Wells Fargo Reports Record Quarterly Net Income of $3.9 Billion

July 19, 2011 08:00 AM Eastern Daylight Time 

Increased Revenue and Loans, Lower Expenses from First Quarter

SAN FRANCISCO--(BUSINESS WIRE)--Wells Fargo & Company (NYSE:WFC):

“Credit quality continued to improve in the second quarter, our sixth consecutive quarter of declining loan losses and the third consecutive quarter of lower nonperforming assets”

• Strong financial results:
  • Record Wells Fargo net income of $3.9 billion, up 29 percent from prior year, up 5 percent from prior quarter
  • Record diluted earnings per common share of $0.70, up 27 percent from prior year, up 4 percent from prior quarter
  • Pre-tax pre-provision profit (PTPP)¹ of $7.9 billion, up 4 percent from prior quarter
  • Return on average assets of 1.27 percent, highest in 3 years
  • Revenue of $20.4 billion, up from $20.3 billion in prior quarter
  • Noninterest expense down $258 million from prior quarter
  • Average checking and savings deposits up 9 percent from prior year; consumer checking accounts up a net 7.0 percent from June 30, 2010
  • Total loans of $751.9 billion at June 30, 2011, up $766 million from March 31, 2011; core loan portfolios up $5.8 billion from March 31, 2011²
• Improved capital position:
  • Capital ratios increased, with Tier 1 common equity ratio of 9.2 percent under Basel I at June 30, 2011; under current Basel III capital proposals, Tier 1 common equity ratio estimated at 7.4 percent³
  • Redeemed $3.4 billion of trust preferred securities
  • Re-started open market common stock repurchase program; purchased 35 million shares in second quarter 2011
• Improved credit quality:
  • Net loan charge-offs declined to $2.8 billion, down $372 million from prior quarter; down $1.7 billion from prior year
  • Nonperforming assets declined to $27.9 billion, down $2.6 billion from prior quarter; down $4.9 billion from prior year
  • Reserve release⁴ of $1.0 billion (pre tax) reflected improved portfolio performance
• Converted Wachovia banking stores in Pennsylvania and Florida; remaining Eastern banking markets scheduled to convert by year end; 83 percent of banking customers company-wide on a single system

¹ See footnote (2) in SUMMARY FINANCIAL DATA table for more information on pre-tax, pre-provision profit.

² See table in "Loans" section for more information on core and non-strategic/liquidating loan portfolios.

³ See TIER 1 COMMON EQUITY tables for more information on Tier 1 common equity.

⁴ Reserve release represents the amount by which net charge-offs exceed the provision for credit losses.