Kroll Bond Rating Agency Releases Comment on Wells Fargo & Company’s Energy Exposure and Fourth Quarter Results

Kroll Bond Rating Agency (KBRA) released a comment on Wells Fargo & Company, Inc.’s energy exposure and earnings results. The comment makes the following key points:

• Wells Fargo & Company, Inc. (NYSE:WFC, or “Wells”) reported its fourth quarter 2015 earnings, indicating positive operating results despite challenges in the energy lending portfolio.
• WFC reported $17 billion of energy loans, approximately 2% of total loans.
• As with the rest of the industry, provisions continued to increase due to challenges associated with the energy sector.
• Some $118 million was reported in oil and gas loan defaults with losses expected to grow in 2016, impacting Wells’ overall C&I lending portfolio.
• In KBRA’s view, WFC‘s exposure to the energy sector may adversely impact asset quality and earnings in 2016 due to the sector’s price volatility, though this increased credit expense may be partially offset by higher CRE and consumer loan yields.
• The rating outlook for WFC remains Stable. Potential energy problems are expected by KBRA to remain well contained with solid overall financial and asset quality metrics.

To view the full comment, please use the following link: www.krollbondratings.com/show_report/3641

About Kroll Bond Rating Agency

KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).

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