Exhibit 99
Wells Fargo and Company's financial results for the quarter ended
December 31, 1999
Wells Fargo & Company reported net income of $970 million for the fourth
quarter of 1999, compared with a loss of $194 million for the fourth quarter
of 1998. Net income for the full year of 1999 was $3,747 million, compared
with $1,950 million a year ago. Diluted earnings (loss) per common share
were $.58 for the fourth quarter of 1999 and $2.23 for the full year of 1999,
compared with $(.12) and $1.17 for the same periods of 1998.
Return on average assets (ROA) was 1.85 percent for both the fourth
quarter and the full year of 1999. Return on average common equity (ROE) was
17.84 percent for the fourth quarter of 1999 and 17.66 percent for the full
year of 1999.
Diluted cash earnings (loss) were $.68 per share for the fourth quarter
of 1999 and $2.56 per share for the full year of 1999, compared with ($.04)
per share and $1.50 per share for the same periods of 1998. Cash earnings
are earnings before the amortization of goodwill and nonqualifying core
deposit intangible (related primarily to the 1996 acquisition of First
Interstate Bancorp). Cash return on average assets was 2.24 percent for the
fourth quarter of 1999 and 2.22 percent for the full year of 1999. Cash
return on average tangible common equity was 34.20 percent for the fourth
quarter of 1999 and 34.08 percent for the full year of 1999.
Net interest income on a taxable-equivalent basis was $2,412 million in
the fourth quarter of 1999, compared with $2,315 million for the same quarter
a year ago and $9,419 million for the full year of 1999, compared with $9,049
million in 1998. The net interest margin was 5.61 percent for the fourth
quarter of 1999 and 5.66 percent for the full year of 1999, compared with
5.60 percent and 5.79 percent for the same periods of 1998.
Noninterest income in the fourth quarter of 1999 was $2,071 million,
compared with $1,557 million in the same quarter of 1998, an increase of 33
percent. For the full year of 1999, noninterest income was $7,420 million,
compared with $6,427 million in 1998, an increase of 15 percent. The majority
of the increase for the fourth quarter of 1999 was due to the non-cash
venture capital gain of about $560 million related to the Company's venture
capital investment in Cerent Corporation, partially offset by a loss on the
sales of investment securities and a write-down of auto lease residuals.
Noninterest expense was $2,657 million in the fourth quarter of 1999,
compared with $3,482 million in the same quarter of 1998, a decrease of 24
percent. For the full year of 1999, noninterest expense was $9,782 million,
compared with $10,579 million in 1998, a decrease of 8 percent. The decrease
in noninterest expense for the fourth quarter of 1999 was due to fourth
quarter 1998 merger-related and other charges of approximately $1.15 billion,
partly offset by $55 million of expenditures for store platform conversions
in
-2-
the fourth quarter of 1999, along with $34 million of additional
expenditures, primarily for Internet and other technology investments and $40
million of asset write-downs.
The provision for loan losses was $275 million for the fourth quarter of
1999, compared with $624 million for the same period in 1998. Net
charge-offs totaled $274 million, or .93 percent of average loans
(annualized), in the fourth quarter of 1999. Net charge-offs totaled $686
million, or 2.56 percent of average loans (annualized), for the fourth
quarter of 1998. For the year ended December 31, 1999, the loan loss
provision was $1,045 million and net charge-offs totaled $1,049 million, or
.94 percent of average loans, compared with a loan loss provision of $1,545
million and net charge-offs of $1,617 million, or 1.52 percent of average
loans for the full year of 1998.
At December 31, 1999, the allowance for loan losses of $3,170 million
was 2.65 percent of total loans, compared with 2.90 percent at December 31,
1998. Total nonaccrual and restructured loans were $669 million at December
31, 1999, compared with $710 million at December 31, 1998.
- ----------------
The following appears in accordance with the Private Securities Litigation
Reform Act of 1995:
This discussion of financial results may contain forward-looking
statements about the Company, including descriptions of plans or objectives
of its management for future operations, products or services, and forecasts
of its revenues, earnings or other measures of economic performance.
Forward-looking statements can be identified by the fact that they do not
relate strictly to historical or current facts. They often include the words
"believe," "expect," "anticipate," "intend," "plan," "estimate" or words of
similar meaning, or future or conditional verbs such as "will," "would,"
"should," "could" or "may."
Forward-looking statements, by their nature, are subject to risks and
uncertainties. A number of factors--many of which are beyond the Company's
control--could cause actual conditions, events or results to differ
significantly from those described in the forward-looking statements. The
Company's reports filed with the Securities and Exchange Commission,
including the Company's Form 10-Q for the quarter ended September 30, 1999,
describe some of these factors, including certain credit, market,
operational, liquidity, interest rate, and Year 2000 risks associated with
the Company's business and operations. Other factors described in the
Company's September 30, 1999 Form 10-Q include changes in business and
economic conditions, competition, fiscal and monetary policies,
disintermediation, legislation including the Gramm-Leach-Bliley Act of 1999,
the combination of the former Norwest Corporation and the former Wells Fargo
& Company, and other mergers and acquisitions.
