Wells Fargo Reports Full Year Net Income of $2.84 Billion, $0.75 Per Share, Fourth Quarter Net Loss of $2.55 Billion, $0.79 Per Share, After Significant De-Risking and Merger-Related Actions

Wells Fargo & Company (NYSE:WFC):

Full Year 2008:

• Record revenue of $42.23 billion, up 7 percent from prior year
• Positive operating leverage (revenue growth of 7 percent; expense decline of 1 percent), best among large bank peers
• Net income of $2.84 billion, including $8.14 billion (pre tax) credit reserve build, $1.68 billion (pre tax) other-than-temporary impairment and $124 million (pre tax) of merger-related expenses
• Diluted earnings per share of $0.75, including credit reserve build ($1.51 per share) and other-than-temporary impairment ($0.31 per share)
• Industry-leading annual results – highest growth in pre-tax pre-provision earnings (up 18 percent), highest net interest margin (4.83 percent), return on equity, return on assets and highest total shareholder return among large bank peers (up 2 percent)

Fourth Quarter 2008:

• Successfully closed Wachovia acquisition on December 31, 2008
  • Integration proceeding as planned and on schedule
  • Completed updated analysis of Wachovia loan portfolios and remain comfortable in the aggregate with original credit assumptions
  • Comfortable with original assumptions on cost saves and earnings per share accretion
  • Announced leadership structure for merged company
  • Wachovia deposit inflows and loan originations have resumed
  • Wachovia recorded fourth quarter loss of $11.2 billion, including $2.8 billion deferred tax asset write-down, $4.2 billion credit reserve build and $4.3 billion of market disruption losses
• Significantly reduced the risk, or "de-risked,” the balance sheet and future earnings stream of the new Wells Fargo
  • De-risking at Wachovia:
    • $37.2 billion of credit write-downs taken at December 31, 2008, through purchase accounting adjustments on $93.9 billion of high-risk loans segregated in Wachovia’s loan portfolio; reduces need for provisions in future
    • Fourth quarter net charge-offs included $1.2 billion on legacy Pick-a-Pay portfolio
    • $4.2 billion credit reserve build
    • Reduced the cost basis of the Wachovia securities portfolio by $9.6 billion reflecting $2.4 billion of recognized losses and write-off of $7.2 billion of unrealized losses previously reflected in negative cumulative other comprehensive income
    • Additional net $2.9 billion of negative cumulative other comprehensive income also written off, primarily related to pension obligations
    • Wachovia period-end loans, securities, trading assets and loans held for sale reduced by $115.2 billion, or 17 percent, from June 30, 2008
  • De-risking at Wells Fargo:
    • $5.6 billion credit reserve build, including $3.9 billion provision to conform to most conservative credit reserve practices from each company
    • Wells Fargo securities portfolio written down by $473 million for other-than-temporary impairment
    • $413 million write-down of aged loans in mortgage warehouse and additions to the mortgage repurchase reserve
  • Combined allowance for credit losses of $21.7 billion at December 31, 2008
    • 3.2 times coverage of nonaccrual loans, highest coverage of any large bank in the U.S.
    • Allowance now covers 12 months of estimated losses for all consumer portfolios and at least 24 months of estimated losses for all commercial and commercial real estate portfolios

• Tier 1 capital was $86.4 billion at December 31, 2008, after the impact of de-risking the balance sheet for credit impairment of loans and write-down of negative cumulative other comprehensive income at Wachovia, which, in the aggregate, reduced the Tier 1 capital ratio by approximately 230 basis points to 7.9 percent at year end

• Board of Directors declares quarterly dividend of $0.34 per share
• No plans to request additional TARP capital
• Continued to grow the Wells Fargo franchise and increased market share in fourth quarter:
  • Pre-tax pre-provision earnings of $4.0 billion
  • Average loans up 11 percent from prior year, up 10 percent (annualized) from prior quarter
  • Record 31 percent annualized growth in average core deposits from prior quarter
  • Net new checking accounts up 6.2 percent from prior year
  • 410,000 new households served in 2008
  • Record cross-sell of 5.73 for retail bank households and 6.4 for wholesale customers
  • Mortgage applications of $116 billion, up 158 percent (annualized) linked quarter; December was 4^th highest application month in Company’s history
  • Mortgage application pipeline of $71 billion at year end
  • Mortgage market share rose to 12 percent (based on third quarter 2008 data) from 10 percent a year earlier
  • Industry-leading net interest margin of 4.90 percent, up 28 basis points from prior year, up 11 basis points from prior quarter

• Among the banking industry’s leaders in increasing loans and assets, remained "open for business” in providing credit to consumers, small business and commercial customers
  • Average earning assets, primarily loans and securities, up $119 billion, or 28 percent, since the start of the credit crisis in mid-2007
  • New loan commitments to consumer and commercial customers of $187 billion since mid-2007
  • Residential real estate originations of $354 billion since mid-2007
  • Average loans in fourth quarter up $9.7 billion, or 10 percent (annualized), linked quarter; new loan commitments of $22 billion
  • Residential real estate originations of $50 billion in fourth quarter

