Wells Fargo & Company 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.
“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. Our 264,000 team members made it possible through their strong commitment to our consumer, small business and commercial customers, and the communities they serve around the world. 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. Wells Fargo’s diversified model was again able to produce solid results for our shareholders.”
Revenue
Revenue in the fourth quarter was $20.7 billion, compared with $21.9 billion from a year ago. On a linked-quarter basis, revenue grew $187 million driven by increases in both net interest income and noninterest income. Revenue growth from the prior quarter was broad-based, with several businesses generating year-over-year double-digit growth, including retail brokerage, commercial real estate, credit card, insurance and asset-backed finance.
Loans
Total loans were $825.8 billion at December 31, 2013, up $13.5 billion from September 30, 2013, driven by growth in all categories except for junior lien mortgages—a portfolio the Company has intentionally been reducing. Core loan growth was $16.7 billion, as non-strategic/liquidating portfolios declined $3.3 billion in the quarter. Total average loans were $816.7 billion, up $11.9 billion from the prior quarter, driven by commercial and industrial, 1-4 family first mortgages and the full quarter benefit of portfolio acquisitions in the third quarter (CRE and foreign).
Credit Quality
“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 percent year-over-year improvement. The quarterly loss rate was 0.47 percent with commercial losses of only 0.06 percent and consumer losses of 0.82 percent. 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 percent (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.”
Net Loan Charge-offs
Net loan charge-offs improved to $963 million in fourth quarter 2013, or 0.47 percent of average loans, compared with $975 million in third quarter 2013, or 0.48 percent of average loans.
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