
1,951,564

 
1,930,115

 
1,942,124

 
1,889,235

 
1,849,182

Deposits
1,325,444

 
1,306,079

 
1,275,894

 
1,245,473

 
1,241,490

Common stockholders' equity
178,388

 
176,469

 
179,916

 
178,633

 
175,534

Wells Fargo stockholders’ equity
201,500

 
199,581

 
203,028

 
201,745

 
197,496

Total equity
202,489

 
200,497

 
203,958

 
202,661

 
198,504

Tangible common equity (1)
148,850

 
146,737

 
149,829

 
148,110

 
144,679

Common shares outstanding
4,996.7

 
5,016.1

 
5,023.9

 
5,048.5

 
5,075.9

Book value per common share (5)
$
35.70

 
35.18

 
35.81

 
35.38

 
34.58

Tangible book value per common share (1)(5)
29.79

 
29.25

 
29.82

 
29.34

 
28.50

Common stock price:
 
 
 
 
 
 
 
 
 
High
59.99

 
58.02

 
51.00

 
51.41

 
53.27

Low
53.35

 
43.55

 
44.10

 
44.50

 
44.50

Period end
55.66

 
55.11

 
44.28

 
47.33

 
48.36

Team members (active, full-time equivalent)
272,800

 
269,100

 
268,800

 
267,900

 
268,600

(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 investments 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 32.
(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.



- 17 -

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

(in millions, except per share amounts)
2017

 
2016

 
Change

Interest income
 
 
 
 
 
Trading assets
$
643

 
596

 
8
 %
Investment securities
2,675

 
2,262

 
18

Mortgages held for sale
184

 
161

 
14

Loans held for sale
1

 
2

 
(50
)
Loans
10,141

 
9,577

 
6

Other interest income
582

 
374

 
56

Total interest income
14,226

 
12,972

 
10

Interest expense
 
 
 
 
 
Deposits
537

 
307

 
75

Short-term borrowings
114

 
67

 
70

Long-term debt
1,183

 
842

 
40

Other interest expense
92

 
89

 
3

Total interest expense
1,926

 
1,305

 
48

Net interest income
12,300

 
11,667

 
5

Provision for credit losses
605

 
1,086

 
(44
)
Net interest income after provision for credit losses
11,695

 
10,581

 
11

Noninterest income
 
 
 
 
 
Service charges on deposit accounts
1,313

 
1,309

 

Trust and investment fees
3,570

 
3,385

 
5

Card fees
945

 
941

 

Other fees
865

 
933

 
(7
)
Mortgage banking
1,228

 
1,598

 
(23
)
Insurance
277

 
427

 
(35
)
Net gains from trading activities
439

 
200

 
120

Net gains on debt securities
36

 
244

 
(85
)
Net gains from equity investments
403

 
244

 
65

Lease income
481

 
373

 
29

Other
145

 
874

 
(83
)
Total noninterest income
9,702

 
10,528

 
(8
)
Noninterest expense
 
 
 
 
 
Salaries
4,261

 
4,036

 
6

Commission and incentive compensation
2,725

 
2,645

 
3

Employee benefits
1,686

 
1,526

 
10

Equipment
577

 
528

 
9

Net occupancy
712

 
711

 

Core deposit and other intangibles
289

 
293

 
(1
)
FDIC and other deposit assessments
333

 
250

 
33

Other
3,209

 
3,039

 
6

Total noninterest expense
13,792

 
13,028

 
6

Income before income tax expense
7,605

 
8,081

 
(6
)
Income tax expense
2,057

 
2,567

 
(20
)
Net income before noncontrolling interests
5,548

 
5,514

 
1

Less: Net income from noncontrolling interests
91

 
52

 
75

Wells Fargo net income
$
5,457

 
5,462

 

Less: Preferred stock dividends and other
401

 
377

 
6

Wells Fargo net income applicable to common stock
$
5,056

 
5,085

 
(1
)
Per share information
 
 
 
 
 
Earnings per common share
$
1.01

 
1.00

 
1

Diluted earnings per common share
1.00

 
0.99

 
1

Dividends declared per common share
0.380

 
0.375

 
1

Average common shares outstanding
5,008.6

 
5,075.7

 
(1
)
Diluted average common shares outstanding
5,070.4

 
5,139.4

 
(1
)




- 18 -

Wells Fargo & Company and Subsidiaries
FIVE QUARTER CONSOLIDATED STATEMENT OF INCOME
 
Quarter ended
 
(in millions, except per share amounts)
Mar 31,
2017

 
Dec 31,
2016

 
Sep 30,
2016

 
Jun 30,
2016

 
Mar 31,
2016

Interest income
 
 
 
 
 
 
 
 
 
Trading assets
$
643

 
745

 
593

 
572

 
596

Investment securities
2,675

 
2,512

 
2,298

 
2,176

 
2,262

Mortgages held for sale
184

 
235

 
207

 
181

 
161

Loans held for sale
1

 
2

 
2

 
3

 
2

Loans
10,141

 
10,128

 
9,978

 
9,822

 
9,577

Other interest income
582

 
436

 
409

 
392

 
374

Total interest income
14,226

 
14,058

 
13,487

 
13,146

 
12,972

Interest expense
 
 
 
 
 
 
 
 
 
