Wells Fargo Reports Record EPS, Double-Digit Revenue Growth



    SAN FRANCISCO, October 16 /CNW/ - Wells Fargo & Company (NYSE:  WFC):

    
    Third Quarter 2007 Highlights:

    -- Record diluted earnings per share of $0.68, up 6 percent from prior
       year's $0.64

    -- Record net income of $2.28 billion, up 4 percent from prior year's
       $2.19 billion

    -- Revenue of $9.85 billion, up 10 percent from prior year's $8.93
       billion

    -- Revenue growth (10 percent) exceeded expense growth (8 percent)

    -- Average total loans up 15 percent from prior year; up 22 percent
       (annualized) from prior quarter
          -- Average commercial and commercial real estate loans up 16
             percent from prior year, up 24 percent (annualized) from
             prior quarter
          -- Average consumer loans up 15 percent from prior year and up
             22 percent (annualized) from prior quarter

    -- Average core deposits(a) up 11 percent from prior year, up 8 
       percent (annualized) from prior quarter

    -- Net credit losses up $172 million from prior quarter, primarily
       due to increased home equity portfolio losses and seasonally higher
       auto portfolio losses
    

    
    Selected Financial                                Nine months ended
     Information                 Third Quarter             Sept. 30
                             ---------------------- ----------------------
                                                  %                      %
                              2007    2006   Change  2007    2006   Change
                              -----   -----  ------  -----   -----  ------
    Diluted earnings per
     share                   $ 0.68  $ 0.64      6% $ 2.01  $ 1.85      9%
    Net income (in billions)   2.28    2.19      4    6.81    6.30      8
    Revenue (in billions)      9.85    8.93     10   29.19   26.28     11
    Average loans (in
     billions)                350.7   304.0     15   334.8   305.1     10
    Average core deposits
     (in billions)(a)         306.1   269.7     13   299.1   263.8     13
    Net charge-offs as % of
     avg. total loans          1.01%   0.86%    17    0.93%   0.67%    39
    Net interest margin        4.55    4.79     (5)   4.79    4.80     --

    (a) See Footnote 3 to SUMMARY FINANCIAL DATA.
    

    Wells Fargo & Company (NYSE:  WFC) reported record diluted earnings per
common share of $0.68 for third quarter 2007, up 6 percent from $0.64 in third
quarter 2006. Net income was $2.28 billion, up 4 percent from $2.19 billion in
third quarter 2006. For the first nine months of 2007, diluted earnings per
share were a record $2.01 and net income was a record $6.81 billion, up 9
percent and 8 percent, respectively, from the first nine months of 2006.

    "Given the severe disruption in the credit markets, it was a challenging
quarter to be sure. Despite that, we had strong growth in revenue and earnings
per share, as our team members remained focused on executing our time-tested,
diversified business model," said President and CEO John Stumpf. "Our team
continued to earn more of our customers' business, setting a new record in
customer cross-sell of 5.5 products per consumer household. We maintained our
conservative risk management practices, and our strong balance sheet and
capital ratios, perhaps the strongest in the industry, which allowed us to
continue to grow profitably despite the problems in the market. A challenging
environment presents exceptional growth opportunities, perhaps the best in
recent years and we are well positioned to take advantage of them. We welcome
the new team members and customers from Greater Bay Bancorp who joined our
Wells Fargo family this month, adding $7.4 billion in assets and 41 banking
stores across the San Francisco Bay Area, including the teams from Greater
Bay's ABD Insurance and Financial Services and Matsco Financial Corporation."

    Financial Performance

    Diluted earnings per share rose 6 percent to a record $0.68. "While we're
not immune to the evolving slowdown in the housing sector, we had another
solid quarter, in total and across most of our businesses, despite the
turbulent credit markets," said Chief Financial Officer Howard Atkins. "Once
again, these solid results were driven by double-digit revenue growth (10
percent), positive operating leverage (revenue growth 2 percentage points
above expense growth), double-digit growth in both loans and core deposits,
and operating margins that remained at the top of the large bank peer group."

    Revenue

    Revenue of $9.85 billion was up $919 million, or 10 percent, from a year
ago. Year-to-date revenue growth was 11 percent. "Achieving double-digit
revenue growth during the challenging environment in the third quarter once
again reflected the value of our diversified business model and our success in
earning more of our customers' business," said Atkins. Businesses that
generated double-digit, year-over-year revenue growth included asset
management, real estate brokerage, insurance, international, small business
lending, wealth management, credit card, global remittance services, corporate
trust and home mortgage.

    Revenue was flat on a linked-quarter basis, with most businesses up
solidly, offset by a seasonal drop in insurance premiums and a decline in real
estate brokerage fees from the record set in second quarter 2007. The declines
in insurance and real estate brokerage fees were partially offset by
associated declines in expenses in these businesses.

    Loans

    Average loans of $350.7 billion increased $46.7 billion, or 15 percent,
from a year ago. On a linked-quarter basis, average loans grew $18.7 billion,
including the impact of the acquisitions of Placer Sierra Bancshares ($1.2
billion) and CIT Construction ($2.6 billion).

    This was the 12th consecutive quarter of double-digit, year-over-year
growth for average commercial and commercial real estate loans, up $18.8
billion, or 16 percent. Commercial loan growth was broadly diversified by
product and geography, with small business lending, specialized financial
services, asset-based lending, international, and commercial real estate
generating double-digit loan growth from third quarter 2006. On a
linked-quarter basis, average commercial and commercial real estate loans
increased $7.7 billion, or 24 percent (annualized), including $3.5 billion
from acquisitions. Average consumer loans increased $26.9 billion, or 15
percent, from third quarter 2006 and increased $10.7 billion, or 22 percent
(annualized), from second quarter 2007, including $350 million from
acquisitions.

    Deposits

    Average core deposits were $306.1 billion, up $36.4 billion, or 13
percent, year over year and up 7 percent (annualized) on a linked-quarter
basis, including $1.7 billion from the acquisition of Placer Sierra
Bancshares. Core deposits include certain Eurodollar sweep accounts that
previously were swept into non-deposit products. Including only the growth in
these funds post conversion to deposits, average core deposits grew 11 percent
year over year. Average mortgage escrow deposits were $22.4 billion, up $3
billion from third quarter 2006 and down $1 billion from second quarter 2007.
Excluding mortgage escrow balances, total average core deposits grew 13
percent from third quarter 2006 and 9 percent (annualized) on a linked-quarter
basis. Average retail core deposits grew $14.3 billion, or 7 percent, from
third quarter 2006 and increased $627 million, or 1 percent (annualized), on a
linked-quarter basis. Net new consumer checking accounts grew 4.8 percent from
third quarter 2006.

    Net Interest Income

    Net interest income increased 5 percent from third quarter 2006 and 6
percent (annualized) from second quarter 2007. "During the quarter, we sold
$27 billion of our lowest-yielding mortgage-backed securities that were
largely hedging the mortgage servicing rights (MSRs) asset against a decline
in interest rates," said Atkins. "The securities were replaced with
off-balance sheet economic hedges to more efficiently manage the market risk
in the MSRs portfolio. Since most of these securities were sold on a forward
basis, they remained on the balance sheet for most of the quarter, while only
modestly adding to net interest income, the principal reason the net interest
margin declined during the quarter. In total, gains on the sale of all
mortgage-backed securities in the quarter were $160 million, largely offset by
the associated loss on the forward sales contracts executed to lock in the
sale of the securities. The sale of the mortgage-backed securities also
provided additional capacity to acquire more attractively-yielding assets.
About $17 billion of new loans and securities were purchased later in the
third quarter at yields well above the yields on the mortgage-backed
securities that were sold, which will benefit net interest margin in fourth
quarter 2007." Net interest income was reduced by approximately $15 million in
the quarter due to temporarily elevated short-term London Interbank Offered
Rate (LIBOR)-based funding costs at the peak of the dislocation in the capital
markets in August.

    Noninterest Income

    Noninterest income increased $686 million, or 18 percent, from third
quarter 2006. The double-digit, year-over-year growth in fee income reflected
very strong growth in deposit service fees (up 18 percent); trust and
investment fees (up 17 percent driven by new business growth and market
appreciation); card fees (up 21 percent driven by business activity and
continued increases in debit/credit card penetration rates); and other fees
(up 11 percent driven by real estate brokerage fees). Mortgage banking
noninterest income increased $339 million year over year and $134 million on a
linked-quarter basis with the growth and value of the mortgage servicing
business more than offsetting a decline of 12 percent in mortgage originations
from a year ago. On a linked-quarter basis, there was a seasonal drop in
insurance premiums and a decline in real estate brokerage fees from the record
set in second quarter 2007.

    During the quarter, noninterest income was affected by widening credit
spreads, increases in market volatility, changes in interest rates and other
credit/housing market conditions, including:

    
    -- ($490) million    Reduction in net mortgage loan origination/sales
                         activities gains reflecting a write-down of the
                         mortgage warehouse/pipeline due to the
                         illiquidity in the non-agency mortgage secondary
                         market, a write-down of mortgage loans
                         repurchased during the quarter, and an increase
                         in the repurchase reserve for projected early
                         payment defaults

    -- $562 million      Increase in mortgage servicing income reflecting
                         a $638 million reduction in the value of MSRs due
                         to the decline in mortgage rates during the
                         quarter, offset by a $1.2 billion gain on the
                         financial instruments hedging the MSRs. The ratio
                         of MSRs to related loans serviced for others was
                         1.35 percent, the lowest capitalization ratio in
                         eight quarters

    -- ($14) million     Net loss on the sale of mortgage-backed
                         securities by Wells Fargo Home Mortgage,
                         consisting of a $109 million realized gain on
                         debt securities offset by a $123 million realized
                         loss on the related forward sales contract,
                         recorded in other noninterest income - trading
                         activities

    -- ($20) million     Write-down on commercial loans held for sale,
                         recorded in other noninterest income
    

    At September 30, 2007, the net unrealized gain on the debt and equity
securities available for sale portfolio was $581 million, up from $91 million
at June 30, 2007. "Given our long-standing practice of opportunistically
selling lower-yielding available for sale securities and buying only when
long-term rates are perceived to be high, we continued to hold what we believe
is one of the best yielding debt securities portfolios in the industry," said
Atkins.

    Noninterest Expense

    Noninterest expense increased $420 million, or 8 percent, from third
quarter 2006, 2 percentage points below revenue growth, resulting in positive
operating leverage. The efficiency ratio improved to 55.8 percent from 56.9
percent a year ago and 57.9 percent in second quarter 2007. Third quarter
expenses included $26 million for merger and integration costs, and severance
and other costs in the residential real estate businesses. "While we actively
manage our expenses for positive operating leverage and have reduced expenses
at Wells Fargo Home Mortgage, we continued to invest for future growth," said
Atkins. "We added 20 banking stores and converted 39 Placer Sierra Bancshares
stores in the third quarter, as well as added 342 platform bankers."
Noninterest expense declined $226 million, or 16 percent (annualized), from
second quarter 2007, primarily due to lower expenses in the insurance and real
estate brokerage businesses.

    Credit Quality

    Net credit losses were $892 million (1.01 percent of average loans,
annualized) up from $720 million (0.87 percent) in second quarter 2007 and
from $663 million (0.86 percent) in third quarter 2006. "Almost half of the
increase in net credit losses from second quarter 2007 was concentrated in the
home equity portfolio, where losses accelerated in the quarter given the
steeper than anticipated decline in national home prices," said Chief Credit
Officer Mike Loughlin. "The remainder of the increased credit losses was
concentrated in the auto portfolio (seasonally higher in the second half of
the year) and in unsecured consumer credit (largely due to portfolio growth,
with loss rates remaining relatively stable). Commercial loan losses remained
modest and within portfolio expectations."

    
                            September 30, 2007          June 30,2007
                         ------------------------ ------------------------
                              Net loan     As a %      Net loan     As a %
                           charge-offs of average   charge-offs of average
                         (in millions)      loans (in millions)      loans
                         ------------- ---------- ------------- ----------

    Total commercial and
     commercial real
     estate              $         125      0.37% $         107      0.33%

    Consumer:
        Real estate 1-4
         family first
         mortgage                   16      0.11             19      0.13
        Real estate 1-4
         family junior
         lien                      153      0.83             91      0.51
        Credit card                176      4.30            161      4.31
        Other revolving
         credit and
         installment               368      2.68            295      2.22
                         -------------            -------------
    Total consumer                 713      1.36            566      1.15

    Foreign                         54      2.86             47      2.64
                         -------------            -------------

    Total loans          $         892      1.01% $         720      0.87%
                         ------------- ---------  ------------- ---------
    

    "Our first mortgage portfolio continued to perform well, with annualized
losses of 0.11 percent - only $16 million on the entire portfolio of $63.9
billion (average) for third quarter 2007 - down from 0.13 percent in second
quarter 2007," said Loughlin. "The $24 billion debt consolidation portfolio at
Wells Fargo Financial continued to grow and perform as expected, and better
than industry levels. First mortgage delinquency rates also remained
considerably below industry levels."