There are other factors besides these that could cause actual
conditions, events or results to differ significantly from those described in
the forward-looking statements or otherwise affect in the future the
Company's business, results of operations and financial condition.
###
-3-
Wells Fargo & Company and Subsidiaries
SUMMARY FINANCIAL DATA
- ---------------------------------------------------------------------------------------------------------------------------
Quarter Year
ended December 31, % ended December 31, %
--------------------- ---------------------
(in millions, except per share amounts) 1999 1998 Change 1999 1998 Change
- ---------------------------------------------------------------------------------------------------------------------------
FOR THE PERIOD
Net income (loss) $ 970 $ (194) -- % $ 3,747 $ 1,950 92 %
Net income (loss) applicable to common stock 961 (203) -- 3,712 1,915 94
Earnings (loss) per common share $ .59 $ (.12) -- $ 2.26 $ 1.18 92
Diluted earnings (loss) per common share .58 (.12) -- 2.23 1.17 91
Dividends declared per common share .20 .185 8 .785 .70 12
Average common shares outstanding 1,635.6 1,642.4 -- 1,645.6 1,621.5 1
Diluted average common shares outstanding 1,656.0 1,642.4 1 1,665.2 1,641.8 1
Profitability ratios (annualized)
Net income to average total assets (ROA) 1.85% -- % -- 1.85% 1.04% 78
Net income applicable to common stock to
average common stockholders' equity (ROE) 17.84 -- -- 17.66 9.86 79
Total revenue $ 4,466 $ 3,858 16 $ 16,775 $ 15,417 9
Efficiency ratio (1) 59.5% 90.2 % (34) 58.3% 68.5% (15)
Average loans $116,301 $107,324 8 $111,374 $106,205 5
Average assets 208,347 197,772 5 202,623 188,355 8
Average core deposits 126,493 127,810 (1) 127,231 123,801 3
Net interest margin 5.61% 5.60 % -- 5.66% 5.79% (2)
NET INCOME AND RATIOS EXCLUDING
GOODWILL AND NONQUALIFYING CORE DEPOSIT
INTANGIBLE AMORTIZATION AND BALANCES
("CASH" OR "TANGIBLE") (2)
Net income (loss) applicable to common stock $ 1,120 $ (66) -- $ 4,269 $ 2,465 73
Earnings (loss) per common share .68 (.04) -- 2.59 1.52 70
Diluted earnings (loss) per common share .68 (.04) -- 2.56 1.50 71
ROA 2.24% -- % -- 2.22% 1.39% 60
ROE 34.20 -- -- 34.08 23.15 47
Efficiency ratio 55.6 86.1 (35) 54.6 64.3 (15)
AT PERIOD END
Securities available for sale $ 38,518 $ 31,997 20 $ 38,518 $ 31,997 20
Loans 119,464 107,994 11 119,464 107,994 11
Allowance for loan losses 3,170 3,134 1 3,170 3,134 1
Goodwill 7,702 7,664 -- 7,702 7,664 --
Assets 218,102 202,475 8 218,102 202,475 8
Core deposits 126,198 132,289 (5) 126,198 132,289 (5)
Common stockholders' equity 21,860 20,296 8 21,860 20,296 8
Stockholders' equity 22,131 20,759 7 22,131 20,759 7
Capital ratios
Common stockholders' equity to assets 10.02% 10.02 % -- 10.02% 10.02% --
Stockholders' equity to assets 10.15 10.25 (1) 10.15 10.25 (1)
Risk-based capital (3)
Tier 1 capital 7.95 8.08 (2) 7.95 8.08 (2)
Total capital 10.40 10.90 (5) 10.40 10.90 (5)
Leverage (3) 6.75 6.58 3 6.75 6.58 3
Book value per common share $ 13.44 $ 12.35 9 $ 13.44 $ 12.35 9
Staff (active, full-time equivalent) 89,355 91,403 (2) 89,355 91,403 (2)
COMMON STOCK PRICE
High $ 49.94 $ 40.88 22 $ 49.94 $ 43.88 14
Low 38.38 30.19 27 32.13 27.50 17
Period end 40.44 39.94 1 40.44 39.94 1
- ---------------------------------------------------------------------------------------------------------------------------
(1) The efficiency ratio is defined as noninterest expense divided by total
revenue (net interest income and noninterest income).
