Wells Fargo Reports Record Quarterly Net Income

Q2 Net Income of $4.6 billion; EPS of $0.82, Up 17 Percent from Prior Year

July 13, 2012 08:00 AM Eastern Daylight Time

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

Continued strong financial results:
- Record diluted earnings per common share of $0.82, up 38 percent (annualized) from prior quarter
- Record Wells Fargo net income of $4.6 billion, up 35 percent (annualized) from prior quarter
- Pre-tax pre-provision profit (PTPP)¹ of $8.9 billion, up 12 percent (annualized) from prior quarter
- Revenue of $21.3 billion, compared with $21.6 billion in prior quarter
- Positive operating leverage; continued expense control
- Return on average assets (ROA) of 1.41 percent, up 10 basis points from prior quarter
- Return on equity (ROE) of 12.86 percent, up 72 basis points from prior quarter
Strong loan and deposit growth:
- Total loans of $775.2 billion at June 30, 2012, up from $766.5 billion at March 31, 2012
- Core loan portfolio up $13.8 billion from March 31, 2012²
- Completed the acquisitions of BNP Paribas’s North American energy lending business and WestLB’s subscription finance loan portfolio
- Total average core checking and savings deposits up $12.5 billion from prior quarter
Maintained strong capital position:
- Tier 1 common equity³ under Basel I increased $2.2 billion to $101.7 billion, with Tier 1 common equity ratio of 10.08 percent under Basel I at June 30, 2012. Estimated Tier 1 common equity ratio of 7.78 percent under the latest Basel III capital proposals⁴
- Purchased 53 million shares of common stock in second quarter 2012 and an additional estimated 11 million shares through a forward repurchase transaction expected to settle in third quarter 2012
- Redeemed $1.8 billion of trust preferred securities, with an average coupon of 6.31 percent, on June 15, 2012
- Paid quarterly common stock dividend of $0.22 per share
Solid credit improvement:
- Net charge-offs were $2.2 billion, a decline of $195 million from prior quarter
- 1.15 percent (annualized) net charge-off rate, lowest since third quarter 2007
- Non-performing assets of $24.9 billion, down $1.8 billion from prior quarter
- Reserve release⁵ of $400 million (pre-tax) reflected continued improved credit performance

¹ See footnote (2) in SUMMARY FINANCIAL DATA table for more information on pre-tax pre-provision profit.

² See table in Loans section for more information on core and non-strategic/liquidating loan portfolios.

³ See tables on TIER 1 COMMON EQUITY for more information on Tier 1 common equity.

⁴ Estimated Basel III calculation based on management’s current interpretation of the Basel III capital rules proposed by federal banking agencies in notices of proposed rulemaking announced in June 2012. The proposed rules and interpretations and assumptions used in estimating Basel III calculations are subject to change depending on final promulgation of Basel III capital rules.

⁵ Reserve release represents the amount by which net charge-offs exceed the provision for credit losses.


Selected Financial Information

	Quarter ended
	June 30, 2012			Mar. 31, 2012	June 30, 2011
Earnings
Diluted earnings per common share	$	0.82		0.75	0.70
Wells Fargo net income (in billions)		4.62		4.25	3.95
Return on assets (ROA)		1.41	%	1.31	1.27
Return on equity (ROE)		12.86		12.14	11.92

Asset Quality
Net charge-offs as a % of avg. total loans		1.15		1.25	1.52
Allowance as a % of total loans		2.41		2.50	2.83
Allowance as a % of annualized net charge-offs		211		199	187

Other
Revenue (in billions)	$	21.29		21.64	20.39
Efficiency ratio		58.2		60.1	61.2
Average loans (in billions)		768.2		768.6	751.3
Average core deposits (in billions)		880.6		870.5	807.5
Net interest margin		3.91	%	3.91	4.01

Wells Fargo & Company (NYSE:WFC) reported record net income of $4.6 billion, or $0.82 per diluted common share, for second quarter 2012, up from $3.9 billion, or $0.70 per share, for second quarter 2011, and up from $4.2 billion, or $0.75 per share, for first quarter 2012. For the first six months of 2012, net income was $8.9 billion, or $1.57 per share, compared with $7.7 billion, or $1.37 per share, a year ago.

“Wells Fargo’s strong financial results this quarter again reflect the benefit of our diversified business model,” said Chairman and CEO John Stumpf. “While the economic recovery remains uneven, we continued to meet our customers’ financial needs and benefited from signs of stabilization in the housing market. Our accomplishments reflect our continued focus on key Wells Fargo fundamentals: the way our team members work together to serve customers, and the way we manage risk. The foundation of our business is putting the customer at the center of all we do. Because of that focus, our customers entrusted more of their business with us—we had record quarterly mortgage applications, increases in lending to consumers and businesses, and continued growth in deposits and cross-sell.”

“Our performance was strong across the board,” said Chief Financial Officer Tim Sloan. “In the quarter, we had record net income and earnings per share; expense reduction of approximately $600 million; an improved efficiency ratio; higher PTPP, ROA and ROE; core loan growth of $13.8 billion; and continued improvement in credit metrics.”

Revenue

Revenue was $21.3 billion in the second quarter, compared with $21.6 billion in first quarter 2012. Net interest income increased 1.4 percent from first quarter, and noninterest income declined by $496 million from first quarter because of lower market sensitive revenue, including a decline in trading gains related to deferred compensation plan investments (offset in employee benefits expense). Businesses generating linked-quarter revenue growth included capital finance, capital markets, commercial banking, commercial mortgage servicing, commercial real estate, corporate banking, corporate trust, debit card, equipment finance, global remittance, government and institutional banking, home equity, international, merchant services, real estate capital markets, and wealth management.

Net Interest Income

Net interest income increased to $11.0 billion in the second quarter, up from $10.9 billion in first quarter 2012. Growth in commercial loan interest income and yields was driven by balance growth and higher levels of purchased credit-impaired (PCI) resolution income. The yield and interest income on the available-for-sale securities portfolio increased as short-term, low yielding agency securities were replaced with high quality municipal and agency mortgage-backed securities. Finally, interest expense declined as we redeemed higher cost trust preferred securities. The net interest margin was 3.91 percent, unchanged from first quarter 2012. On a linked quarter basis, the impact of higher variable income, including PCI loan resolution income, was approximately 7 basis points, helping offset pressure on the net interest margin from balance sheet repricing in the current low interest rate environment.

Noninterest Income

Noninterest income was $10.3 billion, compared with $10.7 billion in first quarter 2012. While the Company recorded higher deposit service charges, trust and investment fees, card fees and mortgage banking revenue, the decline from first quarter 2012 was attributable to lower market sensitive revenue, primarily trading gains related to deferred compensation plan investments ($218 million offset in employee benefits expense), as well as $122 million in lower equity gains.

Mortgage banking noninterest income was $2.9 billion, up $23 million from first quarter, on $131 billion of originations, compared with $129 billion of originations in first quarter. The Company provided $669 million for mortgage loan repurchase losses, compared with $430 million in first quarter (included in net gains from mortgage loan origination/sales activities). The increase in the repurchase provision was primarily attributable to an increase in projected demands from government-sponsored entities on loans sold between 2006 and 2008. Net mortgage servicing rights (MSRs) results were a $377 million gain compared with a $58 million loss in first quarter. The ratio of MSRs to related loans serviced for others was 69 basis points and the average note rate on the servicing portfolio was 4.97 percent. The unclosed pipeline at June 30, 2012, was $102 billion, up from $79 billion at March 31, 2012.

The Company had net unrealized securities gains of $9.5 billion at June 30, 2012, compared with a net unrealized gain of $8.7 billion at March 31, 2012. Period-end securities available for sale balances declined $3.4 billion, due primarily to lower-yielding securities being called.

Noninterest Expense

Noninterest expense declined $596 million in the quarter to $12.4 billion, compared with $13.0 billion in first quarter 2012. The decline in noninterest expense was primarily due to lower employee benefits expense, down $559 million from first quarter’s seasonally elevated levels, including $222 million of lower deferred compensation expense (offset in revenue), and reduced merger integration expenses. These reductions were partially offset by higher revenue-based incentive compensation and higher severance expense. Operating losses increased $47 million in the quarter to $524 million, compared with $477 million in first quarter, and included additional litigation accruals relating to the settlement with the Department of Justice announced yesterday.

The Company’s efficiency ratio improved to 58.2 percent from 60.1 percent in first quarter 2012 and 61.2 percent in second quarter 2011. “Our second quarter expense reduction was in-line with our prior estimates and is reflected in our improved efficiency ratio, which is now within the target range of 55 to 59 percent we cited at our 2012 Investor Day,” said Sloan. “Given the continued momentum in revenue opportunities this quarter, including a record number of mortgage applications, we currently expect fourth quarter 2012 expenses to be higher than our previous target of $11.25 billion. Reflecting these higher revenue opportunities, we believe our efficiency ratio is a better measure of our expense management than specific dollar estimates. For the remainder of 2012, we expect noninterest expense to decline from second quarter 2012 levels and that we will operate within our 55 to 59 percent efficiency ratio range.”

Loans

Total loans were $775.2 billion at June 30, 2012, up $8.7 billion from $766.5 billion at March 31, 2012. Excluding runoff in the non-strategic/liquidating portfolio of $5.1 billion, loans in the core portfolio grew $13.8 billion in the quarter. Included in the core loan growth was $6.9 billion of commercial loans acquired in the quarter from WestLB’s subscription finance loan portfolio and BNP Paribas’s North American energy lending business. In addition, core loan growth was driven by strength in key consumer lending businesses: 1-4 family first mortgages (up $1.6 billion from first quarter 2012), credit cards (up $708 million) due in part to stronger new account growth, and auto (up $1.5 billion).

Average loan balances were down slightly in the second quarter, as the acquisition of WestLB’s subscription finance loan portfolio closed toward the end of the quarter. Many loan portfolios had linked-quarter growth in average balances, including asset backed finance, brokerage services, capital finance, commercial banking, corporate banking, dealer services, equipment finance, mortgage, real estate capital markets and retail sales finance.



	June 30, 2012					March 31, 2012
(in millions)	Core		Liquidating (1)		Total	Core	Liquidating (1)		Total
Commercial	$	349,774	4,278		354,052	340,536	5,213		345,749
Consumer		322,297	98,850		421,147	317,753	103,019		420,772
Total loans	$	672,071	103,128		775,199	658,289	108,232		766,521

Change from prior quarter:	$	13,782	(5,104	)	8,678	984	(4,094	)	(3,110	)

(1) See NON-STRATEGIC AND LIQUIDATING LOAN PORTFOLIOS table for additional information on non-strategic/liquidating loan portfolios. Management believes that the above information provides useful disclosure regarding the Company’s ongoing loan portfolios.

Deposits

Average core deposits were $880.6 billion, up 9 percent from a year ago and up 5 percent (annualized) from first quarter 2012. Average core checking and savings deposits were $820.3 billion, up 12 percent from a year ago and up 6 percent (annualized) from first quarter 2012. Average mortgage escrow deposits were $35.4 billion, compared with $23.9 billion a year ago and $33.0 billion in first quarter 2012. Average core checking and savings deposits were 93 percent of average core deposits, up from 91 percent a year ago. The average deposit cost for second quarter 2012 was 19 basis points, compared with 20 basis points in first quarter 2012. Average core deposits were 115 percent of average loans, up slightly from first quarter 2012.

Capital

Capital increased in the second quarter, with Tier 1 common equity reaching $101.7 billion under Basel I, or 10.08 percent of risk-weighted assets. Based on our interpretation of the latest Basel III capital proposals, including the notices of proposed rulemaking issued by the federal banking agencies in June 2012, the Tier 1 common equity ratio was an estimated 7.78 percent. In the second quarter, the Company purchased approximately 53 million shares of its common stock and an additional estimated 11 million shares through a forward repurchase transaction expected to settle in third quarter 2012, paid quarterly common stock dividends of $0.22 per share, and redeemed $1.8 billion of trust preferred securities, with an average coupon of 6.31 percent, on June 15, 2012.




(as a percent of total risk-weighted assets)	June 30, 2012		Mar. 31, 2012	June 30, 2011
Ratios under Basel I (1):
Tier 1 common equity (2)	10.08	%	9.98	9.15
Tier 1 capital	11.68		11.78	11.69
Tier 1 leverage	9.25		9.35	9.43


(1) June 30, 2012, ratios are preliminary.
(2) See tables on TIER 1 COMMON EQUITY for more information on Tier 1 common equity.

Credit Quality

“Credit quality trends continued to show improvement in the second quarter, with reductions in net losses, nonperforming assets, nonaccrual loans, and loans 90 days or more past due and still accruing,” said Chief Risk Officer Mike Loughlin. Second quarter 2012 net charge-offs were $2.2 billion, or 1.15 percent (annualized) of average loans, down from first quarter 2012 net charge-offs of $2.4 billion (1.25 percent). The loan loss reserve release was $400 million, equal to the release in the first quarter. “Credit performance over the past two years has steadily improved and the second quarter results continued that trend. Absent significant deterioration in the economy, we expect continued but more modest improvement for the remainder of the year, and we continue to expect future reserve releases in 2012,” said Loughlin.


Net Loan Charge-Offs
	Quarter ended
	June 30, 2012				March 31, 2012				December 31, 2011
($ in millions)	Net loan charge- offs		As a % of average loans (1)		Net loan charge- offs		As a % of average loans (1)		Net loan charge- offs			As a % of average loans (1)

Commercial:
Commercial and industrial	$	249	0.58	%	$	256	0.62	%	$	310		0.74		%
Real estate mortgage		81	0.31			46	0.17			117		0.44
Real estate construction		17	0.40			67	1.43			(5	)	(0.09	)
Lease financing		-	-			2	0.06			4		0.13
Foreign		11	0.11			14	0.14			45		0.45
Total commercial		358	0.42			385	0.45			471		0.54

Consumer:
Real estate 1-4 family first mortgage		743	1.30			791	1.39			844		1.46
Real estate 1-4 family junior lien mortgage		689	3.38			763	3.62			800		3.64
Credit card		240	4.37			242	4.40			256		4.63
Other revolving credit and installment		170	0.79			214	0.99			269		1.24
Total consumer		1,842	1.76			2,010	1.91			2,169		2.02
Total	$	2,200	1.15	%	$	2,395	1.25	%	$	2,640		1.36		%


(1) Quarterly net charge-offs as a percentage of average loans are annualized. See explanation in PURCHASED CREDIT-IMPAIRED (PCI) LOANS section of the accounting for purchased credit-impaired (PCI) loans and the impact on selected financial ratios.

Nonperforming Assets

Nonperforming assets declined by $1.8 billion, ending the quarter at $24.9 billion, compared with $26.6 billion in first quarter 2012. Nonaccrual loans decreased to $20.6 billion from $22.0 billion in the first quarter, with declines in both commercial and consumer categories. Foreclosed assets were down to $4.3 billion from $4.6 billion in first quarter 2012.


Nonperforming Assets (Nonaccrual Loans and Foreclosed Assets)
	June 30, 2012					March 31, 2012				December 31, 2011
($ in millions)		Total balances		As a % of total loans			Total balances	As a % of total loans			Total balances		As a % of total loans

Commercial:
Commercial and industrial	$	1,549		0.87	%	$	1,726	1.02	%	$	2,142		1.28	%
Real estate mortgage		3,832		3.63			4,081	3.85			4,085		3.85
Real estate construction		1,421		8.08			1,709	9.21			1,890		9.75
Lease financing		43		0.34			45	0.34			53		0.40
Foreign		79		0.20			38	0.10			47		0.12
Total commercial		6,924		1.96			7,599	2.20			8,217		2.38

Consumer:
Real estate 1-4 family first mortgage		10,368		4.50			10,683	4.67			10,913		4.77
Real estate 1-4 family junior lien mortgage		3,091		3.82			3,558	4.28			1,975		2.30
Other revolving credit and installment		195		0.22			186	0.21			199		0.23
Total consumer		13,654		3.24			14,427	3.43			13,087		3.09
Total nonaccrual loans		20,578		2.65			22,026	2.87			21,304		2.77

Foreclosed assets:
GNMA		1,465					1,352				1,319
Non GNMA		2,842					3,265				3,342
Total foreclosed assets		4,307					4,617				4,661
Total nonperforming assets	$	24,885		3.21	%	$	26,643	3.48	%	$	25,965		3.37	%

Change from prior quarter:
Total nonaccrual loans	$	(1,448	)			$	722			$	(596	)
Total nonperforming assets		(1,758	)				678				(879	)

Loans 90 Days or More Past Due and Still Accruing

Loans 90 days or more past due and still accruing (excluding government insured/guaranteed) totaled $1.4 billion at June 30, 2012, compared with $1.6 billion at March 31, 2012. Loans 90 days or more past due and still accruing with repayments insured by the Federal Housing Administration (FHA) or predominantly guaranteed by the Department of Veterans Affairs (VA) for mortgages and the U.S. Department of Education for student loans under the Federal Family Education Loan Program were $21.5 billion at June 30, 2012, up from $20.9 billion at March 31, 2012, due to growth in the FHA/VA portfolio over the past two years and the subsequent seasoning of those loans.

