Wells Fargo Reports Record Q3 and Year-to-Date Net Income

• Press Release
• Source: Wells Fargo & Company
• On 8:00 am EDT, Wednesday October 21, 2009

SAN FRANCISCO--(BUSINESS WIRE)--Wells Fargo & Company (NYSE:WFC - News):

• 3^rd consecutive quarter of record earnings
  • Record Wells Fargo net income of $3.2 billion, up 98 percent from last year; $9.5 billion year to date, up 75 percent from last year
  • Diluted earnings per common share of $0.56, up 14 percent from last year; $1.69 per share year to date
  • Results driven by record $10.8 billion pre-tax, pre-provision profit (PTPP); PTPP has been more than two times quarterly net charge-offs each quarter this year, despite cyclically elevated net charge-offs. (See footnote 4 on page 20 for information on PTPP)
• Continued strong revenue
  • Revenue of $22.5 billion, flat with record revenue in second quarter 2009
  • $169 billion of credit extended to customers in the quarter
  • Average checking and savings deposits up 11 percent (annualized) from prior quarter
  • Net interest margin of 4.36 percent, up 6 basis points from prior quarter
  • Cross-sell for legacy Wells Fargo a record 5.90 for retail bank households
  • Broad-based revenue contribution from diverse businesses, including double-digit linked-quarter growth in asset management, auto lending, consumer finance, debit cards, retirement services, SBA lending and wealth management, along with continued strong performance from regional banking and mortgage banking
• Significant increases in capital, reduction in risk
  • Wells Fargo stockholders’ equity increased to $122 billion (10 percent of total assets), up $23 billion from year end
  • Generated $20 billion during the past six months toward the $13.7 billion Supervisory Capital Assessment Program (SCAP) buffer requirement; PTPP tracking above Company’s internal SCAP estimates and 35 percent above supervisory adverse scenario estimate
  • Credit reserves built by $1.0 billion ($3.0 billion year to date), reaching $24.5 billion, or 3.07 percent of total loans and 118 percent of nonaccrual loans
  • Substantial increases in capital ratios driven by record retained earnings and other sources of internal capital generation

							Sept. 30,			June 30,		Dec. 31,
(as a percent of total risk-weighted assets)							2009 (1	)		2009		2008
Tier 1 capital							10.6		%	9.8		7.8
Tier 1 common equity (2)							5.2			4.5		3.1
Tier 1 leverage							9.0			8.3		14.5		(3	)
Total capital							14.7			13.8		11.8
(1) September 30, 2009, ratios are preliminary.
(2) See table on page 38 for more information on Tier 1 common equity.
(3) Based on average Q4 2008 Wells Fargo assets only, excludes Wachovia.

• Reduced non-strategic/liquidating loans by $5.7 billion in the quarter
• FAS 166/167 expected to add approximately $28 billion to risk-weighted assets upon adoption in 2010

• Current projections show credit losses peaking in 2010, with consumer losses potentially peaking in first half of the year and gradually declining, absent further economic deterioration
  • Growth in nonperforming loans and net charge-offs slowing as of third quarter, for consumer and commercial portfolios
  • Credit performance of recent vintage legacy Wells Fargo consumer portfolios improving, largely the result of proactive credit management over past two years
  • 90 days past due and still accruing levels flat with second quarter; consumer 90 days past due and still accruing declined from prior quarter
  • Significantly smaller credit card portfolio than large bank peers
  • Pick-a-Pay portfolio currently estimated to have lower life-of-loan losses than originally estimated, driven in part by extensive and successful loan modification efforts
  • Collateral values improving in auto market and housing prices stabilizing in many regions
  • Legacy Wells Fargo commercial and commercial real estate portfolio well underwritten and diversified; Wachovia commercial and commercial real estate portfolio marked down at merger close at end of last year
  • Legacy Wells Fargo loss rate of 3.37 percent, below large bank peers; overall loss rate of 2.50 percent reflected benefit of purchase accounting on Wachovia loan portfolio; combined losses less than half of Company’s quarterly PTPP
• Wachovia integration on track and on schedule
  • Estimated cumulative merger expenses reduced to approximately $5.5 billion from $7.9 billion; on track to achieve $5.0 billion annual run-rate cost savings by completion of integration in 2011
  • Cross-sell revenues already being realized
  • Credit overall performing in line with original expectations
  • First state community bank conversion (Colorado) scheduled for November; conversion of remaining overlapping markets expected in 2010
• Increased loan modifications
  • Provided 62,989 trial and completed modifications through the Home Affordable Modification Program (HAMP) and 292,005 through Company’s proprietary programs, bringing total this year through September 30, 2009, to 354,994
  • Refinanced 987,000 customers’ mortgages using the Home Affordable Refinance Program (HARP) and other standard refinance programs
  • Over 20 percent of PCI Pick-a-Pay portfolio modified through September 30, 2009, with positive early performance

Selected Financial Information													Nine
													months
							Quarter ended						ended
							Sept. 30,				June 30,		Sept. 30,
								2009			2009		2009
Earnings
Diluted earnings per share							$	0.56			0.57		1.69
Wells Fargo net income (in billions)								3.24			3.17		9.45
Asset Quality
Net charge-offs as % of avg. total loans								2.50		%	2.11		2.05
Nonperforming loans as % of total loans								2.61			1.92		2.61
Allowance as a % of total loans								3.07			2.86		3.07
Other
Revenue (in billions)							$	22.47			22.51		65.99
Average loans (in billions)								810.2			833.9		833.1
Average core deposits (in billions)								759.3			765.7		759.7
Net interest margin								4.36		%	4.30		4.27

Wells Fargo & Company (NYSE:WFC - News) reported diluted earnings per common share of $0.56 for third quarter 2009 compared with $0.57 for second quarter 2009 and $0.49 for third quarter 2008. (Results prior to January 1, 2009, do not include Wachovia.) Wells Fargo net income was a record $3.24 billion for third quarter 2009, up 98 percent from last year, and a record $9.45 billion for the first nine months of 2009, up 75 percent from last year.

“Doing what’s right for our customers again proved to be right for our stockholders as our talented team members earned even more of our customers’ business, enabling us to achieve our third consecutive quarter of record earnings,” said President and CEO John Stumpf. “The Wells Fargo-Wachovia merger, agreed to a year ago, is exceeding our expectations and already adding value for many of our 70 million customers across North America. Merger costs have been significantly less than originally expected. With our 80-plus businesses pulling the stagecoach, the diversity of our business model again showed significant power to generate capital internally. We had solid performance across our company – especially among counter-cyclical businesses such as deposits, residential mortgages, debit card and asset-based lending. We’re also doing what’s right for our mortgage customers having difficulty making their payments on time. We’ve offered home payment relief to 1.3 million customers so far this year, including 355,000 loan modifications. We now have 13,000 team members working on helping customers stay in their homes and our delinquency and foreclosure rates continue to be well below the industry average. As we’ve already announced, Dick Kovacevich will step down as chairman and a director at the end of 2009 and retire from the Company in early 2010. I am grateful to Dick and to Wells Fargo’s leadership team and believe we have the strongest, most experienced team of senior leaders in all of financial services. They’ve led our businesses to a strong third quarter, following two consecutive quarters of record earnings, despite the economic recession. This is something that few, if any, financial services companies have achieved – and during the most challenging credit cycle in recent memory and while we continue to build reserves.

Wells Fargo has always been committed to providing clear, complete, and transparent communication about the Company’s results to all of its stakeholders. As we enter the second year of the merger with Wachovia, we will be expanding our quarterly communications to include a live quarterly earnings conference call – starting in January for our fourth quarter and full year 2009 results – and we will also host an investor day in 2010.”

Financial Performance

“Third quarter results again illustrated the Company’s ability to profitably grow, even through the downward cycle despite elevated credit losses,” said Chief Financial Officer Howard Atkins. “Since the merger with Wachovia at year-end 2008, we’ve earned a record $9.45 billion, even after building credit reserves by $3.0 billion and recording $1.4 billion of other-than-temporary impairment (OTTI) charges. Pre-tax pre-provision profit has grown every quarter this year, reaching a record $10.8 billion in the third quarter, more than double quarterly net charge-offs. While mortgage origination and hedging results contributed to our performance, collectively all of our other businesses have also grown PTPP each quarter this year reflecting the breadth of our diversified business model, record levels of sales and cross-sell, the realization of revenue synergies from the combination with Wachovia, and further improvements in our net interest margin to 4.36 percent and efficiency ratio to 52.0 percent. We continued to maintain what we believe is one of the strongest balance sheets in banking, building credit reserves by $1.0 billion in the quarter to $24.5 billion, or 3.07 percent of total loans, reducing previously identified non-strategic and liquidating loan portfolios to $152.7 billion, down over $14 billion from year end, and reducing the value of our debt and equity investment portfolios through $396 million of OTTI. Also, in line with lower mortgage rates, the ratio of mortgage servicing rights (MSRs) as a percentage of loans serviced for others was 83 basis points, the third lowest ratio in our Company’s history and a level considerably lower than our mortgage peers.

“We have significantly built capital, increasing common stockholders’ equity to $123 billion, up $23 billion so far in 2009 and increasing Tier 1 common to 5.2 percent, nearly two times our capital position at year-end 2008. Nonperforming loans and net charge-offs increased in the quarter, but the rate of growth of nonperforming loans has declined each quarter so far this year. While the level of nonperforming assets and losses is expected to remain elevated for a period of time, we currently expect total credit losses to peak in 2010, with consumer losses potentially peaking in the first half of the year and gradually declining as the year progresses, absent any further deterioration in the U.S. economy. Our credit reserves as of September 30, 2009, reflect an improvement in consumer loss emergence with almost all of the current quarter reserve build covering higher commercial loss emergence.

“Operationally and financially, the Wachovia merger is exceeding our expectations. Structurally, the merger leaves us with an even more diversified business than legacy Wells Fargo alone – less geographic concentration, an even wider array of products and services, better balance between consumer and commercial businesses, and an equal split between spread income and fee income. We are currently on track to realize our objective of $5.0 billion in annual run-rate savings when we complete the integration in 2011, with about 30-40 percent of those savings now beginning to be realized in our expense run-rate. We now expect to spend about $2.4 billion less in merger and integration costs than previously expected to achieve the run-rate savings, largely because proportionately more of the labor savings are being realized through attrition instead of severance and because we’re spending less than planned on building disposition, as we fill unoccupied space with third party tenants. We are ahead of plan in shedding asset risk from businesses that do not meet our financial and strategic criteria and in retaining deposits and customers. We’re already realizing meaningful revenue synergies, an important driver of our earnings this year. Because Wachovia’s credit-impaired loan portfolios were written down at the close of the merger at the end of last year, Wachovia is now contributing to the Company’s rapid internal capital growth.”