• Continued to help homeowners remain in their homes
  • Working with government agencies, HOPE NOW and others, Wells Fargo has led the industry in development of programs for at-risk customers to avoid foreclosure
  • More than 498,000 solutions delivered to customers in 2008, including more than 143,000 solutions in fourth quarter
  • Announced new program to give 478,000 Wachovia mortgage customers, including those with Pick-a-Pay loans, access to Wells Fargo solutions to avoid preventable foreclosures and help stabilize communities
• Fourth quarter net loss of $2.55 billion, or $0.79 per share, included the following significant items:
  • $(5.6) billion, or $(0.99) per share, credit reserve build through Wells Fargo earnings, which includes $(3.9) billion, or $(0.69) per share, to conform reserve practices of both Wells Fargo and Wachovia
  • $(473) million, or $(0.08) per share, other-than-temporary impairment
  • $(413) million, or $(0.07) per share, write-downs on aged loans in mortgage warehouse and additions to the mortgage repurchase reserve
  • $(294) million, or $(0.05) per share, net charge-offs related to Madoff fraud
  • $(74) million, or $(0.01) per share, merger-related integration and severance expenses

Selected Financial Information										Quarter ended
(Wells Fargo only)		Dec. 31,				Sept. 30,				Dec. 31,
			2008				2008				2007
Earnings
Diluted earnings (loss) per share		$	(0.79	)		$	0.49			$	0.41
Net income (loss) (in billions)			(2.55	)			1.64				1.36
Asset Quality
Net charge-offs as % of avg. total loans			2.69	%			1.96	%			1.28	%
Allowance as a % of nonperforming loans			319				161				206
Other
Revenue (in billions)		$	9.82			$	10.38			$	10.21
Average loans (in billions)			413.9				404.2				374.4
Average core deposits (in billions)			345.0				320.1				314.8
Net interest margin			4.90	%			4.79	%			4.62	%
Effective December 31, 2008, Wells Fargo & Company acquired Wachovia Corporation. Wachovia's assets and liabilities are included in the consolidated balance sheet at their respective acquisition date fair value. Because the acquisition was completed at the end of 2008, Wachovia's results are not included in the income statement or average balance sheet.

Wells Fargo & Company (NYSE:WFC) reported diluted earnings per common share of $0.75 for 2008 compared with $2.38 for 2007. Net income was $2.84 billion compared with $8.06 billion in 2007. Full year results included $8.1 billion (pre tax) of credit reserve build ($1.51 per share), which included $3.9 billion of conforming credit reserve adjustments, and $1.7 billion ($0.31 per share) for other-than-temporary impairment charges. Net loss for fourth quarter 2008 was $2.55 billion, or $0.79 per share, compared with earnings of $1.36 billion, or $0.41 per share, in fourth quarter 2007.

"We thank our combined new team of 281,000 for all their hard work and dedication laying the foundation so together we can build the world’s premier financial services company,” said President and CEO John Stumpf. "Asset size is not important to us. As always, we’re focusing on our vision of satisfying all our customers’ financial needs and helping them succeed financially. If we continue to do that, good things will happen for all our stakeholders and we will continue to produce industry-leading returns for our shareholders.

"Despite the unprecedented contraction in the credit markets, we remained ‘open for business’ and continued to lend to credit-worthy customers. We made $106 billion in new loan commitments during 2008 to consumer, small business and commercial customers and originated $230 billion of residential mortgages. The decline in profitability was caused by adding $8.1 billion to credit reserves, which included a $3.9 billion provision to conform reserve practices of both Wachovia and Wells Fargo. The fundamentals of our time-tested business model, however, are as sound as ever. During the quarter, our average core deposits grew at an impressive rate, up 31 percent (annualized) from the prior quarter. We set new records for products per customer for retail (5.73) and commercial (6.4). We were able to increase our lending to creditworthy customers because we were building capital and shrinking our balance sheet in 2005 and 2006 when credit spreads were unrealistically low and were not priced for their underlying risk. We did make some mistakes, but, for the most part, we maintained our credit discipline. We understood our customers’ financial needs. As a result, our company at year-end 2008 was one of the world’s strongest financial institutions.” Wells Fargo Bank, N.A. has the highest credit rating currently given to U.S. banks by Moody’s Investors Service, "Aa1” and Standard & Poor’s Ratings Services, "AA+.”

Financial Performance

"In 2008, Wells Fargo remained in a league of its own with respect to continued growth, providing the largest increase in loans to households and companies across the country and maintaining industry-leading profit margins,” said Chief Financial Officer Howard Atkins. "Despite the significant challenges facing the industry in 2008, the Company earned a profit of $2.84 billion, even after charging earnings $8.1 billion pre tax to build credit reserves. We are disappointed to report a loss for the fourth quarter. Fourth quarter loss included $6.9 billion of pre-tax charges, largely de-risking and merger related, including $3.9 billion of credit reserve build on Wells Fargo’s books to conform both Wells Fargo’s and Wachovia’s credit reserve practices to the more conservative of each bank. Business momentum in the quarter was consistent with Wells Fargo’s long-standing growth. Average loans were up 11 percent year over year and average core deposits increased 31 percent (annualized) linked quarter. Mortgage applications were $116 billion in the quarter, with December the fourth best application month in the Company’s history, and mortgage applications in the first two weeks of 2009 are running 20 percent higher than the average daily rate in December. The Company’s operating margins once again improved in the quarter, with an 8 percentage point spread between revenue growth and expense growth, and our industry-leading net interest margin was 4.90 percent, up 28 basis points from a year ago and 11 basis points from third quarter.

