Wells Fargo Reports Record Quarterly Net Income

Q1 Net Income of $3.8 billion

April 20, 2011 08:00 AM Eastern Daylight Time

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

Continued strong financial results:
- Record net income of $3.8 billion, up 48 percent from prior year, up 10 percent from prior quarter
- Diluted earnings per common share of $0.67, up 49 percent from prior year, up 10 percent from prior quarter
- All business segments contributed to earnings
- Return on assets of 1.23 percent, up 14 basis points from prior quarter, highest in 3 years
- Revenue of $20.3 billion, down $1.2 billion from prior quarter, reflecting $741 million decline in mortgage banking fee income
- Noninterest expense down $607 million from prior quarter
- Average checking and savings deposits up 9 percent from prior year; consumer checking accounts up a net 7.4 percent from March 31, 2010
- Average loans of $754.1 billion, up $402 million from prior quarter
Capital strength; returned more capital to shareholders:
- Capital ratios increased, with Tier 1 common equity ratio of 8.9 percent under Basel I at March 31, 2011, and an estimated Tier 1 common equity ratio of 7.2 percent under current Basel III capital proposals¹
- Increased quarterly dividend rate to $0.12 per share, fully paid in first quarter
- Additional 200 million share repurchase authority
- Called $3.2 billion of high-cost trust preferred securities
Significant improvement in credit quality:
- Net loan charge-offs declined to $3.2 billion, down $629 million from prior quarter
- Nonperforming assets declined $1.8 billion from prior quarter to $30.6 billion and nonperforming loans declined $1.3 billion
- Reserve release²of $1.0 billion (pre tax) reflected improved portfolio performance; expect future reductions in the allowance absent significant deterioration in the economy
Wachovia merger integration remained on track:
- Converted retail banking stores in Connecticut, Delaware, New Jersey and New York in first quarter
- Completed conversion to one common retail brokerage platform
- Pennsylvania banking stores converted April 15^th
- Florida banking stores expected to convert in June and July; remaining Eastern banking markets expected to convert by year end
Supplied $151 billion in credit to consumers and businesses during the quarter, up from $128 billion in first quarter 2010
As of March 31, 2011, over 665,000 active trial or completed loan modifications had been initiated since the beginning of 2009; of this total, over 85 percent were through Wells Fargo’s own modification programs and the remainder were through the federal government’s Home Affordable Modification Program (HAMP)

¹See FIVE QUARTER TIER 1 COMMON EQUITY table for more information on Tier 1 common equity.

² Reserve release represents the amount by which net charge-offs exceed the provision for credit losses.

Selected Financial Information

	Quarter ended
	Mar. 31,			Dec. 31,	Mar. 31,
	2011			2010	2010
Earnings
Diluted earnings per common share	$	0.67		0.61	0.45
Wells Fargo net income (in billions)		3.76		3.41	2.55

Asset Quality
Net charge-offs as a % of avg. total loans (annualized)		1.73	%	2.02	2.71
Allowance as a % of total loans		2.98		3.10	3.28
Allowance as a % of annualized net charge-offs		172		154	119

Other
Revenue (in billions)	$	20.33		21.49	21.45
Average loans (in billions)		754.1		753.7	797.4
Average core deposits (in billions)		796.8		794.8	759.2
Net interest margin		4.05	%	4.16	4.27

Wells Fargo & Company (NYSE:WFC) reported record net income of $3.8 billion, or $0.67 per diluted common share, for first quarter 2011, up from $2.5 billion, or $0.45 per share, for first quarter 2010.

“Our strong first quarter results reflected positive trends in our business fundamentals as credit quality improved, capital ratios increased and cross-selling reached new highs,” said Chairman and CEO John Stumpf. “As the economy continued an uneven recovery, our business customers increased borrowing and utilization of credit lines – a hopeful sign that businesses are once again investing for growth. Consumers continue to be hesitant to borrow, yet our robust deposit growth reflects the strong loyalty and market share we enjoy among customers. We also marked an historic return of the Wells Fargo name to the New York market as we celebrated our 159th anniversary and converted banking stores in Connecticut, Delaware, New Jersey and New York during the quarter. Our Pennsylvania banking stores were converted successfully this past weekend and we expect to convert all remaining Wachovia stores by the end of this year.

“We were extremely pleased to return additional capital to our shareholders in the first quarter with an increased common stock dividend. This action, coupled with the reinstatement of our common stock repurchase program and the calling of certain high-cost trust preferred securities, reflects the continued strength of our capital position. The diversity of Wells Fargo's business lines enables us to better serve all our customers' financial needs and enhances the stability and strength of our earnings – which in turn provides the foundation that supports us in doing the right thing for our customers and our shareholders every day, for the long term. Our focus is on improving our efficiency, investing wisely, making every good loan we can, helping customers emerge from the economic downturn, and building an ever-stronger capital base.”

Financial Performance

“In the first quarter, our businesses again produced strong results for shareholders – demonstrating the power of our diversified business model and risk discipline,” said Chief Financial Officer Tim Sloan. “Our focus on expanding customer relationships was evident in this quarter’s growth in core deposits, net checking accounts and many commercial loan portfolios. While revenue declined from the prior quarter, our expense and risk management discipline helped produce record results – evidence of the benefits our business model provides our shareholders. Expenses declined significantly from fourth quarter and credit quality continued to improve, with the second consecutive quarterly decline in nonperforming loans and the fifth consecutive quarter of lower net charge-offs. Capital levels grew once again, with Tier 1 common equity reaching 8.9 percent under Basel I at March 31, 2011, and an estimated 7.2 percent under current Basel III capital proposals. Integration activities remain on track and, after converting customers in Pennsylvania, we now have 74 percent of our banking customers company-wide on a single system. We believe our franchise has never been better positioned to capture future growth opportunities.”

Revenue

Revenue was $20.3 billion, compared with $21.5 billion in fourth quarter 2010 and $21.4 billion in first quarter 2010. The linked-quarter decline in revenue was primarily due to lower mortgage banking revenue (down $741 million) and lower net interest income. Many businesses generated linked-quarter revenue growth, including commercial mortgage servicing, fixed income and equity sales and trading, global remittance, real estate capital markets, retail brokerage, retirement services, SBA lending and wealth management.

Net Interest Income

Net interest income was $10.7 billion, compared with $11.1 billion in fourth quarter 2010. The net interest margin was 4.05 percent, down 11 basis points from 4.16 percent in fourth quarter 2010. Approximately one-half of the decline in margin was due to a lower level of accelerated income from purchased credit-impaired (PCI) loan resolutions and securities redemptions predominantly related to legacy Wachovia positions. The remaining portion of the decline in margin was attributable to higher levels of low-yielding cash and short-term investments reflecting the Company’s interest rate risk management discipline. Other than these items, the margin was essentially flat compared with last quarter.

Noninterest Income

Noninterest income was $9.7 billion, down $623 million, or 6 percent, from first quarter 2010, and down $753 million from fourth quarter 2010, almost entirely attributable to the decline in mortgage banking income. On a linked-quarter basis, card fees were higher driven by new account growth and increased card usage by existing customers. Gains on trading assets were up (improved fixed income environment) as were debt securities results (lower losses from sales of lower-yielding bonds) and gains from equity investments. Trust and investment fees were down modestly, reflecting lower bond and equity originations after a particularly strong fourth quarter, partially offset by higher retail brokerage asset-based fees. Insurance fees were seasonally lower.

Mortgage banking noninterest income was $2.02 billion, down $741 million from fourth quarter 2010 on $84 billion of originations compared with $128 billion of originations in fourth quarter. Mortgage banking noninterest income in first quarter included a $249 million provision for mortgage loan repurchase losses compared with $464 million in fourth quarter (included in net gains from mortgage loan origination/sales activities). Net mortgage servicing rights (MSRs) results were a $379 million gain compared with a $143 million loss in fourth quarter 2010. The ratio of MSRs to related loans serviced for others was 92 basis points and the average note rate on the servicing portfolio was 5.31 percent, compared with an average 4.86 percent published rate in the Freddie Mac Primary Mortgage Market Survey at quarter-end. The unclosed pipeline at March 31, 2011, was $45 billion compared with $73 billion at December 31, 2010.

The Company had net unrealized securities gains of $8.9 billion at March 31, 2011, up $549 million from fourth quarter 2010. Net realized equity gains of $353 million were partially offset by $166 million of realized bond losses.

Noninterest Expense

Noninterest expense was $12.7 billion, down $607 million from fourth quarter 2010 and up $616 million from a year ago. First quarter expenses included $440 million of merger integration costs (down from $534 million in fourth quarter 2010), $472 million of operating losses (up from $193 million in fourth quarter 2010) substantially all from additional litigation accruals for foreclosure-related matters, and seasonally higher incentive compensation expenses. “We continue to focus on managing costs across our company, without compromising future growth opportunities,” said Sloan. “Certain expenses in the quarter remained elevated, including loan resolution costs and merger costs. As we conclude the integration process, and as the economy continues to recover, we expect these expenses to decline. It’s also important to note that expense reductions in some of our large variable-cost businesses, such as consumer mortgage origination, can sometimes lag related reductions in revenue.”

Loans

Total loans were $751.2 billion at March 31, 2011, compared with $757.3 billion at December 31, 2010, including non-strategic/liquidating portfolios. These portfolios (legacy Wells Fargo Financial indirect auto, liquidating home equity, legacy Wells Fargo Financial debt consolidation, education finance government loans, Pick-a-Pay mortgage, and other PCI) declined $6.5 billion in the quarter. Excluding this planned reduction, total loans increased modestly from the prior quarter. Average loans increased $402 million from last quarter and many portfolios had linked-quarter average loan growth, including auto dealer services, asset-backed finance, brokerage, commercial banking, commercial real estate, corporate banking, government banking, international, private student lending and SBA lending. “The increase in loan balances this quarter reflected new customer relationships, as well as increased borrowing by existing commercial customers,” said Sloan.

March 31, 2011

December 31, 2010

(in millions)

Core

Liquidating (1)

Total

Core

Liquidating (1)

Total

Commercial

315,715

7,507

323,222

314,123

7,935

322,058

Consumer

308,619

119,314

427,933

309,840

125,369

435,209

Total loans

624,334

126,821

751,155

623,963

133,304

757,267

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

Deposits

Average core deposits were $796.8 billion, up 5 percent from a year ago and 1 percent (annualized) from fourth quarter 2010. Consumer checking accounts grew a net 7.4 percent from March 31, 2010. Average checking and savings deposits were $722.5 billion, up 9 percent from a year ago and up 4 percent (annualized) from fourth quarter 2010. Average mortgage escrow deposits were $27.9 billion compared with $24.6 billion a year ago and $36.0 billion in fourth quarter 2010. Average checking and savings deposits were 91 percent of average core deposits, up from 88 percent a year ago. The average deposit cost for first quarter 2011 was 30 basis points compared with 31 basis points in fourth quarter 2010. Total core deposits were 106 percent of total loans at March 31, 2011.

Capital

Capital ratios increased again in the quarter, reflecting continued strong internal capital generation. The Company took several capital actions contemplated in its capital plan submitted to the Federal Reserve, including increasing the quarterly common stock dividend rate to $0.12 a share, reinstating the common stock repurchase program, and calling $3.2 billion of high-cost trust preferred securities that will no longer count as Tier 1 capital under Dodd-Frank and Basel III. “We have confidence in our capital plan, which recognizes the continued strength of our capital position and supports our goal of returning over time to a more normalized common stock dividend payout ratio of 30 percent,” said Sloan. “We appreciate the patience and loyalty our shareholders have demonstrated and look forward to returning more capital over time.”

(as a percent of total risk-weighted assets)

Mar. 31,
2011

Dec. 31,
2010

Mar. 31,
2010

Ratios under Basel I (1):

Tier 1 common equity (2)

8.9

8.3

7.1

Tier 1 capital

11.5

11.2

9.9

Tier 1 leverage

9.3

9.2

8.3

Tier 1 common equity under Basel III, estimated (3)

7.2

6.9

N/A

(1) March 31, 2011, ratios are preliminary.