Revenue

Revenue of $22.5 billion remained at near-record levels following strong first and second quarters. Relative to the pre-Wachovia third quarter a year ago, the Company’s assets almost doubled, while total revenue has substantially more than doubled, despite the weak economy and despite the reduction in non-strategic/liquidating loan and asset portfolios. The high levels of revenue generated in the third quarter related to several factors:

• Continued strong core deposits reflecting 11 percent (annualized) growth in checking and savings, 25 percent (annualized) growth in wholesale banking core deposits and 10 percent (annualized) growth in wealth management core deposits. Wachovia’s deposit pricing has been conformed to that of Wells Fargo, with continued better-than-planned retention of Wachovia’s maturing higher-rate CDs (57 percent retained in third quarter). The average cost of all core deposits declined to 41 basis points in the quarter, the principal reason for the Company’s 4.36 net interest margin, highest among large bank peers.
• The Company remained an industry leader in making credit available to U.S. consumers and businesses. Total credit supplied in the quarter through mortgage originations and new/increased credit facilities was $169 billion, one of the main drivers of continued strong loan fees, even though loan demand remained soft in the quarter.
• Record core product solutions (sales) and record cross-sell in regional banking for legacy Wells Fargo
• Broad-based revenue growth across multiple businesses, including double-digit (annualized) linked-quarter growth in asset management, auto lending, consumer finance, debit card, retirement services, SBA lending and wealth management. Linked-quarter growth in these businesses was partially offset by more modest mortgage revenue, lower investment banking revenue and seasonal decline in insurance revenue.
• While mortgage originations and servicing revenue remained high, total mortgage banking noninterest income represented less than 15 percent of consolidated company revenue, reflecting the breadth and depth of the Company’s business model.

Net Interest Income

Net interest income was $11.7 billion, compared with $11.8 billion in second quarter 2009. While the net interest margin improved to 4.36 percent, average earning assets were down $23.7 billion linked quarter, reflecting soft loan demand and reductions in non-strategic/liquidating assets. While average investment securities were up $7.3 billion, this largely reflected the averaging effect in the quarter of mortgage-backed securities (MBS) purchased late in the second quarter at yields more than 1 percent above current market. During the third quarter, $23 billion of the lowest-yielding MBS were sold to reduce exposure to higher long-term interest rates.

Loans

Average total loans were $810.2 billion compared with $833.9 billion in second quarter 2009, as consumer and commercial demand for credit remained moderate and the Company continued to reduce certain higher-risk loan portfolios. The decline in average loans included a reduction of $5.7 billion linked quarter in the non-strategic and liquidating loan portfolios that the Company has been exiting, such as indirect home equity and indirect auto from legacy Wells Fargo, and Wachovia’s Pick-a-Pay and commercial real estate portfolios.

Deposits

Average total core deposits were $759.3 billion compared with $765.7 billion in second quarter 2009. During the quarter, $38 billion of Wachovia’s higher-rate certificates of deposit matured, with $22 billion of those balances retained. “We continued to gain new deposit customers and deepen our relationship with existing customers,” said Atkins. Average checking and savings deposits increased 11 percent (annualized) to $629.6 billion from $613.3 billion in second quarter 2009. Average mortgage escrow deposits were $28.7 billion compared with $32.0 billion in second quarter 2009. Average consumer checking accounts at legacy Wells Fargo grew a net 6.4 percent from third quarter 2008 and, for Wells Fargo and Wachovia combined, grew a net 5.2 percent in California for the same period.

Noninterest Income

Noninterest income of $10.8 billion was flat compared with $10.7 billion in second quarter 2009 and included:

• Mortgage banking income of $3.1 billion, including:
  • $1.1 billion in revenue from mortgage loan originations/sales activities on $96 billion of residential mortgage originations
  • $1.5 billion combined market-related valuation changes to mortgage servicing rights (MSRs) and economic hedges (consisting of a $2.1 billion decrease in the fair value of the MSRs more than offset by a $3.6 billion economic hedge gain in the quarter), largely due to hedge-carry income reflecting the current low short-term interest rate environment, which is expected to continue into the fourth quarter; MSRs as a percentage of loans serviced for others reduced to 0.83 percent; average servicing portfolio note rate was only 5.72 percent.
• Trust and investment fees of $2.5 billion, up 15 percent (annualized) linked quarter primarily reflecting an increase in client assets, bond origination fees, and higher brokerage revenue as the Company further builds its retail securities brokerage business
• Service charges on deposit accounts of $1.5 billion, up 8 percent (annualized) linked quarter driven by continued strong checking account growth
• Card fees of $946 million, up 10 percent (annualized) linked quarter reflecting seasonally higher purchase volumes and higher customer penetration rates
• Net losses on debt and equity securities totaling $11 million, including $396 million of OTTI write-downs and $120 million of realized gains on the sale of MBS in the third quarter. After having purchased over $34 billion of agency MBS in the second quarter of 2009 at yields more than 1 percent above the current market, the Company sold $23 billion of its lowest-yielding MBS after long-term interest rates declined in the third quarter.

Due to the general decline in long-term yields and narrowing of credit spreads in the quarter, the Company’s net unrealized securities gains, reflected in equity, increased to $6.6 billion at September 30, 2009, from net losses of $400 million at June 30, 2009.

Noninterest Expense

Noninterest expense declined to $11.7 billion from $12.7 billion in the second quarter, which included $565 million of FDIC deposit insurance assessments. The balance of the decline in third quarter expense was due to merger consolidation savings and ongoing expense management initiatives. “We currently expect cumulative merger integration costs of approximately $5.5 billion, down from our previous $7.9 billion estimate,” said Atkins. “The revised estimate reflects lower owned real estate write-downs and lower estimated severance costs since a greater proportion of labor savings is being realized through attrition. Of this $5.5 billion, we’ve spent $1.0 billion merger to date, including $200 million in the third quarter. Of the amount spent thus far, $444 million has been recorded through the income statement and $559 million has been recorded through purchase accounting adjustments to goodwill. A portion of the remaining integration costs will be charged to goodwill in the fourth quarter under purchase accounting. The balance of the cumulative estimated integration costs are expected to be expensed over the next two years, and are likely to be offset by merger-related savings during this period. We remain on track to achieve $5.0 billion in annual run-rate savings upon completion of the integration in 2011. To date, we have achieved approximately 30-40 percent of these savings.” Noninterest expense also included $100 million of additional insurance reserve at the Company’s captive mortgage reinsurance operation and $49 million of non-Wachovia-related integration costs. “As we reduce expenses through consolidation and other expense initiatives, we continue to reinvest in our businesses for long-term revenue growth,” said Atkins. “During 2009, we’ve opened 41 banking stores and converted 1,274 ATMs to Envelope-Free^SM webATM machines. We have also continued to increase the level and productivity of our sales force in community banking, commercial banking and wealth management. We continue to manage to a variable expense base in the mortgage company. Part-time staff was reduced in third quarter as application volume declined, and increased again in September and early in the fourth quarter as applications increased.” The Company’s efficiency ratio improved to 52.0 percent from 56.4 percent in second quarter and 56.2 percent in first quarter.

Capital

“We have rebuilt capital significantly this year,” said Atkins, “with most of our capital ratios now higher – in some cases substantially so – than they were just before the Wachovia merger a year ago.”

							Sept. 30,			Sept. 30,
(as a percent of total risk-weighted assets)							2009 (1	)		2008 (2	)
Tier 1 common equity							5.2		%	6.4
Tier 1 capital							10.6			8.6
Tier 1 leverage							9.0			7.5
Total capital							14.7			11.5
(1) September 30, 2009, ratios are preliminary
(2) Wells Fargo only, excludes Wachovia

Stockholders’ equity now stands at $122 billion, up $50 billion from a year ago (excluding the U.S. Treasury’s $25 billion Capital Purchase Program investment), up $23 billion from post-merger closing year-end equity and up $8 billion just in the third quarter of this year alone. “In the past year, we have more than doubled stockholders’ equity while significantly reducing risk and increasing internal capital momentum,” said Atkins. Tier 1 common equity grew from second quarter 2009 entirely from internally generated sources – record retained earnings, realization of deferred tax assets and stock issued to the Company’s benefit plans. Through September 30, 2009, the Company generated $20 billion, including the $8.6 billion equity raise in the second quarter, toward the $13.7 billion regulatory capital buffer under SCAP, exceeding the requirement by $6 billion. “A major contributor to our strong results compared with the regulatory SCAP requirement has been our consistent outperformance on pre-tax pre-provision profit year to date, which confirmed the confidence we’ve had from the beginning of this process in the underlying revenue strength of our company and the consistency of our revenue generation even in adverse scenarios,” said Atkins. See footnote (4) on page 20 and the table on page 38 for more information.

In January, the Company will adopt FAS 166/167, which will result in the consolidation of certain off-balance sheet assets not currently included in its financial statements. The Company’s current estimate is that FAS 166/167 is expected to add approximately $28 billion in risk-weighted assets. This latest analysis is lower than originally projected primarily due to a reduction in the amount of securitized residential mortgages expected to be consolidated. In addition, the Company continues to explore the sale of certain interests held in securitized residential mortgage loans, which would be expected to reduce further the amount of incremental GAAP assets and incremental risk-weighted assets.

Credit Quality

“While the challenging credit cycle continues and losses remain elevated, we have begun to see early indications of consumer credit stability,” said Chief Credit and Risk Officer Mike Loughlin. “In the third quarter, this stabilization was evident in several consumer loan portfolios, while the consumer real estate portfolio continued to vary across geography. Some real estate markets, such as California, have had increased home sales and home price stabilization and, as these conditions improve in more markets, we expect to see improvement in credit results. Third quarter commercial and commercial real estate losses remained at manageable levels, reflecting the high-quality of Wells Fargo’s commercial loan portfolio and the fact that Wachovia’s commercial and commercial real estate loan portfolios were already written down at the end of last year.

“Nonperforming assets and credit losses increased during the quarter, and once again we increased reserve levels to provide for the additional risk. We expect credit losses and nonperforming assets to continue to increase in the near term, but at a slower rate as we have seen the pace of deterioration slow. Based on our current economic outlook, we expect losses to peak in 2010, with consumer losses expected to peak in the first half of 2010 and commercial and commercial real estate losses expected to peak in the second half of 2010. The recovery may take some time to gain momentum and changes in the economic outlook could affect this time horizon.”

Credit Losses

Third quarter net charge-offs were $5.1 billion, or 2.50 percent of average loans, compared with second quarter net charge-offs of $4.4 billion, or 2.11 percent of average loans. While losses were up in the quarter, the increase in terms of both dollars and percentages moderated from prior quarter growth. The overall quarterly loss rate in the third quarter, 2.50 percent, is substantially lower than reported large peer loss rates partly because Wells Fargo had already written down Wachovia’s higher-risk loan portfolios at year end. Reflecting, in part, stabilizing credit performance, legacy Wells Fargo net charge-offs were $3.4 billion, or 3.37 percent of average loans. Wachovia’s net charge-offs increased to $1.7 billion, or 1.66 percent of average loans, compared with $984 million in second quarter 2009, due to some deterioration in its portfolios and the lagging effect of purchase accounting.

Total credit losses of $5.1 billion included $1.5 billion of commercial and commercial real estate loans (1.78 percent of average loans) and $3.6 billion in consumer loans (3.13 percent of average loans), as shown in the following table.

