Wells Fargo and Norwest
"Creating ... The Premier Financial Services Company"
June 8, 1998
Pro Forma Financial Results
1999E 2000E 2001E
Cash EPS $2.56 $2.91 $3.35
% Accretion 7.6% 9.4% 12.8%
GAAP EPS $2.23 $2.59 $3.03
% Accretion -- 3.2% 7.4%
% Change from prior yr. 13.2%(1) 16.1% 17.0%
(1) Based on analyst estimates of $1.97 GAAP EPS for 1998.
Note: Estimates exclude one-time merger related costs
Premier Banking Franchise in the West and Midwest
[Map]
Deposit Rank # of States Total $
1 5 20.1
2 5 73.3
3 2 10.1
4 4 16.9
5+ 5 4.6
- --------------------------------------------------------------------------------
Total 21 $125
($ in billions)
Leadership in Retail Distribution
- #1 in total stores (5,777)
- #3 Bank network (2,800 stores)
- #1 Retail mortgage network (741 stores)
- Largest mortgage banking originator (1 out of 15 mortgages)
- Largest mortgage banking servicer (2,000,000 customers)
- #1 Premier, U.S. Consumer finance company (1,425 stores)
- #3 ATM network in U.S. (6,500 ATMs)
- #1 Internet bank for consumers (460,000 customers)
- #1 Supermarket bank (900 stores)
- Leader in telephone banking functionality
- Leading NAFTA bank
- #1 Mexican border
- #1 Canadian border
The New Wells Fargo
- #1, 2, or 3 Bank Deposit Share in 73 MSA's
- #1 Mortgage Originator and Servicer
- #1 Bank Commercial Real Estate Lender
- #1 Bank-Owned Insurance Agency
- #1 Agricultural Bank
- #2 Small Business Lender
- #4 Middle Market Lender
- #4 Bank Mutual Fund Manager
- #1 Internet Bank
- Premier Consumer Finance Company
Significant Customer Base
- --------------------------------------------------------------------------------
Norwest Wells Fargo Combined
----------------------------------------------
Retail Banking 3mm 6.1mm 9.1mm households
Mortgage 2.1mm - 2.1mm customers
Consumer Finance 3.2mm - 3.2mm customers
Small Business 284k 750k 1.0mm customers
Middle Market 10k 13k 23k customers
Large Corporate 1.2k 1.5k 2.7k customers
Leveraging Complementary Strengths
- Norwest
- Exceptional sales and service culture
- Strong revenue generation
- Wells Fargo
- Alternative delivery leader
- Outstanding expense efficiency
Expense Savings
Amount
Source of Savings ($mm) Comments
Systems $200 - Conversion to one system platform
- Elimination of duplicate systems
development and maintenance
Operations 120 - Consolidation of operations
Branch Consolidations 175 - Based on states with market place
overlap
General Administration 155 - Elimination of duplicate overhead
--- functions
Total Cost Saves $650
%of combined expenses 8%
Note: Expenses excluding intangible amortization
Expense Savings Projected in
Recent Major Bank Transactions
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($ in Millions) Cost Saves as
a % of Smaller Pre-Tax
Non-Interest Non-Interest
Merger Partners Expense Base Expense Savings
- --------------- -------------- ---------------
Norwest/Wells Fargo 17% $ 650
In-Market
Corestates/First Union 46% $ 723
First Interstate/Wells Fargo 37 800
Chase/Chemical 41 1,800
Market Extension
BankAmerica/NationsBank 27% $2,000
First Chicago NBD/Banc One 28 930
First America/National City 31 243
US Bancorp/First Banks 30 340
First Chicago/NBD Bancorp 16 200
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Opportunities Not Included in Financial Model
Annual Pre-Tax
Income Potential
($mm)
----------------
- - Increase Wells Fargo's current products per
household to Norwest average $700
- - Improve Norwest banking efficiency ratio to
level of Wells Fargo 400
- - Other cross-business integration revenue
opportunities 150