(2) Nonqualifying core deposit intangible (CDI) amortization and average
balance excluded from these calculations are, with the exception of the
efficiency and ROA ratios, net of applicable taxes. The pretax amount for
the average balance of nonqualifying CDI was $1,257 million for the quarter
ended December 31, 1999 and $1,323 million for the year ended December 31,
1999. The after-tax amounts for the amortization and average balance of
nonqualifying CDI were $27 million and $779 million, respectively, for the
quarter ended December 31, 1999 and $111 million and $820 million,
respectively, for the year ended December 31, 1999. Goodwill amortization
and average balance (which are not tax effected) were $132 million and
$7,600 million, respectively, for the quarter ended December 31, 1999 and
$447 million and $7,666 million, respectively, for the year ended December
31, 1999.
(3) The December 31, 1999 ratios are preliminary.
-4-
Wells Fargo & Company and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
- ---------------------------------------------------------------------------------------------------------------------------
Quarter Year
ended December 31, % ended December 31, %
--------------------- ---------------------
(in millions, except per share amounts) 1999 1998 Change 1999 1998 Change
- ---------------------------------------------------------------------------------------------------------------------------
INTEREST INCOME
Securities available for sale $ 563 $ 514 10 % $ 2,176 $ 1,844 18 %
Mortgages held for sale 182 290 (37) 853 898 (5)
Loans held for sale 92 97 (5) 372 371 --
Loans 2,848 2,639 8 10,761 10,685 1
Other interest income 64 58 10 213 257 (17)
-------- -------- ------- --------
Total interest income 3,749 3,598 4 14,375 14,055 2
-------- -------- ------- --------
INTEREST EXPENSE
Deposits 682 771 (12) 2,757 3,111 (11)
Short-term borrowings 289 219 32 924 777 19
Long-term debt 368 292 26 1,279 1,097 17
Guaranteed preferred beneficial interests
in Company's subordinated debentures 15 15 -- 60 80 (25)
-------- -------- ------- --------
Total interest expense 1,354 1,297 4 5,020 5,065 (1)
-------- -------- ------- --------
NET INTEREST INCOME 2,395 2,301 4 9,355 8,990 4
Provision for loan losses 275 624 (56) 1,045 1,545 (32)
-------- -------- ------- --------
Net interest income after
provision for loan losses 2,120 1,677 26 8,310 7,445 12
-------- -------- ------- --------
NONINTEREST INCOME
Service charges on deposit accounts 396 364 9 1,492 1,357 10
Trust and investment fees and commissions 324 274 18 1,256 1,068 18
Credit card fee revenue 142 136 4 538 520 3
Other fees and commissions 268 252 6 1,030 946 9
Mortgage banking 270 252 7 1,239 1,106 12
Insurance 84 70 20 383 348 10
Net venture capital gains (losses) 721 (4) -- 1,008 113 792
Net (losses) gains on securities available for sale (260) 8 -- (241) 169 --
Other 126 205 (39) 715 800 (11)
-------- -------- ------- --------
Total noninterest income 2,071 1,557 33 7,420 6,427 15
-------- -------- ------- --------
NONINTEREST EXPENSE
Salaries 802 971 (17) 3,053 3,103 (2)
Incentive compensation 129 123 5 522 572 (9)
Employee benefits 197 198 (1) 821 741 11
Equipment 274 328 (16) 840 900 (7)
Net occupancy 188 200 (6) 764 764 --
Goodwill 132 104 27 447 421 6
Core deposit intangible 48 60 (20) 199 243 (18)
Net (gains) losses on dispositions of premises
and equipment (10) 270 -- (16) 325 --
Other 897 1,228 (27) 3,152 3,510 (10)
-------- -------- ------- --------
Total noninterest expense 2,657 3,482 (24) 9,782 10,579 (8)
-------- -------- ------- --------
INCOME (LOSS) BEFORE INCOME
TAX EXPENSE (BENEFIT) 1,534 (248) -- 5,948 3,293 81
Income tax expense (benefit) 564 (54) -- 2,201 1,343 64
-------- -------- ------- --------
NET INCOME (LOSS) $ 970 $ (194) -- % $ 3,747 $ 1,950 92 %
======== ======== ==== ======= ======== ====
NET INCOME (LOSS) APPLICABLE TO
COMMON STOCK $ 961 $ (203) -- % $ 3,712 $ 1,915 94 %
======== ======== ==== ======= ======== ====
EARNINGS (LOSS) PER COMMON SHARE $ .59 $ (.12) -- % $ 2.26 $ 1.18 92 %
======== ======== ==== ======= ======== ====
DILUTED EARNINGS (LOSS)
PER COMMON SHARE $ .58 $ (.12) -- % $ 2.23 $ 1.17 91 %
======== ======== ==== ======= ======== ====