Net Loan Charge-Offs (1)					Quarter ended
					September 30, 2009							June 30, 2009							March 31, 2009
								As a							As a							As a
								% of							% of							% of
					Net loan			average				Net loan			average				Net loan			average
					charge-			loans				charge-			loans				charge-			loans
($ in millions)					offs			(annualized)				offs			(annualized)				offs			(annualized)
Commercial and
	commercial real estate:
	Legacy Wells Fargo				$	862		1.96		%		$	897		2.01		%		$	667		1.48		%
	Wachovia					602		1.57					246		0.61					30		0.07
Total commercial and
	commercial real estate					1,464		1.78					1,143		1.35					697		0.80
Consumer:
	Legacy Wells Fargo					2,480		4.50					2,462		4.44					2,175		3.90
	Wachovia					1,107		1.87					735		1.22					341		0.56
Total consumer						3,587		3.13					3,197		2.77					2,516		2.16
Foreign
	Legacy Wells Fargo					43		3.00					43		3.05					45		3.13
	Wachovia					17		0.28					3		0.05					-		-
Total foreign						60		0.79					46		0.61					45		0.56
Total Legacy Wells Fargo						3,385		3.37					3,402		3.35					2,887		2.82
Total Wachovia						1,726		1.66					984		0.92					371		0.34
	Total				$	5,111		2.50		%		$	4,386		2.11		%		$	3,258		1.54		%
(1)See explanation on page 40 of the accounting for purchased credit-impaired (PCI) loans from Wachovia and the impact on selected financial ratios.

“Commercial and commercial real estate charge-offs remained manageable in the third quarter,” said Loughlin. “In fact, legacy Wells Fargo’s commercial and commercial real estate losses declined $35 million, or 4 percent, in the quarter. The increase in commercial and commercial real estate losses was entirely in the Wachovia non-impaired portfolio, in part reflecting the fact that charge-offs are just now coming through Wachovia’s portfolio after having eliminated nonaccruals through purchase accounting at the end of last year. The overall loss rate in third quarter for Wachovia’s commercial and commercial real estate portfolio was roughly comparable to Wells Fargo’s higher-quality commercial portfolio. While the industry is likely to experience elevated commercial and commercial real estate losses, we continue to believe we have one of the best commercial and commercial real estate loan portfolios among large bank peers given our long-standing underwriting discipline and because we wrote down Wachovia’s commercial and commercial real estate portfolio when we closed the acquisition at year end.”

Consumer losses were up 12 percent in the third quarter, with virtually all of the increase in Wachovia’s consumer portfolios. Over 40 percent of the increase in Wachovia consumer loan losses came from the non-impaired Pick-a-Pay portfolio, in large part reflecting the lagging effect of purchase accounting. “We are currently expecting lower life-of-loan losses on the non-impaired Pick-a-Pay portfolio than originally assumed at the time of the merger,” said Loughlin. Overall losses on legacy Wells Fargo’s consumer portfolio were essentially flat linked quarter. “Given the actions we’ve previously taken to reduce higher-risk portfolios, given the life-of-loan loss write-downs we have taken through purchase accounting and given the substantially smaller exposure to credit cards and sub-prime loans, we are expecting consumer losses to potentially peak in the first half of 2010 and gradually decline as the year progresses.

“We remain comfortable with our original loss estimates for the impaired portfolio from Wachovia, and currently expect life-of-loan losses on the purchased credit-impaired (PCI) Pick-a-Pay portfolio to be lower than original estimates. Also, while increasing this year, losses in the non-impaired Pick-a-Pay portion of the Wachovia portfolio are tracking below our original estimates at the time we acquired Wachovia. We continue to expect the non-impaired portfolios to perform significantly better than the impaired portfolios that have already been written down through purchase accounting, and the Pick-a-Pay portfolio to perform better than other companies’ option adjustable-rate mortgage portfolios.”

Nonperforming assets

Total nonperforming assets (NPAs) were $23.5 billion (2.93 percent of total loans) at September 30, 2009, and included $20.9 billion of nonaccrual loans and $2.5 billion of foreclosed assets (repossessed real estate and vehicles).

Nonaccrual Loans and Other Nonperforming Assets
					September 30, 2009							June 30, 2009							March 31, 2009
								As a							As a							As a
								% of							% of							% of
								total							total							total
($ in millions)					Balances			loans				Balances			loans				Balances			loans
Commercial and
	commercial real estate:
	Legacy Wells Fargo				$	6,037		3.53		%		$	5,260		3.02		%		$	3,860		2.13		%
	Wachovia					4,227		2.86					2,333		1.46					645		0.39
Total commercial and
	commercial real estate					10,264		3.22					7,593		2.28					4,505		1.30
Consumer:
	Legacy Wells Fargo					6,293		2.90					5,687		2.59					4,970		2.22
	Wachovia					4,168		1.78					2,292		0.96					966		0.40
Total consumer						10,461		2.32					7,979		1.74					5,936		1.27
Foreign						144		0.48					226		0.75					75		0.24
		Total nonaccrual loans				20,869		2.61					15,798		1.92					10,516		1.25
Foreclosed assets:
	Legacy Wells Fargo					1,756							1,741							1,421
	Wachovia					771							783							641
Total foreclosed assets						2,527							2,524							2,062
Real estate and other
	nonaccrual investments					55							20							34
			Total nonaccrual loans and
				other nonperforming assets	$	23,451		2.93		%		$	18,342		2.23		%		$	12,612		1.50		%
Change from prior quarter					$	5,109						$	5,730						$	3,603

While commercial and commercial real estate nonaccrual loans were up in the quarter, the dollar amount of the increase declined in the quarter and the rate of growth slowed considerably. Legacy Wells Fargo’s commercial and commercial real estate nonaccrual loans increased $777 million. The rate of growth in Wachovia’s commercial and commercial real estate nonaccrual loans reflected some deterioration but was in line with management’s expectations. Similarly, the growth rate in consumer nonaccrual loans also slowed in the quarter. Legacy Wells Fargo’s consumer nonaccrual loans increased $606 million, about 11 percent, reflecting the more moderate deterioration the Company has experienced in consumer loans. Wachovia’s Pick-a-Pay portfolio represents the largest portion of consumer nonaccrual loans. While up $1.2 billion in the third quarter, the increase in nonaccrual loans in the non-impaired Pick-a-Pay portfolio reflected the inflows to nonaccruals expected in the first few quarters after purchase accounting write-downs. The Company continued to actively modify non-PCI Pick-a-Pay loans through the use of troubled debt restructurings (TDRs), which temporarily keeps NPA levels elevated until the modified loans can demonstrate performance. To the extent these nonperforming loans return to accrual status, NPA growth should moderate.

The loss exposure expected in the nonperforming assets is significantly mitigated by three factors. First, 96 percent of our nonperforming loans (NPLs) are secured. Second, losses have already been recognized on 36 percent of the total. Residential real estate NPLs greater than 180 days old, or 41 percent of the total NPLs balance, have been written down to net realizable value. Third, there is a segment of NPLs for which there are specific reserves in the allowance, while other NPLs are covered by general reserves. “We believe that the allowance as of September 30, 2009, fully covers loss content embedded in the September 30, 2009 nonaccrual balances,” said Loughlin.

Loans 90 Days or More Past Due and Still Accruing (1)
(Excluding Insured/Guaranteed GNMA and Similar Loans)
Includes Wells Fargo and Wachovia
			Sept. 30,			June 30,
(in millions)			2009			2009
Commercial and commercial real estate:
Commercial			$	458		415
Real estate mortgage				693		702
Real estate construction				930		860
Total commercial and commercial real estate				2,081		1,977
Consumer:
Real estate 1-4 family first mortgage				1,552		1,497
Real estate 1-4 family junior lien mortgage				484		660
Credit card				683		680
Other revolving credit and installment				1,138		1,160
Total consumer				3,857		3,997
Foreign				76		32
Total loans			$	6,014		6,006
(1) The table above does not include PCI loans that were contractually 90 days past due and still accruing. These loans have a related nonaccretable difference that will absorb future losses; therefore charge-offs on these loans are not expected to reduce income in future periods to the extent that actual future loan performance is consistent with original estimates.

Loans 90 days or more past due and still accruing totaled $18.9 billion at September 30, 2009, and $16.7 billion at June 30, 2009. For the same periods, the totals included $12.9 billion and $10.7 billion, respectively, in advances pursuant to the Company’s servicing agreement to Government National Mortgage Association (GNMA) mortgage pools and similar loans whose repayments are insured by the Federal Housing Administration or guaranteed by the Department of Veterans Affairs.

Allowance for Credit Losses

(Includes Wells Fargo and, beginning December 31, 2008, Wachovia)

The allowance for credit losses, including the reserve for unfunded commitments, totaled $24.5 billion at September 30, 2009, compared with $23.5 billion at June 30, 2009. The credit reserve is driven by management’s estimate of inherent losses in the loan portfolio at September 30, 2009. Of the $1.0 billion reserve increase in the third quarter, approximately $900 million reflected continued deterioration in the commercial portfolios. “We continued to see a decline in the quality of our performing commercial and commercial real estate portfolio as well as an increase in the amount of life-of-loan reserves taken on large commercial loans where we believe it is probable that we will not collect all amounts due,” said Loughlin.

The remaining $100 million increase in the reserve relates mostly to the consumer loan portfolio and is principally due to the increasing level of residential real estate loan modifications classified as TDRs. The increased modifications this quarter resulted in an increase in the allowance of approximately $400 million compared with approximately $265 million last quarter. This increase was offset by approximately $345 million release in reserves related to performing consumer loans. “Based on our expectation that consumer related losses will peak in the first half of 2010 and then begin to gradually decline, the allowance required for performing consumer loans has decreased when compared to the allowance at the end of the second quarter 2009,” said Loughlin.

The allowance coverage to total loans increased to 3.07 percent compared with 2.86 percent at June 30, 2009. The allowance coverage to NPLs was 118 percent as of September 30, 2009. “We believe the allowance was adequate for losses inherent in the loan portfolio at September 30, 2009, including both performing and nonperforming loans,” said Loughlin.

Credit Summary

“We are two years into the most difficult credit cycle in recent memory,” said Loughlin. “Economic challenges continue and we expect that credit costs will remain elevated in the fourth quarter. However, based on portfolio trends and our current economic outlook, and assuming no unexpected further deterioration in the economy, we believe consumer loan losses will peak in the first half of 2010 then gradually decline, while commercial and commercial real estate loan losses will peak in the second half of 2010 and then gradually decline. We expect nonperforming assets to continue to increase in the near term, but at a slower pace as credit deterioration slows. NPAs are expected to remain elevated through 2010. We are working closely with customers who are having difficulties to understand their challenges, identify possible solutions and minimize loss. We believe our experienced and stable management team is well equipped to navigate through the end of this cycle.”

For additional detail on credit quality and trends, please refer to the quarterly supplement.

Business Segment Performance

Wells Fargo defines its operating segments by product type and customer segment. Segment net income for each of the three business segments was:

						Quarter ended
						Sept. 30,			June 30,
(in millions)							2009		2009
Community Banking						$	2,667		2,008
Wholesale Banking							598		1,067
Wealth, Brokerage and Retirement							244		363

More financial information about the business segments is on pages 39 and 40.

Community Banking offers a complete line of diversified financial products and services for consumers and small businesses including investment, insurance and trust services in 39 states and D.C., and mortgage and home equity loans in all 50 states and D.C.