    Net credit losses and loss rates in the home equity portfolio increased
over the prior quarter and prior year. Third quarter 2007 net credit losses in
real estate 1-4 family junior liens were $153 million (0.83 percent of average
loans, annualized), a $62 million increase from $91 million (0.51 percent) for
second quarter 2007. Third quarter 2006 losses were $27 million (0.17
percent). "The majority of the home equity portfolio segments, those sourced
through our retail stores or through cross-sell from Wells Fargo Home
Mortgage, performed satisfactorily during the quarter," said Loughlin. "Losses
have increased on a linked-quarter basis as the softness in the residential
real estate market continued to impact consumers. We have tracked national
real estate and economic trends for a number of years and due to the continued
soft market conditions we reduced maximum allowable combined loan-to-value
advance rates for all sales channels during the third quarter. In addition, a
segment of the portfolio, correspondent home equity loans purchased from third
party originators, has demonstrated an unacceptable level of credit losses.
The loans generated by our correspondent channel represented about 7 percent
of the home equity portfolio at quarter end, but generated about 25 percent of
the losses in the quarter. As this adverse trend emerged, we tightened credit
standards earlier in 2007 and completely eliminated this channel during the
third quarter. Given current real estate market conditions, credit losses in
the home equity portfolio are likely to increase in fourth quarter 2007 and
remain at elevated levels into 2008."

    Losses in non-real estate consumer loans (credit card and other revolving
credit and installment) were higher primarily due to typical second half
seasonal increases in the indirect auto portfolio, with net auto losses up $57
million from the prior quarter. Year over year, net auto losses were down $32
million. "Third quarter results demonstrated that credit performance in auto
has stabilized as we continued to refine the indirect auto business model,"
said Loughlin. Losses in all other consumer portfolios, including credit cards
and retail store lines of credit, increased only $32 million during the third
quarter primarily due to slightly higher levels of bankruptcies and
delinquency rates.

    Credit performance in the commercial and commercial real estate portfolio
remained strong, with credit losses of $125 million (0.37 percent of average
loans) compared with $107 million (0.33 percent) in second quarter 2007. As is
typical each quarter, the vast majority of these charge-offs came from the
small business loan portfolio (loans under $100,000), which continued to
perform as expected. "Because of our Wholesale Banking business model, focused
primarily on middle-market customers and regional commercial real estate, we
do not actively participate in many higher-risk activities," said Loughlin.
"We did not create any structured investment vehicles to hold off-balance
sheet assets and have no direct exposure to hedge funds. LBO-related
outstandings are diversified by business and borrower and at quarter end
totaled less than 2 percent of total Wells Fargo loans. Our residential real
estate development portfolio of less than $6 billion, or 2 percent of total
loans, continued to perform in a satisfactory manner."

    Total nonperforming assets were $3.18 billion (0.88 percent of loans) at
September 30, 2007, compared with $2.72 billion (0.79 percent) at June 30,
2007, and $2.10 billion (0.68 percent) at September 30, 2006. The majority of
the $468 million increase in nonperforming assets from second quarter 2007 was
concentrated in the residential real estate portfolio. Commercial and
commercial real estate nonperforming assets increased $124 million, as one
large, residential real estate developer was moved to nonperforming status.

    Loans 90 days or more past due and still accruing totaled $5.53 billion,
$4.99 billion and $3.66 billion at September 30, 2007, June 30, 2007 and
September 30, 2006, respectively. For the same periods, the total included
$4.26 billion, $3.91 billion, and $2.69 billion, respectively, in advances
pursuant to our servicing agreement to GNMA mortgage pools whose repayments
are insured by the Federal Housing Administration or guaranteed by the
Department of Veteran Affairs.

    
    Loans 90 Days or More Past Due and
     Still Accruing
    (Excluding Insured/Guaranteed GNMA
     Balances)
                                           Sept. 30,   June 30,  Sept. 30,
    (in millions)                            2007        2007      2006
                                          ----------- ---------- ---------
    Commercial and commercial real
     estate:
       Commercial                         $        14 $       21 $      20
       Other real estate mortgage                  22          2         8
       Real estate construction                    10          4         4
                                          ----------- ---------- ---------
            Total commercial and
             commercial real estate                46         27        32
    Consumer:
       Real estate 1-4 family first
        mortgage                                  225        179       123
       Real estate 1-4 family junior lien
        mortgage                                  127         76        50
       Credit card                                303        253       213
       Other revolving credit and
        installment                               520        515       516
                                          ----------- ---------- ---------
            Total consumer                      1,175      1,023       902
    Foreign                                        42         36        41
                                          ----------- ---------- ---------
                Total                     $     1,263 $    1,086 $     975
                                          ----------- ---------- ---------
    

    The allowance for credit losses, including unfunded commitments, was
$4.02 billion at September 30, 2007. "We believe the allowance was adequate
for losses inherent in the loan portfolio at September 30, 2007," said
Loughlin. "We continue to monitor allowance adequacy in light of volatile
economic and real estate markets."

    Business Segment Performance

    Wells Fargo has three lines of business for management reporting:
Community Banking, Wholesale Banking and Wells Fargo Financial.

    
    Net Income            Third Quarter       Nine months ended Sept. 30
                      ----------------------  ---------------------------
                                           %                            %
    (in millions)       2007     2006 Change       2007    2006    Change
                       -----  ------- ------   --------  ------ ---------
    Community Banking $1,605 $  1,493      8  $   4,710 $ 4,080        15
    Wholesale Banking    543      510      6      1,693   1,527        11
    Wells Fargo
     Financial           135      191    (29)       403     694       (42)
    

    More financial information about the business segments is on tables
OPERATING SEGMENT RESULTS and FIVE QUARTER OPERATING SEGMENT RESULTS.

    Community Banking offers a complete line of diversified financial
products and services for consumers and small businesses including investment,
insurance and trust services primarily in 23 midwestern and western states,
and mortgage and home equity loans in all 50 states.

    
    Selected Financial
     Information             Third Quarter      Nine months ended Sept. 30
                        ----------------------- --------------------------
                                              %                          %
    (in millions)          2007     2006 Change     2007      2006  Change
                         ------  ------- ------  -------  -------- -------
    Total revenue       $ 6,477 $  5,784     12 $ 18,878 $  16,902      12
    Provision for
     credit losses          446      236     89    1,105       612      81
    Noninterest expense   3,619    3,392      7   10,926    10,264       6
    Net income            1,605    1,493      8    4,710     4,080      15
    Average loans (in
     billions)            197.4    172.5     14    188.2     178.8       5
    Average core
     deposits (in
     billions)            250.6    233.1      8    248.5     231.4       7
    

    Community Banking reported net income of $1.61 billion, up $112 million,
or 8 percent, from third quarter 2006, due to strong fee income in retail
banking and mortgage, as well as positive operating leverage. Noninterest
income increased $618 million, or 25 percent, compared with third quarter
2006, largely due to increases related to brokerage, deposit service charges,
cards, investments and mortgage banking. Noninterest expense increased $227
million, or 7 percent, due to growth in personnel expense. The provision for
credit losses increased $210 million, or 89 percent, due primarily to higher
losses in the home equity portfolio. Average loans increased $24.9 billion, or
14 percent, from third quarter 2006. Average core deposits grew $17.5 billion,
or 8 percent, from third quarter 2006.

    
    Regional Banking Highlights
    -- Record core product solutions (sales) of 5.25 million, up 9 percent
       from prior year on a comparable basis
    -- Record retail bank household cross-sell of 5.5 products per
       household
    -- Sales of Wells Fargo Packages(R) (a checking account and at least
       three other products) up 13 percent from prior year, purchased by
       69 percent of new checking account customers
    -- Net consumer checking accounts up 4.8 percent from prior year
    -- Store-based customer loyalty scores up 9 percent from prior year
    -- Business Banking
          -- Store-based business solutions up 16 percent from prior year
             on a comparable basis
          -- Loans to small businesses (loans primarily less than $100,000
             on our Business Direct platform) up 19 percent from prior
             year
          -- Net business checking accounts up 4.3 percent from prior year
          -- Business Banking household cross-sell at 3.5, up from 3.2 in
             prior year
          -- Sales of Wells Fargo Business Services Packages (a business
             checking account and at least three other business products)
             up 31 percent from prior year, purchased by 43 percent of new
             business checking account customers
    

    "Thank you to our Regional Banking team for their continued focus on
earning 100 percent of our customers' business," said Carrie Tolstedt, senior
EVP, Community Banking. "We had solid results this quarter, with a record 5.25
million core product solutions provided to customers, up 9 percent from the
prior year on a comparable basis. Our retail bank household cross-sell rose to
a record high of 5.5, and 69 percent of new checking account customers
purchased Wells Fargo Packages. Sales of store-based business solutions
increased 16 percent from prior year on a comparable basis, and sales of Wells
Fargo Business Services Packages rose 31 percent. We continue to perform
50,000 store-based customer surveys per month. For customers transacting at
the teller line, welcoming and wait time survey scores were up 16 percent and
customer loyalty scores improved 9 percent from same period last year. We
opened 20 banking stores and converted 39 Placer Sierra Bancshares stores to
our network, bringing our total retail store count to 3,283. To better serve
our customers, we added 49 webATM(R) machines and converted 199 to
Envelope-Free(SM) webATM machines bringing our total to 1,102 primarily in
Northern California."

    
    Home Mortgage and Home Equity Highlights
    -- Mortgage originations of $68 billion, down $9 billion from prior
       year
    -- Mortgage applications of $95 billion, flat from prior year
    -- Mortgage application pipeline of $45 billion, down $10 billion from
       prior year
    -- Record owned mortgage servicing portfolio of $1.48 trillion, up 11
       percent from prior year, up 9 percent (annualized) from prior
       quarter
    -- National Home Equity Group portfolio of $83 billion
    

    "We experienced an extremely challenging business environment in the
quarter for our home mortgage and home equity businesses as a result of the
decline of home values and an unprecedented disruption in the secondary
markets," said Mark Oman, senior EVP, Home and Consumer Finance Group. "This
environment demonstrated the value of operating a balanced mortgage business
model between originations and servicing businesses. While the performance of
the origination business was negatively impacted by the lack of liquidity in
the secondary market and widening of credit spreads, the servicing business
performed well and benefited from many of the same market factors that
adversely impacted the origination business.

    "Given the uncertainty in the housing and capital markets, we took
actions in both the home equity and home mortgage businesses to eliminate
origination activities where we didn't think we could be both competitively
priced and appropriately compensated for risk. These actions, along with an
industry-wide origination slowdown, contributed to a 12 percent reduction in
residential real estate originations from third quarter 2006. The mortgage
market disruptions have also created opportunities for us to strengthen our
mortgage sales force by selectively hiring highly-successful sales
representatives from our competitors."

    The National Home Equity Group portfolio was $83 billion at September 30,
2007, up 7 percent from a year ago. Growth of this portfolio has slowed, and
the portfolio had significantly higher credit losses than it has historically
experienced as a result of the continuing decline in home values.

    
    Wealth Management Group Highlights
    -- Revenue up 20 percent from prior year
    -- Net income up 24 percent from prior year
    -- Brokerage assets under administration up 15 percent from prior year
    -- Brokerage revenue up 31 percent, net income up 51 percent from
       prior year
    -- Wells Fargo Private Banking opened office in Chicago
    

    

    Internet Highlights
    -- 9.46 million active online consumers, up 14 percent from prior
       year, reaching 64 percent of all checking account customers
    -- 950,000 active online small business customers, up 19 percent from
       prior year
    -- 4.7 million online money movement customers, up 19 percent from
       prior year
    -- Global Finance ranked Wells Fargo "Best Integrated Consumer Bank
       Site"
    -- Launched Wells Fargo Mobile(SM) for consumers and small business
       customers
    

    Wholesale Banking serves customers coast to coast, including middle
market banking, corporate banking, commercial real estate, treasury
management, asset-based lending, insurance brokerage, foreign exchange, trade
services, specialized lending, equipment finance, capital markets activities
and institutional investments.

    
    Selected Financial
     Information             Third Quarter     Nine months ended Sept. 30
                          -------------------- ---------------------------
                                             %                           %
    (in millions)           2007   2006 Change     2007     2006    Change
                          ------  ----- ------  -------  -------  --------
    Total revenue        $ 2,003 $1,784     12 $  6,199 $  5,351        16
    Provision (reversal
     of provision) for
     credit losses            19     --     --       33       (9)       --
    Noninterest expense    1,154    999     16    3,560    3,009        18
    Net income               543    510      6    1,693    1,527        11
    Average loans (in
     billions)              87.5   72.3     21     82.4     70.1        18
    Average core
     deposits (in
     billions)              55.5   36.5     52     50.6     32.3        57
    

    

    -- Double-digit increases in revenue, loans and core deposits from
       same period last year
    -- Institutional assets under management up 14 percent from same
       period last year
    -- Surpassed $1 billion in financing LEED-certified green buildings
    

    "Wells Fargo's wholesale businesses continued to perform well despite a
challenging environment," said Dave Hoyt, senior EVP, Wholesale Banking Group.
"Our disciplined lending and investing approach positions us well for economic
cycles and has allowed us to maintain a conservative risk profile relative to
the industry. The market volatility helped several of our businesses,
including foreign exchange and financial products, set new volume records.
Recent acquisitions like CIT Construction have been successfully integrated,
and we're seeing the benefits of those acquisitions for Wells Fargo and our
customers."