DIVIDENDS DECLARED PER COMMON SHARE $ .20 $ .185 8 % $ .785 $ .70 12 %
======== ======== ==== ======= ======== ====
Average common shares outstanding 1,635.6 1,642.4 -- % 1,645.6 1,621.5 1 %
======== ======== ==== ======= ======== ====
Diluted average common shares outstanding 1,656.0 1,642.4 1 % 1,665.2 1,641.8 1 %
======== ======== ==== ======= ======== ====
- ---------------------------------------------------------------------------------------------------------------------------
-5-
Wells Fargo & Company and Subsidiaries
CONSOLIDATED BALANCE SHEET
- ---------------------------------------------------------------------------------------------------------------------------
December 31, %
-----------------------------
(in millions, except shares) 1999 1998 Change
- ---------------------------------------------------------------------------------------------------------------------------
ASSETS
Cash and due from banks $ 13,250 $ 12,731 4 %
Federal funds sold and securities
purchased under resale agreements 1,554 1,517 2
Securities available for sale 38,518 31,997 20
Mortgages held for sale 11,707 19,770 (41)
Loans held for sale 4,975 5,322 (7)
Loans 119,464 107,994 11
Allowance for loan losses 3,170 3,134 1
-------- --------
Net loans 116,294 104,860 11
-------- --------
Mortgage servicing rights 4,483 3,080 46
Premises and equipment, net 2,985 3,130 (5)
Core deposit intangible 1,286 1,510 (15)
Goodwill 7,702 7,664 --
Interest receivable and other assets 15,348 10,894 41
-------- --------
Total assets $218,102 $202,475 8%
======== ======== ====
LIABILITIES
Noninterest-bearing deposits $ 42,916 $ 46,732 (8)%
Interest-bearing deposits 89,792 90,056 --
-------- --------
Total deposits 132,708 136,788 (3)
Short-term borrowings 27,995 15,897 76
Accrued expenses and other liabilities 11,108 8,537 30
Long-term debt 23,375 19,709 19
Guaranteed preferred beneficial interests
in Company's subordinated debentures 785 785 --
STOCKHOLDERS' EQUITY
Preferred stock 344 547 (37)
Unearned ESOP shares (73) (84) (13)
-------- --------
Total preferred stock 271 463 (41)
Common stock - $1-2/3 par value,
authorized 4,000,000,000 shares;
issued 1,666,095,265 shares and 1,661,392,590 shares 2,777 2,769 --
Additional paid-in capital 8,786 8,673 1
Retained earnings 11,196 9,045 24
Cumulative other comprehensive income 892 463 93
Note receivable from ESOP (1) (3) (67)
Treasury stock - 39,245,724 shares and 17,334,787 shares (1,790) (651) 175
-------- --------
Total stockholders' equity 22,131 20,759 7
-------- --------
Total liabilities and stockholders' equity $218,102 $202,475 8 %
======== ======== ====
- ---------------------------------------------------------------------------------------------------------------------------
-6-
Wells Fargo & Company and Subsidiaries
CONDENSED CONSOLIDATED STATEMENT OF
CHANGES IN STOCKHOLDERS' EQUITY
- -------------------------------------------------------------------------------------------------------------------
Year ended December 31,
-------------------------
(in millions) 1999 1998
- -------------------------------------------------------------------------------------------------------------------
BALANCE, BEGINNING OF PERIOD $ 20,759 $ 19,778
Net income 3,747 1,950
Other comprehensive income (loss), net of tax:
Change in foreign currency translation adjustments 4 (4)
Change in investment securities valuation allowance 425 3
Common stock issued 612 1,087
Common stock issued for acquisitions 155 157
Common stock repurchased (2,122) (1,170)
Preferred stock redeemed (191) --
Preferred stock released to ESOP 86 32
Preferred stock dividends (35) (35)
Common stock dividends (1,293) (982)
Cash payments received on notes receivable from ESOP 2 9
Increase in Rabbi trust assets (classified as treasury stock) (18) (66)
-------- --------
BALANCE, END OF PERIOD $ 22,131 $ 20,759
======== ========
- -------------------------------------------------------------------------------------------------------------------
LOANS
- -------------------------------------------------------------------------------------------------------------------
December 31,
---------------------------
(in millions) 1999 1998
- -------------------------------------------------------------------------------------------------------------------