Allowance for Credit Losses

The allowance for credit losses, including the allowance for unfunded commitments, totaled $18.6 billion at June 30, 2012, down from $19.1 billion at March 31, 2012. The allowance coverage to total loans was 2.41 percent, compared with 2.50 percent in first quarter 2012. The allowance covered 2.11 times annualized second quarter net charge-offs, compared with 1.99 times in the prior quarter. The allowance coverage to nonaccrual loans was 91 percent at June 30, 2012, compared with 87 percent at March 31, 2012. “We believe the allowance was appropriate for losses inherent in the loan portfolio at June 30, 2012,” said Loughlin.

Business Segment Performance

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



	Quarter ended
(in millions)	June 30, 2012		Mar. 31, 2012	June 30, 2011
Community Banking	$	2,535	2,348	2,120
Wholesale Banking		1,881	1,868	1,913
Wealth, Brokerage and Retirement		343	296	337

More financial information about the business segments is in OPERATING SEGMENT RESULTS table and FIVE QUARTER OPERATING SEGMENT RESULTS table.

Community Banking offers a complete line of diversified financial products and services for consumers and small businesses. These products include investment, insurance and trust services in 39 states and D.C., and mortgage and home equity loans in all 50 states and D.C. through its Regional Banking and Wells Fargo Home Mortgage business units.

Selected Financial Information

	Quarter ended
(in millions)	June 30, 2012		Mar. 31, 2012	June 30, 2011
Total revenue	$	13,092	13,421	12,605
Provision for credit losses		1,573	1,878	1,916
Noninterest expense		7,580	7,825	7,412
Segment net income		2,535	2,348	2,120

(in billions)
Average loans		483.9	486.1	497.0
Average assets		746.6	738.3	747.6
Average core deposits		586.1	575.2	552.0

Community Banking reported net income of $2.5 billion, up $187 million, or 8 percent, from first quarter 2012. Revenue decreased $329 million, or 2 percent, from first quarter 2012, primarily due to lower gains on deferred compensation plan investments (offset in employee benefits expense) and planned runoff of non-strategic loan portfolios, partially offset by growth in deposit service charges, trust and investment fees and debit, credit and merchant card transaction volumes. Noninterest expense decreased $245 million, or 3 percent, from first quarter 2012, due to seasonally higher benefits expense in first quarter and lower deferred compensation expense (offset in revenue), partially offset by higher operating losses and higher severance expense associated with our efficiency and cost save initiatives. The provision for credit losses decreased $305 million from first quarter 2012 as net charge-offs declined $180 million and improved credit performance resulted in a $125 million higher reserve release.

Net income was up $415 million, or 20 percent, from second quarter 2011. Revenue increased $487 million, or 4 percent, from second quarter 2011 as a result of higher volume-related mortgage banking income and deposit growth, partially mitigated by higher equity gains in the prior year, planned runoff of non-strategic loan balances and lower debit card revenue due to regulatory changes enacted in October 2011. Noninterest expense increased $168 million, or 2 percent, from second quarter 2011, largely the result of higher mortgage volume-related expenses, operating losses and increased severance expense associated with efficiency and cost save initiatives. The provision for credit losses decreased $343 million from second quarter 2011 due to a $618 million improvement in net charge-offs, offset in part by a lower reserve release.

Regional Banking

Retail banking
- Achieved new Retail Bank cross-sell milestone of 6.00 products per household for the combined company, up from 5.82; cross-sell in the West reached 6.37, compared with 5.52 in the East⁶
- Consumer checking accounts up a net 1.0 percent⁶
- Consumer credit card, lines of credit and loan product solutions (sales) in the retail banking stores were up by double digits from the prior year
- Partner referrals that resulted in a sale, including products such as insurance, mortgage and student lending, were more than 1.5 times the prior year
- Customer experience ratings exceeded last quarter’s record, as customers rated their experience in our retail banking stores at an all-time high, based on survey results
Small Business/Business Banking
- Business checking accounts up a net 3.8 percent⁶
- Business Direct credit card, lines of credit and loan product solutions (primarily under $100,000 sold through our retail banking stores) were more than 1.5 times the prior year
- $7.4 billion in net new loan commitments to small business customers (primarily with annual revenues less than $20 million) in the first half of 2012, up approximately 32 percent from prior year
Online and Mobile Banking
- 21.1 million active online customers⁶
- 8.3 million active mobile customers⁶

Consumer Lending Group

Home Mortgage
- Originations of $131 billion, up from $129 billion in prior quarter
- Applications of $208 billion, compared with $188 billion in prior quarter
- Application pipeline of $102 billion at quarter end, compared with $79 billion at March 31, 2012
- Residential mortgage servicing portfolio of $1.9 trillion
Other Consumer Lending
- Credit card penetration in retail banking households rose to 31.0 percent⁶, up from 29.9 percent in the prior year
- Record auto originations of $6.6 billion, up 6 percent from prior quarter and up 18 percent from prior year

⁶ Data as of May 2012. Comparisons are May 2012 compared with May 2011.

Wholesale Banking provides financial solutions to businesses across the United States and globally with annual sales generally in excess of $20 million. Products & business segments include Middle Market Commercial Banking, Government and Institutional Banking, Corporate Banking, Commercial Real Estate, Treasury Management, Wells Fargo Capital Finance, Insurance, International, Real Estate Capital Markets, Commercial Mortgage Servicing, Corporate Trust, Equipment Finance, Wells Fargo Securities, Principal Investments, Asset Backed Finance, and Asset Management.

Selected Financial Information

	Quarter ended
(in millions)	June 30, 2012		Mar. 31, 2012	June 30, 2011
Total revenue	$	6,117	6,033	5,595
Provision (reversal of provision) for credit losses		188	95	(97	)
Noninterest expense		3,113	3,054	2,761
Segment net income		1,881	1,868	1,913

(in billions)
Average loans		270.2	268.6	242.9
Average assets		478.4	467.8	417.3
Average core deposits		220.9	220.9	190.6

Wholesale Banking reported net income of $1.9 billion, up $13 million from first quarter 2012. Record revenue of $6.1 billion increased 1 percent from first quarter 2012 as strong growth across many businesses, including capital finance, commercial banking, commercial real estate, corporate banking, capital markets, international and real estate capital markets as well as increased PCI resolutions offset lower trading portfolio and equity gains. Noninterest expense increased $59 million, or 2 percent, from first quarter 2012 due to higher non-personnel expenses related to growth initiatives and compliance and regulatory requirements. The provision for credit losses was $188 million and increased $93 million from first quarter 2012 despite a net charge-off improvement of $32 million. The provision also included a $25 million credit reserve build, compared with a $100 million reserve release in first quarter 2012.

Net income was down $32 million, or 2 percent, from second quarter 2011 as higher revenue was offset by an increase in noninterest expense and the provision for credit losses. Revenue increased $522 million, or 9 percent, from second quarter 2011 driven by broad-based business growth, including from acquisitions, and strong loan and deposit growth. Noninterest expense increased $352 million, or 13 percent, from second quarter 2011 due to higher personnel expenses related to revenue growth and higher operating losses. Despite an improvement of $40 million in net charge-offs, the provision for credit losses rose $285 million from second quarter 2011. The provision included a $25 million credit reserve build, compared with a $300 million reserve release a year ago.

11 percent year-over-year average loan and 15 percent average asset growth. The growth came from nearly all portfolios, including asset backed finance, capital finance, commercial banking, commercial real estate, corporate banking and international
Eight straight quarters of average loan growth in Commercial Banking
Average core deposits up 16 percent from prior year
Investment Banking year to date revenue from commercial customers increased 22 percent from 2011 year to date due to attractive capital markets conditions and continued momentum in cross selling
Acquired BNP Paribas’s North American energy lending business in April with nearly $9.4 billion of loan commitments and $3.7 billion in loans outstanding
Acquired WestLB’s subscription finance portfolio in June with nearly $6 billion of loan commitments and $3.2 billion in loans outstanding
Agreement to acquire Merlin Securities LLC, a prime brokerage services and technology provider. Transaction is expected to close in third quarter 2012
Wells Fargo & Company named “Best Trade Bank in USA” for second year in a row by Trade Finance magazine’s online readers poll
Wells Fargo Capital Finance named Best Bank for Supply Chain Finance by Trade & Forfaiting Review, a leading international trade finance publication

Wealth, Brokerage and Retirement provides a full range of financial advisory services to clients using a planning approach to meet each client's needs. Wealth Management provides affluent and high net worth clients with a complete range of wealth management solutions, including financial planning, private banking, credit, investment management and trust. Abbot Downing (formerly branded as Lowry Hill and Wells Fargo Family Wealth) meets the unique needs of ultra high net worth clients. Brokerage serves customers' advisory, brokerage and financial needs as part of one of the largest full-service brokerage firms in the United States. Retirement is a national leader in providing institutional retirement and trust services (including 401(k) and pension plan record keeping) for businesses, retail retirement solutions for individuals, and reinsurance services for the life insurance industry.

Selected Financial Information

	Quarter ended
(in millions)	June 30, 2012		Mar. 31, 2012	June 30, 2011
Total revenue	$	2,971	3,062	3,093
Provision for credit losses		37	43	62
Noninterest expense		2,376	2,547	2,486
Segment net income		343	296	337

(in billions)
Average loans		42.5	42.5	43.5
Average assets		160.9	161.9	150.7
Average core deposits		134.2	135.6	125.9

Wealth, Brokerage and Retirement reported net income of $343 million, up $47 million from first quarter 2012. Revenue was $3.0 billion, down 3 percent from first quarter 2012 due to the impact of the equity market decline on deferred compensation plan investment results (offset in noninterest expense). Apart from the $122 million lower deferred compensation plan investment results, all other revenue was up 1 percent driven by higher asset-based fees, partially offset by lower brokerage transaction revenue. Total provision for credit losses decreased $6 million from first quarter 2012, including a reserve release of $10 million in second quarter 2012. Noninterest expense decreased 7 percent from first quarter 2012 driven by lower deferred compensation plan expense. Excluding $118 million lower deferred compensation plan expense, noninterest expense was down 2 percent primarily due to the first quarter 2012 seasonal impact on personnel expenses, partially offset by increased broker commissions on higher production levels.

Net income was up $6 million from second quarter 2011. Revenue was down 4 percent from second quarter 2011 due to lower brokerage transaction revenue, reduced securities gains in the brokerage business and market impact on deferred compensation plan investments, partially offset by growth in managed account fee revenue. Apart from $33 million lower deferred compensation plan results, all other revenue was down 3 percent. Total provision for credit losses decreased $25 million from second quarter 2011. Noninterest expense was down 4 percent from second quarter 2011 driven by a decline in personnel costs largely due to decreased broker commissions, driven by lower production levels, and lower deferred compensation plan expense. Apart from $34 million lower deferred compensation expense, all other noninterest expenses were down 3 percent.

Retail Brokerage

Strong deposit growth, with average balances up $12 billion, or 14 percent, from prior year
Client assets of $1.2 trillion, down 2 percent with prior year
Managed account assets increased $18 billion, or 7 percent, from prior year driven by strong net flows

Wealth Management

Client assets of $197 billion, down $8 billion, or 4 percent, from prior year

Retirement

Institutional Retirement plan assets of $250 billion, up $3 billion, or 1 percent, from prior year
IRA assets of $282 billion, down $4 billion, or 1 percent, from prior year

Conference Call

The Company will host a live conference call on Friday, July 13, at 7 a.m. PDT (10 a.m. EDT). To access the call, please dial 866-872-5161 (U.S. and Canada) or 706-643-1962 (International). No password is required. The call is also available online at wellsfargo.com/invest_relations/earnings and http://us.meeting-stream.com/wellsfargocompany_041312.

A replay of the conference call will be available beginning at approximately noon PDT (3 p.m. EDT) on July 13 through Friday, July 20. Please dial 855-859-2056 (U.S. and Canada) or 404-537-3406 (International) and enter Conference ID #87775616. The replay will also be available online at wellsfargo.com/invest_relations/earnings.

Cautionary Statement about Forward-Looking Information

In accordance with the Private Securities Litigation Reform Act of 1995, we caution you that this news release contains forward-looking statements about our future financial performance and business. We make forward-looking statements when we use words such as “believe,” “expect,” “anticipate,” “estimate,” “target,” “should,” “may,” “can,” “will,” “outlook,” “project,” “appears” or similar expressions. Forward-looking statements in this news release include, among others, statements about: (i) future credit quality and performance, and the appropriateness of the allowance for loan losses, including our current expectation of future reserve releases in 2012; (ii) our expectations regarding noninterest expense and our targeted efficiency ratio for the remainder of 2012 as part of our expense management initiatives; and (iii) our estimate regarding our Tier 1 common equity ratio under proposed Basel III capital rules as of June 30, 2012.

Do not unduly rely on forward-looking statements as actual results could differ materially from expectations. Forward-looking statements speak only as of the date made, and we do not undertake to update them to reflect changes or events that occur after that date. Several factors could cause actual results to differ materially from expectations including: current and future economic and market conditions, including the effects of further declines in housing prices, high unemployment rates, U.S. fiscal debt and budget matters and the sovereign debt crisis and economic difficulties in Europe; our capital requirements (including under regulatory capital standards as determined and interpreted by applicable regulatory authorities such as the proposed Basel III capital rules) and our ability to generate capital internally or raise capital on favorable terms; financial services reform and other current, pending or future legislation or regulation that could have a negative effect on our revenue and businesses (including the Dodd-Frank Wall Street Reform and Consumer Protection Act), as well as our ability to mitigate the loss of revenue and income from financial services reform and other regulation and legislation; the extent of success in our loan modification efforts, including the effects of regulatory requirements, or changes in regulatory requirements, relating to loan modifications; the amount of mortgage loan repurchase demands that we receive and our ability to satisfy any such demands without having to repurchase loans related thereto or otherwise indemnify or reimburse third parties; negative effects relating to mortgage servicing and foreclosures, as well as effects associated with our settlement with the Department of Justice and other federal and state government entities related to our mortgage servicing and foreclosure practices, including changes in our procedures or practices and/or industry standards or practices, regulatory or judicial requirements, penalties or fines, increased servicing and other costs or obligations, including loan modification requirements, or delays or moratoriums on foreclosures; our ability to realize our efficiency ratio target as part of our expense management initiatives when and in the range targeted, including as a result of business and economic cyclicality, seasonality, changes in our business composition and operating environment, growth in our businesses and/or acquisitions, and unexpected expenses relating to, among other things, litigation and regulatory matters; a failure in or breach of our operational or security systems or infrastructure, or those of our third party vendors and other service providers; recognition of other-than-temporary impairment on securities held in our available-for-sale portfolio; the effect of the current low interest rate environment or changes in interest rates on our net interest margin and our mortgage originations, mortgage servicing rights and mortgages held for sale; hedging gains or losses; disruptions in the capital markets and reduced investor demand for mortgage loans; our ability to sell more products to our customers; the effect of fluctuations in stock market prices on fee income from our brokerage, asset and wealth management businesses; our election to provide support to our money market funds; changes in the value of our venture capital investments; changes in our accounting policies or in accounting standards or in how accounting standards are to be applied; changes in our credit ratings and changes in the credit ratings of our customers or counterparties; mergers and acquisitions; federal and state regulations; reputational damage from negative publicity, fines, penalties and other negative consequences from regulatory violations and legal actions; the loss of checking and saving account deposits to other investments such as the stock market; and fiscal and monetary policies of the Federal Reserve Board. There is no assurance that our allowance for credit losses will be adequate to cover future credit losses, especially if housing prices decline and unemployment worsens. Increases in loan charge-offs or in the allowance for credit losses and related provision expense could materially adversely affect our financial results and condition. For more information about factors that could cause actual results to differ materially from our expectations, refer to our reports filed with the Securities and Exchange Commission, including the discussion under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2011, as filed with the SEC and available on the SEC’s website at www.sec.gov. Any factor described above or in our SEC reports could, by itself or together with one or more other factors, adversely affect our financial results and condition.

About Wells Fargo

Wells Fargo & Company (NYSE: WFC) is a nationwide, diversified, community-based financial services company with $1.3 trillion in assets. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance through more than 9,000 stores, 12,000 ATMs, the Internet (wellsfargo.com), and has offices in more than 35 countries to support the bank’s customers who conduct business in the global economy. With approximately 265,000 full-time equivalent team members, Wells Fargo serves one in three households in United States. Wells Fargo & Company was ranked No. 26 on Fortune’s 2012 rankings of America’s largest corporations. Wells Fargo’s vision is to satisfy all our customers’ financial needs and help them succeed financially.


