EXHIBIT 99
Wells Fargo & Company's financial results for the quarter ended March
31, 2001.
Wells Fargo & Company reported net income of $1,165 million for the
first quarter of 2001, up 12% from the first quarter of 2000, on revenue growth
of 12%. Diluted cash earnings per common share were $.80 for the first quarter
of 2001, up 16% from $.69 per share in the first quarter of 2000. Cash earnings
are earnings before goodwill and nonqualifying core deposit intangible
amortization and the reduction of unamortized goodwill due to sales of assets.
Cash return on average assets (ROA) was 2.18% and cash return on average common
equity (ROE) was 34.50% for the first quarter of 2001, compared with 2.07% and
31.98%, respectively, for the prior year.
Diluted earnings per common share were a $.67 for the first quarter of
2001, up 10% from the $.61 reported for the first quarter of 2000. ROA was 1.76%
for the first quarter of 2001, compared with 1.75% for the first quarter of
2000. ROE was 17.95% for the first quarter of 2001, compared with 17.45% for the
same period a year ago.
The difference between cash and reported earnings per share this
quarter was greater than in prior quarters due to the impact of goodwill and
core deposit intangibles from acquisitions completed recently. Goodwill and
core deposit intangible amortization and the reduction of unamortized
goodwill due to sales of assets related to acquisitions completed since the
Wells Fargo/Norwest merger in November 1998, while not affecting cash
earnings, reduced first quarter 2001 reported earnings by about $.05 per
share and, together with the effect of pending acquisitions, are expected to
reduce reported earnings for the full year by about $.13 per share under
current accounting rules. The total difference between cash and reported
earnings is expected to be $.43 per share in 2001 assuming no change in
accounting rules.
After-tax conversion costs for First Security, National Bancorp of
Alaska and Brenton Banks were approximately $50 million for the first quarter
of 2001. Additional integration costs to complete these conversions are
expected to be approximately $87 million (after-tax), or $.05 per share,
primarily during the second quarter of 2001. Given current stock market
conditions, market-sensitive income such as venture capital gains will likely
fall below the normalized level of $140 million (pretax), or $87 million
(after-tax), per quarter and therefore will not offset these conversion
costs, as was the case in 1999 and 2000.
Wells Fargo completed its merger with First Security Corporation on
October 25, 2000. The merger was accounted for under the pooling-of-interests
method of accounting. These financial results present the results of Wells Fargo
& Company as if the merger with First Security had been in effect for all
periods presented.
Net interest income on a taxable-equivalent basis was $2,834 million in
the first quarter of 2001, up 7%, compared with $2,649 million in the first
quarter of 2000. The net interest margin was 5.21% for the first quarter of
2001, compared with 5.39% for the same period of 2000. Following the Federal
Reserve interest rate reductions, loan rates have fallen faster than customer
deposit rates. Average loans grew from $155.9 billion in the fourth quarter of
2000 to $159.9 billion in the first quarter, an annualized growth rate of
approximately 10%.
Noninterest income was $2,414 million in the first quarter of 2001, up
18%, compared with $2,043 million in the same period of 2000. The increase in
noninterest income was due to higher
-2-
net gains on sales of securities in the securities available for sale
portfolio in 2001, a $160 million write-down of auto lease residuals in the
first quarter of 2000 and a $96 million gain on divestitures (required as a
condition to the First Security merger) of 39 stores in Idaho, New Mexico,
Nevada and Utah in 2001. This gain includes a $54 million reduction of
unamortized goodwill. The increase in noninterest income was primarily offset
by a decrease in net venture capital gains.
Noninterest expense was $2,996 million in the first quarter of 2001,
compared with $2,736 million in the same period a year ago, an increase of
10%. Salaries, incentive compensation and employee benefit expenses grew by
almost 12% during this period due primarily to headcount growth of 13%. The
cash efficiency ratio was 53.2% for the first quarter of 2001, compared with
55.1% for the first quarter of 2000.