    Wholesale Banking's net income was $543 million, up 6 percent from a year
ago. For the first nine months of 2007, Wholesale Banking reported net income
of $1.7 billion, up 11 percent from the same period of 2006. Third quarter
2007 revenue increased 12 percent to $2.0 billion from a year ago, driven by
strong loan and deposit growth and higher fee income. Average loans reached
$87.5 billion, up 21 percent from a year ago, with double-digit increases
across nearly all wholesale lending businesses. Average core deposits were
$55.5 billion, up 52 percent from a year ago, all in interest-bearing
balances, reflecting a combination of organic growth from new and existing
customers and conversions, completed in 2006, of customer sweep accounts from
off-balance sheet money market funds into Wells Fargo deposits. Noninterest
income increased $116 million from third quarter 2006 due to higher commercial
real estate brokerage fees, trust and investment income (reflecting a 14
percent increase in assets under management), foreign exchange and insurance
revenue, partially offset by a lower level of capital markets activity.
Noninterest expense increased $155 million from a year ago, mainly due to
higher personnel-related costs, including additional team members and higher
incentive expenses, and expenses associated with higher sales volumes and
acquisitions completed in the latter part of 2006.

    Wells Fargo Financial offers consumer loans primarily through real-estate
debt consolidation products, automobile financing, consumer and private-label
credit cards and commercial services to consumers and businesses throughout
the United States, Canada, Puerto Rico and the Pacific Rim.

    
     Selected Financial
      Information             Third Quarter     Nine months ended Sept. 30
                          --------------------- --------------------------
                                              %                          %
    (in millions)           2007    2006 Change      2007     2006  Change
                           -----  ------ ------  --------  ------- -------
    Total revenue         $1,373 $ 1,366     1  $   4,108 $  4,025      2
    Provision for credit
     losses                  427     377    13      1,189      875     36
    Noninterest expense      728     690     6      2,268    2,058     10
    Net income               135     191   (29)       403      694    (42)
    Average loans (in
     billions)              65.8    59.2    11       64.2     56.2     14
    

    

    -- Average loans up 11 percent from third quarter 2006
         -- Real estate-secured receivables up 24 percent to $26.1 billion
         -- Auto finance receivables up 5 percent to $27.8 billion
    

    "We continued to see solid performance from our real-estate secured
product, despite pressures brought on by the housing markets," said Tom
Shippee, Wells Fargo Financial president and CEO. "Credit quality remained
sound, as real estate losses and delinquencies in the quarter were within our
model. Losses in our auto portfolio were down $32 million year over year, but
up $57 million from second quarter 2007 due to seasonality. We continued to
conservatively manage growth in the auto portfolio, with receivables flat on a
linked-quarter basis, and saw positive results from the additional collection
capacity added late last year. Delinquencies have increased due to
seasonality, but total and 90-day results improved over third quarter 2006. We
continue to manage our store network and reduce redundancy. Through third
quarter 2007, approximately 8 percent of our Wells Fargo Financial store
locations have been closed and team members have been redeployed to other
locations, which will improve the overall effectiveness and efficiency of our
store operations."

    Wells Fargo Financial's net income was $135 million in third quarter
2007, down 29 percent, or $56 million, from a year ago. For the first nine
months of 2007, Wells Fargo Financial reported net income of $403 million,
down 42 percent, or $291 million, from the same period of 2006. Prior year
results included a $50 million reversal of the allowance for credit losses
previously established for Hurricane Katrina. Third quarter 2007 revenue of
$1.4 billion was virtually flat compared with third quarter 2006. Average
loans reached $65.8 billion, up 11 percent from a year ago due primarily to 24
percent growth in the real estate loan portfolio. Noninterest expense
increased 6 percent, or $38 million, to $728 million from a year ago,
primarily due to increased collection capacity added in the auto business.

    Recorded Message

    A recorded message reviewing Wells Fargo's results and characteristics of
several of the loan portfolios will be available at 5:30 a.m. Pacific Time.
The recorded call will be available through October 19, 2007. Dial
877-660-6853 (domestic) or 201-612-7415 (international). Enter account number
286# and conference ID 255747#. The call is also available on the internet at
www.wellsfargo.com/ir and http://www.vcall.com/IC/CEPage.asp?ID=120904.

    The following appears in accordance with the Private Securities
Litigation Reform Act of 1995:

    This news release contains forward-looking statements about the Company,
including statements that:

    
    -- loans and securities purchased in third quarter 2007 will benefit
       net interest margin in fourth quarter 2007;
    -- credit losses in the home equity portfolio are likely to increase
       in fourth quarter 2007 and remain at elevated levels into 2008;
    -- we believe the allowance for credit losses was adequate for losses
       inherent in the loan portfolio at September 30, 2007; and
    -- redeployment of Wells Fargo Financial team members from store
       locations that have been closed to other store locations will
       improve the overall effectiveness and efficiency of store
       operations.
    

    Do not unduly rely on forward-looking statements. They give our
expectations about the future and are not guarantees. Forward-looking
statements speak only as of the date they are made, and we do not undertake
any obligation to update them to reflect changes that occur after that date.

    There are a number of factors that could cause results to differ
significantly from our expectations, including further deterioration in the
credit quality of our home equity, real estate, auto or other loan portfolios,
or in the value of the collateral securing those loans, due to higher interest
rates, increased unemployment, a decline in home or auto values, or other
economic factors. For a discussion of factors that may cause actual results to
differ from expectations, refer to our Annual Report on Form 10-K for the year
ended December 31, 2006, as updated by our Quarterly Report on Form 10-Q for
the quarter ended June 30, 2007, filed with the Securities and Exchange
Commission and available on the SEC's website at www.sec.gov.

    Any factor described in this news release or in any document referred to
in this news release could, by itself or together with one or more other
factors, adversely affect the Company's business, earnings and/or financial
condition.

    Wells Fargo & Company is a diversified financial services company with
$549 billion in assets, providing banking, insurance, investments, mortgage
and consumer finance through almost 6,000 stores and the internet
(wellsfargo.com) across North America and internationally. Wells Fargo Bank,
N.A. is the only bank in the U.S., and one of only two banks worldwide, to
have the highest credit rating from both Moody's Investors Service, "Aaa," and
Standard & Poor's Ratings Services, "AAA."

    
    Wells Fargo & Company and Subsidiaries
    SUMMARY FINANCIAL DATA
    ----------------------------------------------------------------------

                        Quarter ended            Nine months ended
                          Sept. 30,                  Sept. 30,
                     -------------------        -------------------
    ($ in millions,
     except per                               %                          %
     share amounts)    2007      2006    Change   2007      2006    Change
    --------------------------------------------------------------- ------

    For the Period
    Net income       $  2,283  $  2,194    4 %  $  6,806  $  6,301     8 %
    Diluted earnings
     per common
     share               0.68      0.64    6        2.01      1.85     9

    Profitability
     ratios
     (annualized):
      Net income to
       average total
       assets (ROA)      1.67%     1.76%  (5)       1.79%     1.73%    3
      Net income to
       average
       stockholders'
       equity (ROE)     19.12     20.00   (4)      19.44     19.89    (2)

    Efficiency ratio
     (1)                 55.8      56.9   (2)       57.4      58.3    (2)

    Total revenue    $  9,853  $  8,934   10    $ 29,185  $ 26,278    11

    Dividends
     declared per
     common share
     (2)                 0.31        --   --        0.87      0.80     9
    Dividends paid
     per common
     share               0.31      0.28   11        0.87      0.80     9

    Average common
     shares
     outstanding      3,339.6   3,371.9   (1)    3,355.5   3,364.6    --
    Diluted average
     common shares
     outstanding      3,374.0   3,416.0   (1)    3,392.9   3,405.5    --

    Average loans    $350,683  $303,980   15    $334,801  $305,141    10
    Average assets    541,533   494,679    9     508,992   487,182     4
    Average core
     deposits (3)     306,135   269,725   13     299,142   263,818    13
    Average retail
     core deposits
     (4)              228,633   214,294    7     226,799   214,358     6

    Net interest
     margin              4.55%     4.79%  (5)       4.79%     4.80%   --

    At Period End
    Securities
     available for
     sale            $ 57,440  $ 52,635    9    $ 57,440  $ 52,635     9
    Loans             362,922   307,491   18     362,922   307,491    18
    Allowance for
     loan losses        3,829     3,799    1       3,829     3,799     1
    Goodwill           12,018    11,192    7      12,018    11,192     7
    Assets            548,727   483,441   14     548,727   483,441    14
    Core deposits
     (3)              303,853   270,818   12     303,853   270,818    12
    Stockholders'
     equity            47,738    44,862    6      47,738    44,862     6

    Capital ratios:
      Stockholders'
       equity to
       assets            8.70%     9.28%  (6)       8.70%     9.28%   (6)
      Risk-based
       capital (5)
        Tier 1
         capital         8.21      8.74   (6)       8.21      8.74    (6)
        Total
         capital        11.11     12.34  (10)      11.11     12.34   (10)
      Tier 1
       leverage (5)      7.29      7.41   (2)       7.29      7.41    (2)

    Book value per
     common share    $  14.36  $  13.30    8    $  14.36  $  13.30     8

    Team members
     (active, full-
     time
     equivalent)      158,800   156,400    2     158,800   156,400     2

    Common Stock
     Price
    High             $  37.99  $  36.89    3    $  37.99  $  36.89     3
    Low                 32.66     33.36   (2)      32.66     30.31     8
    Period end          35.62     36.18   (2)      35.62     36.18    (2)

    ----------------------------------------------------------------------

    (1) The efficiency ratio is noninterest expense divided by total
     revenue (net interest income and noninterest income).
    (2) On April 25, 2006, the Company's Board of Directors declared the
     second quarter 2006 cash dividend payable June 1, 2006. On June 27,
     2006, the Board declared a two-for-one split in the form of a 100%
     stock dividend on the Company's common stock and, at the same time,
     the third quarter 2006 cash dividend payable September 1, 2006.
    (3) Core deposits are noninterest-bearing deposits, interest-bearing
     checking, savings certificates, market rate and other savings, and
     certain foreign deposits (Eurodollar sweep balances). During 2006,
     certain customer accounts (largely Wholesale Banking) were converted
     to deposit balances in the form of Eurodollar sweep accounts from
     off-balance sheet money market funds and repurchase agreements.
     Average core deposits included converted Eurodollar sweep accounts of
     $9,888 million and $3,343 million for the quarters ended September
     30, 2007, and September 30, 2006, respectively. Average core deposits
     increased 11% from third quarter 2006, not including these converted
     balances.
    (4) Retail core deposits are total core deposits excluding Wholesale
     Banking core deposits and retail mortgage escrow deposits.
    (5) The September 30, 2007, ratios are preliminary.
    

    
    Wells Fargo & Company and Subsidiaries
    FIVE QUARTER SUMMARY FINANCIAL DATA
    ----------------------------------------------------------------------
                                                             Quarter ended
                     -----------------------------------------------------
    ($ in millions,
     except per      Sept. 30,   June 30,   Mar. 31,   Dec. 31,  Sept. 30,
     share amounts)     2007       2007       2007       2006      2006
    ----------------------------------------------------------------------

    For the Quarter
    Net income       $  2,283   $  2,279   $  2,244   $  2,181   $  2,194
    Diluted earnings
     per common
     share               0.68       0.67       0.66       0.64       0.64

    Profitability
     ratios
     (annualized):
      Net income to
       average total
       assets (ROA)      1.67%      1.82%      1.89%      1.79%      1.76%
      Net income to
       average
       stockholders'
       equity (ROE)     19.12      19.55      19.65      18.99      20.00

    Efficiency ratio
     (1)                 55.8       57.9       58.5       57.5       56.9

    Total revenue    $  9,853   $  9,891   $  9,441   $  9,413   $  8,934

    Dividends
     declared per
     common share
     (2)                 0.31       0.28       0.28       0.28         --
    Dividends paid
     per common
     share               0.31       0.28       0.28       0.28       0.28

    Average common
     shares
     outstanding      3,339.6    3,351.2    3,376.0    3,379.4    3,371.9
    Diluted average
     common shares
     outstanding      3,374.0    3,389.3    3,416.1    3,424.0    3,416.0

    Average loans    $350,683   $331,970   $321,429   $312,166   $303,980
    Average assets    541,533    502,686    482,105    482,585    494,679
    Average core
     deposits (3)     306,135    300,535    290,586    283,790    269,725
    Average retail
     core deposits
     (4)              228,633    228,006    223,729    220,025    214,294

    Net interest
     margin              4.55%      4.89%      4.95%      4.93%      4.79%

    At Quarter End
    Securities
     available for
     sale            $ 57,440   $ 72,179   $ 45,443   $ 42,629   $ 52,635
    Loans             362,922    342,800    325,487    319,116    307,491
    Allowance for
     loan losses        3,829      3,820      3,772      3,764      3,799
    Goodwill           12,018     11,983     11,275     11,275     11,192
    Assets            548,727    539,865    485,901    481,996    483,441
    Core deposits
     (3)              303,853    300,602    296,469    288,068    270,818
    Stockholders'
     equity            47,738     47,301     46,135     45,876     44,862

