10-QPeriod: Q1 FY2015

WELLS FARGO & COMPANY/MN Quarterly Report for Q1 Ended Mar 31, 2015

Filed May 6, 2015For Securities:WFCWFC-PDWFC-PCWFC-PYWFC-PAWFC-PLWFCNPWFC-PZ

Summary

Wells Fargo & Company's first quarter 2015 results demonstrate continued operational strength and a robust financial position. The company reported a net income of $5.8 billion, or $1.04 per diluted share, largely consistent with the prior year's quarter, reflecting a diversified business model. Revenue saw a 3% increase year-over-year, driven by growth in both net interest income and noninterest income, with loans and deposits showing healthy increases. Credit quality remained strong, with net charge-offs declining and nonperforming assets continuing their downward trend. Capital levels were robust, with total equity increasing and significant share repurchases undertaken. The company also announced a proposed 7% increase in its quarterly dividend for the second quarter of 2015, signaling confidence in its financial performance and commitment to returning capital to shareholders. The company's diversified business segments—Community Banking, Wholesale Banking, and Wealth, Brokerage and Retirement—all contributed positively to net income, with Wholesale and Wealth, Brokerage and Retirement showing year-over-year growth. Investors should note the slight increase in the efficiency ratio and the ongoing focus on managing expenses while expanding business activities.

Financial Highlights

35 data points
Beta

Net Income

$5.80B

EPS (Diluted)

$1.04

Total Assets

$1.74T

Free Cash Flow

$2.52B

Financial Statements
Beta
Interest Expense$977.00M
Net Income$5.80B
EPS (Basic)$1.06
EPS (Diluted)$1.04
Shares Outstanding (Basic)5.16B
Shares Outstanding (Diluted)5.24B

Key Highlights

  • 1Net income of $5.8 billion, or $1.04 per diluted share, largely stable compared to the prior year.
  • 2Total revenue increased 3% year-over-year to $21.3 billion, driven by growth in net interest and noninterest income.
  • 3Loans grew 4% year-over-year to $861.2 billion, with the core loan portfolio up 7%.
  • 4Total deposits increased 9% year-over-year to a record $1.2 trillion.
  • 5Credit quality remained strong, with net charge-offs decreasing 14% year-over-year and nonperforming assets declining.
  • 6Total equity increased to $190.0 billion, supported by strong capital generation and share repurchases.
  • 7Proposed a 7% increase in the quarterly dividend to $0.375 per common share, pending board approval.

Frequently Asked Questions

Wells Fargo reported a net income of $5.8 billion for the first quarter of 2015, which was a slight decrease of 2% compared to $5.9 billion in the first quarter of 2014. Diluted earnings per share were $1.04, down 1% from $1.05 in the prior year's quarter. The net interest margin also decreased by 3% year-over-year, primarily due to higher funding balances.

Total revenue grew 3% year-over-year to $21.3 billion. This growth was driven by increases in both net interest income, which rose 4% primarily due to loan and trading asset growth, and noninterest income, which increased 3% driven by higher trust and investment fees, card fees, and net gains on debt securities.

Credit quality remained strong, characterized by historically low losses. Net charge-offs for the quarter were $708 million, down 14% from the prior year. Nonperforming assets also continued to decline, falling 4% from the previous quarter. The allowance for credit losses decreased 1% year-over-year to $13.0 billion, reflecting the improving credit environment and the company's risk management activities.

Wells Fargo is actively returning capital to shareholders through share repurchases and dividends. During the first quarter of 2015, the company repurchased approximately 48.4 million shares. Additionally, the company announced a proposed 7% increase in its quarterly common stock dividend to $0.375 per share for the second quarter of 2015, subject to board approval.