Noninterest expenses declined $222 million, or almost 7%, from the
fourth quarter 2000. Most of the decrease was attributable to reduction in the
integration charges for the Wells Fargo/Norwest and First Security mergers.
The provision for loan losses was $361 million for the first quarter of
2001 and $276 million for first quarter of 2000. Net charge-offs totaled $361
million, or .92% of average loans (annualized), in the first quarter of 2001 and
$352 million, or .90%, for the fourth quarter of 2000 and $275 million, or .82%,
for the first quarter of 2000.
At March 31, 2001, the allowance for loan losses of $3,759 million
was 2.32% of total loans, compared with 2.45% at March 31, 2000. Total
nonaccrual and restructured loans were $1,364 million at March 31, 2001,
$1,195 million at December 31, 2000, and $816 million at March 31, 2000. The
increase in nonaccrual loans from December 31, 2000 included the impact of
Wells Fargo's exposure to a California utility that recently declared
bankruptcy, plus $28 million due to nonaccrual loans from acquisitions closed
during the quarter.
WELLS FARGO & COMPANY IS A DIVERSIFIED FINANCIAL SERVICES COMPANY WITH $280
BILLION IN ASSETS, PROVIDING BANKING, INSURANCE, INVESTMENTS, MORTGAGE AND
CONSUMER FINANCE FROM ABOUT 5,400 STORES AND THE INTERNET (WELLSFARGO.COM)
ACROSS NORTH AMERICA AND ELSEWHERE INTERNATIONALLY.
- ----------------
The following appears in accordance with the Private Securities Litigation
Reform Act of 1995:
The foregoing discussion contains forward-looking statements about
the Company, including, generally, descriptions of plans or objectives for
future operations, products or services, and/or forecasts of revenues,
earnings or other measures of economic performance and, specifically -the
anticipated impact on reported earnings per share for the full year 2001 of
goodwill and core deposit intangible amortization from acquisitions - the
expected difference between cash and reported earnings per share for the full
year 2001 - the anticipated amount and anticipated timing of integration
costs relating to the completion of the First Security, National Bancorp of
Alaska and Brenton Banks conversions - the likely level of market-sensitive
income such as venture capital gains - the expected amount of non-performing
assets and net charge-offs - the expected condition of and growth prospectus
for the California economy - the credit exposure to California utility
companies and to dot-com companies - the mitigating effect of lending
policies and loan portfolio diversity on the impact to the Company of a
weaker economy. Forward-looking statements discuss matters that are not facts
and often include the word: "believe," "expect," "anticipate," "intend,"
"plan," "estimate," "will," "can," "would," "should," "could" or "may." They
give the Company's expectations about the future and are not guarantees.
Forward-looking statements speak only as of the date they are made, and the
Company does not undertake any obligation to update them to reflect changes
that occur after that date.
There are several factors--many of which are beyond the Company's
control--that could cause results to differ significantly from the Company's
expectations. This release describes some of these factors, such as the
California energy crisis (including the level of retail energy prices), the
condition of the national economy and California economies, and the Company's
credit exposure to California utility companies and dot-com companies. The
Company's Annual Report on Form 10-K for the year ended December 31, 2000,
including information incorporated by reference into the Form 10-K from the
Company's 2000 Annual Report to Stockholders (filed as Exhibit 13 to the Form
10-K), describes factors such as credit, market, operational, liquidity,
interest rate and other risks. See, for example, "Financial Review--
-3-
Balance Sheet Analysis" included in the 2000 Annual Report to Stockholders.
The Form 10-K also describes industry-related factors such as - general
business and economic conditions - fiscal and monetary policies - regulation
- -disintermediation - competition generally and specifically in light of the
Gramm-Leach-Bliley Act, as well as Company-related factors such as -
potential dividend restrictions - market acceptance and regulatory approval
of new products and services - non-banking activities - integration of
acquired companies - attracting and retaining key personnel - stock price
volatility. See "Financial Review--Factors That May Affect Future Results"
included in the 2000 Annual Report to Stockholders. Any factor described in
the Form 10-K or in information incorporated by reference into the Form 10-K
could, by itself or together with one or more other factors, adversely affect
the Company's business, earnings and/or financial condition.