"While many banks have been retrenching from lending, Wells Fargo has remained ‘open for business’ since the start of the credit crisis in mid-2007, consistently providing credit to consumers, small businesses and middle market customers. During this time, we have provided $187 billion in new loan commitments, including $22 billion in fourth quarter 2008. Mortgage originations in fourth quarter were $50 billion and given the unclosed pipeline of mortgages of $71 billion at December 31, 2008, the first quarter of 2009 is likely to be an even higher origination quarter. Wells Fargo Home Mortgage is the nation’s second largest mortgage servicer and has taken a lead role in developing programs to protect homeowners, help them modify their mortgages and avoid foreclosure. Through repayment plans, modifications and other loss mitigation options, we delivered more than 498,000 solutions to customers in 2008, including 143,000 in the fourth quarter. We are also pleased that in the fourth quarter deposit inflows and new lending resumed at Wachovia.

"As of December 31, 2008, consolidated Tier 1 regulatory capital was $86.4 billion, after the impact of de-risking the balance sheet for credit impairments of loans and write-down of negative cumulative other comprehensive income at Wachovia, which, in the aggregate, reduced the Tier 1 capital ratio by approximately 230 basis points to 7.9 percent at year end, well above regulatory minimums for a well-capitalized bank.

"Given our strong balance sheet and business momentum, the Board of Directors declared a common stock dividend of $0.34 per share. We have no plans to ask for additional TARP capital.”

Except where noted below, the following results are Wells Fargo stand-alone.

Revenue

Full year 2008 revenue was $42.23 billion, up 7 percent from the same period last year. Fourth quarter revenue was $9.82 billion, down 4 percent from a year ago. Year over year, net interest income was up a very strong 23 percent driven by higher asset growth and a wider net interest margin, offset by securities and loan write-downs in the quarter. On a linked-quarter basis, revenue declined 5 percent, reflecting $343 million growth in net interest income offset by an $898 million decline in noninterest income due to impairments and other write-downs.

Loans

Average loans of $413.9 billion increased $39.6 billion, or 11 percent, from a year ago. On a linked-quarter basis, average loans grew $9.7 billion, or 10 percent (annualized). Average commercial and commercial real estate loans increased $32.3 billion, or 22 percent, from fourth quarter 2007 and increased $9.0 billion, or 21 percent (annualized), from third quarter 2008, making this the 17^th consecutive quarter of double-digit, year-over-year growth. Average consumer loans increased $8.6 billion, or 4 percent, from fourth quarter 2007, and increased $1.7 billion, or 3 percent (annualized), from third quarter 2008. Total loans, including Wachovia, were $864.8 billion at December 31, 2008.

"We’re getting particularly good loan growth in the middle-market commercial segment, as we gain market share at attractive terms,” said Atkins. "As we’ve been paring back risk and exiting higher-risk channels, loan balances in products such as auto have been declining and home equity balances are essentially flat.”

Deposits

Average core deposits of $345.0 billion increased $30.1 billion, or 10 percent, from a year ago and $24.9 billion, or 31 percent (annualized), from third quarter 2008. Average mortgage escrow deposits were $19.7 billion, down $136 million from fourth quarter 2007 and down $1.5 billion linked quarter. Average retail core deposits increased $17.3 billion, or 8 percent, from fourth quarter 2007 and increased $9.3 billion, or 16 percent (annualized), linked quarter. Average consumer checking accounts grew a record net 6.2 percent from fourth quarter 2007, with 8.3 percent growth in California. "We believe we picked up significant market share in the quarter, while maintaining our long-standing pricing discipline,” said Atkins. Total core deposits, including Wachovia, were $745.4 billion at December 31, 2008.

Net Interest Income

Net interest income increased $1.24 billion, or 23 percent, from fourth quarter 2007 driven by 15 percent growth in average earning assets and a 28 basis point increase in the net interest margin to 4.90 percent. Net interest income grew $343 million, or 21 percent (annualized), linked quarter due to 11 percent annualized growth in average earning assets and an 11 basis point increase in the net interest margin. For Wells Fargo in 2008, the negatives of the credit crisis in terms of higher net loan charge-offs have been offset by the benefits of the credit crisis in higher net interest income due to market share gains and wider margins.

Noninterest Income

Noninterest income decreased $898 million linked quarter. Items to note in noninterest income for the quarter included:

• ($473) million other-than-temporary impairment
• ($413) million write-downs of aged loans in mortgage warehouse due to changes in liquidity and other spreads and additions to the mortgage repurchase reserve
• ($328) million other changes in mortgage pipeline/warehouse value including change in servicing value, net of pipeline/warehouse hedge results
• ($346) million mortgage servicing rights (MSRs) mark to market net of hedge loss
• $681 million net gains on securities hedging MSRs risk and servicing value associated with the mortgage pipeline and warehouse, included in $721 million total net gains on debt securities

At December 31, 2008, the net unrealized loss on the debt and equity securities available-for-sale portfolio was $10.3 billion for the combined organization, on the combined securities portfolio of $151.6 billion.