Wells Fargo & Company and Subsidiaries
QUARTERLY FINANCIAL DATA
TABLE OF CONTENTS

		Pages

Summary Information
Summary Financial Data		16-17

Income
Consolidated Statement of Income		18
Consolidated Statement of Comprehensive Income		19
Condensed Consolidated Statement of Changes in Total Equity		19
Five Quarter Consolidated Statement of Income		20
Average Balances, Yields and Rates Paid (Taxable-Equivalent Basis)		21-22
Noninterest Income and Noninterest Expense		23-24

Balance Sheet
Consolidated Balance Sheet		25-26
Five Quarter Average Balances, Yields and Rates Paid (Taxable-Equivalent Basis)		27
Securities Available for Sale		28

Loans
Loans		28
Nonperforming Assets		29
Loans 90 Days or More Past Due and Still Accruing		30
Purchased Credit-Impaired Loans		31-33
Pick-A-Pay Portfolio		34
Non-Strategic and Liquidating Loan Portfolios		35
Home Equity Portfolios		35
Changes in Allowance for Credit Losses		36-37

Equity
Tier 1 Common Equity		38

Operating Segments
Operating Segment Results		39-40

Other
Mortgage Servicing and other related data		41-43


Wells Fargo & Company and Subsidiaries
SUMMARY FINANCIAL DATA

	Quarter ended June 30,				%			Six months ended June 30,			%
($ in millions, except per share amounts)		2012		2011	Change				2012	2011	Change

For the Period
Wells Fargo net income	$	4,622		3,948	17		%	$	8,870	7,707	15		%
Wells Fargo net income applicable to common stock		4,403		3,728	18				8,425	7,298	15
Diluted earnings per common share		0.82		0.70	17				1.57	1.37	15
Profitability ratios (annualized):
Wells Fargo net income to average assets (ROA)		1.41	%	1.27	11				1.36	1.25	9
Wells Fargo net income applicable to common stock to average Wells Fargo common stockholders' equity (ROE)		12.86		11.92	8				12.51	11.95	5
Efficiency ratio (1)		58.2		61.2	(5	)			59.1	61.9	(5	)
Total revenue	$	21,289		20,386	4			$	42,925	40,715	5
Pre-tax pre-provision profit (PTPP) (2)		8,892		7,911	12				17,535	15,507	13
Dividends declared per common share		0.22		0.12	83				0.44	0.24	83
Average common shares outstanding		5,306.9		5,286.5	-				5,294.9	5,282.7	-
Diluted average common shares outstanding		5,369.9		5,331.7	1				5,354.3	5,329.9	-
Average loans	$	768,223		751,253	2			$	768,403	752,657	2
Average assets		1,321,584		1,250,945	6				1,312,252	1,246,088	5
Average core deposits (3)		880,636		807,483	9				875,576	802,184	9
Average retail core deposits (4)		624,329		592,974	5				620,445	588,561	5
Net interest margin		3.91	%	4.01	(2	)			3.91	4.03	(3	)

At Period End
Securities available for sale	$	226,846		186,298	22			$	226,846	186,298	22
Loans		775,199		751,921	3				775,199	751,921	3
Allowance for loan losses		18,320		20,893	(12	)			18,320	20,893	(12	)
Goodwill		25,406		24,776	3				25,406	24,776	3
Assets		1,336,204		1,259,734	6				1,336,204	1,259,734	6
Core deposits (3)		882,137		808,970	9				882,137	808,970	9
Wells Fargo stockholders' equity		148,070		136,401	9				148,070	136,401	9
Total equity		149,437		137,916	8				149,437	137,916	8
Capital ratios:
Total equity to assets		11.18	%	10.95	2				11.18	10.95	2
Risk-based capital (5):
Tier 1 capital		11.68		11.69	-				11.68	11.69	-
Total capital		14.85		15.41	(4	)			14.85	15.41	(4	)
Tier 1 leverage (5)		9.25		9.43	(2	)			9.25	9.43	(2	)
Tier 1 common equity (5)(6)		10.08		9.15	10				10.08	9.15	10
Common shares outstanding		5,275.7		5,278.2	-				5,275.7	5,278.2	-
Book value per common share	$	26.06		23.84	9			$	26.06	23.84	9
Common stock price:
High		34.59		32.63	6				34.59	34.25	1
Low		29.80		25.26	18				27.94	25.26	11
Period end		33.44		28.06	19				33.44	28.06	19
Team members (active, full-time equivalent)		264,400		266,600	(1	)			264,400	266,600	(1	)


(1) The efficiency ratio is noninterest expense divided by total revenue (net interest income and noninterest income).
(2) Pre-tax pre-provision profit (PTPP) is total revenue less noninterest expense. Management believes that PTPP is a useful financial measure because it enables investors and others to assess the Company's ability to generate capital to cover credit losses through a credit cycle.
(3) Core deposits are noninterest-bearing deposits, interest-bearing checking, savings certificates, certain market rate and other savings, and certain foreign deposits (Eurodollar sweep balances).
(4) Retail core deposits are total core deposits excluding Wholesale Banking core deposits and retail mortgage escrow deposits.
(5) The June 30, 2012, ratios are preliminary.
(6) See the "Five Quarter Tier 1 Common Equity Under Basel I" table for additional information.


Wells Fargo & Company and Subsidiaries
FIVE QUARTER SUMMARY FINANCIAL DATA

	Quarter ended
($ in millions, except per share amounts)	June 30, 2012			Mar. 31, 2012	Dec. 31, 2011	Sept. 30, 2011	June 30, 2011

For the Quarter
Wells Fargo net income	$	4,622		4,248	4,107	4,055	3,948
Wells Fargo net income applicable to common stock		4,403		4,022	3,888	3,839	3,728
Diluted earnings per common share		0.82		0.75	0.73	0.72	0.70
Profitability ratios (annualized):
Wells Fargo net income to average assets (ROA)		1.41	%	1.31	1.25	1.26	1.27
Wells Fargo net income applicable to common stock to average Wells Fargo common stockholders' equity (ROE)		12.86		12.14	11.97	11.86	11.92
Efficiency ratio (1)		58.2		60.1	60.7	59.5	61.2
Total revenue	$	21,289		21,636	20,605	19,628	20,386
Pre-tax pre-provision profit (PTPP) (2)		8,892		8,643	8,097	7,951	7,911
Dividends declared per common share		0.22		0.22	0.12	0.12	0.12
Average common shares outstanding		5,306.9		5,282.6	5,271.9	5,275.5	5,286.5
Diluted average common shares outstanding		5,369.9		5,337.8	5,317.6	5,319.2	5,331.7
Average loans	$	768,223		768,582	768,563	754,544	751,253
Average assets		1,321,584		1,302,921	1,306,728	1,281,369	1,250,945
Average core deposits (3)		880,636		870,516	864,928	836,845	807,483
Average retail core deposits (4)		624,329		616,569	606,810	599,227	592,974
Net interest margin		3.91	%	3.91	3.89	3.84	4.01

At Quarter End
Securities available for sale	$	226,846		230,266	222,613	207,176	186,298
Loans		775,199		766,521	769,631	760,106	751,921
Allowance for loan losses		18,320		18,852	19,372	20,039	20,893
Goodwill		25,406		25,140	25,115	25,038	24,776
Assets		1,336,204		1,333,799	1,313,867	1,304,945	1,259,734
Core deposits (3)		882,137		888,711	872,629	849,632	808,970
Wells Fargo stockholders' equity		148,070		145,516	140,241	137,768	136,401
Total equity		149,437		146,849	141,687	139,244	137,916
Capital ratios:
Total equity to assets		11.18	%	11.01	10.78	10.67	10.95
Risk-based capital (5):
Tier 1 capital		11.68		11.78	11.33	11.26	11.69
Total capital		14.85		15.13	14.76	14.86	15.41
Tier 1 leverage (5)		9.25		9.35	9.03	8.97	9.43
Tier 1 common equity (5)(6)		10.08		9.98	9.46	9.34	9.15
Common shares outstanding		5,275.7		5,301.5	5,262.6	5,272.2	5,278.2
Book value per common share	$	26.06		25.45	24.64	24.13	23.84
Common stock price:
High		34.59		34.59	27.97	29.63	32.63
Low		29.80		27.94	22.61	22.58	25.26
Period end		33.44		34.14	27.56	24.12	28.06
Team members (active, full-time equivalent)		264,400		264,900	264,200	263,800	266,600


(1) The efficiency ratio is noninterest expense divided by total revenue (net interest income and noninterest income).
(2) Pre-tax pre-provision profit (PTPP) is total revenue less noninterest expense. Management believes that PTPP is a useful financial measure because it enables investors and others to assess the Company's ability to generate capital to cover credit losses through a credit cycle.
(3) Core deposits are noninterest-bearing deposits, interest-bearing checking, savings certificates, certain market rate and other savings, and certain foreign deposits (Eurodollar sweep balances).
(4) Retail core deposits are total core deposits excluding Wholesale Banking core deposits and retail mortgage escrow deposits.
(5) The June 30, 2012, ratios are preliminary.
(6) See the "Five Quarter Tier 1 Common Equity under Basel I" table for additional information.


Wells Fargo & Company and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME

	Quarter ended June 30,					%			Six months ended June 30,					%
(in millions, except per share amounts)		2012		2011		Change				2012		2011		Change
Interest income
Trading assets	$	343		347		(1	)	%	$	720		697		3		%
Securities available for sale		2,147		2,166		(1	)			4,235		4,330		(2	)
Mortgages held for sale		477		362		32				936		799		17
Loans held for sale		12		17		(29	)			21		29		(28	)
Loans		9,242		9,361		(1	)			18,439		18,748		(2	)
Other interest income		133		131		2				258		253		2
Total interest income		12,354		12,384		-				24,609		24,856		(1	)
Interest expense
Deposits		443		594		(25	)			900		1,209		(26	)
Short-term borrowings		20		20		-				36		46		(22	)
Long-term debt		789		1,009		(22	)			1,619		2,113		(23	)
Other interest expense		65		83		(22	)			129		159		(19	)
Total interest expense		1,317		1,706		(23	)			2,684		3,527		(24	)
Net interest income		11,037		10,678		3				21,925		21,329		3
Provision for credit losses		1,800		1,838		(2	)			3,795		4,048		(6	)
Net interest income after provision for credit losses		9,237		8,840		4				18,130		17,281		5
Noninterest income
Service charges on deposit accounts		1,139		1,074		6				2,223		2,086		7
Trust and investment fees		2,898		2,944		(2	)			5,737		5,860		(2	)
Card fees		704		1,003		(30	)			1,358		1,960		(31	)
Other fees		1,134		1,023		11				2,229		2,012		11
Mortgage banking		2,893		1,619		79				5,763		3,635		59
Insurance		522		568		(8	)			1,041		1,071		(3	)
Net gains from trading activities		263		414		(36	)			903		1,026		(12	)
Net losses on debt securities available for sale		(61	)	(128	)	(52	)			(68	)	(294	)	(77	)
Net gains from equity investments		242		724		(67	)			606		1,077		(44	)
Operating leases		120		103		17				179		180		(1	)
Other		398		364		9				1,029		773		33
Total noninterest income		10,252		9,708		6				21,000		19,386		8
Noninterest expense
Salaries		3,705		3,584		3				7,306		7,038		4
Commission and incentive compensation		2,354		2,171		8				4,771		4,518		6
Employee benefits		1,049		1,164		(10	)			2,657		2,556		4
Equipment		459		528		(13	)			1,016		1,160		(12	)
Net occupancy		698		749		(7	)			1,402		1,501		(7	)
Core deposit and other intangibles		418		464		(10	)			837		947		(12	)
FDIC and other deposit assessments		333		315		6				690		620		11
Other		3,381		3,500		(3	)			6,711		6,868		(2	)
Total noninterest expense		12,397		12,475		(1	)			25,390		25,208		1
Income before income tax expense		7,092		6,073		17				13,740		11,459		20
Income tax expense		2,371		2,001		18				4,699		3,573		32
Net income before noncontrolling interests		4,721		4,072		16				9,041		7,886		15
Less: Net income from noncontrolling interests		99		124		(20	)			171		179		(4	)
Wells Fargo net income	$	4,622		3,948		17			$	8,870		7,707		15
Less: Preferred stock dividends and other		219		220		-				445		409		9
Wells Fargo net income applicable to common stock	$	4,403		3,728		18			$	8,425		7,298		15
Per share information
Earnings per common share	$	0.83		0.70		19			$	1.59		1.38		15
Diluted earnings per common share		0.82		0.70		17				1.57		1.37		15
Dividends declared per common share		0.22		0.12		83				0.44		0.24		83
Average common shares outstanding		5,306.9		5,286.5		-				5,294.9		5,282.7		-
Diluted average common shares outstanding		5,369.9		5,331.7		1				5,354.3		5,329.9		-

Wells Fargo & Company and Subsidiaries
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

									Six months
	Quarter ended June 30,					%			ended June 30,					%
(in millions)		2012		2011		Change				2012		2011		Change
Wells Fargo net income	$	4,622		3,948		17		%	$	8,870		7,707		15		%
Other comprehensive income, before tax:
Foreign currency translation adjustments:
Net unrealized gains (losses) arising during the period		(56	)	5		NM				(46	)	29		NM
Reclassification of net gains included in net income		(10	)	-		-				(10	)	-		-
Securities available for sale:
Net unrealized gains arising during the period		831		631		32				2,705		1,129		140
Reclassification of net gains included in net income		(23	)	(234	)	(90	)			(249	)	(183	)	36
Derivatives and hedging activities:
Net unrealized gains (losses) arising during the period		(3	)	141		NM				39		137		(72	)
Reclassification of net gains on cash flow hedges included in net income		(99	)	(157	)	(37	)			(206	)	(313	)	(34	)
Defined benefit plans adjustment:
Net actuarial losses arising during the period		(12	)	(2	)	500				(17	)	(3	)	467
Amortization of net actuarial loss and prior service cost included in net income		40		24		67				76		48		58
Other comprehensive income, before tax		668		408		64				2,292		844		172
Income tax expense related to OCI		(255	)	(7	)	NM				(866	)	(164	)	428
Other comprehensive income, net of tax		413		401		3				1,426		680		110
Less: Other comprehensive income from noncontrolling interests		-		-		-				4		(4	)	NM
Wells Fargo other comprehensive income, net of tax		413		401		3				1,422		684		108

Wells Fargo comprehensive income		5,035		4,349		16				10,292		8,391		23
Comprehensive income from noncontrolling interests		99		124		(20	)			175		175		-
Total comprehensive income	$	5,134		4,473		15			$	10,467		8,566		22

NM - Not meaningful

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN TOTAL EQUITY

	Six months ended June 30,
(in millions)		2012		2011
Balance, beginning of period	$	141,687		127,889
Cumulative effect of fair value election for certain residential mortgage servicing rights		2		-
Balance, beginning of period - adjusted		141,689		127,889
Wells Fargo net income		8,870		7,707
Wells Fargo other comprehensive income, net of tax		1,422		684
Common stock issued		1,311		801
Common stock repurchased (1)		(2,101	)	(1,072	)
Preferred stock released by ESOP		677		660
Preferred stock issued		-		2,501
Common stock dividends		(2,336	)	(1,269	)
Preferred stock dividends and other		(445	)	(409	)
Noncontrolling interests and other, net		350		424
Balance, end of period	$	149,437		137,916

(1) For the six months ended June 30, 2012, includes $350 million related to a private forward repurchase transaction entered into in second quarter 2012 that is expected to settle in third quarter 2012 for an estimated 11 million shares of common stock.