-4-
Wells Fargo & Company and Subsidiaries
SUMMARY FINANCIAL DATA
- -------------------------------------------------------------------------------------------------------------------
% Change
Quarter ended March 31, 2001 from
-------------------------------- -------------------
MAR. 31, Dec. 31, Mar. 31, Dec. 31, Mar. 31,
(in millions, except per share amounts) 2001 2000 2000 2000 2000
- -------------------------------------------------------------------------------------------------------------------
FOR THE PERIOD
Net income $ 1,165 $ 1,128 $ 1,040 3% 12%
Net income applicable to common stock 1,161 1,124 1,036 3 12
Earnings per common share $ .68 $ .66 $ .61 3 11
Diluted earnings per common share .67 .65 .61 3 10
Dividends declared per common share .24 .24 .22 -- 9
Average common shares outstanding 1,715.9 1,710.5 1,696.7 -- 1
Diluted common shares outstanding 1,738.7 1,732.4 1,711.3 -- 2
Profitability ratios (annualized)
Net income to average total assets (ROA) 1.76% 1.73% 1.75% 2 1
Net income applicable to common stock to
average common stockholders' equity (ROE) 17.95 17.16 17.45 5 3
Total revenue $ 5,234 $ 5,405 $ 4,675 (3) 12
Efficiency ratio (1) 57.2% 59.5% 58.5% (4) (2)
Average loans $159,888 $155,860 $134,935 3 18
Average assets 268,536 259,971 239,464 3 12
Average core deposits 156,898 151,847 139,687 3 12
Net interest margin 5.21% 5.30% 5.39% (2) (3)
CASH NET INCOME AND RATIOS (2)
Net income applicable to common stock $ 1,384 $ 1,291 $ 1,180 7 17
Earnings per common share .81 .75 .70 8 16
Diluted earnings per common share .80 .75 .69 7 16
ROA 2.18% 2.06% 2.07% 6 5
ROE 34.50 31.85 31.98 8 8
Efficiency ratio 53.2 56.1 55.1 (5) (3)
AT PERIOD END
Securities available for sale $ 38,144 $ 38,655 $ 41,955 (1) (9)
Loans 161,876 161,124 139,088 -- 16
Allowance for loan losses 3,759 3,719 3,406 1 10
Goodwill 9,280 9,303 8,692 -- 7
Assets 279,670 272,426 245,567 3 14
Core deposits 163,414 156,710 144,970 4 13
Common stockholders' equity 26,609 26,221 25,095 1 6
Stockholders' equity 26,865 26,488 25,358 1 6
Capital ratios
Common stockholders' equity to assets 9.51% 9.63% 10.22% (1) (7)
Stockholders' equity to assets 9.61 9.72 10.33 (1) (7)
Risk-based capital (3)
Tier 1 capital 7.30 7.29 7.55 -- (3)
Total capital 11.10 10.43 11.02 6 1
Leverage (3) 6.45 6.49 6.58 (1) (2)
Book value per common share $ 15.48 $ 15.29 $ 14.78 1 5
Staff (active, full-time equivalent) 113,214 108,727 100,107 4 13
COMMON STOCK PRICE
High $ 54.81 $ 56.38 $ 43.75 (3) 25
Low 42.55 39.63 31.00 7 37
Period end 49.47 55.69 40.75 (11) 21
- -------------------------------------------------------------------------------------------------------------------
(1) The efficiency ratio is defined as noninterest expense divided by total
revenue (net interest income and noninterest income).