Commercial $ 38,688 $ 35,450
Real estate 1-4 family first mortgage 12,398 11,496
Other real estate mortgage 19,178 16,668
Real estate construction 4,711 3,790
Consumer:
Real estate 1-4 family junior lien mortgage 12,938 11,128
Credit card 5,472 5,795
Other revolving credit and monthly payment 16,656 15,809
-------- --------
Total consumer 35,066 32,732
Lease financing 7,850 6,380
Foreign 1,573 1,478
-------- --------
Total loans (net of unearned discount) $119,464 $107,994
======== ========
- -------------------------------------------------------------------------------------------------------------------
-7-
Wells Fargo & Company and Subsidiaries
CHANGES IN THE ALLOWANCE FOR LOAN LOSSES
- ---------------------------------------------------------------------------------------------------------------------------
Quarter ended Year ended
----------------------------------- ---------------------
DEC. 31, Sept. 30, Dec. 31, DEC. 31, Dec. 31,
(in millions) 1999 1999 1998 1999 1998
- ---------------------------------------------------------------------------------------------------------------------------
BALANCE, BEGINNING OF PERIOD $3,167 $3,165 $3,170 $3,134 $3,062
Allowance related to business combinations, net 2 3 26 40 144
Provision for loan losses 275 240 624 1,045 1,545
Loan charge-offs:
Commercial (97) (93) (72) (382) (261)
Real estate 1-4 family first mortgage (2) (3) (8) (12) (26)
Other real estate mortgage (8) (8) (12) (28) (54)
Real estate construction (1) -- (1) (2) (3)
Consumer:
Real estate 1-4 family junior lien mortgage (11) (7) (13) (33) (31)
Credit card (89) (93) (126) (388) (535)
Other revolving credit and monthly payment (154) (122) (509) (512) (1,002)
------ ------ ------ ------ ------
Total consumer (254) (222) (648) (933) (1,568)
Lease financing (8) (9) (13) (38) (48)
Foreign (21) (18) (37) (90) (84)
------ ------ ------ ------ ------
Total loan charge-offs (391) (353) (791) (1,485) (2,044)
------ ------ ------ ------ ------
Loan recoveries:
Commercial 25 25 22 86 82
Real estate 1-4 family first mortgage -- 3 2 6 11
Other real estate mortgage 4 4 10 37 78
Real estate construction 1 -- 1 5 4
Consumer:
Real estate 1-4 family junior lien mortgage 5 3 2 15 7
Credit card 10 10 12 46 56
Other revolving credit and monthly payment 65 60 51 214 163
------ ------ ------ ------ ------
Total consumer 80 73 65 275 226
Lease financing 3 3 2 12 12
Foreign 4 4 3 15 14
------ ------ ------ ------ ------
Total loan recoveries 117 112 105 436 427
------ ------ ------ ------ ------
Total net loan charge-offs (274) (241) (686) (1,049) (1,617)
------ ------ ------ ------ ------
BALANCE, END OF PERIOD $3,170 $3,167 $3,134 $3,170 $3,134
====== ====== ====== ====== ======
Total net loan charge-offs as a percentage
of average loans (annualized) .92 % .85 % 2.56 % .88 % 1.52 %
====== ====== ====== ====== ======
Allowance as a percentage of total loans 2.65 % 2.76 % 2.90 % 2.65 % 2.90 %
====== ====== ====== ====== ======
- ---------------------------------------------------------------------------------------------------------------------------
-8-
Wells Fargo & Company and Subsidiaries
NONACCRUAL AND RESTRUCTURED LOANS AND OTHER ASSETS
- -------------------------------------------------------------------------------------------------------------------
December 31,
--------------------------
(in millions) 1999 1998
- -------------------------------------------------------------------------------------------------------------------
Nonaccrual loans $665 $709
Restructured loans 4 1
---- ----
Nonaccrual and restructured loans 669 710
As a percentage of total loans .6% .7%
Foreclosed assets 153 148
Real estate investments (1) 33 1
---- ----
Total nonaccrual and restructured loans
and other assets $855 $859
==== ====
- -------------------------------------------------------------------------------------------------------------------
(1) Represents the amount of real estate investments (contingent interest loans
accounted for as investments) that would be classified as nonaccrual if
such assets were loans. Real estate investments totaled $89 million and
$128 million at December 31, 1999 and December 31, 1998, respectively.