    Capital ratios:
      Stockholders'
       equity to
       assets            8.70%      8.76%      9.49%      9.52%      9.28%
      Risk-based
       capital (5)
        Tier 1
         capital         8.21       8.57       8.70       8.95       8.74
        Total
         capital        11.11      11.72      12.10      12.50      12.34
      Tier 1
       leverage (5)      7.29       7.90       7.83       7.89       7.41

    Book value per
     common share    $  14.36   $  14.07   $  13.77   $  13.58   $  13.30

    Team members
     (active, full-
     time
     equivalent)      158,800    158,700    159,600    158,000    156,400

    Common Stock
     Price
    High             $  37.99   $  36.49   $  36.64   $  36.99   $  36.89
    Low                 32.66      33.93      33.01      34.90      33.36
    Period end          35.62      35.17      34.43      35.56      36.18

    ----------------------------------------------------------------------

    (1) The efficiency ratio is noninterest expense divided by total
     revenue (net interest income and noninterest income).
    (2) On April 25, 2006, the Company's Board of Directors declared the
     second quarter 2006 cash dividend payable June 1, 2006. On June 27,
     2006, the Board declared a two-for-one split in the form of a 100%
     stock dividend on the Company's common stock and, at the same time,
     the third quarter 2006 cash dividend payable September 1, 2006.
    (3) Core deposits are noninterest-bearing deposits, interest-bearing
     checking, savings certificates, market rate and other savings, and
     certain foreign deposits (Eurodollar sweep balances). During 2006,
     certain customer accounts (largely Wholesale Banking) were converted
     to deposit balances in the form of Eurodollar sweep accounts from
     off-balance sheet money market funds and repurchase agreements.
     Average core deposits included converted Eurodollar sweep accounts of
     $9,888 million, $9,888 million, $9,888 million, $8,888 million and
     $3,343 million for the quarters ended September 30, 2007, June 30,
     2007, March 31, 2007, December 31, 2006 and September 30, 2006,
     respectively. Average core deposits increased 11% from third quarter
     2006, not including these converted balances.
    (4) Retail core deposits are total core deposits excluding Wholesale
     Banking core deposits and retail mortgage escrow deposits.
    (5) The September 30, 2007, ratios are preliminary.
    

    
    Wells Fargo & Company and Subsidiaries
    CONSOLIDATED STATEMENT OF INCOME
    ----------------------------------------------------------------------

                          Quarter ended           Nine months ended
                            Sept. 30,                 Sept. 30,
                        ------------------        -----------------
    (in millions,
     except per share                           %                        %
     amounts)             2007     2006    Change   2007       2006 Change
    ----------------------------------------------------------------------

    INTEREST INCOME
    Trading assets      $     37 $     45   (18)% $    137 $    179  (23)%
    Securities
     available for
     sale                  1,032    1,014     2      2,470    2,552   (3)
    Mortgages held for
     sale                    586      702   (17)     1,694    2,119  (20)
    Loans held for
     sale                     19       12    58         51       34   50
    Loans                  7,477    6,555    14     21,341   18,910   13
    Other interest
     income                   72       71     1        242      214   13
                        -------- --------         -------- --------
      Total interest
       income              9,223    8,399    10     25,935   24,008    8
                        -------- --------         -------- --------

    INTEREST EXPENSE
    Deposits               2,218    1,997    11      6,016    5,273   14
    Short-term
     borrowings              464      271    71        865      830    4
    Long-term debt         1,261    1,084    16      3,568    3,004   19
                        -------- --------         -------- --------
      Total interest
       expense             3,943    3,352    18     10,449    9,107   15
                        -------- --------         -------- --------

    NET INTEREST
     INCOME                5,280    5,047     5     15,486   14,901    4
    Provision for
     credit losses           892      613    46      2,327    1,478   57
                        -------- --------         -------- --------
    Net interest
     income after
     provision for
     credit losses         4,388    4,434    (1)    13,159   13,423   (2)
                        -------- --------         -------- --------

    NONINTEREST INCOME
    Service charges on
     deposit accounts        837      707    18      2,262    1,995   13
    Trust and
     investment fees         777      664    17      2,347    2,002   17
    Card fees                561      464    21      1,548    1,266   22
    Other fees               566      509    11      1,715    1,507   14
    Mortgage banking         823      484    70      2,302    1,634   41
    Operating leases         171      192   (11)       550      593   (7)
    Insurance                329      313     5      1,160    1,041   11
    Net gains (losses)
     on debt
     securities
     available for
     sale                    160      121    32        149     (70)   --
    Net gains from
     equity
     investments             173      159     9        512      482    6
    Other                    176      274   (36)     1,154      927   24
                        -------- --------         -------- --------
      Total
       noninterest
       income              4,573    3,887    18     13,699   11,377   20
                        -------- --------         -------- --------

    NONINTEREST
     EXPENSE
    Salaries               1,933    1,769     9      5,707    5,195   10
    Incentive
     compensation            802      710    13      2,444    2,092   17
    Employee benefits        518      458    13      1,764    1,534   15
    Equipment                295      294    --        924      913    1
    Net occupancy            398      357    11      1,132    1,038    9
    Operating leases         136      155   (12)       437      473   (8)
    Other                  1,419    1,338     6      4,346    4,086    6
                        -------- --------         -------- --------
      Total
       noninterest
       expense             5,501    5,081     8     16,754   15,331    9
                        -------- --------         -------- --------

    INCOME BEFORE
     INCOME TAX
     EXPENSE               3,460    3,240     7     10,104    9,469    7
    Income tax expense     1,177    1,046    13      3,298    3,168    4
                        -------- --------         -------- --------

    NET INCOME          $  2,283 $  2,194     4   $  6,806 $  6,301    8
                        -------- --------         -------- --------

    EARNINGS PER
     COMMON SHARE       $   0.69 $   0.65     6   $   2.03 $   1.87    9

    DILUTED EARNINGS
     PER COMMON SHARE   $   0.68 $   0.64     6   $   2.01 $   1.85    9

    DIVIDENDS DECLARED
     PER COMMON SHARE   $   0.31 $     --    --   $   0.87 $   0.80    9

    Average common
     shares
     outstanding         3,339.6  3,371.9    (1)   3,355.5  3,364.6   --
    Diluted average
     common shares
     outstanding         3,374.0  3,416.0    (1)   3,392.9  3,405.5   --

    ----------------------------------------------------------------------
    

    
    Wells Fargo & Company and Subsidiaries
    FIVE QUARTER CONSOLIDATED STATEMENT OF INCOME
    ----------------------------------------------------------------------
                                                             Quarter ended
                       ---------------------------------------------------
    (in millions,
     except per share  Sept. 30,  June 30,   Mar. 31,  Dec. 31,  Sept. 30,
     amounts)            2007       2007       2007      2006      2006
    ----------------------------------------------------------------------

    INTEREST INCOME
    Trading assets      $     37  $     47   $     53  $     46   $     45
    Securities
     available for
     sale                  1,032       752        686       726      1,014
    Mortgages held for
     sale                    586       578        530       627        702
    Loans held for
     sale                     19        17         15        13         12
    Loans                  7,477     7,100      6,764     6,701      6,555
    Other interest
     income                   72        79         91       118         71
                       ---------  ---------  --------  --------  ---------
      Total interest
       income              9,223     8,573      8,139     8,231      8,399
                       ---------  ---------  --------  --------  ---------

    INTEREST EXPENSE
    Deposits               2,218     1,941      1,857     1,901      1,997
    Short-term
     borrowings              464       265        136       162        271
    Long-term debt         1,261     1,171      1,136     1,118      1,084
                       ---------  ---------  --------  --------  ---------
      Total interest
       expense             3,943     3,377      3,129     3,181      3,352
                       ---------  ---------  --------  --------  ---------

    NET INTEREST
     INCOME                5,280     5,196      5,010     5,050      5,047
    Provision for
     credit losses           892       720        715       726        613
                       ---------  ---------  --------  --------  ---------
    Net interest
     income after
     provision for
     credit losses         4,388     4,476      4,295     4,324      4,434
                       ---------  ---------  --------  --------  ---------

    NONINTEREST INCOME
    Service charges on
     deposit accounts        837       740        685       695        707
    Trust and
     investment fees         777       839        731       735        664
    Card fees                561       517        470       481        464
    Other fees               566       638        511       550        509
    Mortgage banking         823       689        790       677        484
    Operating leases         171       187        192       190        192
    Insurance                329       432        399       299        313
    Net gains (losses)
     on debt
     securities
     available for
     sale                    160       (42)        31        51        121
    Net gains from
     equity
     investments             173       242         97       256        159
    Other                    176       453        525       429        274
                       ---------  ---------  --------  --------  ---------
      Total
       noninterest
       income              4,573     4,695      4,431     4,363      3,887
                       ---------  ---------  --------  --------  ---------

    NONINTEREST
     EXPENSE
    Salaries               1,933     1,907      1,867     1,812      1,769
    Incentive
     compensation            802       900        742       793        710
    Employee benefits        518       581        665       501        458
    Equipment                295       292        337       339        294
    Net occupancy            398       369        365       367        357
    Operating leases         136       148        153       157        155
    Other                  1,419     1,530      1,397     1,442      1,338
                       ---------  ---------  --------  --------  ---------
      Total
       noninterest
       expense             5,501     5,727      5,526     5,411      5,081
                       ---------  ---------  --------  --------  ---------

    INCOME BEFORE
     INCOME TAX
     EXPENSE               3,460     3,444      3,200     3,276      3,240
    Income tax expense     1,177     1,165        956     1,095      1,046
                       ---------  ---------  --------  --------  ---------

    NET INCOME          $  2,283  $  2,279   $  2,244  $  2,181   $  2,194
                       ---------  ---------  --------  --------  ---------

    EARNINGS PER
     COMMON SHARE       $   0.69  $   0.68   $   0.66  $   0.65   $   0.65

    DILUTED EARNINGS
     PER COMMON SHARE   $   0.68  $   0.67   $   0.66  $   0.64   $   0.64

    DIVIDENDS DECLARED
     PER COMMON SHARE   $   0.31  $   0.28   $   0.28  $   0.28   $     --

    Average common
     shares
     outstanding         3,339.6   3,351.2    3,376.0   3,379.4    3,371.9
    Diluted average
     common shares
     outstanding         3,374.0   3,389.3    3,416.1   3,424.0    3,416.0

    ----------------------------------------------------------------------
    

    
    Wells Fargo & Company and Subsidiaries
    CONSOLIDATED BALANCE SHEET
    ----------------------------------------------------------------------
                                                                  % Change
                                                       Sept. 30, 2007 from
                                                      --------------------
                                                      Dec.
    (in millions,       Sept. 30, Dec. 31,  Sept. 30,  31,    Sept. 30,
     except shares)       2007      2006      2006    2006       2006
    ----------------------------------------------------------------------

    ASSETS
    Cash and due from
     banks              $ 12,200  $ 15,028  $ 12,591  (19)%  (3)%
    Federal funds sold,
     securities
     purchased under
     resale agreements
     and other short-
     term investments      4,546     6,078     4,079  (25)   11
    Trading assets         7,298     5,607     5,300   30    38
    Securities
     available for sale   57,440    42,629    52,635   35     9
    Mortgages held for    29,699    33,097    39,913  (10)  (26)
     sale (includes
     $26,714 carried at
     fair value at
     September 30,
     2007)
    Loans held for sale    1,011       721       617   40    64

    Loans                362,922   319,116   307,491   14    18
    Allowance for loan
     losses               (3,829)   (3,764)   (3,799)   2     1
                        --------- --------- ---------
      Net loans          359,093   315,352   303,692   14    18
                        --------- --------- ---------

    Mortgage servicing
     rights:
      Measured at fair
       value
       (residential
       MSRs)              18,223    17,591    17,712    4     3
      Amortized              460       377       328   22    40
    Premises and
     equipment, net        5,002     4,698     4,645    6     8
    Goodwill              12,018    11,275    11,192    7     7
    Other assets          41,737    29,543    30,737   41    36
                        --------- --------- ---------

         Total assets   $548,727  $481,996  $483,441   14    14
                        --------- --------- ---------

    LIABILITIES
    Noninterest-bearing
     deposits           $ 82,365  $ 89,119  $ 86,849   (8)   (5)
    Interest-bearing
     deposits            252,591   221,124   227,470   14    11
                        --------- --------- ---------
      Total deposits     334,956   310,243   314,319    8     7
    Short-term
     borrowings           41,729    12,829    13,800  225   202
    Accrued expenses
     and other
     liabilities          28,712    25,903    26,369   11     9
    Long-term debt        95,592    87,145    84,091   10    14
                        --------- --------- ---------

         Total
          liabilities    500,989   436,120   438,579   15    14
                        --------- --------- ---------

    STOCKHOLDERS'
     EQUITY
    Preferred stock          545       384       465   42    17
    Common stock - $1-
     2/3 par value,
     authorized
     6,000,000,000
     shares; issued
     3,472,762,050
     shares                5,788     5,788     5,788   --    --
    Additional paid-in
     capital               8,089     7,739     7,667    5     6
    Retained earnings     38,817    35,277    34,080   10    14
    Cumulative other
     comprehensive
     income                  291       302       633   (4)  (54)
    Treasury stock -
     147,535,970
     shares, 95,612,189
     shares and
     100,057,636 shares   (5,209)   (3,203)   (3,273)  63    59
    Unearned ESOP
     shares                 (583)     (411)     (498)  42    17
                        --------- --------- ---------