(2) Cash net income and ratios exclude goodwill and nonqualifying core deposit
intangible (CDI) amortization and the reduction of unamortized goodwill due
to sales of assets. The ratios also exclude the balance of goodwill and
nonqualifying CDI. Nonqualifying core deposit intangible 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 $1,123 million for the
three months ended March 31, 2001. The after-tax amounts for the
amortization and average balance of nonqualifying CDI were $25 million and
$697 million, respectively, for the quarter ended March 31, 2001. Goodwill
amortization and the reduction of unamortized goodwill due to the sales
of assets and average balance (which are not tax effected) were $144
million, $54 million and $9,266 million, respectively, for the quarter
ended March 31, 2001.
(3) The March 31, 2001 ratios are preliminary.
-5-
Wells Fargo & Company and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
- -------------------------------------------------------------------------------------------------------------------
Quarter ended March 31,
---------------------- %
(in millions, except per share amounts) 2001 2000 Change
- -------------------------------------------------------------------------------------------------------------------
INTEREST INCOME
Securities available for sale $ 604 $ 715 (16)%
Mortgages held for sale 257 184 40
Loans held for sale 93 108 (14)
Loans 3,843 3,290 17
Other interest income 84 81 4
-------- --------
Total interest income 4,881 4,378 11
-------- --------
INTEREST EXPENSE
Deposits 1,121 870 29
Short-term borrowings 394 424 (7)
Long-term debt 529 435 22
Guaranteed preferred beneficial interests
in Company's subordinated debentures 17 17 --
-------- --------
Total interest expense 2,061 1,746 18
-------- --------
NET INTEREST INCOME 2,820 2,632 7
Provision for loan losses 361 276 31
-------- --------
Net interest income after
provision for loan losses 2,459 2,356 4
-------- --------
NONINTEREST INCOME
Service charges on deposit accounts 428 404 6
Trust and investment fees 415 397 5
Credit card fees 181 167 8
Other fees 307 251 22
Mortgage banking 391 334 17
Insurance 118 95 24
Net venture capital gains 17 885 (98)
Net gains (losses) on securities available for sale 117 (601) --
Other 440 111 296
-------- --------
Total noninterest income 2,414 2,043 18
-------- --------
NONINTEREST EXPENSE
Salaries 977 881 11
Incentive compensation 204 168 21
Employee benefits 278 255 9
Equipment 237 221 7
Net occupancy 237 238 --
Goodwill 144 117 23
Core deposit intangible 43 48 (10)
Net gains on dispositions of premises and equipment (19) (34) (44)
Other 895 842 6
-------- --------
Total noninterest expense 2,996 2,736 10
-------- --------
INCOME BEFORE INCOME TAX EXPENSE 1,877 1,663 13
Income tax expense 712 623 14
-------- --------
NET INCOME $ 1,165 $ 1,040 12%
======== ========
NET INCOME APPLICABLE TO
COMMON STOCK $ 1,161 $ 1,036 12 %
======= ========
EARNINGS PER COMMON SHARE $ .68 $ .61 11 %
======= ========
DILUTED EARNINGS PER COMMON SHARE $ .67 $ .61 10 %
======= ========
DIVIDENDS DECLARED PER COMMON SHARE $ .24 $ .22 9 %
======= ========
Average common shares outstanding 1,715.9 1,696.7 1 %
======= ========
Diluted average common shares outstanding 1,738.7 1,711.3 2 %
======= ======== ====
- -------------------------------------------------------------------------------------------------------------------
-6-
Wells Fargo & Company and Subsidiaries
CONSOLIDATED BALANCE SHEET
- ---------------------------------------------------------------------------------------------------------------------------
% Change
Mar. 31, 2001 from
-------------------
MAR. 31, Dec. 31, Mar. 31, Dec. 31, Mar. 31,
(in millions, except shares) 2001 2000 2000 2000 2000
- ---------------------------------------------------------------------------------------------------------------------------
ASSETS
Cash and due from banks $ 15,523 $ 16,978 $ 13,003 (9)% 19%
Federal funds sold and securities