(2) See FIVE QUARTER TIER 1 COMMON EQUITY table for more information on Tier 1 common equity.

(3) Estimates are based on reported Tier 1 common equity and management’s current interpretation of Basel III capital proposals. These estimates are subject to change depending on final promulgation of Basel III capital rulemaking and interpretations thereof by regulatory authorities.

Income Tax Expense

The Company’s effective income tax rate was 29.5 percent for first quarter 2011. This rate included the benefit associated with the realization for tax purposes of a previously written down investment. Currently, the Company’s estimate of its full year 2011 effective tax rate is approximately 32 percent.

Credit Quality

Net charge-offs decreased significantly from $3.8 billion in the fourth quarter of 2010 to $3.2 billion in the first quarter. “The first quarter marked the fifth consecutive quarter of declining loan losses and the second consecutive quarter of reduced nonperforming assets,” said Mike Loughlin, Chief Risk Officer. “Delinquency trends continued to improve across the portfolio for both early and late stage delinquencies. Six percent of the retail loan portfolio was 30 days or more past due, down 15 percent from the previous quarter. While these improvements were partially driven by seasonal factors, the improving economic landscape and customer optimism also contributed to a more positive credit environment. Reflecting the improved overall portfolio performance, the provision for credit losses was $1.0 billion less than net charge-offs. Absent significant deterioration in the economy, we expect future reserve releases,” said Loughlin.

Credit Losses

First quarter net charge-offs were $3.2 billion, or 1.73 percent (annualized) of average loans, down $629 million from fourth quarter net charge-offs of $3.8 billion (2.02 percent). Net charge-offs improved across all major portfolio segments. “We continue to be optimistic about the improvements in credit quality and remain focused on managing through this cycle,” said Loughlin.

Net Loan Charge-Offs
	Quarter ended
	March 31, 2011				December 31, 2010				September 30, 2010
($ in millions)	Net loan charge- offs		As a % of average loans (1)		Net loan charge -offs		As a % of average loans (1)		Net loan charge- offs		As a % of average loans (1)

Commercial:
Commercial and industrial	$	354	0.96	%	$	500	1.34	%	$	509	1.38	%
Real estate mortgage		152	0.62			234	0.94			218	0.87
Real estate construction		83	1.38			171	2.51			276	3.72
Lease financing		6	0.18			21	0.61			23	0.71
Foreign		28	0.34			28	0.36			39	0.52
Total commercial		623	0.79			954	1.19			1,065	1.33

Consumer:
Real estate 1-4 family first mortgage		904	1.60			1,024	1.77			1,034	1.78
Real estate 1-4 family junior lien mortgage		994	4.25			1,005	4.08			1,085	4.30
Credit card		382	7.21			452	8.21			504	9.06
Other revolving credit and installment		307	1.42			404	1.84			407	1.83
Total consumer		2,587	2.42			2,885	2.63			3,030	2.72
Total	$	3,210	1.73	%	$	3,839	2.02	%	$	4,095	2.14	%


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

Nonperforming Assets

Nonperforming assets ended the quarter at $30.6 billion, down 5 percent from $32.4 billion in the fourth quarter. Nonaccrual loans declined to $25.0 billion from $26.2 billion in the fourth quarter, with reductions in commercial and industrial, commercial real estate construction and each of the consumer categories: 1-4 family first mortgage, 1-4 family junior lien mortgage, and other revolving credit and installment.

Nonaccrual Loans and Other Nonperforming Assets
	March 31, 2011					December 31, 2010					September 30, 2010
($ in millions)	Total balances			As a % of total loans		Total balances			As a % of total loans		Total balances		As a % of total loans

Commercial:
Commercial and industrial	$	2,653		1.76	%	$	3,213		2.12	%	$	4,103	2.79	%
Real estate mortgage		5,239		5.18			5,227		5.26			5,079	5.14
Real estate construction		2,239		9.79			2,676		10.56			3,198	11.46
Lease financing		95		0.73			108		0.82			138	1.06
Foreign		86		0.24			127		0.39			126	0.42
Total commercial		10,312		3.19			11,351		3.52			12,644	3.99

Consumer:
Real estate 1-4 family first mortgage		12,143		5.36			12,289		5.34			12,969	5.69
Real estate 1-4 family junior lien mortgage		2,235		2.40			2,302		2.39			2,380	2.40
Other revolving credit and installment		275		0.31			300		0.35			312	0.35
Total consumer		14,653		3.42			14,891		3.42			15,661	3.58
Total nonaccrual loans		24,965		3.32			26,242		3.47			28,305	3.76

Foreclosed assets:
GNMA		1,457					1,479					1,492
Non GNMA		4,055					4,530					4,635
Total foreclosed assets		5,512					6,009					6,127
Other		140					120					141
Total nonaccrual loans and other nonperforming assets	$	30,617		4.08	%	$	32,371		4.27	%	$	34,573	4.59	%

Change from prior quarter:
Total nonaccrual loans	$	(1,277	)			$	(2,063	)			$	494
Total nonperforming assets		(1,754	)				(2,202	)				1,637

Loans 90 Days or More Past Due and Still Accruing

Loans 90 days or more past due and still accruing also improved in the quarter, totaling $17.9 billion at March 31, 2011, compared with $18.5 billion at December 31, 2010. For the same dates, the totals included $15.5 billion in mortgage loans and $15.8 billion in student loans whose repayments are insured by the Federal Housing Administration or predominantly guaranteed by the Department of Veterans Affairs for mortgages and the U.S. Department of Education for student loans under the Federal Family Education Loan Program. Excluding these insured guaranteed loan balances, 90 days past due and accruing balances were down 8 percent from the prior quarter.

Allowance for Credit Losses

The allowance for credit losses, including the allowance for unfunded commitments, totaled $22.4 billion at March 31, 2011, down from $23.5 billion at December 31, 2010. The allowance coverage to total loans remained stable with the first quarter at 2.98 percent. The allowance covered 1.72 times annualized first quarter net charge-offs compared with 1.54 times in the prior quarter. The allowance coverage to nonaccrual loans was 90 percent at March 31, 2011, compared with 89 percent at December 31, 2010. “We believe the allowance was adequate for losses inherent in the loan portfolio at March 31, 2011,” said Loughlin.

Additional detail on credit quality is included in the quarterly supplement, available on the Investor Relations page at www.wellsfargo.com/invest_relations/investor_relations/

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
	Mar. 31,		Dec. 31,	Mar. 31,
(in millions)	2011		2010	2010
Community Banking	$	2,175	1,924	1,415
Wholesale Banking		1,652	1,690	1,237
Wealth, Brokerage and Retirement		339	197	282

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

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

Selected Financial Information
	Quarter ended
	Mar. 31,		Dec. 31,	Mar. 31,
(in millions)	2011		2010	2010
Total revenue	$	12,637	13,472	13,964
Provision for credit losses		2,065	2,785	4,519
Noninterest expense		7,605	7,855	7,205
Segment net income		2,175	1,924	1,415

(in billions)
Average loans		509.8	514.1	550.4
Average assets		759.9	771.6	776.8
Average core deposits		548.1	544.4	531.5

Community Banking reported net income of $2.2 billion, up $251 million, or 13 percent, from prior quarter and up $760 million, or 54 percent, from first quarter 2010. Revenue decreased $835 million, from fourth quarter 2010 driven primarily by a decrease in mortgage banking income, as lower originations/sales activities more than offset an increase in servicing income, and by the expected reduction in the liquidating loan portfolios, mitigated by gains on asset disposition. Revenue decreased $1.3 billion, or 10 percent, from first quarter 2010 largely due to lower mortgage banking income, lower deposit service charges due to Regulation E and the expected reduction in the liquidating loan portfolios. Noninterest expense decreased $250 million, or 3 percent, from fourth quarter 2010, which included a $400 million charitable contribution to the Wells Fargo Foundation, reflecting in part lower software license and equipment maintenance expense, partially offset by an increase in operating losses (substantially all from litigation accruals for foreclosure-related matters) and seasonally higher personnel expenses. The provision for credit losses decreased $720 million from fourth quarter 2010 due to a $520 million decrease in net loan charge-offs and an $850 million reserve release compared with a $650 million reserve release in fourth quarter 2010.

Regional Banking Highlights

Strong growth in checking accounts from March 31, 2010 (combined Regional Banking)
- Consumer checking accounts up a net 7.4 percent
- Business checking accounts up a net 5.3 percent
- Consumer checking accounts up a net 7.9 percent in California, 8.5 percent in North Carolina and 12.0 percent in Florida

Record solutions in first quarter 2011
- Western footprint including converted Wachovia
  - Record core product solutions (sales) of 8.93 million, up 16 percent from prior year on a comparable basis
  - Record core sales per platform banker FTE (active, full-time equivalent) of 7.10 per day, up from 6.70 in prior year on a comparable basis
  - Sales of Wells Fargo Packages^® (a checking account and three other products) up 15 percent from prior year, purchased by 84 percent of new checking account customers
- Eastern footprint including converted Wachovia
  - Platform banker FTEs grew by more than 1,700, or 19 percent, from prior year
  - In the southeastern states, which were on Wells Fargo systems the entire quarter, 79 percent of new checking account customers purchased Wells Fargo Packages

Retail bank household cross-sell showed growth for combined company
- Retail bank household cross-sell ratio for total combined company of 5.79 products per household, up from 5.60 in first quarter 2010
- This ratio reflects the opportunity to earn more business from customers in the East; the cross-sell in the West is 6.21, compared with the cross-sell ratio in the East of 5.22
Small Business/Business Banking
- Wells Fargo, America’s #1 small business lender, made 31,000 loans totaling $3.7 billion in new loan commitments to its small business customers in first quarter 2011, a 27 percent increase in dollars lent from prior year
- Store-based business solutions up 31 percent from prior year on a comparable basis (Western footprint including converted Wachovia)
- Sales of Wells Fargo Business Services Packages (business checking account and at least three other business products) up 58 percent from prior year, purchased by 70 percent of new business checking account customers (Western footprint including converted Wachovia)
- Business Banking household cross-sell of 4.09 products per household (Western footprint including Wells Fargo and Wachovia customers)
Online and Mobile Banking
- 19.4 million combined active online customers
- 5.5 million combined active mobile customers

Wells Fargo Home Mortgage (Home Mortgage)

Home Mortgage applications of $102 billion, compared with $158 billion in prior quarter
Home Mortgage application pipeline of $45 billion at quarter end, compared with $73 billion at December 31, 2010
Home Mortgage originations of $84 billion, down from $128 billion in prior quarter
Owned residential mortgage servicing portfolio of $1.8 trillion

Wholesale Banking provides financial solutions to businesses across the United States with annual sales generally in excess of $20 million and to financial institutions globally. Products & business units include Middle Market Commercial Banking, Government & 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, Investment Banking & Capital Markets, Securities Investment Portfolio, Asset Backed Finance, and Asset Management.

Selected Financial Information
	Quarter ended
	Mar. 31,		Dec. 31,	Mar. 31,
(in millions)	2011		2010	2010
Total revenue	$	5,460	5,840	5,423
Provision for credit losses		134	195	810
Noninterest expense		2,800	2,992	2,685
Segment net income		1,652	1,690	1,237

(in billions)
Average loans		234.7	229.6	237.0
Average assets		399.6	384.4	369.5
Average core deposits		184.8	185.1	161.6

Wholesale Banking reported net income of $1.7 billion, up $415 million, or 34 percent, from first quarter 2010 and down $38 million, or 2 percent, from prior quarter. Revenue increased $37 million, or 1 percent, from prior year driven by growth in net interest income due to stronger earnings assets, solid deposit growth and higher loan portfolio yields. Noninterest income declined from first quarter 2010 as growth in investment banking and capital markets, corporate banking, foreign exchange and real estate capital markets was more than offset by reduced levels of PCI portfolio recoveries, crop insurance gains and trading portfolio income. Revenue decreased $380 million, or 7 percent, from the prior quarter as strong loan growth in commercial banking and international was more than offset by lower PCI-related recoveries and other gains. Noninterest expense increased $115 million, or 4 percent, from prior year related to higher personnel expenses and decreased $192 million from prior quarter related to lower litigation expense. Total provision for credit losses of $134 million declined $676 million, or 83 percent, from first quarter 2010. The decrease included a $150 million allowance release in the first quarter along with a $526 million improvement in credit losses.