Noninterest Expense

Noninterest expense decreased $78 million from fourth quarter 2007 and increased $305 million linked quarter. Fourth quarter expenses included $74 million of merger integration and severance costs and $134 million of insurance premiums for additional reserves at the Company’s captive mortgage reinsurance operation.

Credit Quality

"Further declines in residential real estate values, higher unemployment levels and increased bankruptcies had a negative impact on our credit performance,” said Chief Credit Officer Mike Loughlin. Fourth quarter 2008 net charge-offs were $2.8 billion (2.69 percent of average loans, annualized) compared with $2.00 billion (1.96 percent) in third quarter 2008 and $1.21 billion (1.28 percent) in fourth quarter 2007. Fourth quarter 2008 provision was $8.4 billion, including a $5.6 billion credit reserve build primarily related to the provision to conform the loss emergence coverage period to the most conservative of each company, as well as higher projected losses in several consumer credit businesses, and growth and credit deterioration in the wholesale portfolios. Since the beginning of fourth quarter 2007, the Company has provided $9.5 billion in excess of net charge-offs. "Compared with year end 2007, our allowance has tripled, which strengthens our balance sheet in these volatile times,” said Loughlin. "We believe the allowance was adequate for losses inherent in the portfolio at December 31, 2008. The allowance covered 12 months of estimated losses in all consumer loan portfolios and at least 24 months of estimated losses in each of the commercial and commercial real estate portfolios.”

Net charge-offs in the real estate 1-4 family first mortgage portfolio increased $54 million linked quarter, including the $27 million increase from Wells Fargo Financial’s residential real estate portfolio. "Housing price trends and the real estate purchase market will need to improve before we expect to see improvement in loan performance,” said Loughlin. Credit card charge-offs increased $90 million. "The increases in delinquency and loss levels in the consumer unsecured loan portfolios were directly impacted by employment levels.” Losses in the auto portfolio increased $56 million from third quarter 2008 due to credit deterioration, seasonality and depressed used car values. "While we continued to aggressively apply loss mitigation strategies, the economic environment created a headwind against our efforts to manage loan performance.”

Net charge-offs in the real estate 1-4 family junior lien portfolio increased $61 million from third quarter 2008 as residential real estate values continued to deteriorate. "As previously stated, loss levels in this portfolio directly correlate to property values,” said Loughlin. "Until residential real estate values stabilize, our Home Equity portfolios will produce higher than normal loss levels.” More information about the Home Equity portfolios is available on table HOME EQUITY PORTFOLIOS.

Commercial and commercial real estate net charge-offs increased $504 million linked quarter. "The wholesale businesses showed some signs of deterioration, but still performed within expectations. One exception was $294 million in losses for clients who incurred losses related to the Madoff investment firm. Commercial lending opportunities continued for us as credit availability was limited in the marketplace.”

Net Charge-offs: 2008

Full year 2008 net charge-offs were $7.84 billion (1.97 percent of average total loans) compared with $3.54 billion (1.03 percent) during 2007. Total wholesale charge-offs (excluding business direct) increased $864 million from the prior year, including the previously referenced $294 million of Madoff-related losses, residential real estate construction and industries related to home building. Home Equity charge-offs totaled $2.16 billion (2.57 percent of average Home Equity loans) in 2008 compared with $596 million (0.73 percent) in 2007. Auto charge-offs totaled $1.23 billion (4.50 percent of average auto loans) in 2008 compared with $1.02 billion (3.45 percent) in 2007. Business Direct charge-offs totaled $819 million (6.96 percent of average business direct loans) in 2008 compared with $433 million (3.97 percent) in 2007.

		Quarter ended						Quarter ended
		Dec. 31, 2008						Sept. 30, 2008
		Net loan			As a %			Net loan			As a %
		charge-offs			of average			charge-offs			of average
		(in millions)			loans			(in millions)			loans
Commercial and commercial real estate:
Commercial		$	732		2.71	%		$	278		1.10	%
Other real estate mortgage		9			0.09			8			0.06
Real estate construction			84		1.67				36		0.73
Lease financing			17		0.90				16		0.88
Total commercial and commercial real estate			842		1.86				338		0.78
Consumer:
Real estate 1-4 family first mortgage			193		0.98				139		0.73
Real estate 1-4 family junior lien			702		3.68				641		3.38
Credit card			451		8.69				361		7.20
Other revolving credit and installment			565		4.29				469		3.45
Total consumer			1,911		3.35				1,610		2.84
Foreign			51		3.14				47		2.58
Total		$	2,804		2.69			$	1,995		1.96

Nonperforming Assets

Total nonperforming assets were $9.0 billion (1.04 percent of total loans) at December 31, 2008, and included $6.8 billion of nonperforming loans, $667 million of insured Government National Mortgage Association (GNMA) loan repurchases, and $1.5 billion of foreclosed and repossessed real estate and vehicles. "We will continue to hold more nonperforming assets on our balance sheet as it is currently the most economic option available,” said Loughlin. "Until the credit and liquidity markets improve, nonperforming loan balances will continue to increase.”