purchased under resale agreements 2,869 1,598 3,209 80 (11)
Securities available for sale 38,144 38,655 41,955 (1) (9)
Mortgages held for sale 18,677 11,812 7,087 58 164
Loans held for sale 4,875 4,539 5,575 7 (13)
Loans 161,876 161,124 139,088 -- 16
Allowance for loan losses 3,759 3,719 3,406 1 10
--------- --------- ---------
Net loans 158,117 157,405 135,682 -- 17
--------- --------- ---------
Mortgage servicing rights 5,340 5,609 4,799 (5) 11
Premises and equipment, net 3,429 3,415 3,285 -- 4
Core deposit intangible 1,135 1,183 1,263 (4) (10)
Goodwill 9,280 9,303 8,692 -- 7
Interest receivable and other assets 22,281 21,929 21,017 2 6
--------- --------- ---------
Total assets $279,670 $272,426 $245,567 3% 14%
========= ========= ========= === ===
LIABILITIES
Noninterest-bearing deposits $ 54,996 $ 55,096 $ 48,491 --% 13%
Interest-bearing deposits 116,325 114,463 106,577 2 9
--------- --------- ---------
Total deposits 171,321 169,559 155,068 1 10
Short-term borrowings 29,352 28,989 24,964 1 18
Accrued expenses and other liabilities 16,597 14,409 10,986 15 51
Long-term debt 34,600 32,046 28,256 8 22
Guaranteed preferred beneficial interests
in Company's subordinated debentures 935 935 935 -- --
STOCKHOLDERS' EQUITY
Preferred stock 525 385 473 36 11
Unearned ESOP shares (269) (118) (210) 128 28
--------- --------- ---------
Total preferred stock 256 267 263 (4) (3)
Common stock - $1-2/3 par value,
authorized 4,000,000,000 shares;
issued 1,736,381,025 shares, 1,736,381,025 shares
and 1,736,329,885 shares 2,894 2,894 2,894 -- --
Additional paid-in capital 9,354 9,337 9,217 -- 1
Retained earnings 15,176 14,541 13,085 4 16
Cumulative other comprehensive income 122 524 1,570 (77) (92)
Note receivable from ESOP -- -- (1) -- (100)
Treasury stock - 17,838,827 shares,
21,735,182 shares and 38,015,214 shares (937) (1,075) (1,670) (13) (44)
--------- --------- ---------
Total stockholders' equity 26,865 26,488 25,358 1 6
--------- --------- ---------
Total liabilities and stockholders' equity $279,670 $272,426 $245,567 3% 14%
========= ========= ========= === ====
- ---------------------------------------------------------------------------------------------------------------------------
-7-
Wells Fargo & Company and Subsidiaries
CONDENSED CONSOLIDATED STATEMENT OF
CHANGES IN STOCKHOLDERS' EQUITY AND OTHER COMPREHENSIVE INCOME
- -------------------------------------------------------------------------------------------------------------------
Quarter ended March 31,
--------------------------
(in millions) 2001 2000
- -------------------------------------------------------------------------------------------------------------------
BALANCE, BEGINNING OF PERIOD $26,488 $23,871
Net income 1,165 1,040
Other comprehensive income (loss), net of tax:
Change in foreign currency translation adjustments (2) --
Change in valuation allowance related to:
Derivative instruments and hedging activities 93 --
Investment securities (564) 810
Cumulative effect of change in accounting principle related to
derivative instruments and hedging activities 71 --
Common stock issued 236 91
Common stock issued for acquisitions 18 1,125
Common stock repurchased (275) (1,230)
Preferred stock released to ESOP 52 40
Preferred stock dividends (4) (4)
Common stock dividends (412) (386)
Change in Rabbi trust assets (classified as treasury stock) (1) 1
------- -------
BALANCE, END OF PERIOD $26,865 $25,358
======= =======
- -------------------------------------------------------------------------------------------------------------------
LOANS
- -------------------------------------------------------------------------------------------------------------------
MAR. 31, Dec. 31, Mar. 31,
(in millions) 2001 2000 2000
- -------------------------------------------------------------------------------------------------------------------
Commercial $ 49,380 $ 50,518 $ 43,851
Real estate 1-4 family first mortgage 18,940 18,464 15,262
Other real estate mortgage 23,947 23,972 22,011
Real estate construction 8,201 7,715 6,366