Linked-quarter average loan growth in many portfolios including commercial banking, international, commercial real estate, asset-backed finance, government banking and corporate banking driven by both utilization increases and new customer activity
Strong year-over-year average core deposit growth of 14 percent
Continued improvement in nonperforming assets and loan losses
Investment Banking revenue from corporate and commercial customers increased 68 percent from first quarter 2010 due to attractive capital markets conditions and continued momentum in cross selling investment banking products and services to wholesale customer base
42 percent of Wells Fargo Advantage Funds^® rated 4 or 5 stars by Morningstar versus industry average of 32.5 percent
Within Treasury Management, the CEO Mobile^® service continued to process an increasing volume of wires for Wells Fargo corporate, commercial and institutional customers. Through first quarter 2011, $5.4 billion has been processed in the past two years.

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

Selected Financial Information
	Quarter ended
	Mar. 31,		Dec. 31,	Mar. 31,
(in millions)	2011		2010	2010
Total revenue	$	3,150	3,041	2,910
Provision for credit losses		41	113	63
Noninterest expense		2,559	2,608	2,390
Segment net income		339	197	282

(in billions)
Average loans		42.7	43.0	43.8
Average assets		146.5	140.2	137.8
Average core deposits		125.4	121.5	121.1

Wealth, Brokerage and Retirement reported net income of $339 million, up $142 million from fourth quarter 2010 and up $57 million from first quarter 2010. Revenue was $3.2 billion, up 4 percent from fourth quarter 2010 driven by asset-based revenues and brokerage securities gains and up 8 percent from first quarter 2010 driven by higher asset-based revenues and net interest income. Total provision for credit losses decreased $72 million from fourth quarter 2010 and $22 million from first quarter 2010. Noninterest expense declined 2 percent from fourth quarter on reduced non-personnel costs but increased 7 percent from first quarter 2010 due to growth in personnel costs, primarily broker commissions driven by higher production levels. Average core deposits increased $4 billion from fourth quarter 2010 and first quarter 2010.

Retail Brokerage

Client assets of $1.2 trillion, up 6 percent from prior year
Managed account assets increased $45 billion, or 21 percent, from prior year driven by strong net flows and solid market gains
Successfully completed the brokerage conversion in January, converting legacy Wells Fargo brokerage customers to the Wells Fargo Advisors common platform, providing greater access to more products and services

Wealth Management

Investment management and trust asset-based revenue up 8 percent from prior year
Strong deposit growth, with average balances up $1.9 billion, or 4 percent, from prior year

Retirement

Institutional retirement plan assets of $244 billion, up $20 billion, or 9 percent, from prior year
Institutional retirement sales up 40 percent from prior year
IRA assets of $284 billion, up $26 billion, or 10 percent, from prior year

Conference Call

The Company will host a live conference call on Wednesday, April 20, at 6:30 a.m. PDT (9:30 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://event.meetingstream.com/r.htm?e=296339&s=1&k=F045CCDCDDD6B9CB7191D93FDBDD1147.

A replay of the conference call will be available beginning at approximately noon PDT (3 p.m. EDT) on April 20 through Wednesday, April 27. Please dial 800-642-1687 (U.S. and Canada) or 706-645-9291 (international) and enter Conference ID #51667731. The replay will also be available online at wellsfargo.com/invest_relations/earnings.

Cautionary Statement about Forward-Looking Information

In accordance with the Private Securities Litigation Reform Act of 1995, we caution you that this news release contains forward-looking statements about our future financial performance and business. We make forward-looking statements when we use words such as “believe,” “expect,” “anticipate,” “estimate,” “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 expected or estimated future loan losses in our loan portfolios, and the adequacy of the allowance for loan losses, including our current expectation of future reductions in the allowance for loan losses; (ii) our current estimate of our full year 2011 tax rate; (iii) our estimates regarding our Tier 1 common equity ratio as of March 31, 2011, and December 31, 2010, under proposed Basel III capital regulations; and (iv) the timing of expected integration activities related to the Wachovia merger, as well as other expectations regarding future expenses.

Do not unduly rely on forward-looking statements as actual results could differ materially from expectations. Forward-looking statements speak only as of the date made, and we do not undertake to update them to reflect changes or events that occur after that date. Several factors could cause actual results to differ materially from expectations including: current and future economic and market conditions, including the effects of further declines in housing prices and high unemployment rates; our capital requirements (including under regulatory capital standards as determined and interpreted by applicable regulatory authorities such as the proposed Basel III capital regulations) 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); 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 foreclosures, 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 delays or moratoriums on foreclosures; our ability to successfully and timely integrate the Wachovia merger and realize the expected cost savings and other benefits, including delays or disruptions in system conversions and higher severance costs; our ability to realize efficiency initiatives to lower expenses when and in the amount expected; recognition of other-than-temporary impairment on securities held in our available-for-sale portfolio; the effect of changes in interest rates on our net interest margin and our mortgage originations, mortgage servicing rights and mortgages held for sale; hedging gains or losses; disruptions in the capital markets and reduced investor demand for mortgage loans; our ability to sell more products to our customers; the effect of the economic recession on the demand for our products and services; the effect of fluctuations in stock market prices on fee income from our brokerage, asset and wealth management businesses; our election to provide support to our mutual funds for structured credit products they may hold; changes in the value of our venture capital investments; changes in our accounting policies or in accounting standards or in how accounting standards are to be applied; 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; the loss of checking and saving account deposits to other investments such as the stock market; and fiscal and monetary policies of the Federal Reserve Board. There is no assurance that our allowance for credit losses will be adequate to cover future credit losses, especially if credit markets, housing prices, and unemployment do not improve. Increases in loan charge-offs or in the allowance for credit losses and related provision expense could materially adversely affect our financial results and condition. For more information about factors that could cause actual results to differ materially from our expectations, refer to our reports filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2010, including the discussion under “Risk Factors” in that report, as filed with the SEC and available on the SEC’s website at www.sec.gov. Any factor described above or in our SEC reports could, by itself or together with one or more other factors, adversely affect our financial results and condition.

About Wells Fargo

Wells Fargo & Company (NYSE:WFC) is a nationwide, diversified, community-based financial services company with $1.2 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 wachovia.com), and other distribution channels across North America and internationally. With approximately 280,000 team members, Wells Fargo serves one in three households in America. Wells Fargo & Company was ranked No. 19 on Fortune’s 2009 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							18-19

Income
Consolidated Statement of Income							20-21
Average Balances, Yields and Rates Paid							22
Noninterest Income and Noninterest Expense							23-24

Balance Sheet
Consolidated Balance Sheet							25-26
Average Balances							27

Loans
Loans							28
Nonaccrual Loans and Other Nonperforming Assets							28
Loans 90 Days or More Past Due and Still Accruing							29
Purchased Credit-Impaired Loans							30-32
Pick-A-Pay Portfolio							33
Non-Strategic and Liquidating Loan Portfolios							34
Home Equity Portfolios							34
Allowance for Credit Losses							35

Equity
Condensed Consolidated Statement of Changes in Total Equity							36
Tier 1 Common Equity							37

Operating Segments
Operating Segment Results							38

Other
Mortgage Servicing and other related data							39-41

Wells Fargo & Company and Subsidiaries
SUMMARY FINANCIAL DATA

						% Change
	Quarter ended					Mar. 31, 2011 from
($ in millions, except per share amounts)		Mar. 31, 2011		Dec. 31, 2010	Mar. 31, 2010	Dec. 31, 2010			Mar. 31, 2010
For the Period
Wells Fargo net income	$	3,759		3,414	2,547	10		%	48
Wells Fargo net income applicable to common stock		3,570		3,232	2,372	10			51
Diluted earnings per common share		0.67		0.61	0.45	10			49
Profitability ratios (annualized):
Wells Fargo net income to average assets (ROA)		1.23	%	1.09	0.84	13			46
Wells Fargo net income applicable to common stock to average Wells Fargo common stockholders' equity (ROE)		11.98		10.95	8.96	9			34
Efficiency ratio (1)		62.6		62.1	56.5	1			11
Total revenue	$	20,329		21,494	21,448	(5	)		(5	)
Pre-tax pre-provision profit (PTPP) (2)		7,596		8,154	9,331	(7	)		(19	)
Dividends declared per common share		0.12		0.05	0.05	140			140
Average common shares outstanding		5,278.8		5,256.2	5,190.4	-			2
Diluted average common shares outstanding		5,333.1		5,293.8	5,225.2	1			2
Average loans	$	754,077		753,675	797,389	-			(5	)
Average assets		1,241,176		1,237,037	1,226,120	-			1
Average core deposits (3)		796,826		794,799	759,169	-			5
Average retail core deposits (4)		584,100		573,843	573,653	2			2
Net interest margin		4.05	%	4.16	4.27	(3	)		(5	)
At Period End
Securities available for sale	$	167,906		172,654	162,487	(3	)		3
Loans		751,155		757,267	781,430	(1	)		(4	)
Allowance for loan losses		21,983		23,022	25,123	(5	)		(12	)
Goodwill		24,777		24,770	24,819	-			-
Assets		1,244,666		1,258,128	1,223,630	(1	)		2
Core deposits (3)		795,038		798,192	756,050	-			5
Wells Fargo stockholders' equity		133,471		126,408	116,142	6			15
Total equity		134,943		127,889	118,154	6			14
Capital ratios:
Total equity to assets		10.84	%	10.16	9.66	7			12
Risk-based capital (5):
Tier 1 capital		11.50		11.16	9.93	3			16
Total capital		15.29		15.01	13.90	2			10
Tier 1 leverage (5)		9.27		9.19	8.34	1			11
Tier 1 common equity (6)		8.92		8.30	7.09	7			26
Book value per common share	$	23.18		22.49	20.76	3			12
Team members (active, full-time equivalent)		270,200		272,200	267,400	(1	)		1
Common stock price:
High	$	34.25		31.61	31.99	8			7
Low		29.82		23.37	26.37	28			13
Period end		31.71		30.99	31.12	2			2


(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 March 31, 2011, ratios are preliminary.
(6) See the "Five Quarter Tier 1 Common Equity" table for additional information.

Wells Fargo & Company and Subsidiaries
FIVE QUARTER SUMMARY FINANCIAL DATA

		Quarter ended
($ in millions, except per share amounts)		Mar. 31, 2011		Dec. 31, 2010	Sept. 30, 2010	June 30, 2010	Mar. 31, 2010
For the Quarter
Wells Fargo net income	$	3,759		3,414	3,339	3,062	2,547
Wells Fargo net income applicable to common stock		3,570		3,232	3,150	2,878	2,372
Diluted earnings per common share		0.67		0.61	0.60	0.55	0.45
Profitability ratios (annualized):
Wells Fargo net income to average assets (ROA)		1.23	%	1.09	1.09	1.00	0.84
Wells Fargo net income applicable to common stock to average Wells Fargo common stockholders' equity (ROE)		11.98		10.95	10.90	10.40	8.96
Efficiency ratio (1)		62.6		62.1	58.7	59.6	56.5
Total revenue	$	20,329		21,494	20,874	21,394	21,448
Pre-tax pre-provision profit (PTPP) (2)		7,596		8,154	8,621	8,648	9,331
Dividends declared per common share		0.12		0.05	0.05	0.05	0.05
Average common shares outstanding		5,278.8		5,256.2	5,240.1	5,219.7	5,190.4
Diluted average common shares outstanding		5,333.1		5,293.8	5,273.2	5,260.8	5,225.2
Average loans	$	754,077		753,675	759,483	772,460	797,389
Average assets		1,241,176		1,237,037	1,220,368	1,224,180	1,226,120
Average core deposits (3)		796,826		794,799	771,957	761,767	759,169
Average retail core deposits (4)		584,100		573,843	571,062	574,436	573,653
Net interest margin		4.05	%	4.16	4.25	4.38	4.27
At Quarter End
Securities available for sale	$	167,906		172,654	176,875	157,927	162,487
Loans		751,155		757,267	753,664	766,265	781,430
Allowance for loan losses		21,983		23,022	23,939	24,584	25,123
Goodwill		24,777		24,770	24,831	24,820	24,819
Assets		1,244,666		1,258,128	1,220,784	1,225,862	1,223,630
Core deposits (3)		795,038		798,192	771,792	758,680	756,050
Wells Fargo stockholders' equity		133,471		126,408	123,658	119,772	116,142
Total equity		134,943		127,889	125,165	121,398	118,154
Capital ratios:
Total equity to assets		10.84	%	10.16	10.25	9.90	9.66
Risk-based capital (5):
Tier 1 capital		11.50		11.16	10.90	10.51	9.93
Total capital		15.29		15.01	14.88	14.53	13.90
Tier 1 leverage (5)		9.27		9.19	9.01	8.66	8.34
Tier 1 common equity (6)		8.92		8.30	8.01	7.61	7.09
Book value per common share	$	23.18		22.49	22.04	21.35	20.76
Team members (active, full-time equivalent)		270,200		272,200	266,900	267,600	267,400
Common stock price:
High	$	34.25		31.61	28.77	34.25	31.99
Low		29.82		23.37	23.02	25.52	26.37
Period end		31.71		30.99	25.12	25.60	31.12


(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 March 31, 2011, ratios are preliminary.
(6) See the "Five Quarter Tier 1 Common Equity" table for additional information.