Selected Financial Information
						Quarter ended
						Sept. 30,			June 30,
(in millions)							2009		2009
Total revenue						$	15,143		14,807
Provision for credit losses							4,572		4,264
Noninterest expense							6,802		7,665
Segment net income							2,667		2,008
(in billions)
Average loans							534.7		540.7
Average assets							785.2		799.2
Average core deposits							530.3		543.9

Community Banking reported net income of $2.7 billion, up $659 million, or 131 percent (annualized), from second quarter. Revenue increased $336 million, or 9 percent (annualized), driven by strong regional banking and mortgage fee income partially offset by a decrease in net interest margin. Noninterest income increased $420 million, or 28 percent (annualized), from prior quarter driven by continued strength in mortgage banking and strong growth in deposit service charges and card fees. Noninterest expense decreased $863 million, or 45 percent (annualized), driven by higher second quarter FDIC deposit insurance assessments as well as expense reductions due to Wachovia merger-related cost saves. The provision for credit losses increased $308 million, and included a $236 million credit reserve build compared with a $479 million credit reserve build in the prior quarter.

Regional Banking Highlights for Legacy Wells Fargo

• Record core product solutions (sales) of 6.84 million, up 10 percent from prior year on a comparable basis
• Core sales per platform banker FTE (active, full-time equivalent) of 5.88 per day, up from 5.65 in prior year on a comparable basis
• Record retail bank household cross-sell of Wells Fargo products of 5.90 products per household; 25 percent of retail bank households had 8 or more products, the Company’s long-term goal
• Sales of Wells Fargo Packages^® (a checking account and at least three other products) up 14 percent from prior year, purchased by 78 percent of new checking account customers
• Customer loyalty scores up 3 percent, and welcoming and wait time scores improved 7 percent from prior year (based on customers conducting transactions with tellers)
• Business Banking
  • Store-based business solutions up 11 percent from prior year
  • Business Banking household cross-sell of 3.72 products per household
  • Sales of Wells Fargo Business Services Packages (business checking account and at least three other business products) up 18 percent from prior year, purchased by 55 percent of new business checking account customers

Regional Banking Highlights for Wachovia

• Retail bank household cross-sell of Wachovia products of 4.65 products per household
• Wachovia maintained its very high customer experience levels; scores continued to surpass prior year

Combined Regional Banking

• Consumer checking accounts up a net 5.2 percent from prior year
• Business checking accounts up a net 4.1 percent from prior year
• Opened 15 banking stores for retail network total of 6,653 stores
• 12,352 ATMs across our network, including 3,260 Envelope-Free^SM webATM machines
• America’s #1 small business lender for 7^th consecutive year (in loans under $100,000), according to 2008 Community Reinvestment Act (CRA) data

Online Banking

• 16.2 million combined active online customers
• 3.9 million combined active Bill Pay customers
• Global Finance Magazine ranked Wells Fargo the Best Consumer Internet Bank in the U.S. (July 2009)
• Wells Fargo launched customer-to-customer mobile banking money transfers, a simple and secure way to send funds to family and friends

Wells Fargo Home Mortgage (Home Mortgage)

• Home Mortgage applications of $123 billion, compared with $194 billion in prior quarter
• Home Mortgage application pipeline of $62 billion at quarter end, compared with $90 billion at June 30, 2009
• Home Mortgage originations of $96 billion, down from $129 billion in prior quarter
• Owned residential mortgage servicing portfolio of $1.7 trillion

Wholesale Banking provides financial solutions to businesses across the United States with annual sales generally in excess of $10 million and financial institutions globally. Products include middle market banking, corporate banking, commercial real estate, treasury management, asset-based lending, insurance brokerage, foreign exchange, correspondent banking, trade services, specialized lending, equipment finance, corporate trust, investment banking, capital markets and asset management.

Selected Financial Information
						Quarter ended
						Sept. 30,			June 30,
(in millions)							2009		2009
Total revenue						$	4,916		5,238
Provision for credit losses							1,361		738
Noninterest expense							2,630		2,807
Segment net income							598		1,067
(in billions)
Average loans							247.0		263.5
Average assets							369.3		381.7
Average core deposits							146.9		138.1

Wholesale Banking reported net income of $598 million compared with $1.07 billion in second quarter 2009. Revenue decreased $322 million, primarily due to strength in investment banking and capital markets revenue in the prior quarter, as well as insurance revenue seasonality. Average core deposits were $147 billion up 25 percent (annualized) from the prior quarter. Noninterest expense decreased $177 million, primarily due to lower FDIC deposit insurance assessments. The provision for credit losses was $1.36 billion, an increase of $623 million from the prior quarter, and included $627 million of additional provision recorded to build reserves for the wholesale portfolio, compared with a credit reserve build of $162 million in the prior quarter.

• Government and Institutional Banking core deposits up 3 percent and noninterest income up 9 percent, driven by creation of integrated national platform of Wachovia and Wells Fargo capabilities, continued support of client credit needs and expansion in Public Finance
• Total core deposits up 13 percent and noninterest income up 2 percent in Global Financial Institutions and Trade Services, as international bank liquidity continued to improve and trade and payment volumes increased
• For 7^th time in 8 years, Wells Fargo Shareowner Services^SM received the TALON award as transfer agent ranked highest in Overall Satisfaction
• Treasury Management introduced enhanced version of CEO Workstation^®, an easy-to-use online cash management tool
• Merger of Wachovia wholesale businesses on track to meet or exceed expected cost saves and is producing significant new growth opportunities from acquired businesses such as Government and Institutional Banking, Global Finance and Institutional Trade, and Investment Banking and Capital Markets

Wealth, Brokerage and Retirement provides a full range of financial advisory services to clients using a comprehensive planning approach to meet each client’s needs. Wealth Management provides affluent and high net worth clients with a complete range of wealth management solutions including financial planning, private banking, credit, investment management and trust. Family Wealth meets the unique needs of the ultra high net worth customers. Retail Brokerage’s financial advisors serve customers’ advisory, brokerage and financial needs as part of one of the largest full-service brokerage firms in the U.S. Retirement provides retirement services for individual investors and is a national leader in 401(k) and pension record keeping.

Selected Financial Information
						Quarter ended
						Sept. 30,			June 30,
(in millions)							2009		2009
Total revenue						$	2,966		2,986
Provision for credit losses							234		115
Noninterest expense							2,314		2,289
Segment net income							244		363
(in billions)
Average loans							45.4		45.9
Average assets							108.6		110.2
Average core deposits							116.4		113.5

Wealth, Brokerage and Retirement reported net income of $244 million, compared with $363 million in the prior quarter. Revenue was $3.0 billion consistent with the prior quarter’s levels as the strong equity market recovery led to increases in client assets across the brokerage, wealth and retirement businesses, driving solid revenue growth, partially offset by lower realized gains on sales of securities available for sale in the brokerage business. Total provision for credit losses increased $119 million from the prior quarter, largely reflecting a credit reserve build of $137 million in third quarter due to higher loss rates. Average core deposits increased $2.9 billion, or 10 percent (annualized), from second quarter, reflecting continued success in attracting client assets, including deposits.

Retail Brokerage

• Client assets increased 8 percent to $1.1 trillion from prior quarter
• Managed account assets increased $23 billion, or 14 percent, from prior quarter, including net inflows of $8 billion
• Brokerage transactional revenue increased 2 percent from prior quarter

Wealth Management

• Continued strong deposit growth, with average balances up 8 percent from prior quarter
• Trust assets of $119 billion, up 7 percent from prior quarter

Retirement

• Retirement plan assets of $271 billion increased $22 billion, or 9 percent, from prior quarter
• IRA assets of $231 billion increased $20 billion, or 9 percent, from prior quarter
• Integrated sales approach, firm stability and scale in the business, drove key new business wins in institutional retirement

Recorded Message

A recorded message reviewing Wells Fargo’s results is available at 5:30 a.m. Pacific Time through October 24, 2009. Dial 866-416-0522 (domestic) or 706-902-3479 (international). No password is required. The call is also available online at wellsfargo.com/invest_relations/earnings.

Cautionary Statement About Forward-Looking Information

In accordance with the Private Securities Litigation Reform Act of 1995, we caution you that this news release contains forward-looking statements about our future financial performance and business. We make forward-looking statements when we use words such as “believe,” “expect,” “anticipate,” “estimate,” “should,” “may,” “can,” “will,” “outlook,” “project” or similar expressions. Forward-looking statements in this news release include, among others, statements about: (i) future credit quality, the adequacy of the allowance for loan losses, the level of nonperforming assets and nonaccrual loans, expected or estimated future losses in our loan portfolios and life-of-loan loss estimates, including that we currently expect that credit losses will peak in 2010, absent further deterioration in the economy, with consumer loan losses expected to peak in the first half of 2010 and commercial and commercial real estate loan losses expected to peak later in 2010, and that the pick-a-pay portfolios, both purchased credit-impaired and non-impaired, will perform better than management’s expectations at the time of the Wachovia merger; (ii) reduction or mitigation of risk in our loan portfolios and the effects of loan modification programs; (iii) the amount and timing of expected integration activities, expenses and cost savings relating to the Wachovia merger, as well as the expected synergies and benefits of the merger, including that we currently estimate merger expenses of approximately $5.5 billion and that we currently are on track to achieve $5.0 billion annual run rate cost savings by the expected completion of the integration in 2011; (iv) the status of our capital requirements under the Supervisory Capital Assessment Program; and (v) our preliminary estimates to add assets to our consolidated financial statements upon the implementation of FAS 166 and FAS 167.

Do not unduly rely on forward-looking statements as actual results could differ materially from expectations. Forward-looking statements speak only as of the date made, and we do not undertake to update them to reflect changes or events that occur after that date. Several factors could cause actual results to differ materially from expectations including: current and future economic and market conditions, including the effects of further declines in housing prices and high unemployment rates; our capital requirements and our ability to generate capital internally or raise capital on favorable terms; the terms of capital investments or other financial assistance provided by the U.S. government; legislative proposals to allow mortgage cram-downs in bankruptcy or force other loan modifications; the extent of success in our loan modification efforts; our ability to successfully and timely integrate the Wachovia merger and realize the expected cost savings and other benefits, including delays or disruptions in system conversions and higher severance costs; our ability to realize efficiency initiatives to lower expenses when and in the amount expected; recognition of other-than-temporary impairment on securities held in our available-for-sale portfolio; the effect of changes in interest rates on our net interest margin and our mortgage originations, mortgage servicing rights and mortgages held for sale; hedging gains or losses; disruptions in the capital markets and reduced investor demand for mortgage loans; our ability to sell more products to our customers; the effect of the economic recession on the demand for our products and services; the effect of fluctuations in stock market prices on fee income from our brokerage, asset and wealth management businesses; our election to provide support to our mutual funds for structured credit products they may hold; changes in the value of our venture capital investments; changes in our accounting policies or in accounting standards or in how accounting standards are to be applied, including the implementation of FAS 166 and FAS 167 and its effects on the consolidation of additional assets on our balance sheet; mergers and acquisitions; federal and state regulations; reputational damage from negative publicity, fines, penalties and other negative consequences from regulatory violations, the loss of checking and saving account deposits to other investments such as the stock market, and fiscal and monetary policies of the Federal Reserve Board. There is no assurance that our allowance for credit losses will be adequate to cover future credit losses, especially if credit markets, housing prices, and unemployment do not stabilize or improve. Increases in loan charge-offs or in the allowance for credit losses and related provision expense could materially adversely affect our financial results and condition. There is no assurance that we will meet the SCAP capital requirement on the November 9, 2009, deadline established by the Federal Reserve Board. Although we exceeded the requirement at September 30, 2009, our common equity capital could fall between now and the deadline, causing us not to meet the requirement. Failure to meet the requirement could result in the issuance of equity securities or the conversion of preferred securities into common stock, resulting in substantial dilution to existing stockholders. There is no assurance as to when or how we will repay the government’s investment or that we will be able to repay the investment in a manner that does not require the issuance of equity securities resulting in substantial dilution to existing stockholders. For more information about factors that could cause actual results to differ materially from our expectations, refer to our reports filed with the Securities and Exchange Commission, including our Quarterly Reports on Form 10-Q for the periods ended March 31, 2009, and June 30, 2009, and our Annual Report on Form 10-K for the year ended December 31, 2008, including the discussions under “Risk Factors” in each of those reports, as filed with the SEC and available on the SEC’s website at www.sec.gov. Any factor described above or in our SEC reports could, by itself or together with one or more other factors, adversely affect our financial results and condition.

