10-QPeriod: Q3 FY2016

WELLS FARGO & COMPANY/MN Quarterly Report for Q3 Ended Sep 30, 2016

Filed November 3, 2016For Securities:WFCWFC-PDWFC-PCWFC-PYWFC-PAWFC-PLWFCNPWFC-PZ

Summary

Wells Fargo & Company's (WFC) Q3 2016 report shows a slight decrease in net income to $5.6 billion from $5.8 billion in the prior year's quarter, with diluted EPS at $1.03 compared to $1.05 year-over-year. Despite this marginal dip, the company maintained a strong financial position, reporting solid credit quality with low losses and robust capital levels. Total revenue increased by 2% year-over-year to $22.3 billion, driven by growth in net interest income. The company continued its strategic focus on customer relationships and business investments, including significant growth in its investment securities and loan portfolios, with total loans reaching a high of $961.3 billion. The report also highlights substantial increases in deposits and long-term debt, partly attributed to the ongoing integration of the GE Capital business acquisitions. Management's commitment to shareholder returns is evidenced by $3.2 billion returned through dividends and share repurchases in the quarter. However, the report also addresses the significant impact of the retail banking sales practices matter, including leadership changes, forfeited equity awards, and the elimination of product sales goals, with an ongoing investigation by independent directors.

Financial Highlights

35 data points
Beta

Net Income

$5.64B

EPS (Diluted)

$1.03

Total Assets

$1.94T

Free Cash Flow

-$2.40B

Financial Statements
Beta
Interest Expense$1.53B
Net Income$5.64B
EPS (Basic)$1.04
EPS (Diluted)$1.03
Shares Outstanding (Basic)5.04B
Shares Outstanding (Diluted)5.09B

Key Highlights

  • 1Net income of $5.6 billion and diluted EPS of $1.03 for Q3 2016.
  • 2Total revenue increased 2% year-over-year to $22.3 billion.
  • 3Loans outstanding reached a record $961.3 billion, up 6% year-over-year.
  • 4Deposits grew 6% year-over-year to $1.28 trillion.
  • 5Returned $3.2 billion to shareholders through dividends and share repurchases.
  • 6The company is addressing the retail banking sales practices issue with leadership changes and operational adjustments.
  • 7Investment securities portfolio increased by 13% year-over-year to $390.8 billion.

Frequently Asked Questions

Wells Fargo reported a net income of $5.6 billion for the third quarter of 2016, and diluted earnings per common share (EPS) of $1.03.

Total revenue increased by 2% year-over-year to $22.3 billion in the third quarter of 2016, primarily driven by growth in net interest income.

The company announced settlements totaling $185 million related to allegations that some retail customers received unauthorized products. This has led to changes in senior management, including the retirement of the CEO and the forfeiture of equity awards by executives involved. Product sales goals for retail banking team members were eliminated, and the company is implementing enhanced team member training and monitoring.

Wells Fargo experienced strong growth in both its loan and deposit portfolios. Total loans reached a high of $961.3 billion, an increase of 6% year-over-year. Total deposits also grew by 6% year-over-year to a record $1.28 trillion.