Wells Fargo & Company and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME

	Quarter ended March 31,				%
(in millions, except per share amounts)	2011			2010	Change
Interest income
Trading assets	$	350		267	31		%
Securities available for sale		2,164		2,415	(10	)
Mortgages held for sale		437		387	13
Loans held for sale		12		34	(65	)
Loans		9,387		10,038	(6	)
Other interest income		122		84	45
Total interest income		12,472		13,225	(6	)
Interest expense
Deposits		615		735	(16	)
Short-term borrowings		26		18	44
Long-term debt		1,104		1,276	(13	)
Other interest expense		76		49	55
Total interest expense		1,821		2,078	(12	)
Net interest income		10,651		11,147	(4	)
Provision for credit losses		2,210		5,330	(59	)
Net interest income after provision for credit losses		8,441		5,817	45
Noninterest income
Service charges on deposit accounts		1,012		1,332	(24	)
Trust and investment fees		2,916		2,669	9
Card fees		957		865	11
Other fees		989		941	5
Mortgage banking		2,016		2,470	(18	)
Insurance		503		621	(19	)
Net gains from trading activities		612		537	14
Net gains (losses) on debt securities available for sale		(166	)	28	NM
Net gains from equity investments		353		43	721
Operating leases		77		185	(58	)
Other		409		610	(33	)
Total noninterest income		9,678		10,301	(6	)
Noninterest expense
Salaries		3,454		3,314	4
Commission and incentive compensation		2,347		1,992	18
Employee benefits		1,392		1,322	5
Equipment		632		678	(7	)
Net occupancy		752		796	(6	)
Core deposit and other intangibles		483		549	(12	)
FDIC and other deposit assessments		305		301	1
Other		3,368		3,165	6
Total noninterest expense		12,733		12,117	5
Income before income tax expense		5,386		4,001	35
Income tax expense		1,572		1,401	12
Net income before noncontrolling interests		3,814		2,600	47
Less: Net income from noncontrolling interests		55		53	4
Wells Fargo net income	$	3,759		2,547	48
Less: Preferred stock dividends and other		189		175	8
Wells Fargo net income applicable to common stock	$	3,570		2,372	51
Per share information
Earnings per common share	$	0.68		0.46	48
Diluted earnings per common share		0.67		0.45	49
Dividends declared per common share		0.12		0.05	140
Average common shares outstanding		5,278.8		5,190.4	2
Diluted average common shares outstanding		5,333.1		5,225.2	2


NM - Not meaningful

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

		Quarter ended
(in millions, except per share amounts)		Mar. 31, 2011		Dec. 31, 2010		Sept. 30, 2010		June 30, 2010	Mar. 31, 2010
Interest income
Trading assets	$	350		295		270		266	267
Securities available for sale		2,164		2,374		2,492		2,385	2,415
Mortgages held for sale		437		495		449		405	387
Loans held for sale		12		15		22		30	34
Loans		9,387		9,666		9,779		10,277	10,038
Other interest income		122		124		118		109	84
Total interest income		12,472		12,969		13,130		13,472	13,225
Interest expense
Deposits		615		662		721		714	735
Short-term borrowings		26		26		27		21	18
Long-term debt		1,104		1,153		1,226		1,233	1,276
Other interest expense		76		65		58		55	49
Total interest expense		1,821		1,906		2,032		2,023	2,078
Net interest income		10,651		11,063		11,098		11,449	11,147
Provision for credit losses		2,210		2,989		3,445		3,989	5,330
Net interest income after provision for credit losses		8,441		8,074		7,653		7,460	5,817
Noninterest income
Service charges on deposit accounts		1,012		1,035		1,132		1,417	1,332
Trust and investment fees		2,916		2,958		2,564		2,743	2,669
Card fees		957		941		935		911	865
Other fees		989		1,063		1,004		982	941
Mortgage banking		2,016		2,757		2,499		2,011	2,470
Insurance		503		564		397		544	621
Net gains from trading activities		612		532		470		109	537
Net gains (losses) on debt securities available for sale		(166	)	(268	)	(114	)	30	28
Net gains from equity investments		353		317		131		288	43
Operating leases		77		79		222		329	185
Other		409		453		536		581	610
Total noninterest income		9,678		10,431		9,776		9,945	10,301
Noninterest expense
Salaries		3,454		3,513		3,478		3,564	3,314
Commission and incentive compensation		2,347		2,195		2,280		2,225	1,992
Employee benefits		1,392		1,192		1,074		1,063	1,322
Equipment		632		813		557		588	678
Net occupancy		752		750		742		742	796
Core deposit and other intangibles		483		549		548		553	549
FDIC and other deposit assessments		305		301		300		295	301
Other		3,368		4,027		3,274		3,716	3,165
Total noninterest expense		12,733		13,340		12,253		12,746	12,117
Income before income tax expense		5,386		5,165		5,176		4,659	4,001
Income tax expense		1,572		1,672		1,751		1,514	1,401
Net income before noncontrolling interests		3,814		3,493		3,425		3,145	2,600
Less: Net income from noncontrolling interests		55		79		86		83	53
Wells Fargo net income	$	3,759		3,414		3,339		3,062	2,547
Less: Preferred stock dividends and other		189		182		189		184	175
Wells Fargo net income applicable to common stock	$	3,570		3,232		3,150		2,878	2,372
Per share information
Earnings per common share	$	0.68		0.62		0.60		0.55	0.46
Diluted earnings per common share		0.67		0.61		0.60		0.55	0.45
Dividends declared per common share		0.12		0.05		0.05		0.05	0.05
Average common shares outstanding		5,278.8		5,256.2		5,240.1		5,219.7	5,190.4
Diluted average common shares outstanding		5,333.1		5,293.8		5,273.2		5,260.8	5,225.2

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

	Quarter ended March 31,
	2011							2010
(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	$	83,386		0.35	%	$	72	40,833		0.33	%	$	33
Trading assets		37,403		3.81			356	27,911		3.91			272
Debt securities available for sale (3):
Securities of U.S. Treasury and federal agencies		1,575		2.87			11	2,278		3.62			20
Securities of U.S. states and political subdivisions		19,570		5.45			270	13,696		6.60			221
Mortgage-backed securities:
Federal agencies		73,466		4.72			832	79,730		5.39			1,023
Residential and commercial		32,934		9.68			732	32,768		9.67			790
Total mortgage-backed securities		106,400		6.21			1,564	112,498		6.67			1,813
Other debt securities (4)		35,920		5.55			465	32,346		6.51			492
Total debt securities available for sale (4)		163,465		5.94			2,310	160,818		6.59			2,546
Mortgages held for sale (5)		38,742		4.51			437	31,368		4.93			387
Loans held for sale (5)		975		4.88			12	6,406		2.15			34
Loans:
Commercial:
Commercial and industrial		150,047		4.65			1,723	156,466		4.51			1,743
Real estate mortgage		99,797		3.92			967	97,967		3.68			889
Real estate construction		24,281		4.26			255	35,852		3.07			272
Lease financing		13,020		7.83			255	14,008		9.22			323
Foreign		33,638		2.83			235	28,561		3.62			256
Total commercial		320,783		4.33			3,435	332,854		4.23			3,483
Consumer:
Real estate 1-4 family first mortgage		229,570		5.01			2,867	245,024		5.26			3,210
Real estate 1-4 family junior lien mortgage		94,708		4.35			1,018	105,640		4.47			1,168
Credit card		21,509		13.18			709	23,345		13.15			767
Other revolving credit and installment		87,507		6.36			1,371	90,526		6.40			1,427
Total consumer		433,294		5.54			5,965	464,535		5.70			6,572
Total loans (5)		754,077		5.03			9,400	797,389		5.09			10,055
Other		5,228		3.90			50	6,069		3.36			50
Total earning assets	$	1,083,276		4.73	%	$	12,637	1,070,794		5.06	%	$	13,377
Funding sources
Deposits:
Interest-bearing checking	$	58,503		0.10	%	$	14	62,021		0.15	%	$	23
Market rate and other savings		443,586		0.22			237	403,945		0.29			286
Savings certificates		74,371		1.39			255	94,763		1.36			317
Other time deposits		13,850		2.24			76	15,878		2.03			80
Deposits in foreign offices		57,473		0.23			33	55,434		0.21			29
Total interest-bearing deposits		647,783		0.38			615	632,041		0.47			735
Short-term borrowings		54,751		0.22			30	45,081		0.18			19
Long-term debt		150,144		2.95			1,104	209,008		2.45			1,276
Other liabilities		9,472		3.24			76	5,664		3.43			49
Total interest-bearing liabilities		862,150		0.85			1,825	891,794		0.94			2,079
Portion of noninterest-bearing funding sources		221,126		-			-	179,000		-			-
Total funding sources	$	1,083,276		0.68			1,825	1,070,794		0.79			2,079
Net interest margin and net interest income on a taxable-equivalent basis (6)				4.05	%	$	10,812			4.27	%	$	11,298
Noninterest-earning assets
Cash and due from banks	$	17,360						18,049
Goodwill		24,775						24,816
Other		115,765						112,461
Total noninterest-earning assets	$	157,900						155,326
Noninterest-bearing funding sources
Deposits	$	193,100						172,039
Other liabilities		55,316						44,739
Total equity		130,610						117,548
Noninterest-bearing funding sources used to fund earning assets		(221,126	)					(179,000	)
Net noninterest-bearing funding sources	$	157,900						155,326
Total assets	$	1,241,176						1,226,120


(1) Our average prime rate was 3.25% for the quarters ended March 31, 2011 and 2010. The average three-month London Interbank Offered Rate (LIBOR) was 0.31% 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 include the effects of any unrealized gain or loss marks but those marks carried in other comprehensive income are not included in yield determination of affected earning assets. Thus yields are based on amortized cost balances computed on a settlement date basis.
(4) Includes certain preferred securities.
(5) Nonaccrual loans and related income are included in their respective loan categories.
(6) Includes taxable-equivalent adjustments of $161 million and $151 million for March 31, 2011 and 2010, respectively, primarily related to tax-exempt income on certain loans and securities. The federal statutory tax rate utilized was 35% for the periods presented.