         Total
          stockholders'
          equity          47,738    45,876    44,862    4     6
                        --------- --------- ---------

         Total
          liabilities
          and
          stockholders'
          equity        $548,727  $481,996  $483,441   14    14
                        --------- --------- ---------

    ----------------------------------------------------------------------
    

    
    Wells Fargo & Company and Subsidiaries
    FIVE QUARTER CONSOLIDATED BALANCE SHEET
    ----------------------------------------------------------------------
                         Sept. 30, June 30,  Mar. 31,  Dec. 31,  Sept. 30,
    (in millions)          2007      2007      2007      2006      2006
    ----------------------------------------------------------------------

    ASSETS
    Cash and due from
     banks               $ 12,200  $ 12,714  $ 12,485  $ 15,028  $ 12,591
    Federal funds sold,
     securities
     purchased under
     resale agreements
     and other short-
     term investments       4,546     5,163     4,668     6,078     4,079
    Trading assets          7,298     7,289     6,525     5,607     5,300
    Securities available
     for sale              57,440    72,179    45,443    42,629    52,635
    Mortgages held for
     sale                  29,699    34,580    32,286    33,097    39,913
    Loans held for sale     1,011       887       829       721       617

    Loans                 362,922   342,800   325,487   319,116   307,491
    Allowance for loan
     losses                (3,829)   (3,820)   (3,772)   (3,764)   (3,799)
                         --------- --------- --------- --------- ---------
      Net loans           359,093   338,980   321,715   315,352   303,692
                         --------- --------- --------- --------- ---------

    Mortgage servicing
     rights:
      Measured at fair
       value
       (residential
       MSRs)               18,223    18,733    17,779    17,591    17,712
      Amortized               460       418       400       377       328
    Premises and
     equipment, net         5,002     4,973     4,864     4,698     4,645
    Goodwill               12,018    11,983    11,275    11,275    11,192
    Other assets           41,737    31,966    27,632    29,543    30,737
                         --------- --------- --------- --------- ---------

         Total assets    $548,727  $539,865  $485,901  $481,996  $483,441
                         --------- --------- --------- --------- ---------

    LIABILITIES
    Noninterest-bearing
     deposits            $ 82,365  $ 89,809  $ 89,067  $ 89,119  $ 86,849
    Interest-bearing
     deposits             252,591   234,934   222,090   221,124   227,470
                         --------- --------- --------- --------- ---------
      Total deposits      334,956   324,743   311,157   310,243   314,319
    Short-term
     borrowings            41,729    40,838    13,181    12,829    13,800
    Accrued expenses and
     other liabilities     28,712    33,153    25,101    25,903    26,369
    Long-term debt         95,592    93,830    90,327    87,145    84,091
                         --------- --------- --------- --------- ---------

         Total
          liabilities     500,989   492,564   439,766   436,120   438,579
                         --------- --------- --------- --------- ---------

    STOCKHOLDERS' EQUITY
    Preferred stock           545       637       740       384       465
    Common stock            5,788     5,788     5,788     5,788     5,788
    Additional paid-in
     capital                8,089     8,027     7,875     7,739     7,667
    Retained earnings      38,817    37,665    36,439    35,277    34,080
    Cumulative other
     comprehensive
     income (loss)            291      (236)      289       302       633
    Treasury stock         (5,209)   (3,898)   (4,204)   (3,203)   (3,273)
    Unearned ESOP shares     (583)     (682)     (792)     (411)     (498)
                         --------- --------- --------- --------- ---------

         Total
          stockholders'
          equity           47,738    47,301    46,135    45,876    44,862
                         --------- --------- --------- --------- ---------

          Total
           liabilities
           and
           stockholders'
           equity        $548,727  $539,865  $485,901  $481,996  $483,441
                         --------- --------- --------- --------- ---------

    ----------------------------------------------------------------------
    

    
    Wells Fargo & Company and Subsidiaries
    FIVE QUARTER AVERAGE BALANCES
    ----------------------------------------------------------------------
                                                             Quarter ended
                         -------------------------------------------------
                         Sept. 30, June 30,  Mar. 31,  Dec. 31,  Sept. 30,
    (in millions)          2007      2007      2007      2006      2006
    ----------------------------------------------------------------------

    EARNING ASSETS
    Federal funds sold,
     securities
     purchased under
     resale agreements
     and other short-
     term investments    $  4,219  $  4,849  $  5,867  $  7,751  $  4,247
    Trading assets          4,043     4,572     4,305     3,950     3,880
    Debt securities
     available for sale:
     Securities of U.S.
      Treasury and
      federal agencies        871       839       753       786       912
     Securities of U.S.
      states and
      political
      subdivisions          5,021     4,383     3,532     3,406     3,240
     Mortgage-backed
      securities:
      Federal agencies     52,681    35,406    30,640    31,718    47,009
      Private
       collateralized
       mortgage
       obligations          4,026     3,816     3,993     5,130     7,696
                         --------- --------- --------- --------- ---------
       Total mortgage-
        backed
        securities         56,707    39,222    34,633    36,848    54,705
     Other debt
      securities (1)        5,822     5,090     5,778     6,406     6,865
                         --------- --------- --------- --------- ---------
       Total debt
        securities
        available for
        sale (1)           68,421    49,534    44,696    47,446    65,722
    Mortgages held for
     sale (2)              35,552    36,060    32,343    37,878    42,369
    Loans held for sale       960       864       794       659       622
    Loans:
     Commercial and
      commercial real
      estate:
      Commercial           79,713    73,932    71,063    68,402    66,216
      Other real estate
       mortgage            32,641    31,736    30,590    29,882    29,851
      Real estate
       construction        16,914    16,393    15,892    15,775    15,073
      Lease financing       6,026     5,559     5,503     5,500     5,385
                         --------- --------- --------- --------- ---------
       Total commercial
        and commercial
        real estate       135,294   127,620   123,048   119,559   116,525
     Consumer:
      Real estate 1-4
       family first
       mortgage            63,929    58,283    54,444    50,836    50,138
      Real estate 1-4
       family junior
       lien mortgage       73,476    70,390    69,079    68,208    65,991
      Credit card          16,261    14,950    14,557    13,737    12,810
      Other revolving
       credit and
       installment         54,165    53,464    53,539    53,206    51,988
                         --------- --------- --------- --------- ---------
       Total consumer     207,831   197,087   191,619   185,987   180,927
     Foreign                7,558     7,263     6,762     6,620     6,528
                         --------- --------- --------- --------- ---------
       Total loans (2)    350,683   331,970   321,429   312,166   303,980
    Other                   1,396     1,329     1,327     1,333     1,348
                         --------- --------- --------- --------- ---------
       Total earning
        assets           $465,274  $429,178  $410,761  $411,183  $422,168
                         --------- --------- --------- --------- ---------

    FUNDING 

SOURCES Deposits: Interest-bearing checking $ 5,160 $ 5,193 $ 4,615 $ 4,477 $ 4,370 Market rate and other savings 149,194 145,185 140,934 135,673 132,906 Savings certificates 41,080 39,729 38,514 36,382 33,909 Other time deposits 10,948 4,574 9,312 19,838 36,920 Deposits in foreign offices 41,326 32,841 27,647 24,425 22,303 --------- --------- --------- --------- --------- Total interest- bearing deposits 247,708 227,522 221,022 220,795 230,408 Short-term borrowings 36,415 21,066 11,498 13,470 21,539 Long-term debt 94,686 90,931 89,027 85,809 84,112 --------- --------- --------- --------- --------- Total interest- bearing liabilities 378,809 339,519 321,547 320,074 336,059 Portion of noninterest-bearing funding sources 86,465 89,659 89,214 91,109 86,109 --------- --------- --------- --------- --------- Total funding sources $465,274 $429,178 $410,761 $411,183 $422,168 --------- --------- --------- --------- --------- NONINTEREST-EARNING ASSETS Cash and due from banks $ 11,579 $ 11,655 $ 11,862 $ 12,379 $ 12,159 Goodwill 12,008 11,435 11,274 11,259 11,156 Other 52,672 50,418 48,208 47,764 49,196 --------- --------- --------- --------- --------- Total noninterest- earning assets $ 76,259 $ 73,508 $ 71,344 $ 71,402 $ 72,511 --------- --------- --------- --------- --------- NONINTEREST-BEARING FUNDING