About Wells Fargo

Wells Fargo & Company is a diversified financial services company with $1.2 trillion in assets, providing banking, insurance, investments, mortgage and consumer finance through more than 10,000 stores, over 12,000 ATMs and the internet (wellsfargo.com) across North America and internationally.

Wells Fargo & Company and Subsidiaries
SUMMARY FINANCIAL DATA (1) (2)
				Quarter ended Sept. 30,						Nine months ended Sept. 30,
($ in millions, except per share amounts)					2009			2008		2009		2008
For the Period
Wells Fargo net income				$	3,235			1,637		9,452		5,389
Wells Fargo net income applicable to common stock					2,637			1,637		7,596		5,389
Diluted earnings per common share					0.56			0.49		1.69		1.62
Profitability ratios (annualized):
	Wells Fargo net income to average assets (ROA)				1.03	%		1.06		1.00		1.21
	Net income to average assets				1.06			1.07		1.02		1.22
	Wells Fargo net income applicable to common stock to average Wells Fargo common stockholders' equity (ROE)				12.04			13.63		13.29		15.02
	Net income to average total equity				10.57			13.66		11.32		15.06
Efficiency ratio (3)					52.0			53.0		54.9		51.8
Total revenue				$	22,466			10,377		65,990		32,400
Pre-tax pre-provision profit (PTPP) (4)					10,782			4,876		29,791		15,612
Dividends declared per common share					0.05			0.34		0.44		0.96
Average common shares outstanding					4,678.3			3,316.4		4,471.2		3,309.6
Diluted average common shares outstanding					4,706.4			3,331.0		4,485.3		3,323.4
Average loans				$	810,191			404,203		833,076		393,262
Average assets					1,246,051			614,194		1,270,071		594,717
Average core deposits (5)					759,319			320,074		759,668		318,582
Average retail core deposits (6)					584,414			234,140		590,499		230,935
Net interest margin					4.36	%		4.79		4.27		4.80
At Period End
Securities available for sale				$	183,814			86,882		183,814		86,882
Loans					799,952			411,049		799,952		411,049
Allowance for loan losses					24,028			7,865		24,028		7,865
Goodwill					24,052			13,520		24,052		13,520
Assets					1,228,625			622,361		1,228,625		622,361
Core deposits (5)					747,913			334,076		747,913		334,076
Wells Fargo stockholders' equity					122,150			46,957		122,150		46,957
Total equity					128,924			47,259		128,924		47,259
Capital ratios:
	Wells Fargo common stockholders' equity to assets				7.41	%		7.54		7.41		7.54
	Total equity to assets				10.49			7.59		10.49		7.59
	Average Wells Fargo common stockholders' equity to average assets				6.98			7.78		6.02		8.06
	Average total equity to average assets				9.99			7.83		8.98		8.11
	Risk-based capital (7)
		Tier 1 capital			10.63			8.59		10.63		8.59
		Total capital			14.66			11.51		14.66		11.51
	Tier 1 leverage (7)				9.03			7.54		9.03		7.54
Book value per common share				$	19.46			14.14		19.46		14.14
Team members (active, full-time equivalent)					265,100			159,000		265,100		159,000
Common stock price:
	High			$	29.56			44.68		30.47		44.68
	Low				22.08			20.46		7.80		20.46
	Period end				28.18			37.53		28.18		37.53
(1)	Wells Fargo & Company (Wells Fargo) acquired Wachovia Corporation (Wachovia) on December 31, 2008. Because the acquisition was completed on December 31, 2008, Wachovia’s results are included in the income statement, average balances and related metrics beginning in 2009. Wachovia’s assets and liabilities are included in the consolidated balance sheet beginning on December 31, 2008.
(2)	On January 1, 2009, we adopted new accounting guidance on noncontrolling interests contained in FASB ASC 810-10, Consolidation (Statement of Financial Accounting Standards (FAS) No. 160, Noncontrolling Interests in Consolidated Financial Statements – an amendment of ARB No. 51), on a retrospective basis for disclosure and, accordingly, prior period information reflects the adoption. The guidance requires that noncontrolling interests be reported as a component of total equity.
(3)	The efficiency ratio is noninterest expense divided by total revenue (net interest income and noninterest income).
(4)	Pre-tax pre-provision profit (PTPP) is total revenue less noninterest expense. Management believes that PTPP is a useful financial measure because it enables investors and others to assess the Company's ability to generate capital to cover credit losses through a credit cycle.
(5)	Core deposits are noninterest-bearing deposits, interest-bearing checking, savings certificates, market rate and other savings, and certain foreign deposits (Eurodollar sweep balances).
(6)	Retail core deposits are total core deposits excluding Wholesale Banking core deposits and retail mortgage escrow deposits.
(7)	The September 30, 2009, ratios are preliminary.

Wells Fargo & Company and Subsidiaries
FIVE QUARTER SUMMARY FINANCIAL DATA (1) (2)
				Quarter ended
				Sept. 30,			June 30,		Mar. 31,		Dec. 31,			Sept. 30,
($ in millions, except per share amounts)					2009		2009		2009		2008			2008
For the Quarter
Wells Fargo net income (loss)				$	3,235		3,172		3,045		(2,734	)		1,637
Wells Fargo net income (loss) applicable to common stock					2,637		2,575		2,384		(3,020	)		1,637
Diluted earnings (loss) per common share					0.56		0.57		0.56		(0.84	)		0.49
Profitability ratios (annualized):
	Wells Fargo net income (loss) to average assets (ROA)				1.03	%	1.00		0.96		(1.72	)		1.06
	Net income (loss) to average assets				1.06		1.02		0.97		(1.72	)		1.07
	Wells Fargo net income (loss) applicable to common stock to average Wells Fargo common stockholders' equity (ROE)				12.04		13.70		14.49		(22.32	)		13.63
	Net income (loss) to average total equity				10.57		11.56		11.97		(15.53	)		13.66
Efficiency ratio (3)					52.0		56.4		56.2		61.3			53.0
Total revenue				$	22,466		22,507		21,017		9,477			10,377
Pre-tax pre-provision profit (PTPP) (4)					10,782		9,810		9,199		3,667			4,876
Dividends declared per common share					0.05		0.05		0.34		0.34			0.34
Average common shares outstanding					4,678.3		4,483.1		4,247.4		3,582.4			3,316.4
Diluted average common shares outstanding					4,706.4		4,501.6		4,249.3		3,593.6			3,331.0
Average loans				$	810,191		833,945		855,591		413,940			404,203
Average assets					1,246,051		1,274,926		1,289,716		633,223			614,194
Average core deposits (5)					759,319		765,697		753,928		344,957			320,074
Average retail core deposits (6)					584,414		596,648		590,502		243,464			234,140
Net interest margin					4.36	%	4.30		4.16		4.90			4.79
At Quarter End
Securities available for sale				$	183,814		206,795		178,468		151,569			86,882
Loans					799,952		821,614		843,579		864,830			411,049
Allowance for loan losses					24,028		23,035		22,281		21,013			7,865
Goodwill					24,052		24,619		23,825		22,627			13,520
Assets					1,228,625		1,284,176		1,285,891		1,309,639			622,361
Core deposits (5)					747,913		761,122		756,183		745,432			334,076
Wells Fargo stockholders' equity					122,150		114,623		100,295		99,084			46,957
Total equity					128,924		121,382		107,057		102,316			47,259
Capital ratios:
	Wells Fargo common stockholders' equity to assets				7.41	%	6.51		5.40		5.21			7.54
	Total equity to assets				10.49		9.45		8.33		7.81			7.59
	Average Wells Fargo common stockholders' equity to average assets				6.98		5.92		5.17		8.50			7.78
	Average total equity to average assets				9.99		8.85		8.11		11.09			7.83
	Risk-based capital (7)
		Tier 1 capital			10.63		9.80		8.30		7.84			8.59
		Total capital			14.66		13.84		12.30		11.83			11.51
	Tier 1 leverage (7)				9.03		8.32		7.09		14.52			7.54
Book value per common share				$	19.46		17.91		16.28		16.15			14.14
Team members (active, full-time equivalent)					265,100		269,900		272,800		270,800			159,000
Common stock price:
	High			$	29.56		28.45		30.47		38.95			44.68
	Low				22.08		13.65		7.80		19.89			20.46
	Period end				28.18		24.26		14.24		29.48			37.53
(1)	Wells Fargo & Company (Wells Fargo) acquired Wachovia Corporation (Wachovia) on December 31, 2008. Because the acquisition was completed on December 31, 2008, Wachovia’s results are included in the income statement, average balances and related metrics beginning in 2009. Wachovia’s assets and liabilities are included in the consolidated balance sheet beginning on December 31, 2008.
(2)	On January 1, 2009, we adopted new accounting guidance on noncontrolling interests contained in FASB ASC 810-10, Consolidation (Statement of Financial Accounting Standards (FAS) No. 160, Noncontrolling Interests in Consolidated Financial Statements – an amendment of ARB No. 51), on a retrospective basis for disclosure and, accordingly, prior period information reflects the adoption. The guidance requires that noncontrolling interests be reported as a component of total equity.
(3)	The efficiency ratio is noninterest expense divided by total revenue (net interest income and noninterest income).
(4)	Pre-tax pre-provision profit (PTPP) is total revenue less noninterest expense. Management believes that PTPP is a useful financial measure because it enables investors and others to assess the Company's ability to generate capital to cover credit losses through a credit cycle.
(5)	Core deposits are noninterest-bearing deposits, interest-bearing checking, savings certificates, market rate and other savings, and certain foreign deposits (Eurodollar sweep balances).
(6)	Retail core deposits are total core deposits excluding Wholesale Banking core deposits and retail mortgage escrow deposits.
(7)	The September 30, 2009, ratios are preliminary. Because the Wachovia acquisition was completed on December 31, 2008, the Tier 1 leverage ratio at December 31, 2008, which considers period-end Tier 1 capital and quarterly average assets in the computation of the ratio, does not reflect average assets of Wachovia for 2008.