Wells Fargo & Company and Subsidiaries
FIVE QUARTER CONSOLIDATED STATEMENT OF INCOME

		Quarter ended
		June 30,		Mar. 31,		Dec. 31,	Sept. 30,		June 30,
(in millions, except per share amounts)		2012		2012		2011	2011		2011
Interest income
Trading assets	$	343		377		400	343		347
Securities available for sale		2,147		2,088		2,092	2,053		2,166
Mortgages held for sale		477		459		456	389		362
Loans held for sale		12		9		16	13		17
Loans		9,242		9,197		9,275	9,224		9,361
Other interest income		133		125		139	156		131
Total interest income		12,354		12,255		12,378	12,178		12,384
Interest expense
Deposits		443		457		507	559		594
Short-term borrowings		20		16		14	20		20
Long-term debt		789		830		885	980		1,009
Other interest expense		65		64		80	77		83
Total interest expense		1,317		1,367		1,486	1,636		1,706
Net interest income		11,037		10,888		10,892	10,542		10,678
Provision for credit losses		1,800		1,995		2,040	1,811		1,838
Net interest income after provision for credit losses		9,237		8,893		8,852	8,731		8,840
Noninterest income
Service charges on deposit accounts		1,139		1,084		1,091	1,103		1,074
Trust and investment fees		2,898		2,839		2,658	2,786		2,944
Card fees		704		654		680	1,013		1,003
Other fees		1,134		1,095		1,096	1,085		1,023
Mortgage banking		2,893		2,870		2,364	1,833		1,619
Insurance		522		519		466	423		568
Net gains (losses) from trading activities		263		640		430	(442	)	414
Net gains (losses) on debt securities available for sale		(61	)	(7	)	48	300		(128	)
Net gains from equity investments		242		364		61	344		724
Operating leases		120		59		60	284		103
Other		398		631		759	357		364
Total noninterest income		10,252		10,748		9,713	9,086		9,708
Noninterest expense
Salaries		3,705		3,601		3,706	3,718		3,584
Commission and incentive compensation		2,354		2,417		2,251	2,088		2,171
Employee benefits		1,049		1,608		1,012	780		1,164
Equipment		459		557		607	516		528
Net occupancy		698		704		759	751		749
Core deposit and other intangibles		418		419		467	466		464
FDIC and other deposit assessments		333		357		314	332		315
Other		3,381		3,330		3,392	3,026		3,500
Total noninterest expense		12,397		12,993		12,508	11,677		12,475
Income before income tax expense		7,092		6,648		6,057	6,140		6,073
Income tax expense		2,371		2,328		1,874	1,998		2,001
Net income before noncontrolling interests		4,721		4,320		4,183	4,142		4,072
Less: Net income from noncontrolling interests		99		72		76	87		124
Wells Fargo net income	$	4,622		4,248		4,107	4,055		3,948
Less: Preferred stock dividends and other		219		226		219	216		220
Wells Fargo net income applicable to common stock	$	4,403		4,022		3,888	3,839		3,728
Per share information
Earnings per common share	$	0.83		0.76		0.74	0.73		0.70
Diluted earnings per common share		0.82		0.75		0.73	0.72		0.70
Dividends declared per common share		0.22		0.22		0.12	0.12		0.12
Average common shares outstanding		5,306.9		5,282.6		5,271.9	5,275.5		5,286.5
Diluted average common shares outstanding		5,369.9		5,337.8		5,317.6	5,319.2		5,331.7

Wells Fargo & Company and Subsidiaries
AVERAGE BALANCES, YIELDS AND RATES PAID (TAXABLE-EQUIVALENT BASIS) (1)(2)

	Quarter ended June 30,
						2012					2011
					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	$	71,250	0.47	%	$	83	98,519	0.32	%	$	80
Trading assets		42,614	3.27			348	38,015	3.71			352
Securities available for sale (3):
Securities of U.S. Treasury and federal agencies		1,954	1.60			8	2,058	2.33			12
Securities of U.S. states and political subdivisions		34,560	4.39			379	22,536	5.35			302
Mortgage-backed securities:
Federal agencies		95,031	3.37			800	70,891	4.76			844
Residential and commercial		33,870	6.97			591	29,981	8.86			664
Total mortgage-backed securities		128,901	4.32			1,391	100,872	5.98			1,508
Other debt and equity securities		48,915	4.39			535	34,580	5.81			502
Total securities available for sale		214,330	4.32			2,313	160,046	5.81			2,324
Mortgages held for sale (4)		49,528	3.86			477	30,674	4.73			362
Loans held for sale (4)		833	5.48			12	1,356	5.05			17
Loans:
Commercial:
Commercial and industrial		171,776	4.21			1,801	153,630	4.60			1,761
Real estate mortgage		105,509	4.60			1,208	101,437	4.16			1,051
Real estate construction		17,943	4.96			221	21,987	4.64			254
Lease financing		12,890	6.86			221	12,899	7.72			249
Foreign		38,917	2.57			249	36,445	2.65			241
Total commercial		347,035	4.28			3,700	326,398	4.37			3,556
Consumer:
Real estate 1-4 family first mortgage		230,065	4.62			2,658	224,873	4.97			2,792
Real estate 1-4 family junior lien mortgage		82,076	4.30			878	91,934	4.25			975
Credit card		22,065	12.70			697	20,954	12.97			679
Other revolving credit and installment		86,982	6.09			1,317	87,094	6.32			1,372
Total consumer		421,188	5.29			5,550	424,855	5.48			5,818
Total loans (4)		768,223	4.83			9,250	751,253	5.00			9,374
Other		4,486	4.56			51	4,997	4.10			52
Total earning assets	$	1,151,264	4.37	%	$	12,534	1,084,860	4.64	%	$	12,561
Funding sources
Deposits:
Interest-bearing checking	$	30,440	0.07	%	$	5	53,344	0.09	%	$	12
Market rate and other savings		500,327	0.12			152	455,126	0.20			226
Savings certificates		60,341	1.34			200	72,100	1.42			256
Other time deposits		12,803	1.83			59	12,988	2.03			67
Deposits in foreign offices		65,587	0.17			27	57,899	0.23			33
Total interest-bearing deposits		669,498	0.27			443	651,457	0.37			594
Short-term borrowings		51,698	0.19			24	53,340	0.18			24
Long-term debt		127,660	2.48			789	145,431	2.78			1,009
Other liabilities		10,408	2.48			65	10,978	3.03			83
Total interest-bearing liabilities		859,264	0.62			1,321	861,206	0.80			1,710
Portion of noninterest-bearing funding sources		292,000	-			-	223,654	-			-
Total funding sources	$	1,151,264	0.46			1,321	1,084,860	0.63			1,710
Net interest margin and net interest income on a taxable-equivalent basis (5)			3.91	%	$	11,213		4.01	%	$	10,851
Noninterest-earning assets
Cash and due from banks	$	16,200					17,373
Goodwill		25,332					24,773
Other		128,788					123,939
Total noninterest-earning assets	$	170,320					166,085
Noninterest-bearing funding sources
Deposits	$	254,442					199,339
Other liabilities		58,441					53,169
Total equity		149,437					137,231
Noninterest-bearing funding sources used to fund earning assets		(292,000)					(223,654)
Net noninterest-bearing funding sources	$	170,320					166,085
Total assets	$	1,321,584					1,250,945


(1) Our average prime rate was 3.25% for the quarters ended June 30, 2012 and 2011. The average three-month London Interbank Offered Rate (LIBOR) was 0.47% and 0.26% for the same quarters, respectively.
(2) Yield/rates and amounts include the effects of hedge and risk management activities associated with the respective asset and liability categories.
(3) Yields and rates are based on interest income/expense amounts for the period, annualized based on the accrual basis for the respective accounts. The average balance amounts represent amortized cost for the periods presented.
(4) Nonaccrual loans and related income are included in their respective loan categories.
(5) Includes taxable-equivalent adjustments of $176 million and $173 million for the quarters ended June 30, 2012 and 2011, respectively, 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)

	Six months ended June 30,
							2012						2011
							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	$	63,635		0.49	%	$	156	90,994		0.34	%	$	152
Trading assets		43,190		3.39			731	37,711		3.76			708
Securities available for sale (3):
Securities of U.S. Treasury and federal agencies		3,875		1.13			22	1,804		2.56			23
Securities of U.S. states and political subdivisions		33,578		4.45			747	21,220		5.39			572
Mortgage-backed securities:
Federal agencies		93,165		3.43			1,597	70,656		4.74			1,676
Residential and commercial		34,201		6.89			1,178	30,104		9.28			1,396
Total mortgage-backed securities		127,366		4.36			2,775	100,760		6.10			3,072
Other debt and equity securities		49,658		4.10			1,015	34,093		5.68			967
Total securities available for sale		214,477		4.26			4,559	157,877		5.87			4,634
Mortgages held for sale (4)		48,218		3.88			936	34,686		4.61			799
Loans held for sale (4)		790		5.29			21	1,167		4.98			29
Loans:
Commercial:
Commercial and industrial		169,279		4.20			3,534	151,849		4.62			3,484
Real estate mortgage		105,750		4.33			2,280	100,621		4.04			2,018
Real estate construction		18,337		4.87			444	23,128		4.44			509
Lease financing		13,009		7.89			513	12,959		7.78			504
Foreign		40,042		2.54			507	35,050		2.73			476
Total commercial		346,417		4.22			7,278	323,607		4.35			6,991
Consumer:
Real estate 1-4 family first mortgage		229,859		4.66			5,346	227,208		4.99			5,659
Real estate 1-4 family junior lien mortgage		83,397		4.28			1,778	93,313		4.30			1,993
Credit card		22,097		12.81			1,408	21,230		13.08			1,388
Other revolving credit and installment		86,633		6.14			2,646	87,299		6.34			2,743
Total consumer		421,986		5.31			11,178	429,050		5.51			11,783
Total loans (4)		768,403		4.82			18,456	752,657		5.01			18,774
Other		4,545		4.49			103	5,111		4.00			102
Total earning assets	$	1,143,258		4.38	%	$	24,962	1,080,203		4.69	%	$	25,198
Funding sources
Deposits:
Interest-bearing checking	$	31,299		0.06	%	$	10	55,909		0.09	%	$	26
Market rate and other savings		498,177		0.12			305	449,388		0.21			463
Savings certificates		61,515		1.35			413	73,229		1.41			511
Other time deposits		12,727		1.88			119	13,417		2.14			143
Deposits in foreign offices		65,217		0.16			53	57,687		0.23			66
Total interest-bearing deposits		668,935		0.27			900	649,630		0.38			1,209
Short-term borrowings		50,040		0.17			43	54,041		0.20			54
Long-term debt		127,599		2.54			1,619	147,774		2.86			2,113
Other liabilities		10,105		2.55			129	10,230		3.13			159
Total interest-bearing liabilities		856,679		0.63			2,691	861,675		0.82			3,535
Portion of noninterest-bearing funding sources		286,579		-			-	218,528		-			-
Total funding sources	$	1,143,258		0.47			2,691	1,080,203		0.66			3,535
Net interest margin and net interest income on a taxable-equivalent basis (5)				3.91	%	$	22,271			4.03	%	$	21,663
Noninterest-earning assets
Cash and due from banks	$	16,587						17,367
Goodwill		25,230						24,774
Other		127,177						123,744
Total noninterest-earning assets	$	168,994						165,885
Noninterest-bearing funding sources
Deposits	$	250,528						196,237
Other liabilities		57,821						54,237
Total equity		147,224						133,939
Noninterest-bearing funding sources used to fund earning assets		(286,579	)					(218,528	)
Net noninterest-bearing funding sources	$	168,994						165,885
Total assets	$	1,312,252						1,246,088


(1) Our average prime rate was 3.25% for the six months ended June 30, 2012 and 2011. The average three-month London Interbank Offered Rate (LIBOR) was 0.49% and 0.29% for the same periods, respectively.
(2) Yield/rates and amounts include the effects of hedge and risk management activities associated with the respective asset and liability categories.
(3) Yields and rates are based on interest income/expense amounts for the period, annualized based on the accrual basis for the respective accounts. The average balance amounts represent amortized cost for the periods presented.
(4) Nonaccrual loans and related income are included in their respective loan categories.
(5) Includes taxable-equivalent adjustments of $346 million and $334 million for the six months ended June 30, 2012 and 2011, respectively, primarily related to tax-exempt income on certain loans and securities. The federal statutory tax rate was 35% for the periods presented.

Wells Fargo & Company and Subsidiaries
NONINTEREST INCOME

										Six months
	Quarter ended June 30,					%				ended June 30,				%
(in millions)		2012		2011		Change				2012		2011		Change
Service charges on deposit accounts	$	1,139		1,074		6		%	$	2,223		2,086		7		%
Trust and investment fees:
Trust, investment and IRA fees		1,041		1,020		2				2,065		2,080		(1	)
Commissions and all other fees		1,857		1,924		(3	)			3,672		3,780		(3	)
Total trust and investment fees		2,898		2,944		(2	)			5,737		5,860		(2	)
Card fees		704		1,003		(30	)			1,358		1,960		(31	)
Other fees:
Cash network fees		120		94		28				238		175		36
Charges and fees on loans		427		404		6				872		801		9
Processing and all other fees		587		525		12				1,119		1,036		8
Total other fees		1,134		1,023		11				2,229		2,012		11
Mortgage banking:
Servicing income, net		679		877		(23	)			931		1,743		(47	)
Net gains on mortgage loan origination/sales activities		2,214		742		198				4,832		1,892		155
Total mortgage banking		2,893		1,619		79				5,763		3,635		59
Insurance		522		568		(8	)			1,041		1,071		(3	)
Net gains from trading activities		263		414		(36	)			903		1,026		(12	)
Net losses on debt securities available for sale		(61	)	(128	)	(52	)			(68	)	(294	)	(77	)
Net gains from equity investments		242		724		(67	)			606		1,077		(44	)
Operating leases		120		103		17				179		180		(1	)
All other		398		364		9				1,029		773		33
Total	$	10,252		9,708		6			$	21,000		19,386		8

NONINTEREST EXPENSE

								Six months
		Quarter ended June 30,		%				ended June 30,		%
(in millions)		2012	2011	Change				2012	2011	Change
Salaries	$	3,705	3,584	3		%	$	7,306	7,038	4		%
Commission and incentive compensation		2,354	2,171	8				4,771	4,518	6
Employee benefits		1,049	1,164	(10	)			2,657	2,556	4
Equipment		459	528	(13	)			1,016	1,160	(12	)
Net occupancy		698	749	(7	)			1,402	1,501	(7	)
Core deposit and other intangibles		418	464	(10	)			837	947	(12	)
FDIC and other deposit assessments		333	315	6				690	620	11
Outside professional services		658	659	-				1,252	1,239	1
Contract services		236	341	(31	)			539	710	(24	)
Foreclosed assets		289	305	(5	)			593	713	(17	)
Operating losses		524	428	22				1,001	900	11
Postage, stationery and supplies		195	236	(17	)			411	471	(13	)
Outside data processing		233	232	-				449	452	(1	)
Travel and entertainment		218	205	6				420	411	2
Advertising and promotion		144	166	(13	)			266	282	(6	)
Telecommunications		127	132	(4	)			251	266	(6	)
Insurance		183	201	(9	)			340	334	2
Operating leases		27	31	(13	)			55	55	-
All other		547	564	(3	)			1,134	1,035	10
Total	$	12,397	12,475	(1	)		$	25,390	25,208	1

Wells Fargo & Company and Subsidiaries
FIVE QUARTER NONINTEREST INCOME

		Quarter ended
		June 30,		Mar. 31,		Dec. 31,	Sept. 30,		June 30,
(in millions)		2012		2012		2011	2011		2011
Service charges on deposit accounts	$	1,139		1,084		1,091	1,103		1,074
Trust and investment fees:
Trust, investment and IRA fees		1,041		1,024		1,000	1,019		1,020
Commissions and all other fees		1,857		1,815		1,658	1,767		1,924
Total trust and investment fees		2,898		2,839		2,658	2,786		2,944
Card fees		704		654		680	1,013		1,003
Other fees:
Cash network fees		120		118		109	105		94
Charges and fees on loans		427		445		402	438		404
Processing and all other fees		587		532		585	542		525
Total other fees		1,134		1,095		1,096	1,085		1,023
Mortgage banking:
Servicing income, net		679		252		493	1,030		877
Net gains on mortgage loan origination/sales activities		2,214		2,618		1,871	803		742
Total mortgage banking		2,893		2,870		2,364	1,833		1,619
Insurance		522		519		466	423		568
Net gains (losses) from trading activities		263		640		430	(442	)	414
Net gains (losses) on debt securities available for sale		(61	)	(7	)	48	300		(128	)
Net gains from equity investments		242		364		61	344		724
Operating leases		120		59		60	284		103
All other		398		631		759	357		364
Total	$	10,252		10,748		9,713	9,086		9,708

FIVE QUARTER NONINTEREST EXPENSE

		Quarter ended
		June 30,		Mar. 31,		Dec. 31,	Sept. 30,		June 30,
(in millions)		2012		2012		2011	2011		2011
Salaries	$	3,705		3,601		3,706	3,718		3,584
Commission and incentive compensation		2,354		2,417		2,251	2,088		2,171
Employee benefits		1,049		1,608		1,012	780		1,164
Equipment		459		557		607	516		528
Net occupancy		698		704		759	751		749
Core deposit and other intangibles		418		419		467	466		464
FDIC and other deposit assessments		333		357		314	332		315
Outside professional services		658		594		813	640		659
Contract services		236		303		356	341		341
Foreclosed assets		289		304		370	271		305
Operating losses		524		477		163	198		428
Postage, stationery and supplies		195		216		231	240		236
Outside data processing		233		216		257	226		232
Travel and entertainment		218		202		212	198		205
Advertising and promotion		144		122		166	159		166
Telecommunications		127		124		129	128		132
Insurance		183		157		87	94		201
Operating leases		27		28		28	29		31
All other		547		587		580	502		564
Total	$	12,397		12,993		12,508	11,677		12,475

