Wells Fargo 2011 Annual Report Download - page 32
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Earnings Performance
Wells Fargo net income for 2011 was $15.9 billion ($2.82 diluted
earnings per common share) compared with $12.4 billion
($2.21 diluted earnings per common share) for 2010 and
$12.3 billion ($1.75 diluted earnings per common share) for
2009. Our 2011 earnings reflected strong execution of our
business strategy in a difficult economic environment. The key
drivers of our financial performance in 2011 were improved
credit quality, lower operating costs, diversified sources of fee
income, balanced net interest and fee income, a diversified loan
portfolio and increased deposits.
Revenue, the sum of net interest income and noninterest
income, was $80.9 billion in 2011, compared with $85.2 billion
in 2010 and $88.7 billion in 2009. The decline in revenue in
2011 was predominantly due to lower net interest income,
mortgage banking and net gains from trading activities. Net
interest income of $42.8 billion in 2011, represented 53% of
revenue, compared with $44.8 billion (53%) in 2010 and
$46.3 billion (52%) in 2009. The 4% decline in 2011 net interest
income from 2010 reflected a 32 basis points decline in the net
interest margin and a 2% decline in average loans. The decline in
average loans from 2010 reflected reductions in the non-
strategic and liquidating loan portfolios, partially offset by loan
growth and loan acquisitions. Continued success in generating
low-cost deposits enabled the Company to grow assets by
funding loan and securities growth while reducing higher cost
long-term debt.
Noninterest income was $38.2 billion in 2011, representing
47% of revenue, compared with $40.5 billion (47%) in 2010 and
$42.4 billion (48%) in 2009. The decrease in noninterest income
in 2011 was due largely to lower service charges on deposit
accounts, net gains on mortgage loan origination/sales activities
and net gains from trading activities.
Noninterest expense was $49.4 billion in 2011, compared
with $50.5 billion in 2010 and $49.0 billion in 2009.
Noninterest expense as a percentage of revenue was 61% in 2011,
59% in 2010 and 55% in 2009. Noninterest expense for 2011
included $1.7 billion of Wachovia merger-related integration
expense, compared with $1.9 billion in 2010 and $895 million in
2009.
Table 3 presents the components of revenue and noninterest
expense as a percentage of revenue for year-over-year results.
30