WELLS FARGO & COMPANY/MN Quarterly Report for Q2 Ended Jun 30, 2016

Summary

Wells Fargo & Company/MN (WFC) reported solid financial results for the second quarter and first half of 2016, demonstrating the resilience of its diversified business model. Net income for the quarter was $5.6 billion, or $1.01 per diluted share, a slight decrease from the prior year but marking the 15th consecutive quarter with earnings exceeding $5 billion. Total revenue increased 4% year-over-year to $22.2 billion, driven by growth in both net interest and non-interest income. The company continued its strong growth in loans, reaching a record $957.2 billion, and deposits, totaling a record $1.25 trillion. Profitability metrics, such as Return on Average Assets (ROA) and Return on Average Common Equity (ROE), remained robust, although slightly down from the prior year, reflecting the persistent low-interest-rate environment. The company also maintained strong capital levels and returned $3.2 billion to shareholders through dividends and share repurchases, underscoring its commitment to capital returns.

Key Highlights

• 1Net income of $5.6 billion for Q2 2016, translating to $1.01 diluted EPS, demonstrating continued profitability.
• 2Total revenue of $22.2 billion for Q2 2016, a 4% increase year-over-year, driven by net interest income and non-interest income growth.
• 3Total loans reached a record $957.2 billion, an 8% increase year-over-year, highlighting strong lending activity.
• 4Total deposits increased 5% year-over-year to a record $1.25 trillion, indicating a strong deposit franchise.
• 5Pre-tax pre-provision profit (PTPP) grew 5% year-over-year, showing improved operational profitability.
• 6Returned $3.2 billion to shareholders in Q2 2016 via dividends and net share repurchases, continuing a trend of robust capital returns.
• 7Net charge-offs increased to $924 million (0.39% of average loans), primarily due to challenges in the oil and gas portfolio, though consumer credit losses declined.

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