Wells Fargo & Company and Subsidiaries
NONINTEREST INCOME

	Quarter ended March 31,				%
(in millions)	2011			2010	Change
Service charges on deposit accounts	$	1,012		1,332	(24	)	%
Trust and investment fees:
Trust, investment and IRA fees		1,060		1,049	1
Commissions and all other fees		1,856		1,620	15
Total trust and investment fees		2,916		2,669	9
Card fees		957		865	11
Other fees:
Cash network fees		81		55	47
Charges and fees on loans		397		419	(5	)
Processing and all other fees		511		467	9
Total other fees		989		941	5
Mortgage banking:
Servicing income, net		866		1,366	(37	)
Net gains on mortgage loan origination/sales activities		1,150		1,104	4
Total mortgage banking		2,016		2,470	(18	)
Insurance		503		621	(19	)
Net gains from trading activities		612		537	14
Net gains (losses) on debt securities available for sale		(166	)	28	NM
Net gains from equity investments		353		43	721
Operating leases		77		185	(58	)
All other		409		610	(33	)
Total	$	9,678		10,301	(6	)

NM - Not meaningful

NONINTEREST EXPENSE

	Quarter ended March 31,				%
(in millions)	2011			2010	Change
Salaries	$	3,454		3,314	4		%
Commission and incentive compensation		2,347		1,992	18
Employee benefits		1,392		1,322	5
Equipment		632		678	(7	)
Net occupancy		752		796	(6	)
Core deposit and other intangibles		483		549	(12	)
FDIC and other deposit assessments		305		301	1
Outside professional services		580		484	20
Contract services		369		347	6
Foreclosed assets		408		386	6
Operating losses		472		208	127
Outside data processing		220		272	(19	)
Postage, stationery and supplies		235		242	(3	)
Travel and entertainment		206		171	20
Advertising and promotion		116		112	4
Telecommunications		134		143	(6	)
Insurance		133		148	(10	)
Operating leases		24		37	(35	)
All other		471		615	(23	)
Total	$	12,733		12,117	5

Wells Fargo & Company and Subsidiaries
FIVE QUARTER NONINTEREST INCOME

	Quarter ended
(in millions)	Mar. 31, 2011			Dec. 31, 2010		Sept. 30, 2010		June 30, 2010	Mar. 31, 2010
Service charges on deposit accounts	$	1,012		1,035		1,132		1,417	1,332
Trust and investment fees:
Trust, investment and IRA fees		1,060		1,030		924		1,035	1,049
Commissions and all other fees		1,856		1,928		1,640		1,708	1,620
Total trust and investment fees		2,916		2,958		2,564		2,743	2,669
Card fees		957		941		935		911	865
Other fees:
Cash network fees		81		74		73		58	55
Charges and fees on loans		397		446		424		401	419
Processing and all other fees		511		543		507		523	467
Total other fees		989		1,063		1,004		982	941
Mortgage banking:
Servicing income, net		866		240		516		1,218	1,366
Net gains on mortgage loan origination/sales activities		1,150		2,517		1,983		793	1,104
Total mortgage banking		2,016		2,757		2,499		2,011	2,470
Insurance		503		564		397		544	621
Net gains from trading activities		612		532		470		109	537
Net gains (losses) on debt securities available for sale		(166	)	(268	)	(114	)	30	28
Net gains from equity investments		353		317		131		288	43
Operating leases		77		79		222		329	185
All other		409		453		536		581	610
Total	$	9,678		10,431		9,776		9,945	10,301

FIVE QUARTER NONINTEREST EXPENSE

	Quarter ended
(in millions)	Mar. 31, 2011			Dec. 31, 2010		Sept. 30, 2010		June 30, 2010	Mar. 31, 2010
Salaries	$	3,454		3,513		3,478		3,564	3,314
Commission and incentive compensation		2,347		2,195		2,280		2,225	1,992
Employee benefits		1,392		1,192		1,074		1,063	1,322
Equipment		632		813		557		588	678
Net occupancy		752		750		742		742	796
Core deposit and other intangibles		483		549		548		553	549
FDIC and other deposit assessments		305		301		300		295	301
Outside professional services		580		781		533		572	484
Contract services		369		481		430		384	347
Foreclosed assets		408		452		366		333	386
Operating losses		472		193		230		627	208
Outside data processing		220		235		263		276	272
Postage, stationery and supplies		235		239		233		230	242
Travel and entertainment		206		221		195		196	171
Advertising and promotion		116		192		170		156	112
Telecommunications		134		151		146		156	143
Insurance		133		90		62		164	148
Operating leases		24		24		21		27	37
All other		471		968		625		595	615
Total	$	12,733		13,340		12,253		12,746	12,117

Wells Fargo & Company and Subsidiaries CONSOLIDATED BALANCE SHEET
(in millions, except shares)		Mar. 31, 2011	Dec. 31, 2010	% Change
Assets
Cash and due from banks	$	16,978	16,044	6	%
Federal funds sold, securities purchased under resale agreements and other short-term investments		93,041	80,637	15
Trading assets		57,890	51,414	13
Securities available for sale		167,906	172,654	(3)
Mortgages held for sale (includes $28,931 and $47,531 carried at fair value)		33,121	51,763	(36)
Loans held for sale (includes $1,003 and $873 carried at fair value)		1,428	1,290	11

Loans (includes $98 and $309 carried at fair value)		751,155	757,267	(1)
Allowance for loan losses		(21,983)	(23,022)	(5)
Net loans		729,172	734,245	(1)
Mortgage servicing rights:
Measured at fair value		15,648	14,467	8
Amortized		1,423	1,419	-
Premises and equipment, net		9,545	9,644	(1)
Goodwill		24,777	24,770	-
Other assets		93,737	99,781	(6)
Total assets	$	1,244,666	1,258,128	(1)
Liabilities
Noninterest-bearing deposits	$	190,959	191,256	-
Interest-bearing deposits		646,703	656,686	(2)
Total deposits		837,662	847,942	(1)
Short-term borrowings		54,737	55,401	(1)
Accrued expenses and other liabilities		68,721	69,913	(2)
Long-term debt (includes $99 and $306 carried at fair value)		148,603	156,983	(5)
Total liabilities		1,109,723	1,130,239	(2)
Equity
Wells Fargo stockholders' equity:
Preferred stock		11,897	8,689	37
Common stock – $1-2/3 par value, authorized 9,000,000,000 shares; issued 5,312,696,671 and 5,272,414,622 shares		8,854	8,787	1
Additional paid-in capital		54,815	53,426	3
Retained earnings		54,855	51,918	6
Cumulative other comprehensive income		5,021	4,738	6
Treasury stock – 11,818,765 shares and 10,131,394 shares		(541)	(487)	11
Unearned ESOP shares		(1,430)	(663)	116
Total Wells Fargo stockholders' equity		133,471	126,408	6
Noncontrolling interests		1,472	1,481	(1)
Total equity		134,943	127,889	6
Total liabilities and equity	$	1,244,666	1,258,128	(1)

Wells Fargo & Company and Subsidiaries FIVE QUARTER CONSOLIDATED BALANCE SHEET
(in millions)		Mar. 31, 2011		Dec. 31, 2010		Sept. 30, 2010		June 30, 2010		Mar. 31, 2010
Assets
Cash and due from banks	$	16,978		16,044		16,001		17,571		16,301
Federal funds sold, securities purchased under resale agreements and other short-term investments		93,041		80,637		56,549		73,898		54,192
Trading assets		57,890		51,414		49,271		47,132		47,028
Securities available for sale		167,906		172,654		176,875		157,927		162,487
Mortgages held for sale		33,121		51,763		46,001		38,581		34,737
Loans held for sale		1,428		1,290		1,188		3,999		5,140

Loans		751,155		757,267		753,664		766,265		781,430
Allowance for loan losses		(21,983	)	(23,022	)	(23,939	)	(24,584	)	(25,123	)
Net loans		729,172		734,245		729,725		741,681		756,307
Mortgage servicing rights:
Measured at fair value		15,648		14,467		12,486		13,251		15,544
Amortized		1,423		1,419		1,013		1,037		1,069
Premises and equipment, net		9,545		9,644		9,636		10,508		10,405
Goodwill		24,777		24,770		24,831		24,820		24,819
Other assets		93,737		99,781		97,208		95,457		95,601
Total assets	$	1,244,666		1,258,128		1,220,784		1,225,862		1,223,630
Liabilities
Noninterest-bearing deposits	$	190,959		191,256		184,451		175,015		170,518
Interest-bearing deposits		646,703		656,686		630,061		640,608		634,375
Total deposits		837,662		847,942		814,512		815,623		804,893
Short-term borrowings		54,737		55,401		50,715		45,187		46,333
Accrued expenses and other liabilities		68,721		69,913		67,249		58,582		54,371
Long-term debt		148,603		156,983		163,143		185,072		199,879
Total liabilities		1,109,723		1,130,239		1,095,619		1,104,464		1,105,476
Equity
Wells Fargo stockholders' equity:
Preferred stock		11,897		8,689		8,840		8,980		9,276
Common stock		8,854		8,787		8,756		8,743		8,743
Additional paid-in capital		54,815		53,426		52,899		52,687		53,156
Retained earnings		54,855		51,918		48,953		46,126		43,636
Cumulative other comprehensive income		5,021		4,738		5,502		4,844		4,087
Treasury stock		(541	)	(487	)	(466	)	(631	)	(1,460	)
Unearned ESOP shares		(1,430	)	(663	)	(826	)	(977	)	(1,296	)
Total Wells Fargo stockholders' equity		133,471		126,408		123,658		119,772		116,142
Noncontrolling interests		1,472		1,481		1,507		1,626		2,012
Total equity		134,943		127,889		125,165		121,398		118,154
Total liabilities and equity	$	1,244,666		1,258,128		1,220,784		1,225,862		1,223,630

