Drip
Portfolio Report
Monday, June 15, 1998
by Dale Wettlaufer ([email protected])
Alexandria, VA (June 15, 1998) --Today we introduce Norwest Corp. (NYSE: NOB), another great Minneapolis-based superregional bank. Except in the case of Norwest, it's far more than just a bank, which we'll get into tomorrow. We'll also look at the company's plans to merge with Wells Fargo (NYSE: WFC). I think it's a very interesting situation. I also know that many of our veteran Drippers already own Norwest, so I wanted to get to this one as soon as possible. For comparison to our other candidates, here at the numbers on the company:
(Financials in millions)
Price/Valuation
Share Price.....$34 3/8
Market Cap.....$26,892.94
Price/Book.....3.89
Price/ Tangible Book.....4.55
BVPS.....$8.84
Price/Assets.....27.99%
Price/Net Loans.....65.71%
Price/Deposits.....46.50%
Price/Tangible Assets.....28.28%
Price/Revenues.....3.72
P/E.....19.25
Amortization-Adjusted P/E.....18.58
Discount/Premium to Group.....-1.4%
EPS.....$1.79
Cash EPS.....$1.85
Diluted Sharecount.....782.34
1998 EPS Estimate.....$1.98
1999 EPS Estimate.....$2.24
Multiple on 1998 Est......17.36
Multiple on 1999 Est......15.35
Amort-Adjusted Multiple on 1999.....14.92
Discount/Premium to Group.....-2.4%
Capital Productivity/Efficiency
Asset Turnover2.....8.12%
Asset Turnover.....8.04%
ROE2.....22.51%
ROE.....21.73%
Amortization Adjusted ROE.....26.60%
ROA.....1.61%
ROA2.....1.627%
Net margin2.....20.02%
Net Margin.....19.32%
Efficiency Ratio.....60.30%
Interest Income/AEA.....7.69%
Interest Expense/AEA.....3.04%
Net Interest Margin.....4.65%
Net Share Buybacks (Including preferred).....$445.2
Dividends on Common.....$474.7
Retention Rate.....67.20%
Payout Ratio on AAEarnings.....32.80%
Internal Capital Generation Rate.....17.87%
Owners' Yield.....3.42%
Balance Sheet
Cash & Nonearning Assets.....$6,015.4
Cash & Nonearning Last Year.....$6,408.5
Long Term Debt.....$12,780.3
Shareholder's Equity.....$6,919.5
Last Year Equity.....$5,938.4
Tangible Equity.....$5,908.5
Last Year Tangible Equity.....$4,974.8
Tangible Assets.....$95,082.7
Last Year Tangible Assets.....$82,886.70
Total Assets.....$96,093.7
Last Year Assets.....$83,850.3
Total Liabilities.....$88,988.3
Goodwill.....$1,011.0
Last Year's Goodwill.....$963.6
Gross Loans.....$42,162.4
Loan Loss Reserves.....$1,236.30
Loan Loss Reserves %.....2.93%
Leverage
Equity/Tangible Assets.....7.28%
Average Equity/Average Assets.....7.15%
Average Equity/Average Assets (Tangible).....6.12%
Assets/Equity.....13.99
Avg. Assets/Avg. Equity (Tangible).....16.35
Loans to Deposits.....72.90%
LT Debt/Equity.....184.70%
Leveraged Capital Ratio.....6.58%
Tier 1 Capital Ratio.....8.92%
Total Risk Based Capital Ratio.....10.81%
Income Statement
Revenues.....$7,229.70
Interest Income (TTM).....$6,844.5
Interest Expense (TTM).....$2,702.8
Net Interest Income.....$4,141.7
Provision for Loan Losses.....$540.20
Noninterest Income (TTM).....$3,088.0
Noninterest Expense (TTM).....$4,409.80
Net Income for Common (TTM).....$1,396.80
Amortization Adjusted Earnings.....$1,447.35
Noninterest income/interest income.....45.1%
Noninterest income/revenues.....42.71%
Noninterest income/NII.....74.56%
Amort. Adjusted Net/Revs......20.02%
Amortization of Goodwill.....$50.55
Credit Quality
Nonperforming Loans.....$208.80
Nonperforming Assets.....$258.9
Loan Loss Provision/Net Interest Income.....13.04%
Loan Loss Provision/Gross Loans.....1.28%
Charge Offs.....$679.30
Recoveries.....$160.20
Net Charge Offs.....$519.10
Nonperforming Assets Ratio.....0.61%
Reserves/Nonperforming Loans.....477.52%
Months Charge-Offs in Reserves.....21.8
Loan Loss Provision/Net Charge Offs.....104.06%
Deposits
Deposits.....$57,832.5
Noninterest bearing deposits.....$18,605.9
Noninterest bearing deposits last year.....$14,332.3
Noninterest deposits/deposits.....32.17%
Deposits/Liabilities.....64.99%
Risk-Based Capital Productivity
ROE2*Tier1.....20.08
Leverage*Turns*Net Margin2.....1.38
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