Loans 90 days or more past due and still accruing totaled $12.65 billion (Wells Fargo and Wachovia combined), $8.44 billion, and $6.39 billion at December 31, 2008, September 30, 2008, and December 31, 2007, respectively. For the same periods, the totals included $8.18 billion, $6.30 billion and $4.83 billion, respectively, in advances pursuant to our servicing agreement to GNMA mortgage pools and similar loans whose repayments are insured by the Federal Housing Administration or guaranteed by the Department of Veteran Affairs.

Loans 90 Days or More Past Due and Still Accruing
(Excluding Insured/Guaranteed GNMA and Similar Loans)
Includes Wachovia and Wells Fargo at 12/31/08
		Dec. 31,			Sept. 30,			Dec. 31,
(in millions)			2008			2008			2007
Commercial and commercial real estate:
Commercial		$	218		$	46		$	32
Other real estate mortgage			88			111			10
Real estate construction			232			146			24
Total commercial and commercial real estate			538			303			66
Consumer:
Real estate 1-4 family first mortgage			1,565			429			286
Real estate 1-4 family junior lien mortgage			590			257			201
Credit card			687			498			402
Other revolving credit and installment			1,047			617			552
Total consumer			3,889			1,801			1,441
Foreign			34			40			52
Total loans		$	4,461		$	2,144		$	1,559

The previous table does not include loans acquired from Wachovia accounted for under SOP 03-3 that were contractually 90 days past due and still accruing at December 31, 2008. These loans have a related nonaccretable discount that will absorb future losses, therefore charge-offs on these loans are not expected to impact the income statement in future periods.

Allowance for Credit Losses

The allowance for credit losses, including unfunded commitments, totaled $21.7 billion (Wells Fargo and Wachovia combined) at December 31, 2008, compared with $8.0 billion (Wells Fargo only) at September 30, 2008. Fourth quarter 2008 results included a credit reserve build of $5.6 billion at Wells Fargo, primarily for a $3.9 billion provision to conform estimated loss emergence coverage periods to the most conservative of each company within Federal Financial Institutions Examination Council guidance ($1.2 billion for Wachovia and $2.7 billion for Wells Fargo). The balance was attributed to higher projected loss rates across the majority of the consumer credit businesses, and some credit deterioration and growth in the wholesale portfolios.

"With respect to Wachovia, during the months of November and December, officers from both companies evaluated Wachovia’s loan portfolios to identify recent deterioration and estimate future loss potential in the context of the current, unprecedented economic conditions. These loss estimates were then used to assess the value of the loan portfolio as part of the purchase accounting adjustments,” said Loughlin. "While we spent a significant amount of time focused on the Pick-a-Pay and commercial real estate portfolios, all Wachovia loan portfolios were re-evaluated. As a result of this rigorous review process, we were able to develop a better understanding of the risks in the portfolio. Additionally, on our first day as a combined company, Wachovia and Wells Fargo credit officers were in place, prepared to manage risk and available to satisfy customer credit needs.”

Wachovia Fourth Quarter 2008

The Wachovia acquisition was completed on December 31, 2008, and therefore Wachovia’s results are not consolidated in Wells Fargo’s income statement. Wells Fargo’s balance sheet includes Wachovia’s period-end balance sheet data net of closing purchase accounting adjustments. The table below provides highlights of Wachovia’s fourth quarter results on a stand-alone basis.

Wachovia Condensed Income Statement
		Quarter ended
		Dec. 31,				Sept. 30,				%
(in millions)			2008				2008			Change
Net interest income		$	4,505			$	4,991			(10	)	%
Noninterest income			(2,800	)			733			NM
Total revenue			1,705				5,724			(70	)
Provision for credit losses			7,404				6,629			12
Noninterest expense			5,330				6,759			(21	)
Goodwill impairment			--				18,786			NM
Minority interest			(115	)			(105	)		10
Income (loss) before income tax expense (benefit)			(10,914	)			(26,345	)		(59	)
Income tax expense (benefit)			133				(2,647	)		NM
Net income (loss)			(11,047	)			(23,698	)		(53	)
Preferred dividends			122				191			(36	)
Net income (loss) applicable to common stock		$	(11,169	)		$	(23,889	)		(53	)
NM – Not meaningful

The fourth quarter loss of $11.2 billion reflected a $2.8 billion tax expense primarily related to deferred tax asset write-downs. The pre-tax loss of $10.9 billion was primarily driven by the provision for credit losses of $7.4 billion, which included a $4.2 billion reserve build. The provision also included $2.9 billion relating to the Pick-a-Pay portfolio, including $1.2 billion of charge-offs and $1.7 billion reserve build. Results reflected $4.3 billion of market disruption losses including $1.7 billion in investment banking distribution-related losses, $1.3 billion of investment portfolio securities impairments, $1.1 billion of losses relating to liquidation of certain fund investments, $263 million in net valuation losses relating to the support of money market and other funds as well as losses on auction-rate securities inventory. These results were further negatively affected by lower overall market-related activity and valuation declines, including $1.0 billion of other losses relating to trading and principal investing.