Wells Fargo & Company and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
				Quarter ended Sept. 30,							Nine months ended Sept. 30,
(in millions, except per share amounts)				2009				2008			2009			2008
Interest income
Trading assets				$	216			41			688			126
Securities available for sale					2,947			1,397			8,543			3,753
Mortgages held for sale					524			394			1,484			1,211
Loans held for sale					34			12			151			34
Loans					10,170			6,888			31,467			20,906
Other interest income					77			42			249			140
	Total interest income				13,968			8,774			42,582			26,170
Interest expense
Deposits					905			1,019			2,861			3,676
Short-term borrowings					32			492			210			1,274
Long-term debt					1,301			882			4,565			2,801
Other interest expense					46			-			122			-
	Total interest expense				2,284			2,393			7,758			7,751
Net interest income					11,684			6,381			34,824			18,419
Provision for credit losses					6,111			2,495			15,755			7,535
Net interest income after provision for credit losses					5,573			3,886			19,069			10,884
Noninterest income
Service charges on deposit accounts					1,478			839			4,320			2,387
Trust and investment fees					2,502			738			7,130			2,263
Card fees					946			601			2,722			1,747
Other fees					950			552			2,814			1,562
Mortgage banking					3,067			892			8,617			2,720
Insurance					468			439			1,644			1,493
Net gains (losses) on debt securities available for sale (includes impairment losses of $273 and $850, consisting of $314 and $1,889 of total other-than-temporary impairment losses, net of $41 and $1,039 recognized in other comprehensive income, for the quarter and nine months ended September 30, 2009, respectively)					(40	)		84			(237	)		316
Net gains (losses) from equity investments					29			(509	)		(88	)		(149	)
Other					1,382			360			4,244			1,642
	Total noninterest income				10,782			3,996			31,166			13,981
Noninterest expense
Salaries					3,428			2,078			10,252			6,092
Commission and incentive compensation					2,051			555			5,935			2,005
Employee benefits					1,034			486			3,545			1,666
Equipment					563			302			1,825			955
Net occupancy					778			402			2,357			1,201
Core deposit and other intangibles					642			47			1,935			139
FDIC and other deposit assessments					228			37			1,547			63
Other					2,960			1,594			8,803			4,667
	Total noninterest expense				11,684			5,501			36,199			16,788
Income before income tax expense					4,671			2,381			14,036			8,077
Income tax expense					1,355			730			4,382			2,638
Net income before noncontrolling interests					3,316			1,651			9,654			5,439
Less: Net income from noncontrolling interests					81			14			202			50
Wells Fargo net income				$	3,235			1,637			9,452			5,389
Wells Fargo net income applicable to common stock				$	2,637			1,637			7,596			5,389
Per share information
Earnings per common share				$	0.56			0.49			1.70			1.63
Diluted earnings per common share					0.56			0.49			1.69			1.62
Dividends declared per common share					0.05			0.34			0.44			0.96
Average common shares outstanding					4,678.3			3,316.4			4,471.2			3,309.6
Diluted average common shares outstanding					4,706.4			3,331.0			4,485.3			3,323.4

Wells Fargo & Company and Subsidiaries
FIVE QUARTER CONSOLIDATED STATEMENT OF INCOME
				Quarter ended
				Sept. 30,				June 30,			Mar. 31,			Dec. 31,			Sept. 30,
(in millions, except per share amounts)				2009				2009			2009			2008			2008
Interest income
Trading assets				$	216			206			266			51			41
Securities available for sale					2,947			2,887			2,709			1,534			1,397
Mortgages held for sale					524			545			415			362			394
Loans held for sale					34			50			67			14			12
Loans					10,170			10,532			10,765			6,726			6,888
Other interest income					77			81			91			41			42
	Total interest income				13,968			14,301			14,313			8,728			8,774
Interest expense
Deposits					905			957			999			845			1,019
Short-term borrowings					32			55			123			204			492
Long-term debt					1,301			1,485			1,779			955			882
Other interest expense					46			40			36			-			-
	Total interest expense				2,284			2,537			2,937			2,004			2,393
Net interest income					11,684			11,764			11,376			6,724			6,381
Provision for credit losses					6,111			5,086			4,558			8,444			2,495
Net interest income after provision for credit losses					5,573			6,678			6,818			(1,720	)		3,886
Noninterest income
Service charges on deposit accounts					1,478			1,448			1,394			803			839
Trust and investment fees					2,502			2,413			2,215			661			738
Card fees					946			923			853			589			601
Other fees					950			963			901			535			552
Mortgage banking					3,067			3,046			2,504			(195	)		892
Insurance					468			595			581			337			439
Net gains (losses) on debt securities available for sale					(40	)		(78	)		(119	)		721			84
Net gains (losses) from equity investments					29			40			(157	)		(608	)		(509	)
Other					1,382			1,393			1,469			(90	)		360
	Total noninterest income				10,782			10,743			9,641			2,753			3,996
Noninterest expense
Salaries					3,428			3,438			3,386			2,168			2,078
Commission and incentive compensation					2,051			2,060			1,824			671			555
Employee benefits					1,034			1,227			1,284			338			486
Equipment					563			575			687			402			302
Net occupancy					778			783			796			418			402
Core deposit and other intangibles					642			646			647			47			47
FDIC and other deposit assessments					228			981			338			57			37
Other					2,960			2,987			2,856			1,709			1,594
	Total noninterest expense				11,684			12,697			11,818			5,810			5,501
Income (loss) before income tax expense (benefit)					4,671			4,724			4,641			(4,777	)		2,381
Income tax expense (benefit)					1,355			1,475			1,552			(2,036	)		730
Net income (loss) before noncontrolling interests					3,316			3,249			3,089			(2,741	)		1,651
Less: Net income (loss) from noncontrolling interests					81			77			44			(7	)		14
Wells Fargo net income (loss)				$	3,235			3,172			3,045			(2,734	)		1,637
Wells Fargo net income (loss) applicable to common stock				$	2,637			2,575			2,384			(3,020	)		1,637
Per share information
Earnings (loss) per common share				$	0.56			0.58			0.56			(0.84	)		0.49
Diluted earnings (loss) per common share					0.56			0.57			0.56			(0.84	)		0.49
Dividends declared per common share					0.05			0.05			0.34			0.34			0.34
Average common shares outstanding					4,678.3			4,483.1			4,247.4			3,582.4			3,316.4
Diluted average common shares outstanding					4,706.4			4,501.6			4,249.3			3,593.6			3,331.0

Wells Fargo & Company and Subsidiaries
AVERAGE BALANCES, YIELDS AND RATES PAID (TAXABLE-EQUIVALENT BASIS) (1)(2)
									Quarter ended September 30,
									2009										2008
																Interest									Interest
									Average				Yields/			income/			Average			Yields/			income/
(in millions)									balance				rates			expense			balance			rates			expense
Earning assets
Federal funds sold, securities purchased under resale agreements and other short-term investments									$	16,356			0.66	%		$	27		3,463			2.09	%		$	18
Trading assets										20,518			4.29				221		4,838			3.72				46
Debt securities available for sale (3):
	Securities of U.S. Treasury and federal agencies									2,545			3.79				24		1,141			3.99				11
	Securities of U.S. states and political subdivisions									12,818			6.28				204		7,211			6.65				124
	Mortgage-backed securities:
		Federal agencies								94,457			5.34				1,221		50,528			5.83				731
		Residential and commercial								43,214			9.56				1,089		21,358			5.82				346
			Total mortgage-backed securities							137,671			6.75				2,310		71,886			5.83				1,077
	Other debt securities (4)									33,294			7.00				568		12,622			7.17				248
				Total debt securities available for sale (4)						186,328			6.72				3,106		92,860			6.06				1,460
Mortgages held for sale (5)										40,604			5.16				524		24,990			6.31				394
Loans held for sale (5)										4,975			2.67				34		677			6.95				12
Loans:
	Commercial and commercial real estate:
		Commercial								175,642			4.34				1,919		100,688			5.92				1,496
		Real estate mortgage								103,450			3.39				883		43,616			5.60				615
		Real estate construction								32,649			3.02				249		19,715			4.82				238
		Lease financing								14,360			9.14				328		7,250			5.48				100
			Total commercial and commercial real estate							326,101			4.12				3,379		171,269			5.69				2,449
	Consumer:
		Real estate 1-4 family first mortgage								235,051			5.35				3,154		76,197			6.64				1,265
		Real estate 1-4 family junior lien mortgage								105,779			4.62				1,229		75,379			6.36				1,206
		Credit card								23,448			11.65				683		19,948			12.19				609
		Other revolving credit and installment								90,199			6.48				1,473		54,104			8.64				1,175
			Total consumer							454,477			5.73				6,539		225,628			7.52				4,255
	Foreign									29,613			3.61				270		7,306			10.28				188
				Total loans (5)						810,191			5.00				10,188		404,203			6.79				6,892
Other										6,088			3.29				49		2,126			4.64				24
					Total earning assets				$	1,085,060			5.20	%		$	14,149		533,157			6.57	%		$	8,846
Funding sources
Deposits:
	Interest-bearing checking								$	59,467			0.15	%		$	21		5,483			0.87	%		$	12
	Market rate and other savings									369,120			0.34				317		166,710			1.18				495
	Savings certificates									129,698			1.35				442		37,192			2.57				240
	Other time deposits									18,248			1.93				89		7,930			2.59				53
	Deposits in foreign offices									56,820			0.25				36		49,054			1.78				219
			Total interest-bearing deposits							633,353			0.57				905		266,369			1.52				1,019
Short-term borrowings										39,828			0.35				36		83,458			2.35				492
Long-term debt										222,580			2.33				1,301		103,745			3.43				892
Other liabilities										5,620			3.30				46		-			-				-
			Total interest-bearing liabilities							901,381			1.01				2,288		453,572			2.11				2,403
Portion of noninterest-bearing funding sources										183,679			-				-		79,585			-				-
					Total funding sources				$	1,085,060			0.84				2,288		533,157			1.78				2,403
Net interest margin and net interest income on a taxable-equivalent basis (6)													4.36	%		$	11,861					4.79	%		$	6,443
Noninterest-earning assets
Cash and due from banks									$	18,084									11,024
Goodwill										24,435									13,531
Other										118,472									56,482
					Total noninterest-earning assets				$	160,991									81,037
Noninterest-bearing funding sources
Deposits									$	172,588									87,095
Other liabilities										47,646									25,452
Total equity										124,436									48,075
Noninterest-bearing funding sources used to fund earning assets										(183,679	)								(79,585	)
					Net noninterest-bearing funding sources				$	160,991									81,037
						Total assets			$	1,246,051									614,194
(1)	Our average prime rate was 3.25% and 5.00% for the quarters ended September 30, 2009 and 2008, respectively. The average three-month London Interbank Offered Rate (LIBOR) was 0.41% and 2.91% for the same quarters, respectively.
(2)	Interest rates and amounts include the effects of hedge and risk management activities associated with the respective asset and liability categories.
(3)	Yields are based on amortized cost balances computed on a settlement date basis.
(4)	Includes certain preferred securities.
(5)	Nonaccrual loans and related income are included in their respective loan categories.
(6)	Includes taxable-equivalent adjustments primarily related to tax-exempt income on certain loans and securities. The federal statutory tax rate was 35% for the periods presented.

