WELLS FARGO & COMPANY/MN Quarterly Report for Q2 Ended Jun 30, 2013

Summary

Wells Fargo & Company/MN (WFC) reported strong financial results for the second quarter of 2013, marking its 14th consecutive quarter of earnings per share growth and 9th consecutive quarter of record earnings per share. Net income reached $5.5 billion ($0.98 diluted EPS), a 19% increase year-over-year, demonstrating the benefits of its diversified business model and a dynamic economic environment. The company saw improvements across key profitability ratios, including ROA and ROE, while also reducing its efficiency ratio to 57.3%. Credit quality continued to improve with net charge-offs at their lowest rate since the second quarter of 2006, benefiting from conservative underwriting and an improving housing market. The company maintained a robust balance sheet with continued core loan and deposit growth. Deposits grew 10% year-over-year, with a 6% increase in core deposits, while deposit costs were reduced. Capital levels strengthened, with the Tier 1 common equity ratio increasing to 10.71% under Basel I, and an estimated 8.62% under Basel III. In a move to reward shareholders, Wells Fargo increased its quarterly dividend to $0.30 per share and continued its share repurchase program.

Key Highlights

• 1Wells Fargo reported record quarterly net income of $5.5 billion, up 19% year-over-year.
• 2Diluted earnings per common share (EPS) was $0.98, up 20% year-over-year, marking the 14th consecutive quarter of EPS growth.
• 3The efficiency ratio improved to 57.3% from 58.2% in the prior year quarter.
• 4Net charge-offs decreased by 57 basis points year-over-year to 0.58% of average loans, reaching their lowest rate since Q2 2006.
• 5Total deposits grew 10% year-over-year to $1.02 trillion, with core deposits up 6%.
• 6Tier 1 common equity ratio increased to 10.71% (Basel I), and estimated Tier 1 common equity ratio under Basel III was 8.62%.
• 7The quarterly dividend was increased by 20% to $0.30 per common share.

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