Consumer:
Real estate 1-4 family junior lien mortgage 18,912 18,218 13,825
Credit card 6,245 6,616 5,519
Other revolving credit and monthly payment 24,141 23,974 20,958
-------- -------- --------
Total consumer 49,298 48,808 40,302
Lease financing 10,565 10,023 9,670
Foreign 1,545 1,624 1,626
-------- -------- --------
Total loans (net of unearned discount) $161,876 $161,124 $139,088
======== ======== ========
- -------------------------------------------------------------------------------------------------------------------
-8-
Wells Fargo & Company and Subsidiaries
CHANGES IN THE ALLOWANCE FOR LOAN LOSSES
- ------------------------------------------------------------------------------------------------------------------
Quarter ended
-----------------------------------------
MAR. 31, Dec. 31, Mar. 31,
(in millions) 2001 2000 2000
- ------------------------------------------------------------------------------------------------------------------
BALANCE, BEGINNING OF PERIOD $ 3,719 $3,665 $ 3,344
Allowance related to business combinations 40 54 61
Provision for loan losses 361 352 276
Loan charge-offs:
Commercial (109) (115) (105)
Real estate 1-4 family first mortgage (3) (4) (7)
Other real estate mortgage (3) (6) (3)
Real estate construction (1) (1) (1)
Consumer:
Real estate 1-4 family junior lien mortgage (11) (11) (11)
Credit card (101) (103) (86)
Other revolving credit and monthly payment (187) (167) (152)
------- ------ -------
Total consumer (299) (281) (249)
Lease financing (24) (21) (13)
Foreign (18) (21) (24)
------- ------ -------
Total loan charge-offs (457) (449) (402)
------- ------ -------
Loan recoveries:
Commercial 16 27 33
Real estate 1-4 family first mortgage 1 1 1
Other real estate mortgage 2 3 3
Real estate construction 1 1 1
Consumer:
Real estate 1-4 family junior lien mortgage 3 4 4
Credit card 12 10 10
Other revolving credit and monthly payment 49 43 56
------- ------ -------
Total consumer 64 57 70
Lease financing 7 4 3
Foreign 5 4 16
------- ------ -------
Total loan recoveries 96 97 127
------- ------ -------
Total net loan charge-offs (361) (352) (275)
------- ------ -------
BALANCE, END OF PERIOD $ 3,759 $3,719 $ 3,406
======= ====== =======
Total net loan charge-offs as a percentage
of average total loans (annualized) .92% .90% .82%
======= ====== =======
Allowance as a percentage of total loans 2.32% 2.31% 2.45%
======= ====== =======
- ------------------------------------------------------------------------------------------------------------------
-9-
Wells Fargo & Company and Subsidiaries
NONACCRUAL AND RESTRUCTURED LOANS AND OTHER ASSETS
- -------------------------------------------------------------------------------------------------------------------
MAR. 31, Dec. 31, Mar. 31,
(in millions) 2001 2000 2000
- -------------------------------------------------------------------------------------------------------------------
Nonaccrual loans:
Commercial $ 835 $ 739 $458
Real estate 1-4 family first mortgage 131 127 138
Other real estate mortgage 135 113 113
Real estate construction 65 57 23
Consumer:
Real estate 1-4 family junior lien mortgage 16 23 11
Other revolving credit and monthly payment 32 36 23
------ ------ ----
Total consumer 48 59 34
Lease financing 141 92 38
Foreign 9 7 11
------ ------ ----
Total nonaccrual loans 1,364 1,194 815
Restructured loans -- 1 1
------ ------ ----
Nonaccrual and restructured loans 1,364 1,195 816
As a percentage of total loans .8% .7% .6%
Foreclosed assets 127 128 150
Real estate investments (1) 27 27 32
------ ------ ----
Total nonaccrual and restructured loans
and other assets $1,518 $1,350 $998
====== ====== ====
- -------------------------------------------------------------------------------------------------------------------
(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 recorded as loans. Real estate investments totaled $50
million, $56 million and $85 million at March 31, 2001, December 31, 2000
and March 31, 2000, respectively.
