WELLS FARGO & COMPANY/MN - FORM 8-K - EX-99.1 - THE PRESS RELEASE, DEEMED "FILED" UNDER THE SECURITIES EXCHANGE ACT OF 1934

WELLS FARGO & COMPANY/MN - FORM 8-K - EX-99.1 - THE PRESS RELEASE, DEEMED "FILED" UNDER THE SECURITIES EXCHANGE ACT OF 1934 - July 13, 2012

Attached files

Attached files

file	filename
8-K - CURRENT REPORT ON FORM 8-K - WELLS FARGO & COMPANY/MN	d378397d8k.htm
EX-99.2 - THE QUARTERLY SUPPLEMENT, DEEMED "FURNISHED" UNDER THE SECURITIES EXCHANGE ACT - WELLS FARGO & COMPANY/MN	d378397dex992.htm

Exhibit 99.1

LOGO

Friday, July 13, 2012

WELLS FARGO REPORTS RECORD QUARTERLY NET INCOME

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

•

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

¹ See footnote (2) on page 16 for more information on pre-tax pre-provision profit.

² See table on page 5 for more information on core and non-strategic/liquidating loan portfolios.

³ See tables on page 38 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.

- 2 -

•

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

Selected Financial Information



				Quarter ended

	June 30,			Mar. 31,		June 30,
	2012			2012		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

SAN FRANCISCO – 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.”

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

- 3 -

“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

- 4 -

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 West LB’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.

- 5 -



	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 table on page 35 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.



	June 30,			Mar. 31,		June 30,
(as a percent of total risk-weighted assets)	2012			2012		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 table on page 38 for more information on Tier 1 common equity.

- 6 -

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

			As a					As a					As a
	Net loan		% of			Net loan		% of			Net loan		% of
	charge-		average			charge-		average			charge-		average
($ in millions)	offs		loans (1)			offs		loans (1)			offs		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 on page 31 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.

- 7 -

Nonperforming Assets (Nonaccrual Loans and Foreclosed Assets)



	June 30, 2012					March 31, 2012					December 31, 2011

			As a					As a					As a
			% of					% of					% of
	Total		total			Total		total			Total		total
($ in millions)	balances		loans			balances		loans			balances		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.

- 8 -

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

	June 30,		Mar. 31,		June 30,
(in millions)	2012		2012		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 on pages 39 and 40.

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

	June 30,		Mar. 31,		June 30,
(in millions)	2012		2012		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

- 9 -

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.

- 10 -

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

- 11 -

•

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.

- 12 -

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.

- 13 -

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.

- 14 -

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
(in millions)	Average balance			Yields/ rates			Interest income/ expense		Average balance			Yields/ rates			Interest income/ 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
(in millions)	Average balance			Yields/ rates			Interest income/ expense		Average balance			Yields/ rates			Interest income/ 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




	Quarter ended June 30,				%			Six months 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


	Quarter ended June 30,				%			Six months 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


(in millions)	June 30, 2012		Mar. 31, 2012		Dec. 31, 2011		Sept. 30, 2011		June 30, 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


(in millions)	June 30, 2012		Mar. 31, 2012		Dec. 31, 2011		Sept. 30, 2011		June 30, 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




(in millions, except shares)	June 30, 2012		Dec. 31, 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




(in millions)	June 30, 2012		Mar. 31, 2012		Dec. 31, 2011		Sept. 30, 2011		June 30, 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
($ in billions)	Average balance			Yields/ rates			Average balance			Yields/ rates			Average balance			Yields/ rates			Average balance			Yields/ rates			Average balance			Yields/ 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




(in millions)	June 30, 2012		Mar. 31, 2012		Dec. 31, 2011		Sept. 30, 2011		June 30, 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


(in millions)	June 30, 2012		Mar. 31, 2012		Dec. 31, 2011		Sept. 30, 2011		June 30, 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)




(in millions)	June 30, 2012			Mar. 31, 2012		Dec. 31, 2011		Sept. 30, 2011		June 30, 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




(in millions)	June 30, 2012		Mar. 31, 2012		Dec. 31, 2011		Sept. 30, 2011		June 30, 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, 2012		December 31,

(in millions)			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.



(in millions)	Commercial		Pick-a-Pay		Other 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.




(in millions)	Commercial		Pick-a-Pay		Other 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

(in millions)	Adjusted unpaid principal balance (2)		Current LTV ratio (3)			Carrying value (4)		Ratio of carrying value to current value (5)			Carrying value (4)		Ratio of carrying value to current 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




(in millions)	June 30, 2012		Mar. 31, 2012		Dec. 31, 2011		Sept. 30, 2011		June 30, 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)




	Outstanding balance				% of loans two payments or more past due					Loss rate (annualized) Quarter ended


(in millions)	June 30, 2012		Dec. 31, 2011		June 30, 2012			Dec. 31, 2011		June 30, 2012		Dec. 31, 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



	Quarter ended June 30,					Six months 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


(in millions)	June 30, 2012			Mar. 31, 2012		Dec. 31, 2011		Sept. 30, 2011		June 30, 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)



(in billions)		June 30, 2012			Mar. 31, 2012		Dec. 31, 2011		Sept. 30, 2011		June 30, 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)



(in billions)		June 30, 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)

(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)



(income/expense in millions, average balances in billions)	Community Banking				Wholesale Banking				Wealth, Brokerage and Retirement				Other (2)						Consolidated 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

(income/expense in millions, average balances in billions)	June 30, 2012		Mar. 31, 2012		Dec. 31, 2011		Sept. 30, 2011		June 30, 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)

(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

(in millions)	June 30, 2012		Mar. 31, 2012		Dec. 31, 2011		Sept. 30, 2011		June 30, 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

(in millions)	June 30, 2012		Mar. 31, 2012		Dec. 31, 2011		Sept. 30, 2011		June 30, 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

(in millions)	June 30, 2012		Mar. 31, 2012		Dec. 31, 2011		Sept. 30, 2011		June 30, 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 on page 41 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.



(in billions)	June 30, 2012			Mar. 31, 2012		Dec. 31, 2011		Sept. 30, 2011		June 30, 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

(in billions)	June 30, 2012			Mar. 31, 2012		Dec. 31, 2011		Sept. 30, 2011		June 30, 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

(in millions)	June 30, 2012		Mar. 31, 2012		June 30, 2011		June 30, 2012		June 30, 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



($ in millions)	Government sponsored entities (1)		Private		Mortgage insurance 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.

Investors

Mary Eshet