Wells Fargo & Company and Subsidiaries FIVE QUARTER AVERAGE BALANCES, YIELDS AND RATES PAID (TAXABLE-EQUIVALENT BASIS) (1)
	Quarter ended
	Mar. 31, 2011					Dec. 31, 2010					Sept. 30, 2010					June 30, 2010					Mar. 31, 2010
($ 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	$	83.4		0.35	%	$	72.0		0.40	%	$	70.8		0.38	%	$	67.7		0.33	%	$	40.8		0.33	%
Trading assets		37.4		3.81			33.9		3.56			29.0		3.77			28.8		3.79			27.9		3.91
Debt securities available for sale:
Securities of U.S. Treasury and federal agencies		1.6		2.87			1.7		2.80			1.7		2.79			2.0		3.50			2.3		3.62
Securities of U.S. states and political subdivisions		19.6		5.45			18.4		5.58			17.2		5.89			16.2		6.48			13.7		6.60
Mortgage-backed securities:
Federal agencies		73.5		4.72			80.4		4.48			70.5		5.35			72.9		5.39			79.7		5.39
Residential and commercial		32.9		9.68			33.4		10.95			33.4		12.53			33.2		9.59			32.8		9.67
Total mortgage-backed securities		106.4		6.21			113.8		6.35			103.9		7.67			106.1		6.72			112.5		6.67
Other debt securities		35.9		5.55			37.8		6.15			35.5		6.02			33.3		7.21			32.3		6.51
Total debt securities available for sale		163.5		5.94			171.7		6.18			158.3		7.05			157.6		6.75			160.8		6.59
Mortgages held for sale		38.7		4.51			45.1		4.39			38.1		4.72			32.2		5.04			31.4		4.93
Loans held for sale		1.0		4.88			1.1		5.15			3.2		2.71			4.4		2.73			6.4		2.15
Loans:
Commercial:
Commercial and industrial		150.0		4.65			147.9		4.71			146.1		4.57			148.0		5.44			156.5		4.51
Real estate mortgage		99.9		3.92			99.2		3.85			99.0		4.15			97.7		3.89			97.9		3.68
Real estate construction		24.3		4.26			26.9		3.68			29.5		3.31			33.1		3.44			35.9		3.07
Lease financing		13.0		7.83			13.0		9.00			13.2		9.07			13.6		9.54			14.0		9.22
Foreign		33.6		2.83			31.0		3.57			30.3		3.15			29.0		3.62			28.6		3.62
Total commercial		320.8		4.33			318.0		4.42			318.1		4.37			321.4		4.78			332.9		4.23
Consumer:
Real estate 1-4 family first mortgage		229.6		5.01			228.8		5.06			231.2		5.16			237.5		5.24			245.0		5.26
Real estate 1-4 family junior lien mortgage		94.7		4.35			97.7		4.37			100.3		4.41			102.7		4.53			105.6		4.47
Credit card		21.5		13.18			21.9		13.44			22.0		13.57			22.2		13.24			23.3		13.15
Other revolving credit and installment		87.5		6.36			87.3		6.48			87.9		6.50			88.6		6.57			90.6		6.40
Total consumer		433.3		5.54			435.7		5.61			441.4		5.68			451.0		5.74			464.5		5.70
Total loans		754.1		5.03			753.7		5.11			759.5		5.13			772.4		5.34			797.4		5.09
Other		5.2		3.90			5.3		3.93			6.0		3.53			6.1		3.44			6.1		3.36
Total earning assets	$	1,083.3		4.73	%	$	1,082.8		4.87	%	$	1,064.9		5.01	%	$	1,069.2		5.14	%	$	1,070.8		5.06	%
Funding sources
Deposits:
Interest-bearing checking	$	58.5		0.10	%	$	60.9		0.09	%	$	59.7		0.10	%	$	61.2		0.13	%	$	62.0		0.15	%
Market rate and other savings		443.6		0.22			431.2		0.25			420.0		0.25			412.1		0.26			403.9		0.29
Savings certificates		74.4		1.39			79.1		1.43			85.0		1.50			89.8		1.44			94.8		1.36
Other time deposits		13.8		2.24			13.4		2.00			14.4		2.33			14.8		1.90			15.9		2.03
Deposits in foreign offices		57.5		0.23			55.5		0.21			52.1		0.24			57.5		0.23			55.4		0.21
Total interest-bearing deposits		647.8		0.38			640.1		0.41			631.2		0.45			635.4		0.45			632.0		0.47
Short-term borrowings		54.8		0.22			50.6		0.24			46.5		0.26			45.1		0.22			45.1		0.18
Long-term debt		150.1		2.95			160.8		2.86			177.1		2.76			195.4		2.52			209.0		2.45
Other liabilities		9.5		3.24			8.3		3.13			6.7		3.39			6.8		3.33			5.7		3.43
Total interest-bearing liabilities		862.2		0.85			859.8		0.89			861.5		0.94			882.7		0.92			891.8		0.94
Portion of noninterest-bearing funding sources		221.1		-			223.0		-			203.4		-			186.5		-			179.0		-
Total funding sources	$	1,083.3		0.68		$	1,082.8		0.71		$	1,064.9		0.76		$	1,069.2		0.76		$	1,070.8		0.79
Net interest margin on a taxable-equivalent basis				4.05	%				4.16	%				4.25	%				4.38	%				4.27	%
Noninterest-earning assets
Cash and due from banks	$	17.4					18.0					17.0					17.4					18.0
Goodwill		24.8					24.8					24.8					24.8					24.8
Other		115.7					111.4					113.7					112.8					112.5
Total noninterest-earnings assets	$	157.9					154.2					155.5					155.0					155.3
Noninterest-bearing funding sources
Deposits	$	193.1					197.9					184.8					176.9					172.0
Other liabilities		55.3					52.9					50.1					43.7					44.8
Total equity		130.6					126.4					124.0					120.9					117.5
Noninterest-bearing funding sources used to fund earning assets		(221.1	)				(223.0	)				(203.4	)				(186.5	)				(179.0	)
Net noninterest-bearing funding sources	$	157.9					154.2					155.5					155.0					155.3
Total assets	$	1,241.2					1,237.0					1,220.4					1,224.2					1,226.1

(1) Our average prime rate was 3.25% for quarters ended March 31, 2011, and December 31, September 30, June 30 and March 31, 2010. The average three-month London Interbank Offered Rate (LIBOR) was 0.31%, 0.29%, 0.39%, 0.44% and 0.26% for the same quarters, respectively.

Wells Fargo & Company and Subsidiaries FIVE QUARTER LOANS
(in millions)		Mar. 31, 2011	Dec. 31, 2010	Sept. 30, 2010	June 30, 2010	Mar. 31, 2010
Commercial:
Commercial and industrial	$	150,857	151,284	147,321	146,084	150,587
Real estate mortgage		101,084	99,435	98,755	99,626	97,846
Real estate construction		22,868	25,333	27,911	30,879	34,505
Lease financing		12,937	13,094	12,993	13,492	13,887
Foreign (1)		35,476	32,912	29,691	30,474	28,289
Total commercial		323,222	322,058	316,671	320,555	325,114
Consumer:
Real estate 1-4 family first mortgage		226,509	230,235	228,081	233,812	240,528
Real estate 1-4 family junior lien mortgage		93,041	96,149	99,060	101,327	103,800
Credit card		20,996	22,260	21,890	22,086	22,525
Other revolving credit and installment		87,387	86,565	87,962	88,485	89,463
Total consumer		427,933	435,209	436,993	445,710	456,316
Total loans (net of unearned income) (2)	$	751,155	757,267	753,664	766,265	781,430
(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 $40.0 billion, $41.4 billion, $43.8 billion, $46.5 billion, and $49.5 billion of purchased credit-impaired (PCI) loans at March 31, 2011, and December 31, September 30, June 30, and March 31, 2010, respectively. See PURCHASED CREDIT-IMPAIRED (PCI) LOANS table for detail of PCI loans.

FIVE QUARTER NONACCRUAL LOANS AND OTHER NONPERFORMING ASSETS
(in millions)		Mar. 31, 2011		Dec. 31, 2010	Sept. 30, 2010	June 30, 2010	Mar. 31, 2010
Nonaccrual loans:
Commercial:
Commercial and industrial	$	2,653		3,213	4,103	3,843	4,273
Real estate mortgage		5,239		5,227	5,079	4,689	4,345
Real estate construction		2,239		2,676	3,198	3,429	3,327
Lease financing		95		108	138	163	185
Foreign		86		127	126	115	135
Total commercial		10,312		11,351	12,644	12,239	12,265
Consumer:
Real estate 1-4 family first mortgage		12,143		12,289	12,969	12,865	12,347
Real estate 1-4 family junior lien mortgage		2,235		2,302	2,380	2,391	2,355
Other revolving credit and installment		275		300	312	316	334
Total consumer		14,653		14,891	15,661	15,572	15,036
Total nonaccrual loans (1)(2)(3)		24,965		26,242	28,305	27,811	27,301
As a percentage of total loans		3.32	%	3.47	3.76	3.63	3.49
Foreclosed assets:
GNMA (4)	$	1,457		1,479	1,492	1,344	1,111
Non-GNMA		4,055		4,530	4,635	3,650	2,970
Other (5)		140		120	141	131	118
Total nonaccrual loans and other nonperforming assets	$	30,617		32,371	34,573	32,936	31,500
As a percentage of total loans		4.08	%	4.27	4.59	4.30	4.03

(1) Also includes nonaccrual mortgages held for sale and loans held for sale in their respective loan categories.
(2) Excludes loans acquired from Wachovia that are accounted for as PCI loans because they continue to earn interest income from accretable yield, independent of performance in accordance with their contractual terms.
(3) 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 since they are insured or guaranteed.
(4) Consistent with regulatory reporting requirements, foreclosed real estate securing Government National Mortgage Association (GNMA) loans is classified as nonperforming. Both principal and interest for GNMA loans secured by the foreclosed real estate are collectible because the GNMA loans are insured by the FHA or guaranteed by the VA.
(5) Includes real estate investments (loans for which any yield is based on performance of the underlying real estate collateral and are accounted for as investments) that would be classified as nonaccrual if these assets were recorded as loans, and nonaccrual debt securities.

Wells Fargo & Company and Subsidiaries LOANS 90 DAYS OR MORE PAST DUE AND STILL ACCRUING
(in millions)		Mar. 31, 2011	Dec. 31, 2010	Sept. 30, 2010	June 30, 2010	Mar. 31, 2010

Total (excluding PCI)(1):	$	17,901	18,488	18,815	19,384	21,822
Less: FHA insured/guaranteed by the VA (2)		14,353	14,733	14,529	14,387	15,865
Less: Student loans guaranteed under the FFELP (3)		1,120	1,106	1,113	1,122	1,072
Total, not insured/guaranteed	$	2,428	2,649	3,173	3,875	4,885

By segment and class, not insured/guaranteed:
Commercial:
Commercial and industrial	$	338	308	222	540	561
Real estate mortgage		177	104	463	654	947
Real estate construction		156	193	332	471	787
Foreign		16	22	27	21	29
Total commercial		687	627	1,044	1,686	2,324
Consumer:
Real estate 1-4 family first mortgage (4)		858	941	1,016	1,049	1,281
Real estate 1-4 family junior lien mortgage (4)		325	366	361	352	414
Credit card		413	516	560	610	719
Other revolving credit and installment		145	199	192	178	147
Total consumer		1,741	2,022	2,129	2,189	2,561
Total, not insured/guaranteed	$	2,428	2,649	3,173	3,875	4,885

(1) The carrying value of purchased credit-impaired (PCI) loans contractually 90 days or more past due was $10.8 billion, $11.6 billion, $13.0 billion, $15.1 billion, and $16.8 billion, at March 31, 2011, and December 31, September 30, June 30 and March 31, 2010, 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.

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 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.

		Mar. 31,	Dec. 31,
(in millions)		2011	2010	2009	2008
Commercial:
Commercial and industrial	$	608	718	1,911	4,580
Real estate mortgage		2,964	2,855	4,137	5,803
Real estate construction		2,447	2,949	5,207	6,462
Foreign		1,488	1,413	1,733	1,859
Total commercial		7,507	7,935	12,988	18,704
Consumer:
Real estate 1-4 family first mortgage		32,241	33,245	38,386	39,214
Real estate 1-4 family junior lien mortgage		239	250	331	728
Other revolving credit and installment		-	-	-	151
Total consumer		32,480	33,495	38,717	40,093
Total PCI loans (carrying value)	$	39,987	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 was 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, 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 of loans 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 established for the entire pool. This removal method assumes that the amount received from resolution approximates pool performance expectations. The remaining accretable yield balance is unaffected and any material change in remaining effective yield caused by this removal method is addressed by our quarterly cash flow evaluation process for each pool. For loans in pools that are resolved by payment in full, there is no release of the nonaccretable difference since 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 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 related to principal that is not expected to be collected.

(in millions)		Commercial		Pick-a-Pay		Other consumer		Total
Balance at December 31, 2008	$	10,410		26,485		4,069		40,964
Release of nonaccretable difference due to:
Loans resolved by settlement with borrower (1)		(330	)	-		-		(330	)
Loans resolved by sales to third parties (2)		(86	)	-		(85	)	(171	)
Reclassification to accretable yield for loans with improving cash flows (3)		(138	)	(27	)	(276	)	(441	)
Use of nonaccretable difference due to:
Losses from loan resolutions and write-downs (4)		(4,853	)	(10,218	)	(2,086	)	(17,157	)
Balance at December 31, 2009		5,003		16,240		1,622		22,865
Release of nonaccretable difference due to:
Loans resolved by settlement with borrower (1)		(817	)	-		-		(817	)
Loans resolved by sales to third parties (2)		(172	)	-		-		(172	)
Reclassification to accretable yield for loans with improving cash flows (3)		(726	)	(2,356	)	(317	)	(3,399	)
Use of nonaccretable difference due to:
Losses from loan resolutions and write-downs (4)		(1,698	)	(2,959	)	(391	)	(5,048	)
Balance at December 31, 2010		1,590		10,925		914		13,429
Release of nonaccretable difference due to:
Loans resolved by settlement with borrower (1)		(53	)	-		-		(53	)
Loans resolved by sales to third parties (2)		(18	)	-		-		(18	)
Reclassification to accretable yield for loans with improving cash flows (3)		(94	)	-		(21	)	(115	)
Use of nonaccretable difference due to:
Losses from loan resolutions and write-downs (4)		(30	)	(299	)	(64	)	(393	)
Balance at March 31, 2011	$	1,395		10,626		829		12,850
(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 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 other 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 quarterly assessment.