Wells Fargo & Company and Subsidiaries
CONSOLIDATED BALANCE SHEET

		June 30,		Dec. 31,		%
(in millions, except shares)		2012		2011		Change
Assets
Cash and due from banks	$	16,811		19,440		(14	)	%
Federal funds sold, securities purchased under resale agreements and other short-term investments		74,635		44,367		68
Trading assets		64,419		77,814		(17	)
Securities available for sale		226,846		222,613		2
Mortgages held for sale (includes $46,621 and $44,791 carried at fair value)		50,462		48,357		4
Loans held for sale (includes $730 and $1,176 carried at fair value)		853		1,338		(36	)

Loans (includes $6,083 and $5,916 carried at fair value)		775,199		769,631		1
Allowance for loan losses		(18,320	)	(19,372	)	(5	)
Net loans		756,879		750,259		1
Mortgage servicing rights:
Measured at fair value		12,081		12,603		(4	)
Amortized		1,130		1,408		(20	)
Premises and equipment, net		9,317		9,531		(2	)
Goodwill		25,406		25,115		1
Other assets		97,365		101,022		(4	)
Total assets	$	1,336,204		1,313,867		2
Liabilities
Noninterest-bearing deposits	$	253,999		244,003		4
Interest-bearing deposits		674,934		676,067		-
Total deposits		928,933		920,070		1
Short-term borrowings		56,023		49,091		14
Accrued expenses and other liabilities		76,827		77,665		(1	)
Long-term debt (includes $208 and $0 carried at fair value)		124,984		125,354		-
Total liabilities		1,186,767		1,172,180		1
Equity
Wells Fargo stockholders' equity:
Preferred stock		11,694		11,431		2
Common stock – $1-2/3 par value, authorized 9,000,000,000 shares; issued 5,432,624,738 and 5,358,522,061 shares		9,054		8,931		1
Additional paid-in capital		58,091		55,957		4
Retained earnings		70,456		64,385		9
Cumulative other comprehensive income		4,629		3,207		44
Treasury stock – 156,892,121 shares and 95,910,425 shares		(4,638	)	(2,744	)	69
Unearned ESOP shares		(1,216	)	(926	)	31
Total Wells Fargo stockholders' equity		148,070		140,241		6
Noncontrolling interests		1,367		1,446		(5	)
Total equity		149,437		141,687		5
Total liabilities and equity	$	1,336,204		1,313,867		2

Wells Fargo & Company and Subsidiaries
FIVE QUARTER CONSOLIDATED BALANCE SHEET

		June 30,		Mar. 31,		Dec. 31,		Sept. 30,		June 30,
(in millions)		2012		2012		2011		2011		2011
Assets
Cash and due from banks	$	16,811		17,000		19,440		18,314		24,059
Federal funds sold, securities purchased under resale agreements and other short-term investments		74,635		74,143		44,367		89,804		88,406
Trading assets		64,419		75,696		77,814		57,786		54,770
Securities available for sale		226,846		230,266		222,613		207,176		186,298
Mortgages held for sale		50,462		43,449		48,357		42,704		31,254
Loans held for sale		853		958		1,338		743		1,512

Loans		775,199		766,521		769,631		760,106		751,921
Allowance for loan losses		(18,320	)	(18,852	)	(19,372	)	(20,039	)	(20,893	)
Net loans		756,879		747,669		750,259		740,067		731,028
Mortgage servicing rights:
Measured at fair value		12,081		13,578		12,603		12,372		14,778
Amortized		1,130		1,074		1,408		1,397		1,422
Premises and equipment, net		9,317		9,291		9,531		9,607		9,613
Goodwill		25,406		25,140		25,115		25,038		24,776
Other assets		97,365		95,535		101,022		99,937		91,818
Total assets	$	1,336,204		1,333,799		1,313,867		1,304,945		1,259,734
Liabilities
Noninterest-bearing deposits	$	253,999		255,013		244,003		229,863		202,143
Interest-bearing deposits		674,934		675,254		676,067		665,565		651,492
Total deposits		928,933		930,267		920,070		895,428		853,635
Short-term borrowings		56,023		50,964		49,091		50,775		53,881
Accrued expenses and other liabilities		76,827		75,967		77,665		86,284		71,430
Long-term debt		124,984		129,752		125,354		133,214		142,872
Total liabilities		1,186,767		1,186,950		1,172,180		1,165,701		1,121,818
Equity
Wells Fargo stockholders' equity:
Preferred stock		11,694		12,101		11,431		11,566		11,730
Common stock		9,054		9,008		8,931		8,902		8,876
Additional paid-in capital		58,091		57,569		55,957		55,495		55,226
Retained earnings		70,456		67,239		64,385		61,135		57,942
Cumulative other comprehensive income		4,629		4,216		3,207		3,828		5,422
Treasury stock		(4,638	)	(2,958	)	(2,744	)	(2,087	)	(1,546	)
Unearned ESOP shares		(1,216	)	(1,659	)	(926	)	(1,071	)	(1,249	)
Total Wells Fargo stockholders' equity		148,070		145,516		140,241		137,768		136,401
Noncontrolling interests		1,367		1,333		1,446		1,476		1,515
Total equity		149,437		146,849		141,687		139,244		137,916
Total liabilities and equity	$	1,336,204		1,333,799		1,313,867		1,304,945		1,259,734

Wells Fargo & Company and Subsidiaries
FIVE QUARTER AVERAGE BALANCES, YIELDS AND RATES PAID (TAXABLE-EQUIVALENT BASIS) (1)

		Quarter ended
		June 30, 2012					Mar. 31, 2012					Dec. 31, 2011					Sept. 30, 2011					June 30, 2011
		Average		Yields/			Average		Yields/			Average		Yields/			Average		Yields/			Average		Yields/
($ in billions)		balance		rates			balance		rates			balance		rates			balance		rates			balance		rates
Earning assets
Federal funds sold, securities purchased under resale agreements and other short-term investments	$	71.3		0.47	%	$	56.0		0.52	%	$	68.0		0.52	%	$	98.9		0.42	%	$	98.5		0.32	%
Trading assets		42.6		3.27			43.8		3.50			45.5		3.57			37.9		3.67			38.0		3.71
Securities available for sale (2):
Securities of U.S. Treasury and federal agencies		2.0		1.60			5.8		0.97			8.7		0.99			9.6		1.02			2.0		2.33
Securities of U.S. states and political subdivisions		34.5		4.39			32.6		4.52			28.0		4.80			25.6		4.93			22.5		5.35
Mortgage-backed securities:
Federal agencies		95.0		3.37			91.3		3.49			84.3		3.68			72.8		4.41			70.9		4.76
Residential and commercial		33.9		6.97			34.5		6.80			34.7		7.05			32.6		7.46			30.0		8.86
Total mortgage-backed securities		128.9		4.32			125.8		4.40			119.0		4.66			105.4		5.36			100.9		5.98
Other debt and equity securities		48.9		4.39			50.4		3.82			47.3		4.38			38.9		4.69			34.6		5.81
Total securities available for sale		214.3		4.32			214.6		4.19			203.0		4.46			179.5		4.92			160.0		5.81
Mortgages held for sale		49.5		3.86			46.9		3.91			44.8		4.07			34.6		4.49			30.7		4.73
Loans held for sale		0.9		5.48			0.8		5.09			1.1		5.84			1.0		5.21			1.3		5.05
Loans:
Commercial:
Commercial and industrial		171.8		4.21			166.8		4.18			166.9		4.08			159.6		4.22			153.6		4.60
Real estate mortgage		105.5		4.60			106.0		4.07			105.2		4.26			102.4		3.93			101.5		4.16
Real estate construction		17.9		4.96			18.7		4.79			19.6		4.61			20.5		6.12			22.0		4.64
Lease financing		12.9		6.86			13.1		8.89			12.9		7.41			13.0		7.21			12.9		7.72
Foreign		38.9		2.57			41.2		2.52			38.8		2.39			38.2		2.42			36.4		2.65
Total commercial		347.0		4.28			345.8		4.16			343.4		4.10			333.7		4.16			326.4		4.37
Consumer:
Real estate 1-4 family first mortgage		230.0		4.62			229.7		4.69			229.8		4.74			223.8		4.83			224.9		4.97
Real estate 1-4 family junior lien mortgage		82.1		4.30			84.7		4.27			87.2		4.34			89.1		4.37			91.9		4.25
Credit card		22.1		12.70			22.1		12.93			21.9		12.96			21.5		12.96			21.0		12.97
Other revolving credit and installment		87.0		6.09			86.3		6.19			86.3		6.23			86.5		6.25			87.1		6.32
Total consumer		421.2		5.29			422.8		5.34			425.2		5.39			420.9		5.44			424.9		5.48
Total loans		768.2		4.83			768.6		4.81			768.6		4.81			754.6		4.87			751.3		5.00
Other		4.5		4.56			4.6		4.42			4.7		4.32			4.9		4.18			5.0		4.10
Total earning assets	$	1,151.3		4.37	%	$	1,135.3		4.39	%	$	1,135.7		4.41	%	$	1,111.4		4.43	%	$	1,084.8		4.64	%
Funding sources
Deposits:
Interest-bearing checking	$	30.4		0.07	%	$	32.2		0.05	%	$	35.3		0.06	%	$	44.0		0.07	%	$	53.3		0.09	%
Market rate and other savings		500.3		0.12			496.0		0.12			485.1		0.14			473.4		0.17			455.1		0.20
Savings certificates		60.4		1.34			62.7		1.36			64.9		1.43			67.6		1.47			72.1		1.42
Other time deposits		12.8		1.83			12.7		1.93			12.9		1.85			12.8		2.02			13.0		2.03
Deposits in foreign offices		65.6		0.17			64.8		0.16			67.2		0.20			63.5		0.23			57.9		0.23
Total interest-bearing deposits		669.5		0.27			668.4		0.27			665.4		0.30			661.3		0.34			651.4		0.37
Short-term borrowings		51.7		0.19			48.4		0.15			48.7		0.14			50.4		0.18			53.3		0.18
Long-term debt		127.7		2.48			127.5		2.60			129.4		2.73			139.5		2.81			145.5		2.78
Other liabilities		10.4		2.48			9.8		2.63			12.2		2.60			11.2		2.75			11.0		3.03
Total interest-bearing liabilities		859.3		0.62			854.1		0.64			855.7		0.69			862.4		0.76			861.2		0.80
Portion of noninterest-bearing funding sources		292.0		-			281.2		-			280.0		-			249.0		-			223.6		-
Total funding sources	$	1,151.3		0.46		$	1,135.3		0.48		$	1,135.7		0.52		$	1,111.4		0.59		$	1,084.8		0.63
Net interest margin on a taxable-equivalent basis				3.91	%				3.91	%				3.89	%				3.84	%				4.01	%
Noninterest-earning assets
Cash and due from banks	$	16.2					17.0					17.7					17.1					17.4
Goodwill		25.3					25.1					25.1					25.0					24.8
Other		128.8					125.5					128.2					127.9					123.9
Total noninterest-earnings assets	$	170.3					167.6					171.0					170.0					166.1
Noninterest-bearing funding sources
Deposits	$	254.5					246.6					246.7					221.2					199.3
Other liabilities		58.4					57.2					63.5					57.5					53.2
Total equity		149.4					145.0					140.8					140.3					137.2
Noninterest-bearing funding sources used to fund earning assets		(292.0	)				(281.2	)				(280.0	)				(249.0	)				(223.6	)
Net noninterest-bearing funding sources	$	170.3					167.6					171.0					170.0					166.1
Total assets	$	1,321.6					1,302.9					1,306.7					1,281.4					1,250.9


(1) Our average prime rate was 3.25% for quarters ended June 30 and March 31, 2012, and December 31, September 30, and June 30, 2011. The average three-month London Interbank Offered Rate (LIBOR) was 0.47%, 0.51%, 0.48%, 0.30% and 0.26% for the same quarters, respectively.
(2) Yields and rates are based on interest income/expense amounts for the period, annualized based on the accrual basis for the respective accounts. The average balance amounts represent amortized cost for the periods presented.

Wells Fargo & Company and Subsidiaries
FIVE QUARTER SECURITIES AVAILABLE FOR SALE

		June 30,	Mar. 31,	Dec. 31,	Sept. 30,	June 30,
(in millions)		2012	2012	2011	2011	2011
Securities of U.S. Treasury and federal agencies	$	1,493	4,678	6,968	13,813	10,523
Securities of U.S. states and political subdivisions		37,251	34,237	32,593	26,970	24,412
Mortgage-backed securities:
Federal agencies		101,863	102,665	96,754	84,716	78,338
Residential and commercial		35,646	36,486	35,986	35,159	33,088
Total mortgage-backed securities		137,509	139,151	132,740	119,875	111,426
Other debt securities		47,746	49,047	46,895	42,925	35,582
Total debt securities available for sale		223,999	227,113	219,196	203,583	181,943
Marketable equity securities		2,847	3,153	3,417	3,593	4,355
Total securities available for sale	$	226,846	230,266	222,613	207,176	186,298

FIVE QUARTER LOANS

		June 30,	Mar. 31,	Dec. 31,	Sept. 30,	June 30,
(in millions)		2012	2012	2011	2011	2011
Commercial:
Commercial and industrial	$	177,646	168,546	167,216	164,510	157,095
Real estate mortgage		105,666	105,874	105,975	104,363	101,458
Real estate construction		17,594	18,549	19,382	19,719	21,374
Lease financing		12,729	13,143	13,117	12,852	12,907
Foreign (1)		40,417	39,637	39,760	38,390	37,855
Total commercial		354,052	345,749	345,450	339,834	330,689
Consumer:
Real estate 1-4 family first mortgage		230,263	228,885	228,894	223,758	222,874
Real estate 1-4 family junior lien mortgage		80,881	83,173	85,991	88,264	89,947
Credit card		22,706	21,998	22,836	21,650	21,191
Other revolving credit and installment		87,297	86,716	86,460	86,600	87,220
Total consumer		421,147	420,772	424,181	420,272	421,232
Total loans (2)	$	775,199	766,521	769,631	760,106	751,921

(1) Substantially all of our foreign loan portfolio is commercial loans. Loans are classified as foreign if the borrower's primary address is outside of the United States.
(2) Includes $33.8 billion, $35.5 billion, $36.7 billion, $37.2 billion and $38.7 billion of purchased credit-impaired (PCI) loans at June 30 and March 31, 2012, and December 31, September 30 and June 30, 2011, respectively. See the PCI loans table for detail of PCI loans.

Wells Fargo & Company and Subsidiaries
FIVE QUARTER NONPERFORMING ASSETS (NONACCRUAL LOANS AND FORECLOSED ASSETS)

		June 30,		Mar. 31,	Dec. 31,	Sept. 30,	June 30,
(in millions)		2012		2012	2011	2011	2011
Nonaccrual loans:
Commercial:
Commercial and industrial	$	1,549		1,726	2,142	2,128	2,393
Real estate mortgage		3,832		4,081	4,085	4,429	4,691
Real estate construction		1,421		1,709	1,890	1,915	2,043
Lease financing		43		45	53	71	79
Foreign		79		38	47	68	59
Total commercial		6,924		7,599	8,217	8,611	9,265
Consumer:
Real estate 1-4 family first mortgage		10,368		10,683	10,913	11,024	11,427
Real estate 1-4 family junior lien mortgage (1)		3,091		3,558	1,975	2,035	2,098
Other revolving credit and installment		195		186	199	230	255
Total consumer		13,654		14,427	13,087	13,289	13,780
Total nonaccrual loans (2)(3)(4)		20,578		22,026	21,304	21,900	23,045
As a percentage of total loans		2.65	%	2.87	2.77	2.88	3.06
Foreclosed assets:
Government insured/guaranteed (5)	$	1,465		1,352	1,319	1,336	1,320
Non-government insured/guaranteed		2,842		3,265	3,342	3,608	3,541
Total foreclosed assets		4,307		4,617	4,661	4,944	4,861
Total nonperforming assets	$	24,885		26,643	25,965	26,844	27,906
As a percentage of total loans		3.21	%	3.48	3.37	3.53	3.71


(1) Includes $1.7 billion at March 31, 2012, resulting from implementation of the Interagency Supervisory Guidance on Allowance for Loan and Lease Losses Estimation Practices for Loans and Lines of Credit Secured by Junior Liens on 1-4 Family Residential Properties issued on January 31, 2012. This guidance accelerated the timing of placing these loans on nonaccrual to coincide with the timing of placing the related real estate 1-4 family first mortgage loans on nonaccrual.
(2) Also includes nonaccrual mortgages held for sale and loans held for sale in their respective loan categories.
(3) Excludes PCI loans because they continue to earn interest income from accretable yield, independent of performance in accordance with their contractual terms.
(4) Real estate 1-4 family mortgage loans insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA) and student loans predominantly guaranteed by agencies on behalf of the U.S. Department of Education under the Federal Family Education Loan Program are not placed on nonaccrual status because they are insured or guaranteed.
(5) Consistent with regulatory reporting requirements, foreclosed real estate securing government insured/guaranteed loans is classified as nonperforming. Both principal and interest for government insured/guaranteed loans secured by the foreclosed real estate are collectible because the loans are insured by the FHA or guaranteed by the VA.