-9-
Wells Fargo & Company and Subsidiaries
NONINTEREST INCOME
- ---------------------------------------------------------------------------------------------------------------------------
Quarter ended December 31, % Year ended December 31, %
-------------------------- --------------------------
(in millions) 1999 1998 Change 1999 1998 Change
- ---------------------------------------------------------------------------------------------------------------------------
Service charges on deposit accounts $ 396 $ 364 9 % $1,492 $1,357 10 %
Trust and investment fees and commissions:
Asset management and custody fees 180 181 (1) 749 676 11
Mutual fund and annuity sales fees 128 73 75 415 300 38
All other 16 20 (20) 92 92 --
------ ------ ------ ------
Total trust and investment fees
and commissions 324 274 18 1,256 1,068 18
Credit card fee revenue 142 136 4 538 520 3
Other fees and commissions:
Cash network fees 74 62 19 275 229 20
Charges and fees on loans 73 75 (3) 313 290 8
All other 121 115 5 442 427 4
------ ------ ------ ------
Total other fees and commissions 268 252 6 1,030 946 9
Mortgage banking:
Origination and other closing fees 50 163 (69) 380 530 (28)
Servicing fees, net of amortization 179 25 616 410 19 --
Net gains on sales of mortgage servicing rights -- -- -- -- 16 (100)
Net (losses) gains on sales of mortgages (7) (10) (30) 221 296 (25)
All other 48 74 (35) 228 245 (7)
------ ------ ------ ------
Total mortgage banking 270 252 7 1,239 1,106 12
Insurance 84 70 20 383 348 10
Net venture capital gains (losses) 721 (4) -- 1,008 113 792
Net (losses) gains on securities available for sale (260) 8 -- (241) 169 --
Income from equity investments accounted
for by the:
Cost method 38 35 9 138 151 (9)
Equity method 26 4 550 86 47 83
Net gains on sales of loans 1 13 (92) 32 61 (48)
Net gains on dispositions of operations 6 11 (45) 107 100 7
All other 55 142 (61) 352 441 (20)
------ ------ ------ ------
Total $2,071 $1,557 33 % $7,420 $6,427 15 %
====== ====== ==== ====== ====== ====
- ---------------------------------------------------------------------------------------------------------------------------
NONINTEREST EXPENSE
- ---------------------------------------------------------------------------------------------------------------------------
Quarter ended December 31, % Year ended December 31, %
-------------------------- -----------------------
(in millions) 1999 1998 Change 1999 1998 Change
- ---------------------------------------------------------------------------------------------------------------------------
Salaries $ 802 $ 971 (17)% $3,053 $ 3,103 (2)%
Incentive compensation 129 123 5 522 572 (9)
Employee benefits 197 198 (1) 821 741 11
Equipment 274 328 (16) 840 900 (7)
Net occupancy 188 200 (6) 764 764 --
Goodwill 132 104 27 447 421 6
Core deposit intangible:
Nonqualifying (1) 43 54 (20) 179 217 (18)
Qualifying 5 6 (17) 20 26 (23)
Net (gains) losses on dispositions of premises
and equipment (10) 270 -- (16) 325 --
Operating losses 49 46 7 140 152 (8)
Outside professional services 129 178 (28) 372 391 (5)
Contract services 145 98 48 465 342 36
Telecommunications 69 65 6 261 252 4
Outside data processing 72 76 (5) 279 250 12
Advertising and promotion 78 56 39 238 237 --
Postage 54 61 (11) 223 228 (2)
Travel and entertainment 76 59 29 249 212 17
Stationery and supplies 49 55 (11) 171 178 (4)
Insurance 24 21 14 151 132 14
Security 23 21 10 88 84 5
All other 129 492 (74) 515 1,052 (51)
------- ------ --- ------ ------- ----
Total $2,657 $3,482 (24)% $9,782 $10,579 (8)%
====== ====== === ====== ======= ====
- ---------------------------------------------------------------------------------------------------------------------------
(1) Amortization of core deposit intangible acquired after February 1992 that is
subtracted from stockholders' equity in computing regulatory capital for
bank holding companies.
-10-
Wells Fargo & Company and Subsidiaries
AVERAGE BALANCES, YIELDS AND RATES PAID (TAXABLE-EQUIVALENT BASIS) (1)(2)
- ----------------------------------------------------------------------------------------------------------------------------------
Quarter ended December 31,
-------------------------------------------------------------------
1999 1998
-------------------------------------------------------------------
INTEREST Interest
AVERAGE YIELDS/ INCOME/ Average Yields/ income/