-10-
Wells Fargo & Company and Subsidiaries
NONINTEREST INCOME
- ------------------------------------------------------------------------------------------------------------------
Quarter ended March 31,
--------------------------- %
(in millions) 2001 2000 Change
- ------------------------------------------------------------------------------------------------------------------
Service charges on deposit accounts $ 428 $ 404 6%
Trust and investment fees:
Asset management and custody fees 189 176 7
Mutual fund and annuity sales fees 214 184 16
All other 12 37 (68)
------ ------
Total trust and investment fees 415 397 5
Credit card fees 181 167 8
Other fees:
Cash network fees 46 40 15
Charges and fees on loans 94 81 16
All other 167 130 28
------ ------
Total other fees 307 251 22
Mortgage banking:
Origination and other closing fees 121 65 86
Servicing fees, net of amortization and related net gains
on securities available for sale 146 151 (3)
Net gains on sales of mortgage servicing rights 2 26 (92)
Net gains on sales of mortgages 58 43 35
All other 64 49 31
------ ------
Total mortgage banking 391 334 17
Insurance 118 95 24
Net venture capital gains 17 885 (98)
Net gains (losses) on securities available for sale 117 (601) --
Income from equity investments accounted
for by the:
Cost method 91 114 (20)
Equity method 1 37 (97)
Net gains on sales of loans 13 1 --
Net gains on dispositions of operations 101 2 --
All other 234 (43) --
------ ------
Total $2,414 $2,043 18%
====== ====== ====
- -------------------------------------------------------------------------------------------------------------------
NONINTEREST EXPENSE
- ------------------------------------------------------------------------------------------------------------------
Quarter ended March 31,
------------------------- %
(in millions) 2001 2000 Change
- ------------------------------------------------------------------------------------------------------------------
Salaries $ 977 $ 881 11%
Incentive compensation 204 168 21
Employee benefits 278 255 9
Equipment 237 221 7
Net occupancy 237 238 --
Goodwill 144 117 23
Core deposit intangible:
Nonqualifying (1) 40 44 (9)
Qualifying 3 4 (25)
Net gains on dispositions of premises
and equipment (19) (34) (44)
Contract services 116 109 6
Outside professional services 102 89 15
Outside data processing 77 79 (3)
Advertising and promotion 58 61 (5)
Telecommunications 79 68 16
Travel and entertainment 73 57 28
Postage 69 60 15
Stationery and supplies 59 49 20
Insurance 47 42 12
Operating losses 56 37 51
Security 27 23 17
All other 132 168 (21)
------ ------ ----
Total $2,996 $2,736 10%
====== ====== ====
- -------------------------------------------------------------------------------------------------------------------
(1) Represents amortization of core deposit intangible acquired after February
1992 that is subtracted from stockholders' equity in computing regulatory
capital for bank holding companies.