SOURCES Deposits $ 88,991 $ 91,256 $ 88,769 $ 91,259 $ 89,245 Other liabilities 26,351 25,159 25,474 25,687 25,839 Stockholders' equity 47,382 46,752 46,315 45,565 43,536 Noninterest-bearing funding sources used to fund earning assets (86,465) (89,659) (89,214) (91,109) (86,109) --------- --------- --------- --------- --------- Net noninterest- bearing funding sources $ 76,259 $ 73,508 $ 71,344 $ 71,402 $ 72,511 --------- --------- --------- --------- --------- TOTAL ASSETS $541,533 $502,686 $482,105 $482,585 $494,679 --------- --------- --------- --------- --------- ---------------------------------------------------------------------- (1) Includes certain preferred securities. (2) Nonaccrual loans are included in their respective loan categories. Wells Fargo & Company and Subsidiaries CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY ---------------------------------------------------------------------- Nine months ended Sept. 30, --------------------- (in millions) 2007 2006 ---------------------------------------------------------------------- Balance, beginning of period $ 45,876 $ 40,660 Cumulative effect from adoption of: FAS 156 (1) -- 101 FSP 13-2 (2) (71) -- Net income 6,806 6,301 Other comprehensive income (loss), net of tax, related to: Translation adjustments 24 4 Investment securities and other interests held (226) (6) Derivative instruments and hedging activities 174 (27) Defined benefit pension plans 17 (3) Common stock issued 1,531 1,419 Common stock issued for acquisitions 649 -- Common stock repurchased (4,765) (1,566) Preferred stock released to ESOP 323 274 Common stock dividends (2,919) (2,695) Other, net 319 400 ----------- --------- Balance, end of period $ 47,738 $ 44,862 ----------- --------- ---------------------------------------------------------------------- (1) Financial Accounting Standard No. 156, Accounting for Servicing of Financial Assets - an amendment of FASB Statement No. 140. (2) FASB Staff Position 13-2, Accounting for a Change or Projected Change in the Timing of Cash Flows Related to Income Taxes Generated by a Leveraged Lease Transaction. Wells Fargo & Company and Subsidiaries FIVE QUARTER LOANS ---------------------------------------------------------------------- Sept. 30, June 30, Mar. 31, Dec. 31, Sept. 30, (in millions) 2007 2007 2007 2006 2006 ---------------------------------------------------------------------- Commercial and commercial real estate: Commercial $ 82,598 $ 77,560 $ 72,268 $ 70,404 $ 66,797 Other real estate mortgage 33,227 32,336 31,542 30,112 29,914 Real estate construction 17,301 16,552 15,869 15,935 15,397 Lease financing 6,089 5,979 5,494 5,614 5,443 --------- -------- -------- -------- -------- Total commercial and commercial real estate 139,215 132,427 125,173 122,065 117,551 Consumer: Real estate 1-4 family first mortgage 66,877 61,177 55,982 53,228 49,765 Real estate 1-4 family junior lien mortgage 74,632 72,398 69,489 68,926 67,185 Credit card 17,129 15,567 14,594 14,697 13,343 Other revolving credit and installment 57,180 53,701 53,445 53,534 53,080 --------- -------- -------- -------- -------- Total consumer 215,818 202,843 193,510 190,385 183,373 Foreign 7,889 7,530 6,804 6,666 6,567 --------- -------- -------- -------- -------- Total loans (net of unearned income) $362,922 $342,800 $325,487 $319,116 $307,491 --------- -------- -------- -------- -------- ---------------------------------------------------------------------- FIVE QUARTER NONACCRUAL LOANS AND OTHER ASSETS ---------------------------------------------------------------------- Sept. 30, June 30, Mar. 31, Dec. 31, Sept. 30, (in millions) 2007 2007 2007 2006 2006 ---------------------------------------------------------------------- Nonaccrual loans: Commercial and commercial real estate: Commercial $ 399 $ 395 $ 350 $ 331 $ 256 Other real estate mortgage 133 129 114 105 116 Real estate construction 188 81 82 78 90 Lease financing 38 29 31 29 27 --------- -------- -------- -------- -------- Total commercial and commercial real estate 758 634 577 543 489 Consumer: Real estate 1-4 family first mortgage (1) 886 663 701 688 595 Real estate 1-4 family junior lien mortgage 238 228 233 212 200 Other revolving credit and installment 160 155 195 180 167 --------- -------- -------- -------- -------- Total consumer 1,284 1,046 1,129 1,080 962 Foreign 46 53 46 43 38 --------- -------- -------- -------- -------- Total nonaccrual loans 2,088 1,733 1,752 1,666 1,489 As a percentage of total loans 0.58% 0.51% 0.54% 0.52% 0.48% Foreclosed assets: GNMA loans (2) 487 423 381 322 266 Other 603 554 528 423 342 Real estate and other nonaccrual investments (3) 5 5 5 5 3 --------- -------- -------- -------- -------- Total nonaccrual loans and other assets $ 3,183 $ 2,715 $ 2,666 $ 2,416 $ 2,100 --------- -------- -------- -------- -------- As a percentage of total loans 0.88% 0.79% 0.82% 0.76% 0.68% --------- -------- -------- -------- -------- ---------------------------------------------------------------------- (1) Includes nonaccrual mortgages held for sale. (2) Consistent with regulatory reporting requirements, foreclosed real estate securing Government National Mortgage Association (GNMA) loans is classified as nonperforming. Both principal and interest for GNMA loans secured by the foreclosed real estate are fully collectible because the GNMA loans are insured by the Federal Housing Administration or guaranteed by the Department of Veterans Affairs. (3) Includes real estate investments (contingent interest loans accounted for as investments) that would be classified as nonaccrual if these assets were recorded as loans. Wells Fargo & Company and Subsidiaries CHANGES IN THE ALLOWANCE FOR CREDIT LOSSES ---------------------------------------------------------------------- Quarter ended Nine months ended ------------------------ ----------------- Sept. June Sept. Sept. Sept. 30, 30, 30, 30, 30, (in millions) 2007 2007 2006 2007 2006 ---------------------------------------------------------------------- Balance, beginning of period $ 4,007 $3,965 $4,035 $ 3,964 $ 4,057 Provision for credit losses 892 720 613 2,327 1,478 Loan charge-offs: Commercial and commercial real estate: Commercial (155) (127) (103) (408) (275) Other real estate mortgage -- (1) (1) (2) (3) Real estate construction (3) (2) (1) (5) (1) Lease financing (8) (9) (6) (24) (22) -------- ------- ------- -------- -------- Total commercial and commercial real estate (166) (139) (111) (439) (301) Consumer: Real estate 1-4 family first mortgage (22) (25) (30) (71) (81) Real estate 1-4 family junior lien mortgage (167) (107) (36) (357) (98) Credit card (205) (191) (133) (579) (351) Other revolving credit and installment (473) (434) (501) (1,381) (1,172) -------- ------- ------- -------- -------- Total consumer (867) (757) (700) (2,388) (1,702) Foreign (69) (64) (74) (195) (222) -------- ------- ------- -------- -------- Total loan charge-offs (1,102) (960) (885) (3,022) (2,225) -------- ------- ------- -------- -------- Loan recoveries: Commercial and commercial real estate: Commercial 35 25 26 84 84 Other real estate mortgage 2 3 8 7 14 Real estate construction 1 -- -- 2 2 Lease financing 3 4 4 12 16 ------- ------ ------ ------- ------- Total commercial and commercial real estate 41 32 38 105 116 Consumer: Real estate 1-4 family first mortgage 6 6 8 18 20 Real estate 1-4 family junior lien mortgage 14 16 9 39 27 Credit card 29 30 23 90 72 Other revolving credit and installment 105 139 124 393 401 ------- ------ ------ ------- ------- Total consumer 154 191 164 540 520 Foreign 15 17 20 50 61 ------- ------ ------ ------- ------- Total loan recoveries 210 240 222 695 697 ------- ------ ------ ------- ------- Net loan charge-offs (892) (720) (663) (2,327) (1,528) -------- ------- ------- -------- -------- Allowances related to business combinations/other 11 42 (7) 54 (29) ------- ------ ------- ------- -------- Balance, end of period $ 4,018 $4,007 $3,978 $ 4,018 $ 3,978 ------- ------ ------ ------- ------- Components: Allowance for loan losses $ 3,829 $3,820 $3,799 $ 3,829 $ 3,799 Reserve for unfunded credit commitments 189 187 179 189 179 ------- ------ ------ ------- ------- Allowance for credit losses $ 4,018 $4,007 $3,978 $ 4,018 $ 3,978 ------- ------ ------ ------- ------- Net loan charge-offs (annualized) as a percentage of average total loans 1.01% 0.87% 0.86% 0.93% 0.67% ------- ------ ------ ------- ------- ---------------------------------------------------------------------- Wells Fargo & Company and Subsidiaries FIVE QUARTER CHANGES IN THE ALLOWANCE FOR CREDIT LOSSES ---------------------------------------------------------------------- Quarter ended --------------------------------------------- Sept. June Mar. Dec. Sept. 30, 30, 31, 31, 30, (in millions) 2007 2007 2007 2006 2006 ---------------------------------------------------------------------- Balance, beginning of quarter $ 4,007 $3,965 $3,964 $3,978 $4,035 Provision for credit losses 892 720 715 726 613 Loan charge-offs: Commercial and commercial real estate: Commercial (155) (127) (126) (139) (103) Other real estate mortgage -- (1) (1) (2) (1) Real estate construction (3) (2) -- (1) (1) Lease financing (8) (9) (7) (8) (6) -------- ------- ------- ------- ------- Total commercial and commercial real estate (166) (139) (134) (150) (111) Consumer: Real estate 1-4 family first mortgage (22) (25) (24) (22) (30) Real estate 1-4 family junior lien mortgage (167) (107) (83) (56) (36) Credit card (205) (191) (183) (154) (133) Other revolving credit and installment (473) (434) (474) (513) (501) -------- ------- ------- ------- ------- Total consumer (867) (757) (764) (745) (700) Foreign (69) (64) (62) (59) (74) -------- ------- ------- ------- ------- Total loan charge- offs (1,102) (960) (960) (954) (885) -------- ------- ------- ------- ------- Loan recoveries: Commercial and commercial real estate: Commercial 35 25 24 27 26 Other real estate mortgage 2 3 2 5 8 Real estate construction 1 -- 1 1 -- Lease financing 3 4 5 5 4 -------- ------- ------- ------- ------- Total commercial and commercial real estate 41 32 32 38 38 Consumer: Real estate 1-4 family first mortgage 6 6 6 6 8 Real estate 1-4 family junior lien mortgage 14 16 9 9 9 Credit card 29 30 31 24 23 Other revolving credit and installment 105 139 149 136 124 -------- ------- ------- ------- ------- Total consumer 154 191 195 175 164 Foreign 15 17 18 15 20 -------- ------- ------- ------- ------- Total loan recoveries 210 240 245 228 222 -------- ------- ------- ------- ------- Net loan charge- offs (892) (720) (715) (726) (663) -------- ------- ------- ------- ------- Allowances related to business combinations/other 11 42 1 (14) (7) -------- ------- ------- ------- ------- Balance, end of quarter $ 4,018 $4,007 $3,965 $3,964 $3,978 -------- ------- ------- ------- ------- Components: Allowance for loan losses $ 3,829 $3,820 $3,772 $3,764 $3,799 Reserve for unfunded credit commitments 189 187 193 200 179 -------- ------- ------- ------- ------- Allowance for credit losses $ 4,018 $4,007 $3,965 $3,964 $3,978 -------- ------- ------- ------- ------- Net loan charge-offs (annualized) as a percentage of average total loans 1.01 % 0.87 % 0.90 % 0.92 % 0.86 % Allowance for loan losses as a percentage of: Total loans 1.06 % 1.11 % 1.16 % 1.18 % 1.24 % Nonaccrual loans 183 220 215 226 255 Nonaccrual loans and other assets 120 141 141 156 181 Allowance for credit losses as a percentage of: Total loans 1.11 % 1.17 % 1.22 % 1.24 % 1.29 % Nonaccrual loans 192 231 226 238 267 Nonaccrual loans and other assets 126 148 149 164 189 ---------------------------------------------------------------------- Wells Fargo & Company and Subsidiaries NONINTEREST INCOME ---------------------------------------------------------------------- Quarter ended Nine months ended Sept. 30, Sept. 30, --------------- % ----------------- % (in millions) 2007 2006 Change 2007 2006 Change ---------------------------------------------------------------------- Service charges on deposit accounts $ 837 $ 707 18 % $ 2,262 $ 1,995 13 % Trust and investment fees: Trust, investment and IRA fees 573 508 13 1,720 1,508 14 Commissions and all other fees 204 156 31 627 494 27 ------- ------ ------- -------- Total trust and investment fees 777 664 17 2,347 2,002 17 Card fees 561 464 21 1,548 1,266 22 Other fees: Cash network fees 51 48 6 146 140 4 Charges and fees on loans 246 244 1 737 735 -- All other fees 269 217 24 832 632 32 ------- ------ ------- -------- Total other fees 566 509 11 1,715 1,507 14 Mortgage banking: Servicing income, net 797 188 324 968 579 67 Net gains (losses) on mortgage loan origination/sales activities (61) 179 -- 1,069 811 32 All other 87 117 (26) 265 244 9 ------- ------ ------- -------- Total mortgage banking 823 484 70 2,302 1,634 41 Operating leases 171 192 (11) 550 593 (7) Insurance 329 313 5 1,160 1,041 11 Net gains (losses) from trading activities (43) 106 -- 482 331 46 Net gains (losses) on debt securities available for sale 160 121 32 149 (70) -- Net gains from equity investments 173 159 9 512 482 6 All other 219 168 30 672 596 13 ------- ------ ------- -------- Total $4,573 $3,887 18 $13,699 $11,377 20 ------- ------ ------- -------- ---------------------------------------------------------------------- NONINTEREST EXPENSE ---------------------------------------------------------------------- Quarter ended Nine months ended Sept. 30, Sept. 30, --------------- % ----------------- % (in millions) 2007 2006 Change 2007 2006 Change ---------------------------------------------------------------------- Salaries $1,933 $1,769 9 % $ 5,707 $ 5,195 10 % Incentive compensation 802 710 13 2,444 2,092 17 Employee benefits 518 458 13 1,764 1,534 15 Equipment 295 294 -- 924 913 1 Net occupancy 398 357 11 1,132 1,038 9 Operating leases 136 155 (12) 437 473 (8) Outside professional services 222 240 (8) 649 669 (3) Contract services 103 143 (28) 334 414 (19) Travel and entertainment 113 132 (14) 340 401 (15) Advertising and promotion 108 123 (12) 312 354 (12) Outside data processing 123 111 11 355 324 10 Postage 88 75 17 260 235 11 Telecommunications 79 70 13 241 213 13 Insurance 81 43 88 357 218 64 Stationery and supplies 54 57 (5) 159 163 (2) Operating losses 55 33 67 199 140 42 Security 42 43 (2) 129 130 (1) Core deposit intangibles 28 28 -- 81 85 (5) All other 323 240 35 930 740 26 ------- ------ ------- -------- Total $5,501 $5,081 8 $16,754 $15,331 9 ------- ------ ------- -------- ---------------------------------------------------------------------- Wells Fargo & Company and Subsidiaries FIVE QUARTER NONINTEREST INCOME ---------------------------------------------------------------------- Quarter ended -------------------------------------- Sept. June Mar. Dec. Sept. 30, 30, 31, 31, 30, (in millions) 2007 2007 2007 2006 2006 ---------------------------------------------------------------------- Service charges on deposit accounts $ 837 $ 740 $ 685 $ 695 $ 707 Trust and investment fees: Trust, investment and IRA fees 573 610 537 525 508 Commissions and all other fees 204 229 194 210 156 ------- ------- ------ ------ -------- Total trust and investment fees 777 839 731 735 664 Card fees 561 517 470 481 464 Other fees: Cash network fees 51 50 45 44 48 Charges and fees on loans 246 253 238 241 244 All other fees 269 335 228 265 217 ------- ------- ------ ------ -------- Total other fees 566 638 511 550 509 Mortgage banking: Servicing income, net 797 (45) 216 314 188 Net gains (losses) on mortgage loan origination/sales activities (61) 635 495 305 179 All other 87 99 79 58 117 ------- ------- ------ ------ -------- Total mortgage banking 823 689 790 677 484 Operating leases 171 187 192 190 192 Insurance 329 432 399 299 313 Net gains (losses) from trading activities (43) 260 265 213 106 Net gains (losses) on debt securities available for sale 160 (42) 31 51 121 Net gains from equity investments 173 242 97 256 159 All other 219 193 260 216 168 ------- ------- ------ ------ -------- Total $4,573 $4,695 $4,431 $4,363 $ 3,887 ------- ------- ------ ------ -------- ---------------------------------------------------------------------- FIVE QUARTER NONINTEREST EXPENSE ---------------------------------------------------------------------- Quarter ended -------------------------------------- Sept. June Mar. Dec. Sept. 30, 30, 31, 31, 30, (in millions) 2007 2007 2007 2006 2006 ---------------------------------------------------------------------- Salaries $1,933 $1,907 $1,867 $1,812 $ 1,769 Incentive compensation 802 900 742 793 710 Employee benefits 518 581 665 501 458 Equipment 295 292 337 339 294 Net occupancy 398 369 365 367 357 Operating leases 136 148 153 157 155 Outside professional services 222 235 192 273 240 Contract services 103 113 118 165 143 Travel and entertainment 113 118 109 141 132 Advertising and promotion 108 113 91 102 123 Outside data processing 123 121 111 113 111 Postage 88 85 87 77 75 Telecommunications 79 81 81 66 70 Insurance 81 148 128 39 43 Stationery and supplies 54 52 53 60 57 Operating losses 55 57 87 40 33 Security 42 44 43 49 43 Core deposit intangibles 28 27 26 27 28 All other 323 336 271 290 240 ------- ------- ------ ------ -------- Total $5,501 $5,727 $5,526 $5,411 $ 5,081 ------- ------- ------ ------ -------- ---------------------------------------------------------------------- Wells Fargo & Company and Subsidiaries AVERAGE BALANCES, YIELDS AND RATES PAID (TAXABLE-EQUIVALENT BASIS) (1)(2) ---------------------------------------------------------------------- Quarter ended Sept. 30, -------------------------------------------------- 2007 2006 ------------------------ ------------------------- 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 $ 4,219 5.01% $ 53 Trading assets 4,043 3.69 37 Debt securities available for sale (3): Securities of U.S. Treasury and federal agencies 871 4.27 10 Securities of U.S. states and political subdivisions 5,021 7.31 90 Mortgage-backed securities: Federal agencies 52,681 6.03 794 Private collateralized mortgage obligations 4,026 6.22 62 --------- ------ Total mortgage-backed securities 56,707 6.05 856 Other debt securities (4) 5,822 7.67 114 --------- ------ Total debt securities available for sale (4) 68,421 6.26 1,070 Mortgages held for sale (5) 35,552 6.59 586 Loans held for sale 960 7.79 19 Loans: Commercial and commercial real estate: Commercial 79,713 8.24 1,655 Other real estate mortgage 32,641 7.42 610 Real estate construction 16,914 7.94 338 Lease financing 6,026 5.78 87 --------- ------ Total commercial and commercial real estate 135,294 7.90 2,690 Consumer: Real estate 1-4 family first mortgage 63,929 7.26 1,162 Real estate 1-4 family junior lien mortgage 73,476 8.19 1,515 Credit card 16,261 13.68 557 Other revolving credit and installment 54,165 9.79 1,336 --------- ------ Total consumer 207,831 8.75 4,570 Foreign 7,558 11.62 221 --------- ------ Total loans (5) 350,683 8.48 7,481 Other 1,396 5.01 20 --------- ------ Total earning assets $465,274 7.92 9,266 --------- ------ FUNDING