Wells Fargo & Company and Subsidiaries
AVERAGE BALANCES, YIELDS AND RATES PAID (TAXABLE-EQUIVALENT BASIS) (1)(2)
								Nine months ended September 30,
								2009										2008
															Interest									Interest
								Average				Yields/			income/			Average			Yields/			income/
(in millions)								balance				rates			expense			balance			rates			expense
Earning assets
Federal funds sold, securities purchased under resale agreements and other short-term investments								$	20,411			0.73	%		$	111		3,734			2.59	%		$	72
Trading assets									20,389			4.64				709		4,960			3.57				133
Debt securities available for sale (3):
	Securities of U.S. Treasury and federal agencies								2,514			2.61				48		1,055			3.88				30
	Securities of U.S. states and political subdivisions								12,409			6.39				623		6,848			6.88				362
	Mortgage-backed securities:
		Federal agencies							87,916			5.45				3,492		42,448			5.93				1,854
		Residential and commercial							41,070			9.05				3,150		21,589			5.92				1,010
			Total mortgage-backed securities						128,986			6.72				6,642		64,037			5.92				2,864
	Other debt securities (4)								31,437			7.01				1,691		12,351			6.78				670
				Total debt securities available for sale (4)					175,346			6.69				9,004		84,291			6.11				3,926
Mortgages held for sale (5)									38,315			5.16				1,484		26,417			6.11				1,211
Loans held for sale (5)									6,693			3.01				151		686			6.66				34
Loans:
	Commercial and commercial real estate:
		Commercial							186,610			4.10				5,725		95,697			6.29				4,509
		Real estate mortgage							104,003			3.44				2,677		40,351			5.91				1,788
		Real estate construction							33,660			2.92				734		19,288			5.29				763
		Lease financing							14,968			9.04				1,015		7,055			5.63				298
			Total commercial and commercial real estate						339,241			4.00				10,151		162,391			6.05				7,358
	Consumer:
		Real estate 1-4 family first mortgage							240,409			5.51				9,926		74,064			6.77				3,761
		Real estate 1-4 family junior lien mortgage							108,094			4.81				3,894		75,220			6.78				3,820
		Credit card							23,236			12.16				2,118		19,256			12.11				1,749
		Other revolving credit and installment							91,240			6.60				4,502		54,949			8.84				3,637
			Total consumer						462,979			5.90				20,440		223,489			7.74				12,967
	Foreign								30,856			4.02				929		7,382			10.72				592
				Total loans (5)					833,076			5.05				31,520		393,262			7.10				20,917
Other									6,102			3.02				137		1,995			4.55				68
					Total earning assets			$	1,100,332			5.21	%		$	43,116		515,345			6.81	%		$	26,361
Funding sources
Deposits:
	Interest-bearing checking							$	73,195			0.14	%		$	77		5,399			1.31	%		$	53
	Market rate and other savings								339,081			0.42				1,072		162,792			1.45				1,765
	Savings certificates								150,607			1.14				1,280		38,907			3.23				940
	Other time deposits								21,794			1.97				321		6,163			2.87				133
	Deposits in foreign offices								50,907			0.29				111		49,192			2.13				785
			Total interest-bearing deposits						635,584			0.60				2,861		262,453			1.87				3,676
Short-term borrowings									58,447			0.50				217		67,714			2.51				1,274
Long-term debt									238,909			2.55				4,568		101,668			3.71				2,825
Other liabilities									4,675			3.50				122		-			-				-
			Total interest-bearing liabilities						937,615			1.11				7,768		431,835			2.40				7,775
Portion of noninterest-bearing funding sources									162,717			-				-		83,510			-				-
					Total funding sources			$	1,100,332			0.94				7,768		515,345			2.01				7,775
Net interest margin and net interest income on a taxable-equivalent basis (6)												4.27	%		$	35,348					4.80	%		$	18,586
Noninterest-earning assets
Cash and due from banks								$	19,218									11,182
Goodwill									23,964									13,289
Other									126,557									54,901
					Total noninterest-earning assets			$	169,739									79,372
Noninterest-bearing funding sources
Deposits								$	169,187									86,676
Other liabilities									49,249									27,973
Total equity									114,020									48,233
Noninterest-bearing funding sources used to fund earning assets									(162,717	)								(83,510	)
					Net noninterest-bearing funding sources			$	169,739									79,372
						Total assets		$	1,270,071									594,717
(1)	Our average prime rate was 3.25% and 5.43% for the nine months ended September 30, 2009 and 2008, respectively. The average three-month London Interbank Offered Rate (LIBOR) was 0.83% and 2.98% for the same periods, respectively.
(2)	Interest rates and amounts include the effects of hedge and risk management activities associated with the respective asset and liability categories.
(3)	Yields are based on amortized cost balances computed on a settlement date basis.
(4)	Includes certain preferred securities.
(5)	Nonaccrual loans and related income are included in their respective loan categories.
(6)	Includes taxable-equivalent adjustments primarily related to tax-exempt income on certain loans and securities. The federal statutory tax rate was 35% for the periods presented.

Wells Fargo & Company and Subsidiaries
NONINTEREST INCOME
					Quarter ended Sept. 30,							Nine months ended Sept. 30,
(in millions)						2009			2008			2009			2008
Service charges on deposit accounts					$	1,478			839			4,320			2,387
Trust and investment fees:
	Trust, investment and IRA fees					989			549			2,550			1,674
	Commissions and all other fees					1,513			189			4,580			589
		Total trust and investment fees				2,502			738			7,130			2,263
Card fees						946			601			2,722			1,747
Other fees:
	Cash network fees					60			48			176			143
	Charges and fees on loans					453			266			1,326			765
	All other fees					437			238			1,312			654
		Total other fees				950			552			2,814			1,562
Mortgage banking:
	Servicing income, net					1,873			525			3,469			1,019
	Net gains on mortgage loan origination/sales activities					1,125			276			4,910			1,419
	All other					69			91			238			282
		Total mortgage banking				3,067			892			8,617			2,720
Insurance						468			439			1,644			1,493
Net gains from trading activities						622			65			2,158			684
Net gains (losses) on debt securities available for sale						(40	)		84			(237	)		316
Net gains (losses) from equity investments						29			(509	)		(88	)		(149	)
Operating leases						224			102			522			365
All other						536			193			1,564			593
			Total		$	10,782			3,996			31,166			13,981
NONINTEREST EXPENSE
					Quarter ended Sept. 30,							Nine months ended Sept. 30,
(in millions)						2009			2008			2009			2008
Salaries					$	3,428			2,078			10,252			6,092
Commission and incentive compensation						2,051			555			5,935			2,005
Employee benefits						1,034			486			3,545			1,666
Equipment						563			302			1,825			955
Net occupancy						778			402			2,357			1,201
Core deposit and other intangibles						642			47			1,935			139
FDIC and other deposit assessments						228			37			1,547			63
Outside professional services						489			206			1,350			589
Insurance						208			144			734			511
Postage, stationery and supplies						211			136			701			415
Outside data processing						251			122			745			353
Travel and entertainment						151			113			387			330
Foreclosed assets						243			99			678			298
Contract services						254			88			726			300
Operating leases						52			90			183			308
Advertising and promotion						160			96			396			285
Telecommunications						142			78			464			238
Operating losses						117			63			448			46
All other						682			359			1,991			994
	Total				$	11,684			5,501			36,199			16,788

Wells Fargo & Company and Subsidiaries
FIVE QUARTER NONINTEREST INCOME
					Quarter ended
					Sept. 30,				June 30,			Mar. 31,			Dec. 31,			Sept. 30,
(in millions)					2009				2009			2009			2008			2008
Service charges on deposit accounts					$	1,478			1,448			1,394			803			839
Trust and investment fees:
	Trust, investment and IRA fees					989			839			722			487			549
	Commissions and all other fees					1,513			1,574			1,493			174			189
		Total trust and investment fees				2,502			2,413			2,215			661			738
Card fees						946			923			853			589			601
Other fees:
	Cash network fees					60			58			58			45			48
	Charges and fees on loans					453			440			433			272			266
	All other fees					437			465			410			218			238
		Total other fees				950			963			901			535			552
Mortgage banking:
	Servicing income, net					1,873			753			843			(40	)		525
	Net gains (losses) on mortgage loan origination/sales activities					1,125			2,203			1,582			(236	)		276
	All other					69			90			79			81			91
		Total mortgage banking				3,067			3,046			2,504			(195	)		892
Insurance						468			595			581			337			439
Net gains (losses) from trading activities						622			749			787			(409	)		65
Net gains (losses) on debt securities available for sale						(40	)		(78	)		(119	)		721			84
Net gains (losses) from equity investments						29			40			(157	)		(608	)		(509	)
Operating leases						224			168			130			62			102
All other						536			476			552			257			193
			Total		$	10,782			10,743			9,641			2,753			3,996
FIVE QUARTER NONINTEREST EXPENSE
					Quarter ended
					Sept. 30,				June 30,			Mar. 31,			Dec. 31,			Sept. 30,
(in millions)					2009				2009			2009			2008			2008
Salaries					$	3,428			3,438			3,386			2,168			2,078
Commission and incentive compensation						2,051			2,060			1,824			671			555
Employee benefits						1,034			1,227			1,284			338			486
Equipment						563			575			687			402			302
Net occupancy						778			783			796			418			402
Core deposit and other intangibles						642			646			647			47			47
FDIC and other deposit assessments						228			981			338			57			37
Outside professional services						489			451			410			258			206
Insurance						208			259			267			214			144
Postage, stationery and supplies						211			240			250			141			136
Outside data processing						251			282			212			127			122
Travel and entertainment						151			131			105			117			113
Foreclosed assets						243			187			248			116			99
Contract services						254			256			216			107			88
Operating leases						52			61			70			81			90
Advertising and promotion						160			111			125			93			96
Telecommunications						142			164			158			83			78
Operating losses						117			159			172			96			63
All other						682			686			623			276			359
	Total				$	11,684			12,697			11,818			5,810			5,501