-11-
Wells Fargo & Company and Subsidiaries
AVERAGE BALANCES, YIELDS AND RATES PAID (TAXABLE-EQUIVALENT BASIS) (1)(2)
- ---------------------------------------------------------------------------------------------------------------------------
Quarter ended March 31,
----------------------------------------------------------------
2001 2000
------------------------------- ----------------------------
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 $ 2,367 5.33% $ 31 $ 2,235 5.66% $ 31
Debt securities available for sale (3):
Securities of U.S. Treasury and federal agencies 2,409 7.06 41 4,751 5.76 73
Securities of U.S. states and political subdivisions 1,996 7.67 37 2,128 7.94 43
Mortgage-backed securities:
Federal agencies 25,152 7.17 439 27,051 7.18 497
Private collateralized mortgage obligations 1,550 8.83 34 2,996 6.96 54
-------- ------ ------- ------
Total mortgage-backed securities 26,702 7.27 473 30,047 7.16 551
Other debt securities(4) 3,236 7.85 65 5,681 8.05 63
-------- ------ ------- ------
Total debt securities available for sale (4) 34,343 7.33 616 42,607 7.09 730
Mortgages held for sale (3) 14,146 7.24 257 9,660 7.53 184
Loans held for sale (3) 4,817 7.78 93 5,382 8.06 108
Loans:
Commercial 49,093 9.07 1,098 42,200 9.10 954
Real estate 1-4 family first mortgage 18,315 7.56 346 13,811 8.01 276
Other real estate mortgage 23,904 8.80 520 21,329 9.23 490
Real estate construction 7,916 9.60 187 6,256 9.73 151
Consumer:
Real estate 1-4 family junior lien mortgage 18,528 10.20 470 13,325 10.20 339
Credit card 6,333 14.15 225 5,614 13.79 193
Other revolving credit and monthly payment 23,942 11.94 712 20,903 11.77 614
-------- ------ ------- ------
Total consumer 48,803 11.57 1,407 39,842 11.53 1,146
Lease financing 10,273 7.98 204 9,885 7.64 189
Foreign 1,584 21.17 84 1,612 21.48 87
-------- ------ -------- ------
Total loans (5) 159,888 9.70 3,846 134,935 9.79 3,293
Other 3,539 5.98 52 3,491 5.66 49
-------- ------ -------- ------
Total earning assets $219,100 9.02 4,895 $198,310 8.95 4,395
======== ------ ======== ------
FUNDING SOURCES
Deposits:
Interest-bearing checking $ 2,469 3.67 22 $ 3,337 1.41 12
Market rate and other savings 70,158 2.85 494 61,680 2.56 392
Savings certificates 32,828 5.80 470 29,325 4.99 363
Other time deposits 2,223 5.53 30 3,743 5.22 49
Deposits in foreign offices 7,708 5.54 105 3,913 5.55 54
-------- ------ -------- ------
Total interest-bearing deposits 115,386 3.94 1,121 101,998 3.43 870
Short-term borrowings 28,186 5.67 394 29,330 5.81 424
Long-term debt 33,571 6.31 529 27,295 6.37 435
Guaranteed preferred beneficial interests in Company's
subordinated debentures 933 7.80 17 935 7.86 17
-------- ------ -------- ------
Total interest-bearing liabilities 178,076 4.68 2,061 159,558 4.40 1,746
Portion of noninterest-bearing funding sources 41,024 -- -- 38,752 -- --
-------- ------ -------- ------
Total funding sources $219,100 3.81 2,061 $198,310 3.56 1,746
======== ------ ======== ------
NET INTEREST MARGIN AND NET INTEREST INCOME ON
A TAXABLE-EQUIVALENT BASIS (6) 5.21% $2,834 5.39% $2,649
====== ====== ==== ======
NONINTEREST-EARNING ASSETS
Cash and due from banks $ 14,813 $ 12,802
Goodwill 9,266 8,274
Other 25,357 20,078
-------- --------
Total noninterest-earning assets $ 49,436 $ 41,154
======== ========
NONINTEREST-BEARING FUNDING SOURCES
Deposits $ 51,443 $ 45,345
Other liabilities 12,523 10,411
Preferred stockholders' equity 267 272
Common stockholders' equity 26,227 23,878
Noninterest-bearing funding sources used to
fund earning assets (41,024) (38,752)
-------- --------
Net noninterest-bearing funding sources $ 49,436 $ 41,154
======== ========
TOTAL ASSETS $268,536 $239,464
======== ========
- --------------------------------------------------------------------------------------------------------------
(1) The average prime rate of the Company was 8.63% and 8.69% for the quarters
ended March 31, 2001 and 2000, respectively. The average three-month London
Interbank Offered Rate (LIBOR) was 5.34% and 6.11% 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 computed on a settlement date
basis.
(4) Includes certain preferred securities.
(5) Nonaccrual loans and related income are included in their respective loan
categories.
-12-
(6) 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.