The summary UBPR page for Wells Fargo Bank, NA is shown in the table on page 138. Average total assets for Wells Fargo was quite high as of December 31, 2013. Use the data from December 31, 2013, to explain whether this bank was a high- or low-performance bank compared with peers. Discuss specifically (1) financial leverage, (2) expense control, and (3) the contribution of interest and noninterest income to overall bank profitability. List three areas that management should focus on to improve performance. Using the limited information provided, evaluate Wells Fargos credit, liquidity, and capital risk.

138 Chapter 3 Analyzing Bank Performance Summary Ratios from Well Fargo's 2008-2012 UBPR FDIC Certificate # 3531 OCC Charter 1 Public Report WELLS FARGO BANK, NA: SIOUX FALLS, SD Summary Ratios-Page 1 Summary Ratios County: MINNEHAHA 12/31/2013 12/31/2012 12/31/2011 12/31/2010 12/31/2009 Earnings and Profitability Percent of Average Assets: Interest Income (TE) BANK PG 1 PCT BANK PG 1 PCT BANK PG 1 PCT BANK PG 1 PCT BANK PG 1 PCT 3.41 3.61 363.78 3.82 46 3.98 4.02 43 4.34 4.14 55 4.47 4.36 51 0.24 0.36 31 0.28 0.46 28 0.42 0.62 26 0.5 0.85 30 0.94 129 30 Interest Expense Net Interest Income (TE) + Noninterest Income - Noninterest Expense - Provision: Loan & Lease Losses 3.17 3.22 463.50 3.33 59 3.56 3.36 63 3.773.25 75 3.53 3.02 74 1.87 1.05 84 1.63 1.13 75 .79 1.10 81 3.12 2.72 723.472.75 83 339 2.78 81 3.27280 75 3.20 2.83 70 0.22 0.14 72 0.34 0.32 63 0.43 0.47 531.02 1.03 58 1.46 1.72 50 1.82 1.24 75 .97 1.38 78 Pretax Operating Income (TE) 1.70 1.43 69 1.42 42 153 1.22 62 0.75 63 0.83-0.09 57 +Realized Gains/Losses Sec 0.03 0.02 75 0.03 0.04 61 0.04 0.05 57 0.04 0.04 64 -0.01 0.02 23 Net Operating Income Adjusted Net Operating Income Net Inc Attrib to Min Ints Net Income Adjusted Sub S Pretax Net Operating Income (TE) 1.73 1.45 67 1.35 1.47 42 57 1.26 63 34 0.80 64 0.82 -0.13 59 1.24 1.02 75 0.94 1.03 46 1.10 0.87 65 0.94 0.50 67 0.56-0.21 59 1.09 0.97 65 0.84 0.96 42 0.89 0.71 58 0.82 0.43 57 1.03 0.21 70 0.04 0.00 97 0.01 0.00 92 0.01 0.00 92 0.01 0.00 88 0.00 0.00 2 1.19 1.00 69 0.94 .02 46 1.09 0.85 65 0.94 0.49 67 0.57-0.24 60 Net Income 1.19 1.01 69 0.94 .03 46 1.09 0.87 64 0.94 0.49 67 0.57-0.24 60 Margin Analysis: 88.94 92.04 25 87.21 91.88 12 87.39 91.51 18 88.00 91.53 21 87.53 92.28 12 4 77.08 77.80 36 76.88 78.59 36 78.37 80.27 35 79.40 81.24 35 3.84 3.93 40 4.33 4.16 56 4.55 4.40 53 4.93 4.54 64 5.10 4.75 64 0.27 0.39 34 0.32 0.50 30 0.48 0.68 30 0.65 0.94 32 1.07 1.40 32 3.56 3.50 53 4.013.63 73 4.07 3.67 694.28 3.57 81 4.03 3.29 82 77.64 77.39 Avg Int-Bearing Funds to Avg Assets Int Inc (TE) to Avg Earn Assets Int Expense to Avg Earn Assets Net Int inc-TE to Avg Earn Assets Loan & Lease Analysis: Net Loss to Average Total LN&LS Earnings Coverage of Net Losses 5.09 16.75 73.55 10.28 383.00 5.58 49 2.0 326 48 2.28 3.30 58 LN&LS Allowance to LN&LS Not HFS LN&LS Allowance to Net Losses (3.35 8.83 33 3.13 5.00 46 2.65 2.91 61 .66 187 57 87 1.86 65 LN&LS Allowance to Total LN&LS 0.56 0.30 84 0.72 0.6 67 1.06 0.93 59 87 166 64 168 1.86 56 1.84 1.44 772.17 1.73 74 2.73 1.99 783.24 2.36 78 3.21 2.53 73 1.82 1.43 772.13 .68 74 2.68 1.91 78 7 2.30 78 3.16 2.46 75 1.27 0.29 87 2.07 0.4787 2.65 0.62 88 2.90 0.54 89 3.52 0.35 96 1.80 1.05 8278 1.54 65 2.30 2.21 66 3.05 2.99 61 3.35 3.77 54 3.06 1.46 88 3.85 2.2283 4.95 3.16 78 5.95 385 79 687 4.33 80 Total LN&LS-90+ Days Past Due -Total Liquidity Net Non Core Fund Dep New $250M 9.53 12.89 40 10.60 1189 49 11.60 15.09 48 12.96 17.28 47 19.02 30.36 27 Net Loans & Leases to Assets 62.79 63.36 41 62.94 60.79 47 59.92 60.33 41 58.17 60.59 36 59.61 62.96 34 Capitalization Tier One Leverage Capital Cash Dividends to Net Income Retained Earnings to Avg Total Equity 1.79 425 27 0.74 3.7 25 146 3.8524 2.52 136 40 1.77 -5.37 60 Rest+Nonac+RE Acq to Eqcap ALLL 13.45 1148 65 13.73 14.81 52 15.65 19.77 45 16.97 23.46 41 22.35 27.04 50 9.78 9.86 52 10.08 9.76 59 10.05 9.59 62 10.04 9.17 72 9.31 8.68 71 81.47 42.97 79 90.21 45.69 78 83.44 29.78 86 68.04 20.54 85 67.12 20.54 82 Growth Rates Total Assets Tier One Capital Net Loans & Leases Short Term Investments Short Term Non Core Funding .08 5.90 62 .05 7.79 73 2.60 7.93 42 1.41 2.9 38 84.91 4.26 96 1.34 7.83 16 11.03 7.43 74 3.29 11.07 25 0.94 9.83 21 193.74 9.56 98 4.82 9.47 44 17.70 9.19 79 5.69 8.55 583.79 0.94 43 107.96-1.28 98 142.96 4.8891 63.85 23.33 77 32.80 24.16 2718.52 63.67 3416.80 236.29 29 -11.00 10.67 25 14.96 2.27 72 -6.49-23.66 71 -8.43-13.32 6 6.42-14.02 77 Average Total Assets Total Equity Capital Net Income 284,903,864 36,502,602 3,505,355 199 31,636,420 2,793,185 256,207,798 30,575,352 696 271,327,621 28,508,620 ,535,763 2,666,967 Number of banks in Peer Group 188 Source: Wells Farga, Uniform Bank Performance Report, httpsNedr.ffiec.gowpublicManageFacsimiles.aspx?ReportType 283