(in millions) BALANCE RATES EXPENSE balance rates expense
- ----------------------------------------------------------------------------------------------------------------------------------
EARNING ASSETS
Federal funds sold and securities purchased
under resale agreements $ 1,621 5.16% $ 21 $ 2,011 5.25% $ 27
Securities available for sale (3):
Securities of U.S. Treasury and federal agencies 5,619 5.52 83 3,722 5.82 54
Securities of U.S. states and political subdivisions 1,792 8.24 37 1,539 8.41 31
Mortgage-backed securities:
Federal agencies 20,071 6.90 352 20,283 6.85 341
Private collateralized mortgage obligations 2,729 6.97 49 3,433 6.66 57
-------- ------ -------- ------
Total mortgage-backed securities 22,800 6.90 401 23,716 6.82 398
Other securities 4,995 6.13 56 2,738 5.86 43
-------- ------ -------- ------
Total securities available for sale 35,206 6.65 577 31,715 6.71 526
Loans held for sale (3) 4,776 7.65 92 5,099 7.63 97
Mortgages held for sale (3) 10,057 7.10 182 16,995 6.82 290
Loans:
Commercial 37,541 8.98 850 34,631 8.62 751
Real estate 1-4 family first mortgage 12,408 7.64 237 12,059 7.79 235
Other real estate mortgage 18,223 8.59 394 16,305 8.89 365
Real estate construction 4,619 9.17 107 3,779 9.12 87
Consumer:
Real estate 1-4 family junior lien mortgage 12,567 10.11 319 11,007 10.06 278
Credit card 5,285 13.58 179 5,644 14.67 207
Other revolving credit and monthly payment 16,571 12.91 536 16,284 12.69 518
-------- ------ -------- ------
Total consumer 34,423 11.99 1,034 32,935 12.15 1,003
Lease financing 7,542 7.78 147 6,177 8.02 124
Foreign 1,545 21.11 82 1,438 21.18 76
-------- ------ -------- ------
Total loans (4) 116,301 9.76 2,851 107,324 9.80 2,641
Other 3,913 4.36 43 2,353 5.27 31
-------- ------ -------- ------
Total earning assets $171,874 8.75 3,766 $165,497 8.72 3,612
======== ------ ======== ------
FUNDING SOURCES
Deposits:
Interest-bearing checking $ 2,725 1.11 8 $ 2,656 1.05 7
Market rate and other savings 56,500 2.23 318 54,178 2.50 341
Savings certificates 24,556 4.74 293 27,673 5.11 357
Other time deposits 3,307 5.00 42 3,911 5.39 53
Deposits in foreign offices 1,664 5.05 21 1,130 4.69 13
-------- ------ -------- ------
Total interest-bearing deposits 88,752 3.05 682 89,548 3.42 771
Short-term borrowings 20,696 5.54 289 17,075 5.09 219
Long-term debt 24,139 6.10 368 19,143 6.09 292
Guaranteed preferred beneficial interests in Company's
subordinated debentures 785 7.70 15 774 7.65 15
-------- ------ -------- ------
Total interest-bearing liabilities 134,372 4.01 1,354 126,540 4.07 1,297
Portion of noninterest-bearing funding sources 37,502 -- -- 38,957 -- --
-------- ------ -------- ------
Total funding sources $171,874 3.14 1,354 $165,497 3.12 1,297
======== ------ ======== ------
NET INTEREST MARGIN AND NET INTEREST INCOME ON
A TAXABLE-EQUIVALENT BASIS (5) 5.61% $2,412 5.60% $2,315
==== ====== ==== ======
NONINTEREST-EARNING ASSETS
Cash and due from banks $ 12,182 $ 11,086
Goodwill 7,600 7,709
Other 16,691 13,480
-------- --------
Total noninterest-earning assets $ 36,473 $ 32,275
======== ========
NONINTEREST-BEARING FUNDING SOURCES
Deposits $ 42,712 $ 43,303
Other liabilities 9,430 7,197
Preferred stockholders' equity 461 463
Common stockholders' equity 21,372 20,269
Noninterest-bearing funding sources used to
fund earning assets (37,502) (38,957)
-------- --------
Net noninterest-bearing funding sources $ 36,473 $ 32,275
======== ========
TOTAL ASSETS $208,347 $197,772
======== ========
- --------------------------------------------------------------------------------------------------------------
(1) The average prime rate of the Company was 8.37% and 7.92% for the quarters
ended December 31, 1999 and 1998, respectively. The average three-month
London Interbank Offered Rate (LIBOR) was 6.14% and 5.28% for the same
quarters, respectively.
(2) Interest rates and amounts include the effects of hedge and risk management
activities associated with the respective asset and liability categories.
(3) Yields are based on amortized cost balances.
(4) Nonaccrual loans and related income are included in their respective loan
categories.
(5) Includes taxable-equivalent adjustments that primarily relate to income on
certain loans and securities that is exempt from federal and applicable
state income taxes. The federal statutory tax rate was 35% for all periods
presented.