The primary drivers of Wachovia’s higher credit costs in the fourth quarter have been largely addressed through purchase accounting adjustments taken at the time of the merger. Wachovia’s loan portfolios have been significantly de-risked at December 31, 2008, by $37.2 billion of credit write-downs through purchase accounting adjustments on $93.9 billion of high-risk loans (primarily Pick-a-Pay and commercial real estate loans).

At closing, the net unrealized losses on Wachovia’s securities portfolio were released from cumulative other comprehensive income as part of purchase accounting, and a new cost basis was established for this portfolio. These closing entries reduce the near-term risk of recording additional other-than-temporary impairment related to securities acquired from Wachovia through the income statement.

Business Segment Performance

Wells Fargo has three lines of business for management reporting: Community Banking, Wholesale Banking and Wells Fargo Financial. Net income (loss) for each of the three business segments was:

		Fourth Quarter
(in millions)			2008				2007
Community Banking		$	(1,223	)		$	658
Wholesale Banking			272				625
Wells Fargo Financial			(790	)			78

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

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

Selected Financial Information
		Fourth Quarter						%
(in millions)			2008			2007		Change
Total revenue		$	6,327		$	6,522		(3	)	%
Provision for credit losses			4,820			2,082		132
Noninterest expense			3,832			3,822		--
Net income (loss)			(1,223	)		658		NM
(in billions)
Average loans			223.6			210.9		6
Average assets			396.7			346.8		14
Average core deposits			262.9			245.3		7
NM – Not meaningful

Community Banking reported a net loss of $1.2 billion in fourth quarter 2008 compared with net income of $658 million a year ago. Pre-tax pre-provision profit decreased $205 million, or 8 percent, from a year ago. Revenue decreased $195 million, or 3 percent, driven by lower mortgage banking income, partially offset by security gains and strong balance sheet growth. Average loans of $223.6 billion grew 6 percent and average core deposits of $262.9 billion grew 7 percent with a portion of the growth due to acquisitions. Noninterest income decreased $985 million from fourth quarter 2007 due primarily to lower mortgage banking income and trading losses partially offset by security gains. Noninterest expense was flat from a year ago. Fourth quarter expenses included $28 million of integration costs related to the Wachovia acquisition. The provision for credit losses increased $2.7 billion from fourth quarter 2007, which included a $3 billion credit reserve build.

Regional Banking

• Record core product solutions (sales) in 2008 of 23.1 million, up 17 percent from 2007
• Record core sales per platform banker FTE (active, full-time equivalent) of 5.37 per day, up from 4.93 in 2007
• Record retail bank household cross-sell of 5.73 products per household, 24 percent of our retail bank households had 8 or more products, our long-term goal
• Sales of Wells Fargo Packages^® (a checking account and at least three other products) up 37 percent from prior year, purchased by a record 76 percent of new checking account customers
• Consumer checking accounts up a net 6.2 percent from prior year, up 8.3 percent in California
• Customer loyalty and welcoming and wait time scores both up 8 percent from 2007 (based on customers conducting transactions with tellers)
• Added 1,330 platform banker FTEs from 2007 through hiring and acquisitions
• Opened 58 banking stores and converted 32 stores from Greater Bay Bancorp, Farmers State Bank and United Bancorporation of Wyoming
• Added 124 webATM^® machines and converted 672 to Envelope-free^SM webATM machines
• Business Banking
  • Store-based business solutions up 18 percent from 2007
  • Loans to small businesses (loans primarily less than $100,000 on our Business Direct platform) up 8 percent from 2007
  • Business checking accounts up a net 2.2 percent from prior year
  • Business Banking cross-sell of 3.61 products per household
  • Sales of Wells Fargo Business Services Packages (a business checking account and at least three other business products) up 32 percent from prior year, purchased by a record 51 percent of new business checking account customers

"Our team’s performance reflected our commitment to our vision to satisfy all of our customers’ financial needs and help them succeed financially,” said Carrie Tolstedt, senior EVP, Community Banking. "We provided a record 23.1 million core product solutions, up 17 percent from 2007. Retail bank household cross-sell finished the year with a record 5.73 products per household, up from 5.53 in 2007. We continued to achieve gains in net new customer relationships, with consumer checking accounts up a net 6.2 percent, the highest level in six years. In fourth quarter, we welcomed Wachovia Corporation and Century Bancshares to our team, which began our exciting journey to create the country’s premier coast-to-coast banking network.”

Home Mortgage

• Home Mortgage originations of $230 billion in 2008 and $50 billion in fourth quarter
• Home Mortgage applications of $116 billion, up 40 percent from prior quarter
• Mortgage application pipeline of $71 billion, up 73 percent from prior quarter (includes $5 billion from Wachovia)
• Record owned mortgage servicing portfolio of $2.1 trillion, up 39 percent from prior year (includes $379 billion added from Wachovia)

"During the last half of the quarter, we experienced a significant increase in refinance applications as mortgage rates declined significantly in response to the proposed actions by the Federal Reserve to lower mortgage rates,” said Mark Oman, senior EVP, Home and Consumer Finance Group. "Applications of $63 billion for December were the fourth highest month on record in what is traditionally a seasonal slow period. Given the strong refinance demand due to historically low mortgage rates, the acquisition of Wachovia is very timely as we look forward to the opportunity to satisfy all the financial needs of our Wachovia customers.