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


			Quarter ended Mar. 31,		Year ended Dec. 31,
(in millions)			2011		2010		2009
Total, beginning of period		$	16,714		14,559		10,447
Accretion (1)			(701	)	(2,435	)	(2,606	)
Reclassification from nonaccretable difference for loans with improving cash flows			115		3,399		441
Changes in expected cash flows that do not affect nonaccretable difference (2)			(247	)	1,191		6,277
Total, end of period		$	15,881		16,714		14,559
(1) Includes accretable yield released as a result of settlements with borrowers, which are included in interest income, and sales to third parties, which are included in noninterest income ($155 million in first quarter 2011).
(2) Represents changes in cash flows expected to be collected due to changes in interest rates on variable rate PCI loans 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 at December 31, 2008	$	-		-	-		-
Provision for losses due to credit deterioration		850		-	3		853
Charge-offs		(520	)	-	-		(520	)
Balance at December 31, 2009		330		-	3		333
Provision for losses due to credit deterioration		712		-	59		771
Charge-offs		(776	)	-	(30	)	(806	)
Balance at December 31, 2010		266		-	32		298
Provision for losses due to credit deterioration		11		-	(1	)	10
Charge-offs		(43	)	-	(8	)	(51	)
Balance at March 31, 2011	$	234		-	23		257

Wells Fargo & Company and Subsidiaries PICK-A-PAY PORTFOLIO (1)
	March 31, 2011
	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			Carrying value (4)	Current LTV ratio (3)
California	$	27,645	119	%	$	20,952	90	%	$	19,571	83	%
Florida		3,782	125			2,878	90			4,152	103
New Jersey		1,409	93			1,235	80			2,512	78
Texas		365	79			332	72			1,636	65
New York		781	92			682	79			1,087	81
Other states		6,692	109			5,353	86			11,116	86
Total Pick-a-Pay loans	$	40,674			$	31,432			$	40,074

(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 2011.
(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.

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

(in millions)

Mar. 31,
2011

Dec. 31,
2010

Commercial:

Commercial and industrial, commercial real estate and foreign PCI loans (1)

7,507

7,935

Total commercial

7,507

7,935

Consumer:

Pick-a-Pay mortgage (1)

71,506

74,815

Liquidating home equity

6,568

6,904

Legacy Wells Fargo Financial indirect auto

4,941

6,002

Legacy Wells Fargo Financial debt consolidation

18,344

19,020

Education Finance - government guaranteed (2)

16,907

17,510

Other PCI loans (1)

1,048

1,118

Total consumer

119,314

125,369

Total non-strategic and liquidating loan portfolios

126,821

133,304

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

(2) Effective first quarter 2011, we included our education finance government guaranteed loan portfolio as there is no longer a U. S. Government guaranteed student loan program available to private financial institutions, pursuant to legislation in 2010. Prior periods have been adjusted to reflect this change.

HOME EQUITY PORTFOLIOS (1)

Outstanding balances

% of loans
two payments
or more past due

Loss rate (annualized)
Quarter ended

(in millions)

Mar. 31,
2011

Dec. 31,
2010

Mar. 31,
2011

Dec. 31,
2010

Mar. 31,
2011

Dec. 31,
2010

Core portfolio (2)

California

27,048

27,850

3.17

3.30

3.98

3.95

Florida

11,742

12,036

5.07

5.46

6.16

5.84

New Jersey

8,460

8,629

3.24

3.44

2.83

1.83

Virginia

5,535

5,667

2.30

2.33

1.91

1.70

Pennsylvania

5,304

5,432

2.42

2.48

1.49

1.11

Other

49,491

50,976

2.65

2.83

2.97

2.86

Total

107,580

110,590

3.06

3.24

3.44

3.24

Liquidating portfolio

California

2,421

2,555

6.11

6.66

13.19

13.48

Florida

312

330

7.16

8.85

15.15

10.59

Arizona

139

149

6.25

6.91

20.02

18.45

Texas

118

125

2.15

2.02

3.39

2.95

Minnesota

4.24

5.39

8.94

8.73

Other

3,491

3,654

3.98

4.53

7.36

6.46

Total

6,568

6,904

4.94

5.54

10.10

9.49

Total core and liquidating portfolios

114,148

117,494

3.17

3.37

3.83

3.61

(1) Consists predominantly of real estate 1-4 family junior lien mortgages and first and junior lines of credit secured by real estate, excluding PCI loans.

(2) Includes $1.6 billion and $1.7 billion at March 31, 2011, and December 31, 2010, respectively, associated with the Pick-a-Pay portfolio.

Wells Fargo & Company and Subsidiaries FIVE QUARTER CHANGES IN ALLOWANCE FOR CREDIT LOSSES
		Quarter ended
(in millions)		Mar. 31, 2011			Dec. 31, 2010		Sept. 30, 2010		June 30, 2010		Mar. 31, 2010
Balance, beginning of quarter	$	23,463			24,372		25,085		25,656		25,031
Provision for credit losses		2,210			2,989		3,445		3,989		5,330
Interest income on certain impaired loans (1)		(83	)		(63	)	(67	)	(62	)	(74	)
Loan charge-offs:
Commercial:
Commercial and industrial		(468	)		(610	)	(588	)	(810	)	(767	)
Real estate mortgage		(179	)		(270	)	(236	)	(364	)	(281	)
Real estate construction		(119	)		(199	)	(296	)	(289	)	(405	)
Lease financing		(13	)		(26	)	(29	)	(31	)	(34	)
Foreign		(39	)		(50	)	(49	)	(52	)	(47	)
Total commercial		(818	)		(1,155	)	(1,198	)	(1,546	)	(1,534	)
Consumer:
Real estate 1-4 family first mortgage		(1,015	)		(1,199	)	(1,164	)	(1,140	)	(1,397	)
Real estate 1-4 family junior lien mortgage		(1,046	)		(1,059	)	(1,140	)	(1,239	)	(1,496	)
Credit card		(448	)		(505	)	(556	)	(639	)	(696	)
Other revolving credit and installment		(500	)		(573	)	(572	)	(542	)	(750	)
Total consumer		(3,009	)		(3,336	)	(3,432	)	(3,560	)	(4,339	)
Total loan charge-offs		(3,827	)		(4,491	)	(4,630	)	(5,106	)	(5,873	)
Loan recoveries:
Commercial:
Commercial and industrial		114			110		79		121		117
Real estate mortgage		27			36		18		4		10
Real estate construction		36			28		20		51		11
Lease financing		7			5		6		4		5
Foreign		11			22		10		10		11
Total commercial		195			201		133		190		154
Consumer:
Real estate 1-4 family first mortgage		111			175		130		131		86
Real estate 1-4 family junior lien mortgage		52			54		55		55		47
Credit card		66			53		52		60		53
Other revolving credit and installment		193			169		165		181		203
Total consumer		422			451		402		427		389
Total loan recoveries		617			652		535		617		543
Net loan charge-offs		(3,210	)		(3,839	)	(4,095	)	(4,489	)	(5,330	)
Allowances related to business combinations/other		3			4		4		(9	)	699
Balance, end of quarter	$	22,383			23,463		24,372		25,085		25,656
Components:
Allowance for loan losses	$	21,983			23,022		23,939		24,584		25,123
Allowance for unfunded credit commitments		400			441		433		501		533
Allowance for credit losses	$	22,383			23,463		24,372		25,085		25,656
Net loan charge-offs (annualized) as a percentage of average total loans		1.73		%	2.02		2.14		2.33		2.71
Allowance for loan losses as a percentage of:
Total loans		2.93			3.04		3.18		3.21		3.22
Nonaccrual loans		88			88		85		88		92
Nonaccrual loans and other nonperforming assets		72			71		69		75		80
Allowance for credit losses as a percentage of:
Total loans		2.98			3.10		3.23		3.27		3.28
Nonaccrual loans		90			89		86		90		94
Nonaccrual loans and other nonperforming assets		73			72		70		76		81

(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 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN TOTAL EQUITY
		Quarter ended March 31,
(in millions)		2011		2010
Balance, beginning of period	$	127,889		114,359
Cumulative effect from change in accounting for VIEs (1)		-		183
Wells Fargo net income		3,759		2,547
Wells Fargo other comprehensive income (loss), net of tax, related to:
Translation adjustments		15		5
Investment securities		352		984
Derivative instruments and hedging activities		(99	)	73
Defined benefit pension plans		15		16
Common stock issued		634		464
Common stock repurchased		(55	)	(38	)
Preferred stock released by ESOP		493		209
Preferred stock issued		2,501		-
Common stock dividends		(634	)	(260	)
Preferred stock dividends and other		(189	)	(175	)
Noncontrolling interests and other, net		262		(213	)
Balance, end of period	$	134,943		118,154
(1) Effective January 1, 2010, we adopted changes in consolidation accounting pursuant to amendments by ASU 2009-17 to ASC 810 (FAS 167) and, accordingly, consolidated certain VIEs that were not included in our consolidated financial statements at December 31, 2009. We recorded a $183 million increase to beginning retained earnings as a cumulative effect adjustment.

Wells Fargo & Company and Subsidiaries FIVE QUARTER TIER 1 COMMON EQUITY (1)
			Quarter ended
(in billions)			Mar. 31, 2011			Dec. 31, 2010		Sept. 30, 2010		June 30, 2010		Mar. 31, 2010
Total equity		$	134.9			127.9		125.2		121.4		118.1
Noncontrolling interests			(1.5	)		(1.5	)	(1.5	)	(1.6	)	(2.0	)
Total Wells Fargo stockholders' equity			133.4			126.4		123.7		119.8		116.1
Adjustments:
Preferred equity			(10.6	)		(8.1	)	(8.1	)	(8.1	)	(8.1	)
Goodwill and intangible assets (other than MSRs)			(35.1	)		(35.5	)	(36.1	)	(36.7	)	(37.2	)
Applicable deferred taxes			4.2			4.3		4.7		5.0		5.2
MSRs over specified limitations			(0.9	)		(0.9	)	(0.9	)	(1.0	)	(1.5	)
Cumulative other comprehensive income			(4.9	)		(4.6	)	(5.4	)	(4.8	)	(4.0	)
Other			(0.2	)		(0.3	)	(0.3	)	(0.3	)	(0.3	)
Tier 1 common equity	(A)	$	85.9			81.3		77.6		73.9		70.2
Total risk-weighted assets (2)	(B)	$	963.5			980.0		968.4		970.8		990.1
Tier 1 common equity to total risk-weighted assets	(A)/(B)		8.92		%	8.30		8.01		7.61		7.09
(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. Tier 1 common equity includes total Wells Fargo stockholders' equity, less preferred equity, goodwill and intangible assets (excluding MSRs), net of related deferred taxes, adjusted for specified Tier 1 regulatory capital limitations covering deferred taxes, MSRs, and cumulative other comprehensive income. 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 March 31, 2011, preliminary risk-weighted assets reflect estimated on-balance sheet risk-weighted assets of $797.7 billion and derivative and off-balance sheet risk-weighted assets of $165.8 billion.