Wells Fargo & Company and Subsidiaries
LOANS 90 DAYS OR MORE PAST DUE AND STILL ACCRUING

		June 30,	Mar. 31,	Dec. 31,	Sept. 30,	June 30,
(in millions)		2012	2012	2011	2011	2011
Loans 90 days or more past due and still accruing:
Total (excluding PCI)(1):	$	22,872	22,555	22,569	19,639	17,318
Less: FHA insured/VA guaranteed (2)		20,368	19,681	19,240	16,498	14,474
Less: Student loans guaranteed under the FFELP (3)		1,144	1,238	1,281	1,212	1,014
Total, not government insured/guaranteed	$	1,360	1,636	2,048	1,929	1,830

By segment and class, not government insured/guaranteed:
Commercial:
Commercial and industrial	$	44	104	153	108	110
Real estate mortgage		184	289	256	207	137
Real estate construction		25	25	89	57	86
Foreign		3	7	6	11	12
Total commercial		256	425	504	383	345
Consumer:
Real estate 1-4 family first mortgage (4)		561	616	781	819	728
Real estate 1-4 family junior lien mortgage (4)(5)		159	156	279	255	286
Credit card		274	319	346	328	334
Other revolving credit and installment		110	120	138	144	137
Total consumer		1,104	1,211	1,544	1,546	1,485
Total, not government insured/guaranteed	$	1,360	1,636	2,048	1,929	1,830

(1) The carrying value of purchased credit-impaired (PCI) loans contractually 90 days or more past due was $6.6 billion, $7.1 billion, $8.7 billion, $8.9 billion and $9.8 billion at June 30 and March 31, 2012, and December 31, September 30 and June 30, 2011, respectively. These amounts are excluded from the above table as PCI loan accretable yield interest recognition is independent from the underlying contractual loan delinquency status.
(2) Represents loans whose repayments are insured by the FHA or guaranteed by the VA.
(3) Represents loans whose repayments are predominantly guaranteed by agencies on behalf of the U.S. Department of Education under the Federal Family Education Loan Program (FFELP).
(4) Includes mortgages held for sale 90 days or more past due and still accruing.
(5) During first quarter 2012, $43 million of 1-4 family junior lien mortgages were transferred to nonaccrual upon implementation of the Interagency Guidance issued on January 31, 2012.

Wells Fargo & Company and Subsidiaries
PURCHASED CREDIT-IMPAIRED (PCI) LOANS

Loans purchased with evidence of credit deterioration since origination and for which it is probable that all contractually required payments will not be collected are considered to be credit impaired. PCI loans predominately represent loans acquired from Wachovia that were deemed to be credit impaired. Evidence of credit quality deterioration as of the purchase date may include statistics such as past due and nonaccrual status, recent borrower credit scores and recent LTV percentages. PCI loans are initially measured at fair value, which includes estimated future credit losses expected to be incurred over the life of the loan. Accordingly, the associated allowance for credit losses related to these loans is not carried over at the acquisition date. Under the accounting guidance for PCI loans, the excess of cash flows expected to be collected over the estimated fair value is referred to as the accretable yield and is recognized in interest income over the remaining life of the loan, or pool of loans, in situations where there is a reasonable expectation about the timing and amount of cash flows expected to be collected. Accordingly, such loans are not classified as nonaccrual and they are considered to be accruing because their interest income relates to the accretable yield recognized under accounting for PCI loans and not to contractual interest payments. The difference between the contractually required payments and the cash flows expected to be collected at acquisition, considering the impact of prepayments, is referred to as the nonaccretable difference. Subsequent to acquisition, we regularly evaluate our estimates of cash flows expected to be collected. These evaluations, performed quarterly, require the continued usage of key assumptions and estimates, similar to the initial estimate of fair value. If we have probable decreases in the expected cash flows (other than due to a decrease in rate indices), we charge the provision for credit losses, resulting in an increase to the allowance for loan losses. If we have probable and significant increases in the expected cash flows subsequent to establishing an additional allowance, we first reverse any previously established allowance and then increase interest income over the remaining life of the loan, or pool of loans. As a result of PCI loan accounting, certain credit-related ratios cannot be used to compare a portfolio that includes PCI loans against one that does not, or to compare ratios across quarters or years. The ratios particularly affected include the allowance for loan losses and allowance for credit losses as percentages of loans, of nonaccrual loans and of nonperforming assets; nonaccrual loans and nonperforming assets as a percentage of total loans; and net charge-offs as a percentage of loans.


		June 30,	December 31,
(in millions)		2012	2011	2010	2009	2008
Commercial:
Commercial and industrial	$	244	399	718	1,911	4,580
Real estate mortgage		2,622	3,270	2,855	4,137	5,803
Real estate construction		1,296	1,745	2,949	5,207	6,462
Foreign		1,123	1,353	1,413	1,733	1,859
Total commercial		5,285	6,767	7,935	12,988	18,704
Consumer:
Real estate 1-4 family first mortgage		28,331	29,746	33,245	38,386	39,214
Real estate 1-4 family junior lien mortgage		190	206	250	331	728
Other revolving credit and installment		-	-	-	-	151
Total consumer		28,521	29,952	33,495	38,717	40,093
Total PCI loans (carrying value)	$	33,806	36,719	41,430	51,705	58,797

Wells Fargo & Company and Subsidiaries
CHANGES IN NONACCRETABLE DIFFERENCE FOR PCI LOANS

The difference between the contractually required payments and the cash flows expected to be collected at acquisition, considering the impact of prepayments, is referred to as the nonaccretable difference. A nonaccretable difference is established in purchase accounting for PCI loans to absorb losses expected at that time on those loans. Amounts absorbed by the nonaccretable difference do not affect the income statement or the allowance for credit losses. Substantially all our commercial and industrial, CRE and foreign PCI loans are accounted for as individual loans. Conversely, Pick-a-Pay and other consumer PCI loans have been aggregated into several pools based on common risk characteristics. Each pool is accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows. Resolutions of loans may include sales to third parties, receipt of payments in settlement with the borrower, or foreclosure of the collateral. Our policy is to remove an individual loan from a pool based on comparing the amount received from its resolution with its contractual amount. Any difference between these amounts is absorbed by the nonaccretable difference. This removal method assumes that the amount received from resolution approximates pool performance expectations. The accretable yield percentage is unaffected by the resolution and any changes in the effective yield for the remaining loans in the pool are addressed by our quarterly cash flow evaluation process for each pool. For loans that are resolved by payment in full, there is no release of the nonaccretable difference for the pool because there is no difference between the amount received at resolution and the contractual amount of the loan. Modified PCI loans are not removed from a pool even if those loans would otherwise be deemed troubled debt restructurings (TDRs). Modified PCI loans that are accounted for individually are considered TDRs, and removed from PCI accounting, if there has been a concession granted in excess of the original nonaccretable difference. The following table provides an analysis of changes in the nonaccretable difference.


						Other
(in millions)		Commercial		Pick-a-Pay		consumer		Total
Balance, December 31, 2008	$	10,410		26,485		4,069		40,964
Addition of nonaccretable difference due to acquisitions		188		-		-		188
Release of nonaccretable difference due to:
Loans resolved by settlement with borrower (1)		(1,345	)	-		-		(1,345	)
Loans resolved by sales to third parties (2)		(299	)	-		(85	)	(384	)
Reclassification to accretable yield for loans with improving credit-related cash flows (3)		(1,216	)	(2,383	)	(614	)	(4,213	)
Use of nonaccretable difference due to:
Losses from loan resolutions and write-downs (4)		(6,809	)	(14,976	)	(2,718	)	(24,503	)
Balance, December 31, 2011		929		9,126		652		10,707
Addition of nonaccretable difference due to acquisitions		-		-		-		-
Release of nonaccretable difference due to:
Loans resolved by settlement with borrower (1)		(52	)	-		-		(52	)
Loans resolved by sales to third parties (2)		-		-		-		-
Reclassification to accretable yield for loans with improving credit-related cash flows (3)		(147	)	(45	)	(127	)	(319	)
Use of nonaccretable difference due to:
Losses from loan resolutions and write-downs (4)		(72	)	(953	)	(85	)	(1,110	)
Balance, June 30, 2012	$	658		8,128		440		9,226

Balance, March 31, 2012	$	748		8,621		506		9,875
Addition of nonaccretable difference due to acquisitions		-		-		-		-
Release of nonaccretable difference due to:
Loans resolved by settlement with borrower (1)		(24	)	-		-		(24	)
Loans resolved by sales to third parties (2)		-		-		-		-
Reclassification to accretable yield for loans with improving credit-related cash flows (3)		(39	)	(45	)	-		(84	)
Use of nonaccretable difference due to:
Losses from loan resolutions and write-downs (4)		(27	)	(448	)	(66	)	(541	)
Balance, June 30, 2012	$	658		8,128		440		9,226

(1) Release of the nonaccretable difference for settlement with borrower, on individually accounted PCI loans, increases interest income in the period of settlement. Pick-a-Pay and Other consumer PCI loans do not reflect nonaccretable difference releases for settlements with borrowers due to pool accounting for those loans, which assumes that the amount received approximates the pool performance expectations.
(2) Release of the nonaccretable difference as a result of sales to third parties increases noninterest income in the period of the sale.
(3) Reclassification of nonaccretable difference to accretable yield for loans with increased cash flow estimates will result in increased interest income as a prospective yield adjustment over the remaining life of the loan or pool of loans.
(4) Write-downs to net realizable value of PCI loans are absorbed by the nonaccretable difference when severe delinquency (normally 180 days) or other indications of severe borrower financial stress exist that indicate there will be a loss of contractually due amounts upon final resolution of the loan.

Wells Fargo & Company and Subsidiaries
CHANGES IN ACCRETABLE YIELD RELATED TO PCI LOANS

The excess of cash flows expected to be collected over the carrying value of PCI loans is referred to as the accretable yield and is accreted into interest income over the estimated lives of the PCI loans using the effective yield method. The accretable yield is affected by:

Changes in interest rate indices for variable rate PCI loans – Expected future cash flows are based on the variable rates in effect at the time of the quarterly assessment of expected cash flows;
Changes in prepayment assumptions – Prepayments affect the estimated life of PCI loans which may change the amount of interest income, and possibly principal, expected to be collected; and
Changes in the expected principal and interest payments over the estimated life – Updates to changes in expected cash flows are driven by the credit outlook and actions taken with borrowers. Changes in expected future cash flows from loan modifications are included in the regular evaluations of cash flows expected to be collected.

The change in the accretable yield related to PCI loans is presented in the following table.


(in millions)
Balance, December 31, 2008	$	10,447
Addition of accretable yield due to acquisitions		128
Accretion into interest income (1)		(7,199	)
Accretion into noninterest income due to sales (2)		(237	)
Reclassification from nonaccretable difference for loans with improving credit-related cash flows		4,213
Changes in expected cash flows that do not affect nonaccretable difference (3)		8,609
Balance, December 31, 2011	$	15,961
Addition of accretable yield due to acquisitions		-
Accretion into interest income (1)		(1,144	)
Accretion into noninterest income due to sales (2)		(5	)
Reclassification from nonaccretable difference for loans with improving credit-related cash flows		319
Changes in expected cash flows that do not affect nonaccretable difference (3)		22
Balance, June 30, 2012	$	15,153

Balance, March 31, 2012	$	15,763
Addition of accretable yield due to acquisitions		-
Accretion into interest income (1)		(630	)
Accretion into noninterest income due to sales (2)		(5	)
Reclassification from nonaccretable difference for loans with improving credit-related cash flows		84
Changes in expected cash flows that do not affect nonaccretable difference (3)		(59	)
Balance, June 30, 2012	$	15,153

(1) Includes accretable yield released as a result of settlements with borrowers, which is included in interest income.
(2) Includes accretable yield released as a result of sales to third parties, which is included in noninterest income.
(3) Represents changes in cash flows expected to be collected due to changes in interest rates on variable rate PCI loans, changes in prepayment assumptions and the impact of modifications.

CHANGES IN ALLOWANCE FOR PCI LOAN LOSSES

When it is estimated that the expected cash flows have decreased subsequent to acquisition for a PCI loan or pool of loans, an allowance is established and a provision for additional loss is recorded as a charge to income. The following table summarizes the changes in allowance for PCI loan losses.


					Other
(in millions)		Commercial		Pick-a-Pay	consumer		Total
Balance, December 31, 2008	$	-		-	-		-
Provision for losses due to credit deterioration		1,668		-	116		1,784
Charge-offs		(1,503	)	-	(50	)	(1,553	)
Balance, December 31, 2011		165		-	66		231
Provision for losses due to credit deterioration		18		-	9		27
Charge-offs		(38	)	-	(8	)	(46	)
Balance, June 30, 2012	$	145		-	67		212

Balance, March 31, 2012	$	177		-	68		245
(Reversal of provision) / provision for losses due to credit deterioration		(21	)	-	4		(17	)
Charge-offs		(11	)	-	(5	)	(16	)
Balance, June 30, 2012	$	145		-	67		212

Wells Fargo & Company and Subsidiaries
PICK-A-PAY PORTFOLIO (1)

	June 30, 2012
		PCI loans							All other loans
							Ratio of				Ratio of
		Adjusted					carrying				carrying
		unpaid	Current				value to				value to
		principal	LTV			Carrying	current			Carrying	current
(in millions)		balance (2)	ratio (3)			value (4)	value (5)			value (4)	value (5)
California	$	23,498	118	%	$	18,329	91	%	$	16,769	85	%
Florida		3,077	114			2,407	85			3,507	95
New Jersey		1,285	92			1,211	85			2,192	79
New York		729	91			681	84			970	80
Texas		319	77			294	71			1,389	63
Other states		5,736	106			4,781	87			9,515	85
Total Pick-a-Pay loans	$	34,644			$	27,703			$	34,342


(1) The individual states shown in this table represent the top five states based on the total net carrying value of the Pick-a-Pay loans at the beginning of 2012.
(2) Adjusted unpaid principal balance includes write-downs taken on loans where severe delinquency (normally 180 days) or other indications of severe borrower financial stress exist that indicate there will be a loss of contractually due amounts upon final resolution of the loan.
(3) The current LTV ratio is calculated as the adjusted unpaid principal balance divided by the collateral value. Collateral values are generally determined using automated valuation models (AVM) and are updated quarterly. AVMs are computer-based tools used to estimate market values of homes based on processing large volumes of market data including market comparables and price trends for local market areas.
(4) Carrying value, which does not reflect the allowance for loan losses, includes remaining purchase accounting adjustments, which, for PCI loans may include the nonaccretable difference and the accretable yield and, for all other loans, an adjustment to mark the loans to a market yield at date of merger less any subsequent charge-offs.
(5) The ratio of carrying value to current value is calculated as the carrying value divided by the collateral value.

Wells Fargo & Company and Subsidiaries
NON-STRATEGIC AND LIQUIDATING LOAN PORTFOLIOS

					June 30,		Mar. 31,			Dec. 31,	Sept. 30,	June 30,
(in millions)					2012		2012			2011	2011	2011
Commercial:
Legacy Wachovia commercial and industrial, commercial real estate and foreign PCI loans (1)				$	4,278		5,213			5,695	6,321	7,016
Total commercial					4,278		5,213			5,695	6,321	7,016
Consumer:
Pick-a-Pay mortgage (1)					62,045		63,983			65,652	67,361	69,587
Liquidating home equity					5,199		5,456			5,710	5,982	6,266
Legacy Wells Fargo Financial indirect auto					1,454		1,907			2,455	3,101	3,881
Legacy Wells Fargo Financial debt consolidation					15,511		16,013			16,542	17,186	17,730
Education Finance - government guaranteed					13,823		14,800			15,376	15,611	16,295
Legacy Wachovia other PCI loans (1)					818		860			896	947	978
Total consumer					98,850		103,019			106,631	110,188	114,737
Total non-strategic and liquidating loan portfolios				$	103,128		108,232			112,326	116,509	121,753

(1) Net of purchase accounting adjustments related to PCI loans.