Wells Fargo & Company and Subsidiaries CONSOLIDATED BALANCE SHEET
(in millions, except shares)		Sept. 30, 2009				Dec. 31, 2008
Assets
Cash and due from banks		$	17,233			23,763
Federal funds sold, securities purchased under resale agreements and other short-term investments			17,491			49,433
Trading assets			43,198			54,884
Securities available for sale			183,814			151,569
Mortgages held for sale (includes $33,435 and $18,754 carried at fair value)			35,538			20,088
Loans held for sale (includes $201 and $398 carried at fair value)			5,846			6,228
Loans			799,952			864,830
Allowance for loan losses			(24,028	)		(21,013	)
Net loans			775,924			843,817
Mortgage servicing rights:
Measured at fair value (residential MSRs)			14,500			14,714
Amortized			1,162			1,446
Premises and equipment, net			11,040			11,269
Goodwill			24,052			22,627
Other assets			98,827			109,801
Total assets		$	1,228,625			1,309,639
Liabilities
Noninterest-bearing deposits		$	165,260			150,837
Interest-bearing deposits			631,488			630,565
Total deposits			796,748			781,402
Short-term borrowings			30,800			108,074
Accrued expenses and other liabilities			57,861			50,689
Long-term debt			214,292			267,158
Total liabilities			1,099,701			1,207,323
Equity
Wells Fargo stockholders' equity:
Preferred stock			31,589			31,332
Common stock - $1-2/3 par value, authorized 6,000,000,000 shares; issued 4,756,071,429 shares and 4,363,921,429 shares			7,927			7,273
Additional paid-in capital			40,343			36,026
Retained earnings			41,485			36,543
Cumulative other comprehensive income (loss)			4,088			(6,869	)
Treasury stock - 76,876,271 shares and 135,290,540 shares			(2,771	)		(4,666	)
Unearned ESOP shares			(511	)		(555	)
Total Wells Fargo stockholders' equity			122,150			99,084
Noncontrolling interests			6,774			3,232
Total equity			128,924			102,316
Total liabilities and equity		$	1,228,625			1,309,639

Wells Fargo & Company and Subsidiaries FIVE QUARTER CONSOLIDATED BALANCE SHEET
(in millions)		Sept. 30, 2009				June 30, 2009			Mar. 31, 2009			Dec. 31, 2008			Sept. 30, 2008
Assets
Cash and due from banks		$	17,233			20,632			22,186			23,763			12,861
Federal funds sold, securities purchased under resale agreements and other short-term investments			17,491			15,976			18,625			49,433			8,093
Trading assets			43,198			40,110			46,497			54,884			9,097
Securities available for sale			183,814			206,795			178,468			151,569			86,882
Mortgages held for sale			35,538			41,991			36,807			20,088			18,739
Loans held for sale			5,846			5,413			8,306			6,228			635
Loans			799,952			821,614			843,579			864,830			411,049
Allowance for loan losses			(24,028	)		(23,035	)		(22,281	)		(21,013	)		(7,865	)
Net loans			775,924			798,579			821,298			843,817			403,184
Mortgage servicing rights:
Measured at fair value (residential MSRs)			14,500			15,690			12,391			14,714			19,184
Amortized			1,162			1,205			1,257			1,446			433
Premises and equipment, net			11,040			11,151			11,215			11,269			5,054
Goodwill			24,052			24,619			23,825			22,627			13,520
Other assets			98,827			102,015			105,016			109,801			44,679
Total assets		$	1,228,625			1,284,176			1,285,891			1,309,639			622,361
Liabilities
Noninterest-bearing deposits		$	165,260			173,149			166,497			150,837			89,446
Interest-bearing deposits			631,488			640,586			630,772			630,565			264,128
Total deposits			796,748			813,735			797,269			781,402			353,574
Short-term borrowings			30,800			55,483			72,084			108,074			85,187
Accrued expenses and other liabilities			57,861			64,160			58,831			50,689			28,991
Long-term debt			214,292			229,416			250,650			267,158			107,350
Total liabilities			1,099,701			1,162,794			1,178,834			1,207,323			575,102
Equity
Wells Fargo stockholders' equity:
Preferred stock			31,589			31,497			31,411			31,332			625
Common stock			7,927			7,927			7,273			7,273			5,788
Additional paid-in capital			40,343			40,270			32,414			36,026			8,348
Retained earnings			41,485			39,165			36,949			36,543			40,853
Cumulative other comprehensive income (loss)			4,088			(590	)		(3,624	)		(6,869	)		(2,783	)
Treasury stock			(2,771	)		(3,126	)		(3,593	)		(4,666	)		(5,207	)
Unearned ESOP shares			(511	)		(520	)		(535	)		(555	)		(667	)
Total Wells Fargo stockholders' equity			122,150			114,623			100,295			99,084			46,957
Noncontrolling interests			6,774			6,759			6,762			3,232			302
Total equity			128,924			121,382			107,057			102,316			47,259
Total liabilities and equity		$	1,228,625			1,284,176			1,285,891			1,309,639			622,361

Wells Fargo & Company and Subsidiaries FIVE QUARTER AVERAGE BALANCES
		Quarter ended
(in millions)		Sept. 30, 2009				June 30, 2009			Mar. 31, 2009			Dec. 31, 2008			Sept. 30, 2008
Earning assets
Federal funds sold, securities purchased under resale agreements and other short-term investments		$	16,356			20,889			24,074			9,938			3,463
Trading assets			20,518			18,464			22,203			5,004			4,838
Debt securities available for sale:
Securities of U.S. Treasury and federal agencies			2,545			2,102			2,899			1,165			1,141
Securities of U.S. states and political subdivisions			12,818			12,189			12,213			7,124			7,211
Mortgage-backed securities:
Federal agencies			94,457			92,550			76,545			51,714			50,528
Residential and commercial			43,214			41,257			38,690			18,245			21,358
Total mortgage-backed securities			137,671			133,807			115,235			69,959			71,886
Other debt securities (1)			33,294			30,901			30,080			14,217			12,622
Total debt securities available for sale (1)			186,328			178,999			160,427			92,465			92,860
Mortgages held for sale (2)			40,604			43,177			31,058			23,390			24,990
Loans held for sale (2)			4,975			7,188			7,949			1,287			677
Loans:
Commercial and commercial real estate:
Commercial			175,642			187,501			196,923			107,325			100,688
Real estate mortgage			103,450			104,297			104,271			45,555			43,616
Real estate construction			32,649			33,857			34,493			19,943			19,715
Lease financing			14,360			14,750			15,810			7,397			7,250
Total commercial and commercial real estate			326,101			340,405			351,497			180,220			171,269
Consumer:
Real estate 1-4 family first mortgage			235,051			240,798			245,494			78,251			76,197
Real estate 1-4 family junior lien mortgage			105,779			108,422			110,128			75,838			75,379
Credit card			23,448			22,963			23,295			20,626			19,948
Other revolving credit and installment			90,199			90,729			92,820			52,638			54,104
Total consumer			454,477			462,912			471,737			227,353			225,628
Foreign			29,613			30,628			32,357			6,367			7,306
Total loans (2)			810,191			833,945			855,591			413,940			404,203
Other			6,088			6,079			6,140			1,690			2,126
Total earning assets		$	1,085,060			1,108,741			1,107,442			547,714			533,157
Funding sources
Deposits:
Interest-bearing checking		$	59,467			79,955			80,393			6,396			5,483
Market rate and other savings			369,120			334,067			313,445			178,301			166,710
Savings certificates			129,698			152,444			170,122			41,189			37,192
Other time deposits			18,248			21,660			25,555			8,128			7,930
Deposits in foreign offices			56,820			49,885			45,896			42,771			49,054
Total interest-bearing deposits			633,353			638,011			635,411			276,785			266,369
Short-term borrowings			39,828			59,844			76,068			60,210			83,458
Long-term debt			222,580			235,590			258,957			104,112			103,745
Other liabilities			5,620			4,604			3,778			-			-
Total interest-bearing liabilities			901,381			938,049			974,214			441,107			453,572
Portion of noninterest-bearing funding sources			183,679			170,692			133,228			106,607			79,585
Total funding sources		$	1,085,060			1,108,741			1,107,442			547,714			533,157
Noninterest-earning assets
Cash and due from banks		$	18,084			19,340			20,255			11,155			11,024
Goodwill			24,435			24,261			23,183			13,544			13,531
Other			118,472			122,584			138,836			60,810			56,482
Total noninterest-earning assets		$	160,991			166,185			182,274			85,509			81,037
Noninterest-bearing funding sources
Deposits		$	172,588			174,529			160,308			91,229			87,095
Other liabilities			47,646			49,570			50,566			30,651			25,452
Total equity			124,436			112,778			104,628			70,236			48,075
Noninterest-bearing funding sources used to fund earning assets			(183,679	)		(170,692	)		(133,228	)		(106,607	)		(79,585	)
Net noninterest-bearing funding sources		$	160,991			166,185			182,274			85,509			81,037
Total assets		$	1,246,051			1,274,926			1,289,716			633,223			614,194
(1) Includes certain preferred securities.
(2) Nonaccrual loans are included in their respective loan categories.

Wells Fargo & Company and Subsidiaries FIVE QUARTER LOANS
(in millions)		Sept. 30, 2009			June 30, 2009		Mar. 31, 2009		Dec. 31, 2008		Sept. 30, 2008
Commercial and commercial real estate:
Commercial		$	169,610		182,037		191,711		202,469		104,281
Real estate mortgage			103,442		103,654		104,934		103,108		44,741
Real estate construction			31,719		33,238		33,912		34,676		19,681
Lease financing			14,115		14,555		14,792		15,829		7,271
Total commercial and commercial real estate			318,886		333,484		345,349		356,082		175,974
Consumer:
Real estate 1-4 family first mortgage			232,622		237,289		242,947		247,894		77,870
Real estate 1-4 family junior lien mortgage			104,538		107,024		109,748		110,164		75,617
Credit card			23,597		23,069		22,815		23,555		20,358
Other revolving credit and installment			90,027		90,654		91,252		93,253		54,327
Total consumer			450,784		458,036		466,762		474,866		228,172
Foreign			30,282		30,094		31,468		33,882		6,903
Total loans (net of unearned income) (1)		$	799,952		821,614		843,579		864,830		411,049
(1) Includes $54.3 billion, $55.2 billion, $58.2 billion and $58.8 billion of purchased credit-impaired (PCI) loans at September 30, June 30 and March 31, 2009, and December 31, 2008, respectively. See table on page 32 for detail of PCI loans.
FIVE QUARTER NONACCRUAL LOANS AND OTHER NONPERFORMING ASSETS
(in millions)		Sept. 30, 2009			June 30, 2009		Mar. 31, 2009		Dec. 31, 2008		Sept. 30, 2008
Nonaccrual loans:
Commercial and commercial real estate:
Commercial		$	4,540		2,910		1,696		1,253		846
Real estate mortgage			2,856		2,343		1,324		594		296
Real estate construction			2,711		2,210		1,371		989		736
Lease financing			157		130		114		92		69
Total commercial and commercial real estate			10,264		7,593		4,505		2,928		1,947
Consumer:
Real estate 1-4 family first mortgage			8,132		6,000		4,218		2,648		1,975
Real estate 1-4 family junior lien mortgage			1,985		1,652		1,418		894		780
Other revolving credit and installment			344		327		300		273		232
Total consumer			10,461		7,979		5,936		3,815		2,987
Foreign			144		226		75		57		61
Total nonaccrual loans (1) (2)			20,869		15,798		10,516		6,800		4,995
As a percentage of total loans			2.61	%	1.92		1.25		0.79		1.22
Foreclosed assets:
GNMA loans (3)		$	840		932		768		667		596
Other			1,687		1,592		1,294		1,526		644
Real estate and other nonaccrual investments (4)			55		20		34		16		56
Total nonaccrual loans and other nonperforming assets		$	23,451		18,342		12,612		9,009		6,291
As a percentage of total loans			2.93	%	2.23