SOURCES Deposits: Interest-bearing checking $ 5,160 3.20 42 Market rate and other savings 149,194 2.89 1,085 Savings certificates 41,080 4.38 454 Other time deposits 10,948 5.10 140 Deposits in foreign offices 41,326 4.77 497 --------- ------ Total interest-bearing deposits 247,708 3.55 2,218 Short-term borrowings 36,415 5.06 464 Long-term debt 94,686 5.33 1,267 --------- ------ Total interest-bearing liabilities 378,809 4.14 3,949 Portion of noninterest-bearing funding sources 86,465 -- -- --------- ------ Total funding sources $465,274 3.37 3,949 --------- ------ Net interest margin and net interest income on a taxable-equivalent basis (6) 4.55% $5,317 ----- ------ NONINTEREST-EARNING ASSETS Cash and due from banks $ 11,579 Goodwill 12,008 Other 52,672 --------- Total noninterest-earning assets $ 76,259 --------- NONINTEREST-BEARING FUNDING

SOURCES Deposits $ 88,991 Other liabilities 26,351 Stockholders' equity 47,382 Noninterest-bearing funding sources used to fund earning assets (86,465) --------- Net noninterest-bearing funding sources $ 76,259 --------- TOTAL ASSETS $541,533 --------- EARNING ASSETS Federal funds sold, securities purchased under resale agreements and other short-term investments $ 4,247 5.00% $ 53 Trading assets 3,880 5.19 51 Debt securities available for sale (3): Securities of U.S. Treasury and federal agencies 912 4.42 10 Securities of U.S. states and political subdivisions 3,240 7.99 63 Mortgage-backed securities: Federal agencies 47,009 6.09 716 Private collateralized mortgage obligations 7,696 6.78 129 --------- ------ Total mortgage-backed securities 54,705 6.19 845 Other debt securities (4) 6,865 6.80 116 --------- ------ Total debt securities available for sale (4) 65,722 6.31 1,034 Mortgages held for sale (5) 42,369 6.63 702 Loans held for sale 622 7.73 12 Loans: Commercial and commercial real estate: Commercial 66,216 8.36 1,395 Other real estate mortgage 29,851 7.47 562 Real estate construction 15,073 8.13 309 Lease financing 5,385 5.65 76 --------- ------ Total commercial and commercial real estate 116,525 7.98 2,342 Consumer: Real estate 1-4 family first mortgage 50,138 7.54 951 Real estate 1-4 family junior lien mortgage 65,991 8.14 1,353 Credit card 12,810 13.45 431 Other revolving credit and installment 51,988 9.75 1,278 --------- ------ Total consumer 180,927 8.81 4,013 Foreign 6,528 12.42 204 --------- ------ Total loans (5) 303,980 8.57 6,559 Other 1,348 5.12 18 --------- ------ Total earning assets $422,168 7.95 8,429 --------- ------ FUNDING

SOURCES Deposits: Interest-bearing checking $ 4,370 3.24 36 Market rate and other savings 132,906 2.55 854 Savings certificates 33,909 4.03 344 Other time deposits 36,920 5.27 491 Deposits in foreign offices 22,303 4.84 272 --------- ------ Total interest-bearing deposits 230,408 3.44 1,997 Short-term borrowings 21,539 4.99 271 Long-term debt 84,112 5.13 1,084 --------- ------ Total interest-bearing liabilities 336,059 3.96 3,352 Portion of noninterest-bearing funding sources 86,109 -- -- --------- ------ Total funding sources $422,168 3.16 3,352 --------- ------ Net interest margin and net interest income on a taxable-equivalent basis (6) 4.79% $5,077 ----- ------ NONINTEREST-EARNING ASSETS Cash and due from banks $ 12,159 Goodwill 11,156 Other 49,196 --------- Total noninterest-earning assets $ 72,511 --------- NONINTEREST-BEARING FUNDING

SOURCES Deposits $ 89,245 Other liabilities 25,839 Stockholders' equity 43,536 Noninterest-bearing funding sources used to fund earning assets (86,109) --------- Net noninterest-bearing funding sources $ 72,511 --------- TOTAL ASSETS $494,679 --------- ---------------------------------------------------------------------- (1) Our average prime rate was 8.18% and 8.25% for the quarters ended September 30, 2007 and 2006, respectively. The average three-month London Interbank Offered Rate (LIBOR) was 5.44% and 5.43% 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 Sept. 30, -------------------------------------------------- 2007 2006 ------------------------ ------------------------- 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 $ 4,972 5.09% $ 189 Trading assets 4,306 4.70 151 Debt securities available for sale (3): Securities of U.S. Treasury and federal agencies 821 4.29 27 Securities of U.S. states and political subdivisions 4,318 7.36 232 Mortgage-backed securities: Federal agencies 39,656 6.08 1,794 Private collateralized mortgage obligations 3,945 6.32 185 --------- ------- Total mortgage-backed securities 43,601 6.10 1,979 Other debt securities (4) 5,564 7.57 316 --------- ------- Total debt securities available for sale (4) 54,304 6.32 2,554 Mortgages held for sale (5) 34,664 6.52 1,694 Loans held for sale 873 7.78 51 Loans: Commercial and commercial real estate: Commercial 74,934 8.28 4,641 Other real estate mortgage 31,663 7.44 1,762 Real estate construction 16,404 7.97 978 Lease financing 5,698 5.82 249 --------- ------- Total commercial and commercial real estate 128,699 7.92 7,630 Consumer: Real estate 1-4 family first mortgage 58,920 7.31 3,228 Real estate 1-4 family junior lien mortgage 70,998 8.19 4,348 Credit card 15,262 13.89 1,590 Other revolving credit and installment 53,725 9.77 3,926 --------- ------- Total consumer 198,905 8.79 13,092 Foreign 7,197 11.72 631 --------- ------- Total loans (5) 334,801 8.52 21,353 Other 1,351 5.11 54 --------- ------- Total earning assets $435,271 8.00 26,046 --------- ------- FUNDING

SOURCES Deposits: Interest-bearing checking $ 4,991 3.23 121 Market rate and other savings 145,135 2.83 3,070 Savings certificates 39,784 4.40 1,308 Other time deposits 8,284 5.06 313 Deposits in foreign offices 33,988 4.73 1,204 --------- ------- Total interest-bearing deposits 232,182 3.46 6,016 Short-term borrowings 23,084 5.01 865 Long-term debt 91,569 5.22 3,579 --------- ------- Total interest-bearing liabilities 346,835 4.03 10,460 Portion of noninterest-bearing funding sources 88,436 -- -- --------- ------- Total funding sources $435,271 3.21 10,460 --------- ------- Net interest margin and net interest income on a taxable-equivalent basis (6) 4.79% $15,586 ----- ------- NONINTEREST-EARNING ASSETS Cash and due from banks $ 11,698 Goodwill 11,575 Other 50,448 --------- Total noninterest-earning assets $ 73,721 --------- NONINTEREST-BEARING FUNDING

SOURCES Deposits $ 89,673 Other liabilities 25,664 Stockholders' equity 46,820 Noninterest-bearing funding sources used to fund earning assets (88,436) --------- Net noninterest-bearing funding sources $ 73,721 --------- TOTAL ASSETS $508,992 --------- ---------------------------------------------------------------------- EARNING ASSETS Federal funds sold, securities purchased under resale agreements and other short- term investments $ 4,761 4.58% $ 163 Trading assets 5,298 4.91 195 Debt securities available for sale (3): Securities of U.S. Treasury and federal agencies 905 4.38 30 Securities of U.S. states and political subdivisions 3,120 8.11 183 Mortgage-backed securities: Federal agencies 38,366 5.99 1,723 Private collateralized mortgage obligations 7,149 6.65 352 --------- ------- Total mortgage-backed securities 45,515 6.10 2,075 Other debt securities (4) 6,136 7.06 324 --------- ------- Total debt securities available for sale (4) 55,676 6.28 2,612 Mortgages held for sale (5) 44,533 6.34 2,119 Loans held for sale 619 7.33 34 Loans: Commercial and commercial real estate: Commercial 64,816 8.07 3,914 Other real estate mortgage 29,162 7.26 1,585 Real estate construction 14,485 7.89 854 Lease financing 5,416 5.74 233 --------- ------- Total commercial and commercial real estate 113,879 7.73 6,586 Consumer: Real estate 1-4 family first mortgage 59,758 7.20 3,221 Real estate 1-4 family junior lien mortgage 62,923 7.91 3,723 Credit card 12,178 13.29 1,213 Other revolving credit and installment 50,152 9.57 3,592 --------- ------- Total consumer 185,011 8.49 11,749 Foreign 6,251 12.53 587 --------- ------- Total loans (5) 305,141 8.29 18,922 Other 1,366 4.90 50 --------- ------- Total earning assets $417,394 7.72 24,095 --------- ------- FUNDING

SOURCES Deposits: Interest-bearing checking $ 4,243 2.77 88 Market rate and other savings 133,767 2.31 2,307 Savings certificates 30,997 3.75 868 Other time deposits 36,324 4.94 1,343 Deposits in foreign offices 19,477 4.58 667 --------- ------- Total interest-bearing deposits 224,808 3.14 5,273 Short-term borrowings 24,168 4.59 830 Long-term debt 83,437 4.81 3,004 --------- ------- Total interest-bearing liabilities 332,413 3.66 9,107 Portion of noninterest-bearing funding sources 84,981 -- -- --------- ------- Total funding sources $417,394 2.92 9,107 --------- ------- Net interest margin and net interest income on a taxable-equivalent basis (6) 4.80% $14,988 ----- ------- NONINTEREST-EARNING ASSETS Cash and due from banks $ 12,495 Goodwill 11,066 Other 46,227 --------- Total noninterest-earning assets $ 69,788 --------- NONINTEREST-BEARING FUNDING