HOME EQUITY PORTFOLIOS (1)

						% of loans
						two payments					Loss rate (annualized)
		Outstanding balance				or more past due					Quarter ended
		June 30,	Dec. 31,			June 30,			Dec. 31,		June 30,	Dec. 31,
(in millions)		2012	2011			2012			2011		2012	2011
Core portfolio (2)
California	$	24,316	25,555			2.66		%	3.03		3.13	3.42
Florida		10,296	10,870			4.36			4.99		3.76	4.30
New Jersey		7,640	7,973			3.57			3.73		2.02	2.22
Virginia		4,998	5,248			1.98			2.15		1.60	1.31
Pennsylvania		4,867	5,071			2.50			2.82		1.45	1.41
Other		43,636	46,165			2.53			2.79		2.37	2.50
Total		95,753	100,882			2.81			3.13		2.60	2.79
Liquidating portfolio
California		1,827	2,024			5.16			5.50		10.98	11.93
Florida		242	265			5.87			7.02		7.92	9.71
Arizona		104	116			4.39			6.64		11.89	17.54
Texas		86	97			1.26			0.93		2.01	1.57
Minnesota		69	75			2.54			2.83		10.10	8.13
Other		2,871	3,133			3.55			4.13		6.35	7.12
Total		5,199	5,710			4.19			4.73		8.14	9.09
Total core and liquidating portfolios	$	100,952	106,592			2.89			3.22		2.89	3.13


(1) Consists predominantly of real estate 1-4 family junior lien mortgages and first and junior lines of credit secured by real estate, but excludes PCI loans because their losses are generally covered by PCI accounting adjustment at the date of acquisition, and excludes real estate 1-4 family first lien open-ended line reverse mortgages because they do not have scheduled payments. These reverse mortgage loans are insured by the FHA.
(2) Includes $1.4 billion at June 30, 2012, and $1.5 billion at December 31, 2011, associated with the Pick-a-Pay portfolio.

Wells Fargo & Company and Subsidiaries
CHANGES IN ALLOWANCE FOR CREDIT LOSSES

						Six months
		Quarter ended June 30,				ended June 30,
(in millions)		2012		2011		2012		2011
Balance, beginning of period	$	19,129		22,383		19,668		23,463
Provision for credit losses		1,800		1,838		3,795		4,048
Interest income on certain impaired loans (1)		(82	)	(79	)	(169	)	(162	)
Loan charge-offs:
Commercial:
Commercial and industrial		(360	)	(365	)	(719	)	(833	)
Real estate mortgage		(114	)	(185	)	(196	)	(364	)
Real estate construction		(60	)	(99	)	(140	)	(218	)
Lease financing		(5	)	(7	)	(13	)	(20	)
Foreign		(17	)	(57	)	(46	)	(96	)
Total commercial		(556	)	(713	)	(1,114	)	(1,531	)
Consumer:
Real estate 1-4 family first mortgage		(772	)	(1,064	)	(1,600	)	(2,079	)
Real estate 1-4 family junior lien mortgage		(757	)	(968	)	(1,577	)	(2,014	)
Credit card		(286	)	(378	)	(587	)	(826	)
Other revolving credit and installment		(318	)	(391	)	(691	)	(891	)
Total consumer		(2,133	)	(2,801	)	(4,455	)	(5,810	)
Total loan charge-offs		(2,689	)	(3,514	)	(5,569	)	(7,341	)
Loan recoveries:
Commercial:
Commercial and industrial		111		111		214		225
Real estate mortgage		33		57		69		84
Real estate construction		43		27		56		63
Lease financing		5		6		11		13
Foreign		6		10		21		21
Total commercial		198		211		371		406
Consumer:
Real estate 1-4 family first mortgage		29		155		66		266
Real estate 1-4 family junior lien mortgage		68		59		125		111
Credit card		46		84		105		150
Other revolving credit and installment		148		167		307		360
Total consumer		291		465		603		887
Total loan recoveries		489		676		974		1,293
Net loan charge-offs (2)		(2,200	)	(2,838	)	(4,595	)	(6,048	)
Allowances related to business combinations/other		(1	)	(42	)	(53	)	(39	)
Balance, end of period	$	18,646		21,262		18,646		21,262
Components:
Allowance for loan losses	$	18,320		20,893		18,320		20,893
Allowance for unfunded credit commitments		326		369		326		369
Allowance for credit losses (3)	$	18,646		21,262		18,646		21,262
Net loan charge-offs (annualized) as a percentage of average total loans (2)		1.15	%	1.52		1.20		1.62
Allowance for loan losses as a percentage of total loans (3)		2.36		2.78		2.36		2.78
Allowance for credit losses as a percentage of total loans (3)		2.41		2.83		2.41		2.83

(1) Certain impaired loans with an allowance calculated by discounting expected cash flows using the loan's effective interest rate over the remaining life of the loan recognize reductions in allowance as interest income.
(2) For PCI loans, charge-offs are only recorded to the extent that losses exceed the purchase accounting estimates.
(3) The allowance for credit losses includes $212 million and $273 million at June 30, 2012 and 2011, respectively, related to PCI loans acquired from Wachovia. Loans acquired from Wachovia are included in total loans net of related purchase accounting net write-downs.

Wells Fargo & Company and Subsidiaries
FIVE QUARTER CHANGES IN ALLOWANCE FOR CREDIT LOSSES

		Quarter ended
		June 30,		Mar. 31,		Dec. 31,		Sept. 30,		June 30,
(in millions)		2012		2012		2011		2011		2011
Balance, beginning of quarter	$	19,129		19,668		20,372		21,262		22,383
Provision for credit losses		1,800		1,995		2,040		1,811		1,838
Interest income on certain impaired loans (1)		(82	)	(87	)	(86	)	(84	)	(79	)
Loan charge-offs:
Commercial:
Commercial and industrial		(360	)	(359	)	(416	)	(349	)	(365	)
Real estate mortgage		(114	)	(82	)	(153	)	(119	)	(185	)
Real estate construction		(60	)	(80	)	(35	)	(98	)	(99	)
Lease financing		(5	)	(8	)	(8	)	(10	)	(7	)
Foreign		(17	)	(29	)	(52	)	(25	)	(57	)
Total commercial		(556	)	(558	)	(664	)	(601	)	(713	)
Consumer:
Real estate 1-4 family first mortgage		(772	)	(828	)	(904	)	(900	)	(1,064	)
Real estate 1-4 family junior lien mortgage		(757	)	(820	)	(856	)	(893	)	(968	)
Credit card		(286	)	(301	)	(303	)	(320	)	(378	)
Other revolving credit and installment		(318	)	(373	)	(412	)	(421	)	(391	)
Total consumer		(2,133	)	(2,322	)	(2,475	)	(2,534	)	(2,801	)
Total loan charge-offs		(2,689	)	(2,880	)	(3,139	)	(3,135	)	(3,514	)
Loan recoveries:
Commercial:
Commercial and industrial		111		103		106		88		111
Real estate mortgage		33		36		36		23		57
Real estate construction		43		13		40		43		27
Lease financing		5		6		4		7		6
Foreign		6		15		7		17		10
Total commercial		198		173		193		178		211
Consumer:
Real estate 1-4 family first mortgage		29		37		60		79		155
Real estate 1-4 family junior lien mortgage		68		57		56		51		59
Credit card		46		59		47		54		84
Other revolving credit and installment		148		159		143		162		167
Total consumer		291		312		306		346		465
Total loan recoveries		489		485		499		524		676
Net loan charge-offs		(2,200	)	(2,395	)	(2,640	)	(2,611	)	(2,838	)
Allowances related to business combinations/other		(1	)	(52	)	(18	)	(6	)	(42	)
Balance, end of quarter	$	18,646		19,129		19,668		20,372		21,262
Components:
Allowance for loan losses	$	18,320		18,852		19,372		20,039		20,893
Allowance for unfunded credit commitments		326		277		296		333		369
Allowance for credit losses	$	18,646		19,129		19,668		20,372		21,262
Net loan charge-offs (annualized) as a percentage of average total loans		1.15	%	1.25		1.36		1.37		1.52
Allowance for loan losses as a percentage of:
Total loans		2.36		2.46		2.52		2.64		2.78
Nonaccrual loans		89		86		91		92		91
Nonaccrual loans and other nonperforming assets		74		71		75		75		75
Allowance for credit losses as a percentage of:
Total loans		2.41		2.50		2.56		2.68		2.83
Nonaccrual loans		91		87		92		93		92
Nonaccrual loans and other nonperforming assets		75		72		76		76		76


(1) Certain impaired loans with an allowance calculated by discounting expected cash flows using the loan's effective interest rate over the remaining life of the loan recognize reductions in allowance as interest income.

Wells Fargo & Company and Subsidiaries
FIVE QUARTER TIER 1 COMMON EQUITY UNDER BASEL I (1)

			June 30,		Mar. 31,		Dec. 31,		Sept. 30,			June 30,
(in billions)			2012		2012		2011		2011			2011
Total equity		$	149.4		146.8		141.7		139.2			137.9
Noncontrolling interests			(1.3	)	(1.3	)	(1.5	)	(1.5	)		(1.5	)
Total Wells Fargo stockholders' equity			148.1		145.5		140.2		137.7			136.4
Adjustments:
Preferred equity			(10.6	)	(10.6	)	(10.6	)	(10.6	)		(10.6	)
Goodwill and intangible assets (other than MSRs)			(33.5	)	(33.7	)	(34.0	)	(34.4	)		(34.6	)
Applicable deferred taxes			3.5		3.7		3.8		4.0			4.1
MSRs over specified limitations			(0.7	)	(0.9	)	(0.8	)	(0.7	)		(0.9	)
Cumulative other comprehensive income			(4.6	)	(4.1	)	(3.1	)	(3.7	)		(5.3	)
Other			(0.5	)	(0.4	)	(0.4	)	(0.4	)		(0.3	)
Tier 1 common equity	(A)	$	101.7		99.5		95.1		91.9			88.8
Total risk-weighted assets (2)	(B)	$	1,009.1		996.8		1,005.6		983.2			970.2
Tier 1 common equity to total risk-weighted assets	(A)/(B)		10.08	%	9.98		9.46		9.34			9.15

(1) Tier 1 common equity is a non-generally accepted accounting principle (GAAP) financial measure that is used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies. Management reviews Tier 1 common equity along with other measures of capital as part of its financial analyses and has included this non-GAAP financial information, and the corresponding reconciliation to total equity, because of current interest in such information on the part of market participants.
(2) Under the regulatory guidelines for risk-based capital, on-balance sheet assets and credit equivalent amounts of derivatives and off-balance sheet items are assigned to one of several broad risk categories according to the obligor or, if relevant, the guarantor or the nature of any collateral. The aggregate dollar amount in each risk category is then multiplied by the risk weight associated with that category. The resulting weighted values from each of the risk categories are aggregated for determining total risk-weighted assets. The Company's June 30, 2012, preliminary risk-weighted assets reflect estimated on-balance sheet risk-weighted assets of $841.0 billion and derivative and off-balance sheet risk-weighted assets of $168.1 billion.

TIER 1 COMMON EQUITY UNDER BASEL III (ESTIMATED) (1) (2)

												June 30,
(in billions)												2012
Tier 1 common equity under Basel I											$	101.7
Adjustments from Basel I to Basel III (3) (5):
Cumulative other comprehensive income related to AFS securities and defined benefit pension plans												4.2
Other												0.3
Total adjustments from Basel I to Basel III												4.5
Threshold deductions, as defined under Basel III (4) (5)												(0.7	)
Tier 1 common equity anticipated under Basel III	(C)											105.5
Total risk-weighted assets anticipated under Basel III (6)	(D)										$	1,355.4
Tier 1 common equity to total risk-weighted assets anticipated under Basel III	(C)/(D)											7.78	%

(1) Tier 1 common equity is a non-generally accepted accounting principle (GAAP) financial measure that is used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies. Management reviews Tier 1 common equity along with other measures of capital as part of its financial analyses and has included this non-GAAP financial information, and the corresponding reconciliation to total equity, because of current interest in such information on the part of market participants.
(2) The Basel III Tier 1 common equity and risk-weighted assets are calculated based on management’s current interpretation of the Basel III capital rules proposed by federal banking agencies in notices of proposed rulemaking announced in June 2012. The proposed rules and interpretations and assumptions used in estimating Basel III calculations are subject to change depending on final promulgations of Basel III capital rules.
(3) Adjustments from Basel I to Basel III represent reconciling adjustments, primarily certain components of cumulative other comprehensive income deducted for Basel I purposes, to derive Tier 1 common equity under Basel III.
(4) Threshold deductions, as defined under Basel III, include individual and aggregate limitations, as a percentage of Tier 1 common equity, with respect to MSRs, deferred tax assets and investments in unconsolidated financial companies.
(5) Volatility in interest rates can have a significant impact on the valuation of cumulative other comprehensive income and MSRs and therefore, may impact adjustments from Basel I to Basel III, and MSRs subject to threshold deductions, as defined under Basel III, in future reporting periods.
(6) Under current Basel proposals, risk-weighted assets incorporate different classifications of assets, with certain risk weights based on a borrower's credit rating or Wells Fargo's own risk models, along with adjustments to address a combination of credit/counterparty, operational and market risks, and other Basel III elements. The amount of risk-weighted assets anticipated under Basel III is preliminary and subject to change depending on final promulgation of Basel III capital rulemaking and interpretations thereof by regulatory authorities.

Wells Fargo & Company and Subsidiaries
OPERATING SEGMENT RESULTS (1)

		Community		Wholesale			Wealth, Brokerage							Consolidated
		Banking		Banking				and Retirement		Other (2)				Company
(income/expense in millions, average balances in billions)		2012	2011	2012	2011			2012	2011	2012		2011		2012	2011
Quarter ended June 30,
Net interest income (3)	$	7,306	7,390	3,347	2,930			698	697	(314	)	(339	)	11,037	10,678
Provision (reversal of provision) for credit losses		1,573	1,916	188	(97	)		37	62	2		(43	)	1,800	1,838
Noninterest income		5,786	5,215	2,770	2,665			2,273	2,396	(577	)	(568	)	10,252	9,708
Noninterest expense		7,580	7,412	3,113	2,761			2,376	2,486	(672	)	(184	)	12,397	12,475
Income (loss) before income tax expense (benefit)		3,939	3,277	2,816	2,931			558	545	(221	)	(680	)	7,092	6,073
Income tax expense (benefit)		1,313	1,055	932	998			210	206	(84	)	(258	)	2,371	2,001
Net income (loss) before noncontrolling interests		2,626	2,222	1,884	1,933			348	339	(137	)	(422	)	4,721	4,072
Less: Net income from noncontrolling interests		91	102	3	20			5	2	-		-		99	124
Net income (loss) (4)	$	2,535	2,120	1,881	1,913			343	337	(137	)	(422	)	4,622	3,948
Average loans	$	483.9	497.0	270.2	242.9			42.5	43.5	(28.4	)	(32.1	)	768.2	751.3
Average assets		746.6	747.6	478.4	417.3			160.9	150.7	(64.3	)	(64.7	)	1,321.6	1,250.9
Average core deposits		586.1	552.0	220.9	190.6			134.2	125.9	(60.6	)	(61.0	)	880.6	807.5


Six months ended June 30,
Net interest income (3)	$	14,632	14,965	6,528	5,648			1,399	1,397	(634	)	(681	)	21,925	21,329
Provision (reversal of provision) for credit losses		3,451	3,977	283	37			80	102	(19	)	(68	)	3,795	4,048
Noninterest income		11,881	10,297	5,622	5,369			4,634	4,850	(1,137	)	(1,130	)	21,000	19,386
Noninterest expense		15,405	15,034	6,167	5,550			4,923	5,043	(1,105	)	(419	)	25,390	25,208
Income (loss) before income tax expense (benefit)		7,657	6,251	5,700	5,430			1,030	1,102	(647	)	(1,324	)	13,740	11,459
Income tax expense (benefit)		2,606	1,800	1,948	1,860			391	416	(246	)	(503	)	4,699	3,573
Net income (loss) before noncontrolling interests		5,051	4,451	3,752	3,570			639	686	(401	)	(821	)	9,041	7,886
Less: Net income from noncontrolling interests		168	151	3	22			-	6	-		-		171	179
Net income (loss) (4)	$	4,883	4,300	3,749	3,548			639	680	(401	)	(821	)	8,870	7,707
Average loans	$	485.0	502.7	269.4	238.8			42.5	43.1	(28.5	)	(31.9	)	768.4	752.7
Average assets		742.5	752.1	473.1	408.1			161.4	150.7	(64.7	)	(64.8	)	1,312.3	1,246.1
Average core deposits		580.7	550.0	220.9	187.7			134.9	125.7	(60.9	)	(61.2	)	875.6	802.2


(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. In the first quarter 2012, we modified internal funds transfer rates and the allocation of funding. The prior periods have been revised to reflect these changes.
(2) Includes Wachovia integration expenses and the elimination of items that are included in both Community Banking and Wealth, Brokerage and Retirement, largely representing wealth management customers serviced and products sold in the stores.
(3) Net interest income is the difference between interest earned on assets and the cost of liabilities to fund those assets. Interest earned includes actual interest earned on segment assets and, if the segment has excess liabilities, interest credits for providing funding to other segments. The cost of liabilities includes interest expense on segment liabilities and, if the segment does not have enough liabilities to fund its assets, a funding charge based on the cost of excess liabilities from another segment.
(4) Represents segment net income (loss) for Community Banking; Wholesale Banking; and Wealth, Brokerage and Retirement segments and Wells Fargo net income for the consolidated company.