Wells Fargo & Company and Subsidiaries FIVE QUARTER OPERATING SEGMENT RESULTS (1)
		Quarter ended
(income/expense in millions, average balances in billions)		Mar. 31, 2011		Dec. 31, 2010		Sept. 30, 2010		June 30, 2010		Mar. 31, 2010
COMMUNITY BANKING
Net interest income (2)	$	7,543		7,751		7,818		8,063		8,253
Provision for credit losses		2,065		2,785		3,155		3,348		4,519
Noninterest income		5,094		5,721		5,629		5,543		5,711
Noninterest expense		7,605		7,855		7,333		7,678		7,205
Income before income tax expense		2,967		2,832		2,959		2,580		2,240
Income tax expense		742		836		951		783		777
Net income before noncontrolling interests		2,225		1,996		2,008		1,797		1,463
Less: Net income from noncontrolling interests		50		72		73		81		48
Segment net income	$	2,175		1,924		1,935		1,716		1,415
Average loans	$	509.8		514.1		522.2		534.3		550.4
Average assets		759.9		771.6		770.0		771.3		776.8
Average core deposits		548.1		544.4		537.1		532.6		531.5

WHOLESALE BANKING
Net interest income (2)	$	2,755		2,965		2,927		3,028		2,554
Provision for credit losses		134		195		280		635		810
Noninterest income		2,705		2,875		2,461		2,746		2,869
Noninterest expense		2,800		2,992		2,719		2,873		2,685
Income before income tax expense		2,526		2,653		2,389		2,266		1,928
Income tax expense		872		958		866		803		688
Net income before noncontrolling interests		1,654		1,695		1,523		1,463		1,240
Less: Net income from noncontrolling interests		2		5		11		1		3
Segment net income	$	1,652		1,690		1,512		1,462		1,237
Average loans	$	234.7		229.6		227.3		228.2		237.0
Average assets		399.6		384.4		371.8		369.5		369.5
Average core deposits		184.8		185.1		170.8		162.3		161.6

WEALTH, BROKERAGE AND RETIREMENT
Net interest income (2)	$	696		676		683		684		664
Provision for credit losses		41		113		77		81		63
Noninterest income		2,454		2,365		2,229		2,183		2,246
Noninterest expense		2,559		2,608		2,420		2,350		2,390
Income before income tax expense		550		320		415		436		457
Income tax expense		208		121		157		165		173
Net income before noncontrolling interests		342		199		258		271		284
Less: Net income from noncontrolling interests		3		2		2		1		2
Segment net income	$	339		197		256		270		282
Average loans	$	42.7		43.0		42.6		42.6		43.8
Average assets		146.5		140.2		138.2		141.0		137.8
Average core deposits		125.4		121.5		120.7		121.5		121.1

OTHER (3)
Net interest income (2)	$	(343	)	(329	)	(330	)	(326	)	(324	)
Provision for credit losses		(30	)	(104	)	(67	)	(75	)	(62	)
Noninterest income		(575	)	(530	)	(543	)	(527	)	(525	)
Noninterest expense		(231	)	(115	)	(219	)	(155	)	(163	)
Loss before income tax benefit		(657	)	(640	)	(587	)	(623	)	(624	)
Income tax benefit		(250	)	(243	)	(223	)	(237	)	(237	)
Net loss before noncontrolling interests		(407	)	(397	)	(364	)	(386	)	(387	)
Less: Net income from noncontrolling interests		-		-		-		-		-
Other net loss	$	(407	)	(397	)	(364	)	(386	)	(387	)
Average loans	$	(33.1	)	(33.0	)	(32.6	)	(32.6	)	(33.8	)
Average assets		(64.8	)	(59.2	)	(59.6	)	(57.6	)	(58.0	)
Average core deposits		(61.5	)	(56.2	)	(56.6	)	(54.6	)	(55.0	)

CONSOLIDATED COMPANY
Net interest income (2)	$	10,651		11,063		11,098		11,449		11,147
Provision for credit losses		2,210		2,989		3,445		3,989		5,330
Noninterest income		9,678		10,431		9,776		9,945		10,301
Noninterest expense		12,733		13,340		12,253		12,746		12,117
Income before income tax expense		5,386		5,165		5,176		4,659		4,001
Income tax expense		1,572		1,672		1,751		1,514		1,401
Net income before noncontrolling interests		3,814		3,493		3,425		3,145		2,600
Less: Net income from noncontrolling interests		55		79		86		83		53
Wells Fargo net income	$	3,759		3,414		3,339		3,062		2,547
Average loans	$	754.1		753.7		759.5		772.5		797.4
Average assets		1,241.2		1,237.0		1,220.4		1,224.2		1,226.1
Average core deposits		796.8		794.8		772.0		761.8		759.2

(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 fourth quarter 2010, we realigned certain lending businesses into Wholesale Banking from Community Banking to reflect our previously announced restructuring of Wells Fargo Financial. In first quarter 2011, we realigned a private equity business into Wholesale Banking from Community Banking. Prior periods have been revised to reflect these changes.
(2) Net interest income is the difference between interest earned on assets and the cost of liabilities to fund those assets. Interest earned includes actual interest earned on segment assets and, if the segment has excess liabilities, interest credits for providing funding to other segments. The cost of liabilities includes interest expense on segment liabilities and, if the segment does not have enough liabilities to fund its assets, a funding charge based on the cost of excess liabilities from another segment.
(3) Includes Wachovia integration expenses and the elimination of items that are included in both Community Banking and Wealth, Brokerage and Retirement, largely representing wealth management customers serviced and products sold in the stores.

Wells Fargo & Company and Subsidiaries FIVE QUARTER CONSOLIDATED MORTGAGE SERVICING
		Quarter ended
(in millions)		Mar. 31, 2011		Dec. 31, 2010		Sept. 30, 2010		June 30, 2010		Mar. 31, 2010
MSRs measured using the fair value method:
Fair value, beginning of quarter	$	14,467		12,486		13,251		15,544		16,004
Adjustments from adoption of consolidation accounting guidance		-		-		-		-		(118	)
Servicing from securitizations or asset transfers		1,262		1,052		1,043		943		1,054
Net additions		1,262		1,052		1,043		943		936
Changes in fair value:
Due to changes in valuation model inputs or assumptions (1)		499		1,613		(1,132	)	(2,661	)	(777	)
Other changes in fair value (2)		(580	)	(684	)	(676	)	(575	)	(619	)
Total changes in fair value		(81	)	929		(1,808	)	(3,236	)	(1,396	)
Fair value, end of quarter	$	15,648		14,467		12,486		13,251		15,544

(1) Principally reflects changes in discount rates and prepayment speed assumptions, mostly due to changes in interest rates and costs to service, including delinquency and foreclosure costs.
(2) Represents changes due to collection/realization of expected cash flows over time.

		Quarter ended
(in millions)		Mar. 31, 2011		Dec. 31, 2010		Sept. 30, 2010		June 30, 2010		Mar. 31, 2010
Amortized MSRs:
Balance, beginning of quarter	$	1,422		1,013		1,037		1,069		1,119
Adjustments from adoption of consolidation accounting guidance		-		-		-		-		(5	)
Purchases		45		36		14		7		1
Servicing from securitizations or asset transfers		29		432		18		17		11
Amortization		(64	)	(59	)	(56	)	(56	)	(57	)
Balance, end of quarter		1,432		1,422		1,013		1,037		1,069

Valuation Allowance:
Balance, beginning of quarter		(3	)	-		-		-		-
Provision for MSRs in excess of fair value		(6	)	(3	)	-		-		-
Balance, end of quarter		(9	)	(3	)	-		-		-
Amortized MSRs, net	$	1,423		1,419		1,013		1,037		1,069
Fair value of amortized MSRs:
Beginning of quarter	$	1,812		1,349		1,307		1,283		1,261
End of quarter		1,898		1,812		1,349		1,307		1,283

Wells Fargo & Company and Subsidiaries FIVE QUARTER CONSOLIDATED MORTGAGE SERVICING (CONTINUED)
		Quarter ended
(in millions)		Mar. 31, 2011			Dec. 31, 2010		Sept. 30, 2010		June 30, 2010		Mar. 31, 2010
Servicing income, net:
Servicing fees (1)	$	1,137			1,129		1,192		1,223		1,053
Changes in fair value of MSRs carried at fair value:
Due to changes in valuation model inputs or assumptions (2)		499			1,613		(1,132	)	(2,661	)	(777	)
Other changes in fair value (3)		(580	)		(684	)	(676	)	(575	)	(619	)
Total changes in fair value of MSRs carried at fair value		(81	)		929		(1,808	)	(3,236	)	(1,396	)
Amortization		(64	)		(59	)	(56	)	(56	)	(57	)
Provision for MSRs in excess of fair value		(6	)		(3	)	-		-		-
Net derivative gains (losses) from economic hedges (4)		(120	)		(1,756	)	1,188		3,287		1,766
Total servicing income, net	$	866			240		516		1,218		1,366
Market-related valuation changes to MSRs, net of hedge results (2)+(4)	$	379			(143	)	56		626		989

(1) Includes contractually specified servicing fees, late charges and other ancillary revenues.
(2) Principally reflects changes in discount rates and prepayment speed assumptions, mostly due to changes in interest rates and costs to service, including delinquency and foreclosure costs.
(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)		Mar. 31, 2011			Dec. 31, 2010		Sept. 30, 2010		June 30, 2010		Mar. 31, 2010
Managed servicing portfolio (1):
Residential mortgage servicing:
Serviced for others	$	1,453			1,429		1,433		1,437		1,417
Owned loans serviced		346			371		365		365		371
Subservicing		9			9		10		10		10
Total residential servicing		1,808			1,809		1,808		1,812		1,798
Commercial mortgage servicing:
Serviced for others		406			408		439		441		449
Owned loans serviced		101			99		99		100		105
Subservicing		14			13		10		10		10
Total commercial servicing		521			520		548		551		564
Total managed servicing portfolio	$	2,329			2,329		2,356		2,363		2,362
Total serviced for others	$	1,859			1,837		1,872		1,878		1,866
Ratio of MSRs to related loans serviced for others		0.92		%	0.86		0.72		0.76		0.89
Weighted-average note rate (mortgage loans serviced for others)		5.31			5.39		5.46		5.53		5.59

(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)		Mar. 31, 2011			Dec. 31, 2010		Sept. 30, 2010		June 30, 2010		Mar. 31, 2010
Application data:
Wells Fargo first mortgage quarterly applications	$	102			158		194		143		125
Refinances as a percentage of applications		61		%	73		80		58		61
Wells Fargo first mortgage unclosed pipeline, at quarter end	$	45			73		101		68		59


Residential Real Estate Originations:
Wells Fargo first mortgage loans:
Retail	$	49			70		53		44		43
Correspondent/Wholesale		34			57		47		36		32
Other (1)		1			1		1		1		1
Total quarter-to-date	$	84			128		101		81		76
Total year-to-date	$	84			386		258		157		76
(1) Consists of home equity loans and lines and legacy Wells Fargo Financial.

Wells Fargo & Company and Subsidiaries CHANGES IN LIABILITY FOR MORTGAGE LOAN REPURCHASE LOSSES
	Quarter ended
(in millions)		Mar. 31, 2011		Dec. 31, 2010			Sept. 30, 2010		June 30, 2010		Mar. 31, 2010
Balance, beginning of period	$	1,289			1,331		1,375		1,263		1,033
Provision for repurchase losses:
Loan sales		35			35		29		36		44
Change in estimate – primarily due to credit deterioration		214			429		341		346		358
Total additions		249			464		370		382		402
Losses		(331	)		(506	)	(414	)	(270	)	(172	)
Balance, end of period	$	1,207			1,289		1,331		1,375		1,263

OUTSTANDING REPURCHASE DEMANDS AND MORTGAGE INSURANCE RESCISSIONS
($ in millions)				Government sponsored entities (1)			Private		Mortgage insurance rescissions (2)		Total
March 31, 2011
Number of loans					6,210		1,973		2,885		11,068
Original loan balance (3)				$	1,395		424		674		2,493

December 31, 2010
Number of loans					6,501		2,899		3,248		12,648
Original loan balance (3)				$	1,467		680		801		2,948

September 30, 2010
Number of loans					9,887		3,605		3,035		16,527
Original loan balance (3)				$	2,212		882		748		3,842

June 30, 2010
Number of loans					12,536		3,160		2,979		18,675
Original loan balance (3)				$	2,840		707		760		4,307

March 31, 2010
Number of loans					10,804		2,320		2,843		15,967
Original loan balance (3)				$	2,499		519		737		3,755

(1) Includes repurchase demands of 685 and $132 million, 1,495 and $291 million, 2,263 and $437 million, 2,141 and $417 million, and 1,824 and $372 million, for March 31, 2011, and December 31, September 30, June 30, and March 31, 2010, 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.
(2) As part of our representations and warranties in our loan sales contracts, we represent that certain loans have mortgage insurance. To the extent the mortgage insurance is rescinded by the mortgage insurer, the lack of insurance may result in a repurchase demand from an investor.
(3) While original loan balance related to these demands is presented above, the establishment of the repurchase reserve is based on a combination of factors, such as our appeals success rates, reimbursement by correspondent and other third party originators, and projected loss severity, which is driven by the difference between the current loan balance and the estimated collateral value less costs to sell the property.

Contacts

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

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