"Our talented team was able to manage through a very difficult business environment in 2008 and deliver strong results. Home Mortgage’s balanced business model and strong commitment to fair and responsible lending and servicing, conservative credit culture and focus on traditional conventional and FHA/VA mortgage products helped us avoid many of the problems that have plagued the industry. For the full year, mortgage originations were a solid $230 billion. The unclosed mortgage application pipeline was $71 billion at year end, indicating a strong start to 2009. The combined owned mortgage servicing portfolio reached $2.1 trillion at year end. The ratio of MSRs value to related loans serviced for others was 0.87 percent.

"Home Mortgage’s servicing portfolio continued to perform relatively well given the challenges customers are facing in the current economic environment. For our largest product category, prime conventional first mortgages, representing 5.7 million customers and over $1 trillion of servicing, 96 of every 100 customers were current with their payments at year-end compared with 97 of every 100 at September 30, 2008. We are committed to working with our customers, government agencies and our mortgage securities investors to keep people in their homes. More than 498,000 solutions were delivered to customers in 2008 to avert foreclosure. We have already transitioned leadership of refinance and default management for Wachovia’s Pick-a-Pay portfolio to Wells Fargo Home Mortgage and have begun offering enhanced loan modification programs for high-risk customers.”

Wealth Management Group

• Revenue up 10 percent from prior year
• Average core deposits of $24.5 billion, up $7 billion, or 40 percent, from prior year
• Private Bank revenue up 58 percent from prior year
• Private Bank average core deposits up 38 percent, average loans up 27 percent from prior year
• WellsTrade^® revenue up 42 percent, net income up 104 percent from prior year
• Wells Fargo Private Bank Elder Services Program expands into Chicago

Online Banking

• 11.1 million active online consumers, up 15 percent from prior year; 69 percent of all consumer checking accounts are managed online
• 5.6 million online money movement customers, up 15 percent from prior year
• 1.1 million active online small business customers, up 10 percent from prior year
• Wells Fargo ranked #1 for Online Mortgage Experience among banks by Keynote in its fourth quarter 2008 Mortgage Scorecard
• Announced My Spending Report with Budget Watch, an expansion of Wells Fargo’s free, patented online tool that gives customers a consolidated overview of their personal spending

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

Selected Financial Information
		Fourth Quarter						%
(in millions)			2008			2007		Change
Total revenue		$	2,131		$	2,280		(7	)	%
Provision for credit losses			415			36		NM
Noninterest expense			1,318			1,294		2
Net income			272			625		(56	)
(in billions)
Average loans			124.0			95.1		30
Average assets			161.3			128.3		26
Average core deposits			82.1			69.5		18
NM – Not meaningful

• Average loans up 30 percent, with double digit increases across nearly all Wholesale businesses
• Average core deposits up 18 percent from prior year, up 103 percent (annualized) from prior quarter
• Wells Fargo Shareowner Services^SM Winner of TALON award for overall satisfaction with transfer agent for 3^rd straight year

"Loan growth was broad based across nearly all of our Wholesale Banking business lines with average loans up 30 percent year over year,” said Dave Hoyt, senior EVP, Wholesale Banking Group. "We continue to support our existing customers and bring in more new relationships. It’s in difficult economic periods like these that the benefits of Wells Fargo’s relationship approach to the business are most important to both the bank and its customers. While not immune to the economic environment, our overall credit performance continued to be within our expectations. For 2008, our net loan charge-offs totaled $529 million, or 0.47 percent of average loans. Our nonperforming assets ended the year at $1.97 billion, or 1.38 percent of assets.

"We continued to prudently increase business with new and existing customers consistent with our long-standing relationship banking model. Wholesale Banking’s overall cross-sell increased to 6.4 products per customer relationship; our middle market business and U.S. Corporate Banking group had an average of 7.8 and 7.6 products per relationship, respectively. Our customers continued to embrace the latest technology to save time and money. In December, the number of active CEO^® users increased 10 percent from the same period last year, and CEO Mobile^SM service doubled its active users from last quarter.

"We welcome all of the Wachovia customers and look forward to working with Wachovia’s talented and dedicated team members. The increased scale and scope of many product offerings will benefit all our customers across the Company. We’ve begun to make organizational announcements and look forward to combining the two companies.”