Wells Fargo & Company and Subsidiaries
FIVE QUARTER OPERATING SEGMENT RESULTS (1)

		Quarter ended
		June 30,		Mar. 31,		Dec. 31,		Sept. 30,		June 30,
(income/expense in millions, average balances in billions)		2012		2012		2011		2011		2011
COMMUNITY BANKING
Net interest income (2)	$	7,306		7,326		7,420		7,272		7,390
Provision for credit losses		1,573		1,878		2,025		1,974		1,916
Noninterest income		5,786		6,095		5,589		5,238		5,215
Noninterest expense		7,580		7,825		7,313		6,905		7,412
Income before income tax expense		3,939		3,718		3,671		3,631		3,277
Income tax expense		1,313		1,293		1,084		1,220		1,055
Net income before noncontrolling interests		2,626		2,425		2,587		2,411		2,222
Less: Net income from noncontrolling interests		91		77		78		87		102
Segment net income	$	2,535		2,348		2,509		2,324		2,120
Average loans	$	483.9		486.1		490.6		489.7		497.0
Average assets		746.6		738.3		753.3		751.8		747.6
Average core deposits		586.1		575.2		568.4		556.4		552.0

WHOLESALE BANKING
Net interest income (2)	$	3,347		3,181		3,071		2,897		2,930
Provision (reversal of provision) for credit losses		188		95		31		(178	)	(97	)
Noninterest income		2,770		2,852		2,345		2,238		2,665
Noninterest expense		3,113		3,054		2,938		2,689		2,761
Income before income tax expense		2,816		2,884		2,447		2,624		2,931
Income tax expense		932		1,016		813		822		998
Net income before noncontrolling interests		1,884		1,868		1,634		1,802		1,933
Less: Net income (loss) from noncontrolling interests		3		-		(2	)	(1	)	20
Segment net income	$	1,881		1,868		1,636		1,803		1,913
Average loans	$	270.2		268.6		265.1		253.4		242.9
Average assets		478.4		467.8		458.3		437.1		417.3
Average core deposits		220.9		220.9		223.2		209.3		190.6

WEALTH, BROKERAGE AND RETIREMENT
Net interest income (2)	$	698		701		731		716		697
Provision for credit losses		37		43		20		48		62
Noninterest income		2,273		2,361		2,311		2,172		2,396
Noninterest expense		2,376		2,547		2,520		2,371		2,486
Income before income tax expense		558		472		502		469		545
Income tax expense		210		181		191		178		206
Net income before noncontrolling interests		348		291		311		291		339
Less: Net income (loss) from noncontrolling interests		5		(5	)	-		1		2
Segment net income	$	343		296		311		290		337
Average loans	$	42.5		42.5		42.8		43.1		43.5
Average assets		160.9		161.9		160.6		158.4		150.7
Average core deposits		134.2		135.6		135.2		133.3		125.9

OTHER (3)
Net interest income (2)	$	(314	)	(320	)	(330	)	(343	)	(339	)
Provision (reversal of provision) for credit losses		2		(21	)	(36	)	(33	)	(43	)
Noninterest income		(577	)	(560	)	(532	)	(562	)	(568	)
Noninterest expense		(672	)	(433	)	(263	)	(288	)	(184	)
Loss before income tax benefit		(221	)	(426	)	(563	)	(584	)	(680	)
Income tax benefit		(84	)	(162	)	(214	)	(222	)	(258	)
Net loss before noncontrolling interests		(137	)	(264	)	(349	)	(362	)	(422	)
Less: Net income from noncontrolling interests		-		-		-		-		-
Other net loss	$	(137	)	(264	)	(349	)	(362	)	(422	)
Average loans	$	(28.4	)	(28.6	)	(29.9	)	(31.7	)	(32.1	)
Average assets		(64.3	)	(65.1	)	(65.5	)	(65.9	)	(64.7	)
Average core deposits		(60.6	)	(61.2	)	(61.9	)	(62.2	)	(61.0	)

CONSOLIDATED COMPANY
Net interest income (2)	$	11,037		10,888		10,892		10,542		10,678
Provision for credit losses		1,800		1,995		2,040		1,811		1,838
Noninterest income		10,252		10,748		9,713		9,086		9,708
Noninterest expense		12,397		12,993		12,508		11,677		12,475
Income before income tax expense		7,092		6,648		6,057		6,140		6,073
Income tax expense		2,371		2,328		1,874		1,998		2,001
Net income before noncontrolling interests		4,721		4,320		4,183		4,142		4,072
Less: Net income from noncontrolling interests		99		72		76		87		124
Wells Fargo net income	$	4,622		4,248		4,107		4,055		3,948
Average loans	$	768.2		768.6		768.6		754.5		751.3
Average assets		1,321.6		1,302.9		1,306.7		1,281.4		1,250.9
Average core deposits		880.6		870.5		864.9		836.8		807.5


(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. In first quarter 2012, we modified internal funds transfer rates and the allocation of funding. Prior periods have been revised to reflect these changes.
(2) Net interest income is the difference between interest earned on assets and the cost of liabilities to fund those assets. Interest earned includes actual interest earned on segment assets and, if the segment has excess liabilities, interest credits for providing funding to other segments. The cost of liabilities includes interest expense on segment liabilities and, if the segment does not have enough liabilities to fund its assets, a funding charge based on the cost of excess liabilities from another segment.
(3) Includes Wachovia integration expenses and the elimination of items that are included in both Community Banking and Wealth, Brokerage and Retirement, largely representing wealth management customers serviced and products sold in the stores.

Wells Fargo & Company and Subsidiaries
FIVE QUARTER CONSOLIDATED MORTGAGE SERVICING

	Quarter ended
		June 30,		Mar. 31,		Dec. 31,		Sept. 30,		June 30,
(in millions)		2012		2012		2011		2011		2011
MSRs measured using the fair value method:
Fair value, beginning of quarter	$	13,578		12,603		12,372		14,778		15,648
Servicing from securitizations or asset transfers (1)		1,139		1,776		1,211		744		740
Sales		(293	)	-		-		-		-
Net additions (reductions)		846		1,776		1,211		744		740
Changes in fair value:
Due to changes in valuation model inputs or assumptions:
Mortgage interest rates (2)		(1,496	)	147		(483	)	(2,867	)	(905	)
Servicing and foreclosure costs (3)		(146	)	(54	)	(2	)	(33	)	(445	)
Discount rates (4)		-		(344	)	-		-		-
Prepayment estimates and other (5)		11		93		21		260		275
Net changes in valuation model inputs or assumptions		(1,631	)	(158	)	(464	)	(2,640	)	(1,075	)
Other changes in fair value (6)		(712	)	(643	)	(516	)	(510	)	(535	)
Total changes in fair value		(2,343	)	(801	)	(980	)	(3,150	)	(1,610	)
Fair value, end of quarter	$	12,081		13,578		12,603		12,372		14,778

(1) Quarter ended March 31, 2012, includes $315 million residential MSRs transferred from amortized MSRs that we elected to carry at fair value effective January 1, 2012.
(2) Primarily represents prepayment speed changes due to changes in mortgage interest rates, but also includes other valuation changes due to changes in mortgage interest rates (such as changes in estimated interest earned on custodial deposit balances).
(3) Includes costs to service and unreimbursed foreclosure costs.
(4) Reflects discount rate assumption change, excluding portion attributable to changes in mortgage interest rates; the first quarter 2012 change reflects increased capital return requirements from market participants.
(5) Represents changes driven by other valuation model inputs or assumptions including prepayment speed estimation changes and other assumption updates. Prepayment speed estimation changes are influenced by observed changes in borrower behavior.
(6) Represents changes due to collection/realization of expected cash flows over time.


		Quarter ended
		June 30,		Mar. 31,		Dec. 31,		Sept. 30,		June 30,
(in millions)		2012		2012		2011		2011		2011
Amortized MSRs:
Balance, beginning of quarter	$	1,074		1,445		1,437		1,432		1,432
Purchases		78		14		53		21		36
Servicing from securitizations or asset transfers (1)		34		(327	)	26		50		27
Amortization		(56	)	(58	)	(71	)	(66	)	(63	)
Balance, end of quarter		1,130		1,074		1,445		1,437		1,432

Valuation Allowance:
Balance, beginning of quarter		-		(37	)	(40	)	(10	)	(9	)
Reversal of provision (provision) for MSRs in excess of fair value (1)		-		37		3		(30	)	(1	)
Balance, end of quarter		-		-		(37	)	(40	)	(10	)
Amortized MSRs, net	$	1,130		1,074		1,408		1,397		1,422
Fair value of amortized MSRs:
Beginning of quarter	$	1,263		1,756		1,759		1,805		1,898
End of quarter		1,450		1,263		1,756		1,759		1,805

(1) Quarter ended March 31, 2012, is net of $ 350 million ($313 million after valuation allowance) of residential MSRs that we elected to carry at fair value effective January 1, 2012. A cumulative adjustment of $2 million to fair value was recorded in retained earnings at January 1, 2012.

Wells Fargo & Company and Subsidiaries
FIVE QUARTER CONSOLIDATED MORTGAGE SERVICING (CONTINUED)

		Quarter ended
		June 30,		Mar. 31,		Dec. 31,		Sept. 30,		June 30,
(in millions)		2012		2012		2011		2011		2011
Servicing income, net:
Servicing fees (1)	$	1,070		1,011		876		1,029		1,102
Changes in fair value of MSRs carried at fair value:
Due to changes in valuation model inputs or assumptions (2)		(1,631	)	(158	)	(464	)	(2,640	)	(1,075	)
Other changes in fair value (3)		(712	)	(643	)	(516	)	(510	)	(535	)
Total changes in fair value of MSRs carried at fair value		(2,343	)	(801	)	(980	)	(3,150	)	(1,610	)
Amortization		(56	)	(58	)	(71	)	(66	)	(63	)
Reversal of provision (provision) for MSRs in excess of fair value		-		-		3		(30	)	(1	)
Net derivative gains from economic hedges (4)		2,008		100		665		3,247		1,449
Total servicing income, net	$	679		252		493		1,030		877
Market-related valuation changes to MSRs, net of hedge results (2)+(4)	$	377		(58	)	201		607		374


(1) Includes contractually specified servicing fees, late charges and other ancillary revenues.
(2) Refer to the changes in fair value MSRs table in the FIVE QUARTER CONSOLIDATED MORTGAGE SERVICING table for more detail.
(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.


		June 30,		Mar. 31,		Dec. 31,		Sept. 30,		June 30,
(in billions)		2012		2012		2011		2011		2011
Managed servicing portfolio (1):
Residential mortgage servicing:
Serviced for others	$	1,499		1,483		1,456		1,457		1,464
Owned loans serviced		357		350		358		349		338
Subservicing		7		7		8		8		8
Total residential servicing		1,863		1,840		1,822		1,814		1,810
Commercial mortgage servicing:
Serviced for others		406		407		398		401		402
Owned loans serviced		106		106		106		104		101
Subservicing		13		13		14		14		14
Total commercial servicing		525		526		518		519		517
Total managed servicing portfolio	$	2,388		2,366		2,340		2,333		2,327
Total serviced for others	$	1,905		1,890		1,854		1,858		1,866
Ratio of MSRs to related loans serviced for others		0.69	%	0.77		0.76		0.74		0.87
Weighted-average note rate (mortgage loans serviced for others)		4.97		5.05		5.14		5.21		5.26


(1) The components of our managed servicing portfolio are presented at unpaid principal balance for loans serviced and subserviced for others and at book value for owned loans serviced.

SELECTED FIVE QUARTER RESIDENTIAL MORTGAGE PRODUCTION DATA

		Quarter ended
		June 30,		Mar. 31,		Dec. 31,		Sept. 30,		June 30,
(in billions)		2012		2012		2011		2011		2011
Application data:
Wells Fargo first mortgage quarterly applications	$	208		188		157		169		109
Refinances as a percentage of applications		69	%	76		78		74		55
Wells Fargo first mortgage unclosed pipeline, at quarter end	$	102		79		72		84		51


Residential Real Estate Originations:
Wells Fargo first mortgage loans:
Retail	$	62		61		58		43		34
Correspondent/Wholesale		68		68		61		45		29
Other (1)		1		-		1		1		1
Total quarter-to-date	$	131		129		120		89		64
Total year-to-date	$	260		129		357		237		148

(1) Consists of home equity loans and lines.

Wells Fargo & Company and Subsidiaries
CHANGES IN MORTGAGE REPURCHASE LIABILITY

		Quarter ended						Six months ended
		June 30,		Mar. 31,		June 30,		June 30,		June 30,
(in millions)		2012		2012		2011		2012		2011
Balance, beginning of period	$	1,444		1,326		1,207		1,326		1,289
Provision for repurchase losses:
Loan sales		72		62		20		134		55
Change in estimate (1)		597		368		222		965		436
Total additions		669		430		242		1,099		491
Losses		(349	)	(312	)	(261	)	(661	)	(592	)
Balance, end of period	$	1,764		1,444		1,188		1,764		1,188

(1) Results from such factors as changes in investor demand and mortgage insurer practices, credit deterioration and changes in the financial stability of correspondent lenders.

UNRESOLVED REPURCHASE DEMANDS AND MORTGAGE INSURANCE RESCISSIONS

				Government				Mortgage
				sponsored				insurance
($ in millions)				entities (1)		Private		rescissions (2)		Total
June 30, 2012
Number of loans				5,687		913		840		7,440
Original loan balance (3)			$	1,265		213		188		1,666

March 31, 2012
Number of loans				6,333		857		970		8,160
Original loan balance (3)			$	1,398		241		217		1,856

December 31, 2011
Number of loans				7,066		470		1,178		8,714
Original loan balance (3)			$	1,575		167		268		2,010

September 30, 2011
Number of loans				6,577		582		1,508		8,667
Original loan balance (3)			$	1,500		208		314		2,022

June 30, 2011
Number of loans				6,876		695		2,019		9,590
Original loan balance (3)			$	1,565		230		444		2,239


(1) Includes repurchase demands of 526 and $103 million, 694 and $131 million, 861 and $161 million, 878 and $173 million, and 892 and $179 million, for June 30 and March 31, 2012, and December 31, September 30 and June 30, 2011, respectively, received from investors on mortgage servicing rights acquired from other originators. We generally have the right of recourse against the seller and may be able to recover losses related to such repurchase demands subject to counterparty risk associated with the seller. The number of repurchase demands from GSEs that are from mortgage loans originated in 2006 through 2008 totaled 78% at June 30, 2012.
(2) As part of our representations and warranties in our loan sales contracts, we typically represent to GSEs and private investors that certain loans have mortgage insurance to the extent there are loans that have loan to value ratios in excess of 80% that require mortgage insurance. To the extent the mortgage insurance is rescinded by the mortgage insurer due to a claim of breach of a contractual representation or warranty, the lack of insurance may result in a repurchase demand from an investor. Similar to repurchase demands, we evaluate mortgage insurance rescission notices for validity and appeal for reinstatement if the rescission was not based on a contractual breach. When investor demands are received due to lack of mortgage insurance, they are reported as unresolved repurchase demands based on the applicable investor category for the loan (GSE or private). Over the last year, approximately 20% of our repurchase demands from GSEs had mortgage insurance rescission as one of the reasons for the repurchase demand. Of all the mortgage insurance rescissions notices received in 2011, approximately 80% have resulted in repurchase demands through June 2012. Not all mortgage insurance rescissions received in 2011 have been completed through the appeals process with the mortgage insurer and upon successful appeal, we work with the investor to rescind the repurchase demand.
(3) While the original loan balances related to these demands are presented above, the establishment of the repurchase liability is based on a combination of factors, such as our appeals success rates, reimbursement by correspondent and other third party originators, and projected loss severity, which is driven by the difference between the current loan balance and the estimated collateral value less costs to sell the property.

Contacts

Wells Fargo & Company
Mary Eshet, 704-383-7777 (Media)
Jim Rowe, 415-396-8216 (Investors)

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