-11-
Wells Fargo & Company and Subsidiaries
AVERAGE BALANCES, YIELDS AND RATES PAID (TAXABLE-EQUIVALENT BASIS) (1)(2)
- ----------------------------------------------------------------------------------------------------------------------------------
Year ended December 31,
-------------------------------------------------------------------
1999 1998
-------------------------------------------------------------------
INTEREST Interest
AVERAGE YIELDS/ INCOME/ Average Yields/ income/
(in millions) BALANCE RATES EXPENSE balance rates expense
- ----------------------------------------------------------------------------------------------------------------------------------
EARNING ASSETS
Federal funds sold and securities purchased
under resale agreements $ 1,390 5.01% $ 70 $ 1,652 5.58% $ 92
Securities available for sale (3):
Securities of U.S. Treasury and federal agencies 5,611 5.45 316 4,868 5.94 287
Securities of U.S. states and political subdivisions 1,796 8.33 145 1,528 8.50 124
Mortgage-backed securities:
Federal agencies 19,961 6.83 1,366 17,194 7.05 1,187
Private collateralized mortgage obligations 3,048 6.85 211 2,841 6.74 190
-------- ------ -------- ------
Total mortgage-backed securities 23,009 6.84 1,577 20,035 7.01 1,377
Other securities 3,653 6.59 192 1,783 5.06 103
-------- ------ -------- ------
Total securities available for sale 34,069 6.65 2,230 28,214 6.80 1,891
Loans held for sale (3) 5,080 7.33 372 4,804 7.71 371
Mortgages held for sale (3) 12,088 7.00 853 12,978 6.92 898
Loans:
Commercial 36,023 8.75 3,153 33,271 8.93 2,971
Real estate 1-4 family first mortgage 12,203 7.66 934 12,932 7.75 1,003
Other real estate mortgage 17,297 8.76 1,515 16,257 9.37 1,523
Real estate construction 4,189 9.29 389 3,601 9.39 338
Consumer:
Real estate 1-4 family junior lien mortgage 11,646 9.95 1,159 10,703 10.42 1,115
Credit card 5,373 13.71 737 6,012 14.96 900
Other revolving credit and monthly payment 16,131 12.51 2,018 16,497 12.78 2,109
-------- ------ -------- ------
Total consumer 33,150 11.81 3,914 33,212 12.42 4,124
Lease financing 6,997 7.80 546 5,608 8.22 461
Foreign 1,515 21.02 318 1,324 20.96 277
-------- ------ -------- ------
Total loans (4) 111,374 9.67 10,769 106,205 10.07 10,697
Other 2,958 4.90 145 2,853 5.82 166
-------- ------ -------- ------
Total earning assets $166,959 8.67 14,439 $156,706 9.03 14,115
======== ------ ======== ------
FUNDING SOURCES
Deposits:
Interest-bearing checking $ 2,754 .95 26 $ 2,699 1.31 35
Market rate and other savings 56,123 2.27 1,274 52,431 2.61 1,367
Savings certificates 25,693 4.76 1,222 27,749 5.22 1,448
Other time deposits 3,473 4.98 173 4,040 5.49 222
Deposits in foreign offices 1,326 4.68 62 801 4.82 39
-------- ------ -------- -----
Total interest-bearing deposits 89,369 3.09 2,757 87,720 3.55 3,111
Short-term borrowings 18,356 5.04 924 14,454 5.37 777
Long-term debt 21,718 5.89 1,279 17,411 6.30 1,097
Guaranteed preferred beneficial interests in Company's
subordinated debentures 785 7.58 60 1,010 8.06 81
-------- ------ -------- ------
Total interest-bearing liabilities 130,228 3.85 5,020 120,595 4.20 5,066
Portion of noninterest-bearing funding sources 36,731 -- -- 36,111 -- --
-------- ------ -------- ------
Total funding sources $166,959 3.02 5,020 $156,706 3.24 5,066
======== ------ ======== ------
NET INTEREST MARGIN AND NET INTEREST INCOME ON
A TAXABLE-EQUIVALENT BASIS (5) 5.66% $9,419 5.79% $ 9,049
==== ====== ==== =======
NONINTEREST-EARNING ASSETS
Cash and due from banks $ 11,435 $ 10,669
Goodwill 7,666 7,865
Other 16,563 13,115
-------- --------
Total noninterest-earning assets $ 35,664 $ 31,649
======== ========
NONINTEREST-BEARING FUNDING SOURCES
Deposits $ 42,661 $ 40,922
Other liabilities 8,260 6,958
Preferred stockholders' equity 461 463
Common stockholders' equity 21,013 19,417
Noninterest-bearing funding sources used to
fund earning assets (36,731) (36,111)
-------- --------
Net noninterest-bearing funding sources $ 35,664 $ 31,649
======== ========
TOTAL ASSETS $202,623 $188,355
======== ========
- ----------------------------------------------------------------------------------------------------------------------------------
(1) The average prime rate of the Company was 8.00% and 8.35% for the year ended
December 31, 1999 and 1998, respectively. The average three-month London
Interbank Offered Rate (LIBOR) was 5.42% and 5.56% for the same periods,
respectively.
(2) Interest rates and amounts include the effects of hedge and risk management
activities associated with the respective asset and liability categories.
(3) Yields are based on amortized cost balances.
(4) Nonaccrual loans and related income are included in their respective loan
categories.
(5) Includes taxable-equivalent adjustments that primarily relate to income on
certain loans and securities that is exempt from federal and applicable
state income taxes. The federal statutory tax rate was 35% for all periods
presented.