Deposits
537

 
400

 
356

 
332

 
307

Short-term borrowings
114

 
101

 
85

 
77

 
67

Long-term debt
1,183

 
1,061

 
1,006

 
921

 
842

Other interest expense
92

 
94

 
88

 
83

 
89

Total interest expense
1,926

 
1,656

 
1,535

 
1,413

 
1,305

Net interest income
12,300

 
12,402

 
11,952

 
11,733

 
11,667

Provision for credit losses
605

 
805

 
805

 
1,074

 
1,086

Net interest income after provision for credit losses
11,695

 
11,597

 
11,147

 
10,659

 
10,581

Noninterest income
 
 
 
 
 
 
 
 
 
Service charges on deposit accounts
1,313

 
1,357

 
1,370

 
1,336

 
1,309

Trust and investment fees
3,570

 
3,698

 
3,613

 
3,547

 
3,385

Card fees
945

 
1,001

 
997

 
997

 
941

Other fees
865

 
962

 
926

 
906

 
933

Mortgage banking
1,228

 
1,417

 
1,667

 
1,414

 
1,598

Insurance
277

 
262

 
293

 
286

 
427

Net gains (losses) from trading activities
439

 
(109
)
 
415

 
328

 
200

Net gains on debt securities
36

 
145

 
106

 
447

 
244

Net gains from equity investments
403

 
306

 
140

 
189

 
244

Lease income
481

 
523

 
534

 
497

 
373

Other
145

 
(382
)
 
315

 
482

 
874

Total noninterest income
9,702

 
9,180

 
10,376

 
10,429

 
10,528

Noninterest expense
 
 
 
 
 
 
 
 
 
Salaries
4,261

 
4,193

 
4,224

 
4,099

 
4,036

Commission and incentive compensation
2,725

 
2,478

 
2,520

 
2,604

 
2,645

Employee benefits
1,686

 
1,101

 
1,223

 
1,244

 
1,526

Equipment
577

 
642

 
491

 
493

 
528

Net occupancy
712

 
710

 
718

 
716

 
711

Core deposit and other intangibles
289

 
301

 
299

 
299

 
293

FDIC and other deposit assessments
333

 
353

 
310

 
255

 
250

Other
3,209

 
3,437

 
3,483

 
3,156

 
3,039

Total noninterest expense
13,792

 
13,215

 
13,268

 
12,866

 
13,028

Income before income tax expense
7,605

 
7,562

 
8,255

 
8,222

 
8,081

Income tax expense
2,057

 
2,258

 
2,601

 
2,649

 
2,567

Net income before noncontrolling interests
5,548

 
5,304

 
5,654

 
5,573

 
5,514

Less: Net income from noncontrolling interests
91

 
30

 
10

 
15

 
52

Wells Fargo net income
$
5,457

 
5,274

 
5,644

 
5,558

 
5,462

Less: Preferred stock dividends and other
401

 
402

 
401

 
385

 
377

Wells Fargo net income applicable to common stock
$
5,056

 
4,872

 
5,243

 
5,173

 
5,085

Per share information
 
 
 
 
 
 
 
 
 
Earnings per common share
$
1.01

 
0.97

 
1.04

 
1.02

 
1.00

Diluted earnings per common share
1.00

 
0.96

 
1.03

 
1.01

 
0.99

Dividends declared per common share
0.380

 
0.380

 
0.380

 
0.380

 
0.375

Average common shares outstanding
5,008.6

 
5,025.6

 
5,043.4

 
5,066.9

 
5,075.7

Diluted average common shares outstanding
5,070.4

 
5,078.2

 
5,094.6

 
5,118.1

 
5,139.4




- 19 -

Wells Fargo & Company and Subsidiaries
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
 
Quarter ended Mar 31,
 
 
%
(in millions)
2017

 
2016

 
Change
Wells Fargo net income
$
5,457

 
5,462

 
—%
Other comprehensive income (loss), before tax:
 
 
 
 

Investment securities:
 
 
 
 

Net unrealized gains arising during the period
369

 
795

 
(54)
Reclassification of net gains to net income
(145
)
 
(304
)
 
(52)
Derivatives and hedging activities:
 
 
 
 

Net unrealized gains (losses) arising during the period
(133
)
 
1,999

 
NM
Reclassification of net gains on cash flow hedges to net income
(202
)
 
(256
)
 
(21)
Defined benefit plans adjustments:
 
 
 
 

Net actuarial and prior service losses arising during the period
(7
)
 
(8
)
 
(13)
Amortization of net actuarial loss, settlements and other to net income
38

 
37

 
3
Foreign currency translation adjustments:
 
 
 
 

Net unrealized gains arising during the period
16

 
43

 
(63)
Other comprehensive income (loss), before tax
(64
)

2,306

 
NM
Income tax (expense) benefit related to other comprehensive income
37

 
(857
)
 
NM
Other comprehensive income (loss), net of tax
(27
)

1,449

 
NM
Less: Other comprehensive income (loss) from noncontrolling interests
14

 
(28
)
 
NM
Wells Fargo other comprehensive income (loss), net of tax
(41
)

1,477

 
NM
Wells Fargo comprehensive income
5,416


6,939

 
(22)
Comprehensive income from noncontrolling interests
105

 
24

 
338
Total comprehensive income
$
5,521


6,963

 
(21)
NM – Not meaningful
FIVE QUARTER CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN TOTAL EQUITY
 
Quarter ended
 
(in millions)
Mar 31,
2017

 
Dec 31,
2016

 
Sep 30,
2016

 
Jun 30,
2016

 
Mar 31,
2016

Balance, beginning of period
$
200,497

 
203,958

 
202,661

 
198,504

 
193,891

Cumulative effect from change in consolidation accounting (1)

 

 

 

 
121

Wells Fargo net income
5,457

 
5,274

 
5,644

 
5,558

 
5,462

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