Wells Fargo 2013 Annual Report Download - page 43

Noninterest Income
Table 7: Noninterest Income
Year ended December 31,
(in millions) 2013 2012 2011
Service charges on
deposit accounts $ 5,023 4,683 4,280
Trust and investment fees:
Brokerage advisory, commissions
and other fees (1) 8,395 7,524 7,332
Trust and investment management (1) 3,289 3,080 3,008
Investment banking 1,746 1,286 964
Total trust and
investment fees 13,430 11,890 11,304
Card fees 3,191 2,838 3,653
Other fees:
Charges and fees on loans 1,540 1,746 1,641
Merchant transaction
processing fees 669 583 478
Cash network fees 493 470 389
Commercial real estate
brokerage commissions 338 307 236
Letters of credit fees 410 441 472
All other fees 890 972 977
Total other fees 4,340 4,519 4,193
Mortgage banking:
Servicing income, net 1,920 1,378 3,266
Net gains on mortgage loan
origination/sales activities 6,854 10,260 4,566
Total mortgage banking 8,774 11,638 7,832
Insurance 1,814 1,850 1,960
Net gains from trading activities 1,623 1,707 1,014
Net gains (losses) on debt securities (29) (128) 54
Net gains from equity investments 1,472 1,485 1,482
Lease income 663 567 524
Life insurance investment income 566 757 700
All other 113 1,050 1,189
Total $ 40,980 42,856 38,185
(1) Prior year periods have been revised to reflect all fund distribution fees as
brokerage related income.
Noninterest income of $41.0 billion represented 49% of revenue
for 2013 compared with $42.9 billion, or 50%, for 2012 and
$38.2 billion, or 47%, for 2011. The decrease in noninterest
income in 2013 reflected declines in our mortgage banking
business, partially offset by growth in many of our other
businesses, including retail deposits, credit card, merchant card
processing, commercial banking, corporate banking, capital
markets, asset-backed finance, commercial real estate,
commercial mortgage servicing, corporate trust, asset
management, wealth management, brokerage and retirement.
Excluding mortgage banking, noninterest income increased
$988 million from a year ago.
Our service charges on deposit accounts increased in 2013 by
$340 million, or 7%, from 2012, due to primary consumer
checking customer growth, product changes and continued
customer adoption of overdraft services. These charges increased
$403 million, or 9%, in 2012 compared with 2011,
predominantly due to product and account changes including
changes to service charges and fewer fee waivers, continued
customer adoption of overdraft services and customer account
growth.
Brokerage advisory, commissions and other fees are received
for providing services to full-service and discount brokerage
customers. Income from these brokerage-related activities
include transactional commissions based on the number of
transactions executed at the customer’s direction, and
asset-based fees, which are based on the market value of the
customer’s assets. These fees increased to $8.4 billion in 2013,
from $7.5 billion and $7.3 billion in 2012 and 2011, respectively.
The increase in brokerage income for both periods was
predominantly due to higher asset-based fees as a result of
higher market values and growth in assets under management.
Brokerage client assets totaled $1.4 trillion at
December 31, 2013, an increase from $1.2 trillion at
December 31, 2012 and $1.1 trillion at December 31, 2011.
We earn trust and investment management fees from
managing and administering assets, including mutual funds,
corporate trust, personal trust, employee benefit trust and
agency assets. Trust and investment management fees are
largely based on a tiered scale relative to the market value of the
assets under management or administration. These fees
increased to $3.3 billion in 2013 from $3.1 billion in 2012 and
$3.0 billion in 2011, primarily due to growth in assets under
management reflecting higher market values. At
December 31, 2013, these assets totaled $2.4 trillion, an increase
from $2.2 trillion at both December 31, 2012 and 2011.
We earn investment banking fees from underwriting debt
and equity securities, arranging loan syndications, and
performing other related advisory services. Investment banking
fees increased to $1.7 billion in 2013, from $1.3 billion in 2012
and $964 million in 2011, primarily due to increased loan
syndication volume and equity originations.
Card fees were $3.2 billion in 2013, compared with
$2.8 billion in 2012, which was down from $3.7 billion in 2011.
Card fees increased in 2013 due to account growth and increased
purchase activity. During 2012, card fees decreased compared
with 2011 because of lower debit card interchange rates resulting
from the Federal Reserve Board rules implementing the debit
interchange provisions of the Dodd-Frank Act, which became
effective in fourth quarter 2011. The reduction in debit
interchange income for 2012 was partially offset by growth in
purchase volume and new accounts.
Mortgage banking income, consisting of net servicing income
and net gains on loan origination/sales activities, totaled
$8.8 billion in 2013, compared with $11.6 billion in 2012 and
$7.8 billion in 2011.
Net mortgage loan servicing income includes amortization of
commercial mortgage servicing rights (MSRs), changes in the
fair value of residential MSRs during the period, as well as
changes in the value of derivatives (economic hedges) used to
hedge the residential MSRs. Net servicing income of $1.9 billion
for 2013 included a $489 million net MSR valuation gain
($3.4 billion increase in the fair value of the MSRs offset by a
$2.9 billion hedge loss). Net servicing income of $1.4 billion for
2012 included a $681 million net MSR valuation gain
($2.9 billion decrease in the fair value of MSRs offset by a
41