Daily News: January 15, 2014

Wells Fargo Reports Record FY, Q4 Earnings

Wells Fargo reported full year net income was $21.9 billion, compared with $18.9 billion in 2012. For fourth quarter 2013, net income was $5.6 billion compared with $5.1 billion for fourth quarter 2012.

Full year and fourth quarter revenues of $83.8 billion and $20.7 billion were down from $86.1 billion and $21.9 billion, respectively for the same periods in 2012.

Fourth-quarter highlights:

. Total loans of $825.8 billion were up $26.2 billion from fourth quarter
2012 with the core loan portfolio up $39.9 billion.

. Net charge-offs of $963 million, down $1.1 billion from fourth quarter
2012; net charge off rate of 0.47% (annualized), compared with 1.05% a
year earlier.

. Nonperforming assets down $4.9 billion

. $600 million reserve release due to continued strong credit performance
and improved economic conditions

“Wells Fargo had another outstanding year in 2013, including strong growth in loans and deposits, and double-digit growth in earnings,” said chairman and CEO John Stumpf. “In the five years since our merger with Wachovia, we have grown our businesses, invested in our franchise’s future and contributed to the U.S. economy’s recovery. Strong earnings power and capital levels, and an improving economic outlook are major reasons why we look ahead to 2014 with optimism.”

Chief financial officer Tim Sloan said, “The fourth quarter of 2013 was very strong for Wells Fargo, with record earnings, solid growth in loans, deposits and capital, and strong credit quality. We also grew both net
interest income and noninterest income during the quarter, despite a challenging rate environment and the expected decline in mortgage originations.”

“Credit performance continued to be strong in the fourth quarter and we were pleased with the quality of the loans we originated. Losses remained at historical lows and non-performing assets decreased significantly,” said chief risk officer Mike Loughlin. “Credit losses were $963 million in fourth quarter 2013, compared with $2.1 billion in fourth quarter 2012, a 54% year-over-year improvement. The quarterly loss rate was 0.47% with commercial losses of only 0.06% and consumer losses of 0.82%. The consumer loss levels continued to benefit from the improvement in the residential real estate market and the economy.

Nonperforming assets declined by $1.1 billion, or 21% (annualized) from last quarter. We released $600 million from the allowance for credit losses in the fourth quarter, reflecting improvements in credit performance. Given these favorable conditions, we continue to expect future reserve releases absent a significant deterioration in the economic environment.”

To read the Wells Fargo news release PDF click here.