SOURCES Deposits $ 88,395 Other liabilities 24,007 Stockholders' equity 42,367 Noninterest-bearing funding sources used to fund earning assets (84,981) --------- Net noninterest-bearing funding sources $ 69,788 --------- TOTAL ASSETS $487,182 --------- ---------------------------------------------------------------------- (1) Our average prime rate was 8.23% and 7.86% for the nine months ended September 30, 2007 and 2006, respectively. The average three- month London Interbank Offered Rate (LIBOR) was 5.39% and 5.14% 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 OPERATING SEGMENT RESULTS (1) --------------------------------------------------------------------- (income/expense in millions, Community Wholesale average balances in billions) Banking Banking --------------------------------------------------------------------- Quarter ended September 30, 2007 2006 2007 2006 Net interest income $ 3,367 $ 3,292 $ 854 $ 751 Provision for credit losses 446 236 19 -- Noninterest income 3,110 2,492 1,149 1,033 Noninterest expense 3,619 3,392 1,154 999 ------- ------- ------ ------- Income before income tax expense 2,412 2,156 830 785 Income tax expense 807 663 287 275 ------- ------- ------ ------- Net income $ 1,605 $ 1,493 $ 543 $ 510 ------- ------- ------ ------- Average loans $ 197.4 $ 172.5 $ 87.5 $ 72.3 Average assets (2) 348.2 326.7 115.8 97.5 Average core deposits 250.6 233.1 55.5 36.5 Nine months ended September 30, Net interest income $ 9,890 $ 9,869 $2,449 $2,137 Provision (reversal of provision) for credit losses 1,105 612 33 (9) Noninterest income 8,988 7,033 3,750 3,214 Noninterest expense 10,926 10,264 3,560 3,009 ------- ------- ------ ------- Income before income tax expense 6,847 6,026 2,606 2,351 Income tax expense 2,137 1,946 913 824 ------- ------- ------ ------- Net income $ 4,710 $ 4,080 $1,693 $1,527 ------- ------- ------ ------- Average loans $ 188.2 $ 178.8 $ 82.4 $ 70.1 Average assets (2) 325.1 322.9 108.1 96.9 Average core deposits 248.5 231.4 50.6 32.3 --------------------------------------------------------------------- (income/expense in millions, Wells Fargo Consolidated average balances in billions) Financial Company --------------------------------------------------------------------- Quarter ended September 30, 2007 2006 2007 2006 Net interest income $1,059 $1,004 $ 5,280 $ 5,047 Provision for credit losses 427 377 892 613 Noninterest income 314 362 4,573 3,887 Noninterest expense 728 690 5,501 5,081 ------- ------ ------- ------- Income before income tax expense 218 299 3,460 3,240 Income tax expense 83 108 1,177 1,046 ------- ------ ------- ------- Net income $ 135 $ 191 $ 2,283 $ 2,194 ------- ------ ------- ------- Average loans $ 65.8 $ 59.2 $ 350.7 $ 304.0 Average assets (2) 71.7 64.7 541.5 494.7 Average core deposits -- 0.1 306.1 269.7 Nine months ended September 30, Net interest income $3,147 $2,895 $15,486 $14,901 Provision (reversal of provision) for credit losses 1,189 875 2,327 1,478 Noninterest income 961 1,130 13,699 11,377 Noninterest expense 2,268 2,058 16,754 15,331 ------- ------ ------- ------- Income before income tax expense 651 1,092 10,104 9,469 Income tax expense 248 398 3,298 3,168 ------- ------ ------- ------- Net income $ 403 $ 694 $ 6,806 $ 6,301 ------- ------ ------- ------- Average loans $ 64.2 $ 56.2 $ 334.8 $ 305.1 Average assets (2) 70.0 61.6 509.0 487.2 Average core deposits -- 0.1 299.1 263.8 --------------------------------------------------------------------- (1) The management accounting process measures the performance of the operating segments based on our management structure and is not necessarily comparable with other similar information for other financial services companies. We define our operating segments by product type and customer segment. If the management structure and/or the allocation process changes, allocations, transfers and assignments may change. To reflect a change in the allocation of income taxes for management reporting adopted in second quarter 2007, results for prior periods have been revised. (2) The Consolidated Company balance includes unallocated goodwill held at the enterprise level of $5.8 billion for all periods presented. Wells Fargo & Company and Subsidiaries FIVE QUARTER OPERATING SEGMENT RESULTS (1) ---------------------------------------------------------------------- Quarter ended ------------------------------------ Sept. June Mar. Dec. Sept. (income/expense in millions, 30, 30, 31, 31, 30, average balances in billions) 2007 2007 2007 2006 2006 ---------------------------------------------------------------------- COMMUNITY BANKING Net interest income $3,367 $3,299 $3,224 $3,248 $ 3,292 Provision for credit losses 446 353 306 275 236 Noninterest income 3,110 3,031 2,847 2,882 2,492 Noninterest expense 3,619 3,667 3,640 3,558 3,392 ------ ------ ------ ------ -------- Income before income tax expense 2,412 2,310 2,125 2,297 2,156 Income tax expense 807 757 573 765 663 ------ ------ ------ ------ -------- Net income $1,605 $1,553 $1,552 $1,532 $ 1,493 ------ ------ ------ ------ -------- Average loans $197.4 $186.6 $180.8 $175.7 $ 172.5 Average assets 348.2 320.0 307.0 311.9 326.7 Average core deposits 250.6 250.9 243.9 239.8 233.1 WHOLESALE BANKING Net interest income $ 854 $ 814 $ 781 $ 787 $ 751 Provision for credit losses 19 1 13 25 -- Noninterest income 1,149 1,336 1,265 1,096 1,033 Noninterest expense 1,154 1,269 1,137 1,105 999 ------ ------ ------ ------ -------- Income before income tax expense 830 880 896 753 785 Income tax expense 287 310 316 262 275 ------ ------ ------ ------ -------- Net income $ 543 $ 570 $ 580 $ 491 $ 510 ------ ------ ------ ------ -------- Average loans $ 87.5 $ 81.4 $ 77.9 $ 75.0 $ 72.3 Average assets 115.8 107.1 101.0 97.9 97.5 Average core deposits 55.5 49.6 46.7 44.0 36.5 WELLS FARGO FINANCIAL Net interest income $1,059 $1,083 $1,005 $1,015 $ 1,004 Provision for credit losses 427 366 396 426 377 Noninterest income 314 328 319 385 362 Noninterest expense 728 791 749 748 690 ------ ------ ------ ------ -------- Income before income tax expense 218 254 179 226 299 Income tax expense 83 98 67 68 108 ------ ------ ------ ------ -------- Net income $ 135 $ 156 $ 112 $ 158 $ 191 ------ ------ ------ ------ -------- Average loans $ 65.8 $ 64.0 $ 62.7 $ 61.5 $ 59.2 Average assets 71.7 69.8 68.3 67.0 64.7 Average core deposits -- -- -- -- 0.1 CONSOLIDATED COMPANY Net interest income $5,280 $5,196 $5,010 $5,050 $ 5,047 Provision for credit losses 892 720 715 726 613 Noninterest income 4,573 4,695 4,431 4,363 3,887 Noninterest expense 5,501 5,727 5,526 5,411 5,081 ------ ------ ------ ------ -------- Income before income tax expense 3,460 3,444 3,200 3,276 3,240 Income tax expense 1,177 1,165 956 1,095 1,046 ------ ------ ------ ------ -------- Net income $2,283 $2,279 $2,244 $2,181 $ 2,194 ------ ------ ------ ------ -------- Average loans $350.7 $332.0 $321.4 $312.2 $ 304.0 Average assets (2) 541.5 502.7 482.1 482.6 494.7 Average core deposits 306.1 300.5 290.6 283.8 269.7 ---------------------------------------------------------------------- (1) The management accounting process measures the performance of the operating segments based on our management structure and is not necessarily comparable with other similar information for other financial services companies. We define our operating segments by product type and customer segment. If the management structure and/or the allocation process changes, allocations, transfers and assignments may change. To reflect a change in the allocation of income taxes for management reporting adopted in second quarter 2007, results for prior periods have been revised. (2) The Consolidated Company includes unallocated goodwill held at the enterprise level of $5.8 billion for all periods presented. Wells Fargo & Company and Subsidiaries FIVE QUARTER CONSOLIDATED MORTGAGE SERVICING ---------------------------------------------------------------------- Quarter ended ---------------------------------------------- Sept. 30, June 30, Mar. 31, Dec. 31, Sept. 30, (in millions) 2007 2007 2007 2006 2006 ---------------------------------------------------------------------- Residential MSRs measured using the fair value method: Fair value, beginning of quarter $18,733 $17,779 $17,591 $17,712 $15,650 Purchases 188 142 159 222 2,907 Servicing from securitizations or asset transfers 951 1,029 828 843 965 Sales (292) (1,422) -- (469) -- --------- -------- -------- -------- --------- Net additions (reductions) 847 (251) 987 596 3,872 Changes in fair value: Due to changes in valuation model inputs or assumptions (1) (638) 2,013 (11) 66 (1,147) Other changes in fair value (2) (719) (808) (788) (783) (663) --------- -------- -------- -------- --------- Total changes in fair value (1,357) 1,205 (799) (717) (1,810) Fair value, end of quarter $18,223 $18,733 $17,779 $17,591 $17,712 --------- -------- -------- -------- --------- ---------------------------------------------------------------------- (1) Principally reflects changes in discount rates and prepayment speed assumptions, mostly due to changes in interest rates. (2) Represents changes due to collection/realization of expected cash flows over time. ---------------------------------------------------------------------- Quarter ended ---------------------------------------------- Sept. 30, June 30, Mar. 31, Dec. 31, Sept. 30, (in millions) 2007 2007 2007 2006 2006 ---------------------------------------------------------------------- Amortized MSRs: Balance, beginning of quarter $ 418 $ 400 $ 377 $ 328 $ 175 Purchases 46 26 29 53 161 Servicing from securitizations or asset transfers 12 11 10 9 2 Amortization (16) (19) (16) (13) (10) --------- -------- -------- -------- --------- Balance, end of quarter (1) $ 460 $ 418 $ 400 $ 377 $ 328 --------- -------- -------- -------- --------- Fair value of amortized MSRs: Beginning of quarter $ 561 $ 484 $ 457 $ 440 $ 252 End of quarter 602 561 484 457 440 ---------------------------------------------------------------------- (1) There was no valuation allowance recorded for the periods presented. Wells Fargo & Company and Subsidiaries FIVE QUARTER CONSOLIDATED MORTGAGE SERVICING (CONTINUED) ---------------------------------------------------------------------- Quarter ended -------------------------------------------------- Sept. 30, June 30, Mar. 31, Dec. 31, Sept. 30, (in millions) 2007 2007 2007 2006 2006 ---------------------------------------------------------------------- Servicing income, net: Servicing fees (1) $ 970 $ 1,007 $1,054 $1,011 $ 947 Changes in fair value of residential MSRs: Due to changes in valuation model inputs or assumptions (2) (638) 2,013 (11) 66 (1,147) Other changes in fair value (3) (719) (808) (788) (783) (663) --------- -------- -------- -------- -------- Total changes in fair value of residential MSRs (1,357) 1,205 (799) (717) (1,810) Amortization (16) (19) (16) (13) (10) Net derivative gains (losses) from economic hedges (4) 1,200 (2,238) (23) 33 1,061 --------- -------- -------- -------- -------- Total servicing income, net $ 797 $ (45) $ 216 $ 314 $ 188 --------- -------- -------- -------- -------- Market-related valuation changes to MSRs, net of hedge results (2) + (4) $ 562 $ (225) $ (34) $ 99 $ (86) --------- -------- -------- -------- -------- ---------------------------------------------------------------------- (1) Includes contractually specified servicing fees, late charges and other ancillary revenues. (2) Principally reflects changes in discount rates and prepayment speed assumptions, mostly due to changes in interest rates. (3) Represents changes due to collection/realization of expected cash flows over time. (4) Represents results from free-standing derivatives (economic hedges) used to hedge the risk of changes in fair value of MSRs. ---------------------------------------------------------------------- Sept. 30, June 30, Mar. 31, Dec. 31, Sept. 30, (in billions) 2007 2007 2007 2006 2006 ---------------------------------------------------------------------- Managed servicing portfolio: Loans serviced for others (1) $ 1,380 $ 1,347 $1,309 $1,280 $ 1,235 Owned loans serviced (2) 97 96 88 86 90 --------- -------- -------- -------- -------- Total owned servicing 1,477 1,443 1,397 1,366 1,325 Sub-servicing 22 24 26 19 20 --------- -------- -------- -------- -------- Total managed servicing portfolio $ 1,499 $ 1,467 $1,423 $1,385 $ 1,345 --------- -------- -------- -------- -------- Ratio of MSRs to related loans serviced for others 1.35 % 1.42 % 1.39 % 1.41 % 1.46 % Weighted-average note rate (owned servicing only) 5.98 % 5.95 % 5.93 % 5.92 % 5.86 % ---------------------------------------------------------------------- (1) Consists of 1-4 family first mortgage and commercial mortgage loans. (2) Consists of mortgages held for sale and 1-4 family first mortgage loans. Wells Fargo & Company and Subsidiaries SELECTED FIVE QUARTER RESIDENTIAL MORTGAGE PRODUCTION DATA ---------------------------------------------------------------------- Quarter ended ----------------------------- Sept. June Mar. Dec. Sept. 30, 30, 31, 31, 30, (in billions) 2007 2007 2007 2006 2006 ---------------------------------------------------------------------- Application Data: Wells Fargo Home Mortgage first mortgage quarterly applications $ 95 $114 $113 $ 90 $ 95 Refinances as a percentage of applications 40% 40% 46% 50% 41% Wells Fargo Home Mortgage first mortgage unclosed pipeline, at quarter end $ 45 $ 56 $ 57 $ 48 $ 55 ---------------------------------------------------------------------- ---------------------------------------------------------------------- Quarter ended ----------------------------- Sept. June Mar. Dec. Sept. 30, 30, 31, 31, 30, (in billions) 2007 2007 2007 2006 2006 ---------------------------------------------------------------------- Residential Real Estate Originations: (1) Quarter: Wells Fargo Home Mortgage first mortgage loans: Retail $ 29 $ 32 $ 26 $ 29 $ 29 Correspondent/Wholesale 29 36 31 29 36 Home equity loans and lines 7 9 8 9 10 Wells Fargo Financial 3 3 3 3 2 ---- ---- ---- ---- ---- Total $ 68 $ 80 $ 68 $ 70 $ 77 ---- ---- ---- ---- ---- Year-to-date $216 $148 $ 68 $294 $224 ---- ---- ---- ---- ---- ---------------------------------------------------------------------- (1) Consists of residential real estate originations from all Wells Fargo channels.

For further information:

For further information: Wells Fargo & Company Janis Smith, 415-396-7711
(Media) Bob Strickland, 415-396-0523 (Investors)

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WELLS FARGO & COMPANY

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