Wholesale Banking reported net income of $272 million in fourth quarter 2008, compared with $625 million a year ago. Revenue decreased by $149 million, driven by lower noninterest income. Net interest income increased $381 million, or 39 percent, driven by strong loan and deposit growth. Average loans of $124 billion were up 30 percent from a year ago, with double-digit increases across nearly all wholesale lending businesses. Average core deposits of $82 billion increased 18 percent from a year ago. Noninterest income decreased $530 million from fourth quarter 2007, primarily due to impairment charges and other losses in our capital markets areas, as well as lower commercial real estate brokerage and trust and investment fees. Noninterest income from service charges on deposit, foreign exchange, loan fees and institutional brokerage all increased. Noninterest expense increased by $24 million, or 2 percent. The provision for credit losses was $415 million, an increase of $379 million from fourth quarter 2007, and included $237 million from higher net charge-offs and $178 million of additional provision taken to build reserves for the wholesale portfolio.

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

Selected Financial Information
		Fourth Quarter						%
(in millions)			2008			2007		Change
Total revenue		$	1,366		$	1,403		(3	)	%
Provision for credit losses			1,968			494		298
Noninterest expense			672			784		(14	)
Net income (loss)			(790	)		78		NM
(in billions)
Average loans			66.3			68.4		(3	)
Average assets			69.4			74.7		(7	)
NM – Not meaningful

• Average loans of $66.3 billion, down 3 percent from prior year
• Real estate-secured receivables of $29.2 billion, up 7 percent from prior year
• Auto finance receivables/operating leases of $24.5 billion, down 18 percent from prior year

"Credit quality across our portfolios was a challenge throughout 2008 as customers faced ongoing stress because of deteriorating economic conditions,” said Dave Kvamme, Wells Fargo Financial president and CEO. "Our net earnings were negatively impacted by credit reserve builds each quarter that totaled $1.7 billion in 2008, including $1.2 billion in the fourth quarter. Our sound and conservative underwriting has enabled us to keep our foreclosure rates well below industry averages, and we are committed to working hard to keep our customers in their homes. All of our originated adjustable-rate mortgages were underwritten to the fully indexed rate, so many of our customers are benefiting from lower monthly payments as a result of decreasing interest rates. We continued to tighten underwriting standards to effectively manage risk in this environment.

"In response to the difficult economy in 2008, we worked to reduce expenses. We consolidated our consumer store network, eliminating 15 percent, or 158, of our stores in the U.S. and Canada. Across all of our businesses, we eliminated 3,600 positions, leaving us with 17,400 team members at year end, a 17 percent reduction from year-end 2007. The majority of position eliminations were achieved through attrition.

"We also looked for opportunities to grow the business and gain market share in key segments. For example, in December we acquired approximately $730 million in loan and lease receivables from GE Healthcare Financial Services – Equipment Finance, primarily financing of dental and eye care practices and equipment.”

Wells Fargo Financial lost $790 million this quarter reflecting higher credit costs, including a $1.2 billion credit reserve build. Approximately $860 million of the reserve build was to conform estimated loss emergence coverage periods to the most conservative of both Wells Fargo and Wachovia, while the remainder reflected continued softening in the real estate, auto and credit card markets. Fourth quarter revenue of $1.37 billion was down 3 percent from the same period a year ago. Average loans declined 3 percent from fourth quarter 2007. Noninterest expense declined 14 percent from fourth quarter 2007 and 3 percent (annualized) from third quarter 2008.

Recorded Message

A recorded message reviewing Wells Fargo’s results is available at 5:30 a.m. Pacific Time through January 31, 2009. Dial 866-519-1052 (domestic) or 585-295-6792 (international). No password is required. The call is also available on the internet at www.wellsfargo.com/invest_relations/earnings and http://www.investorcalendar.com/IC/CEPage.asp?ID=139241

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

This news release contains forward-looking statements about the Company, including our beliefs and expectations for future credit quality and losses and specifically that we have no plans to request additional TARP capital, that first quarter 2009 is likely to be an even higher mortgage loan origination period than fourth quarter 2008, that housing price trends and the real estate purchase market will need to improve before we expect to see improvement in the real estate 1-4 family first mortgage portfolio, that the Home Equity portfolio will produce higher than normal loss levels until residential real estate values stabilize, that nonperforming loan balances will continue to increase until the credit and liquidity markets improve, and that we do not expect charge-offs on certain Wachovia loans accounted for under SOP 03-3 to impact the income statement in future periods. This news release also contains forward-looking statements about the expected benefits of the Wachovia merger, including assumptions about cost saves and earnings per share accretion. Do not unduly rely on forward-looking statements. They give our expectations about the future and are not guarantees. Forward-looking statements speak only as of the date they are made, and we do not undertake to update them to reflect changes that occur after that date.

There are a number of factors that could cause results to differ significantly from our expectations, including further deterioration in the credit quality of our home equity, real estate, auto or other loan portfolios, or in the value of the collateral securing those loans, due to higher interest rates, increased unemployment, declining home or auto values, economic recession or other economic factors. Factors related to the Wachovia merger include the possibility that the integration process may result in the loss of key employees, the disruption of ongoing businesses and the loss of customers and their business and deposits, or that we will not realize the cost savings and other financial benefits of the merger when and in the amount expected. For a discussion of factors that may cause actual results to differ from expectations, refer to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2008, and our Annual Report on Form 10-K for the year ended December 31, 2007, including information incorporated into the 10-K from our 2007 Annual Report to Stockholders, filed with the Securities and Exchange Commission (SEC) and available on the SEC’s website at www.sec.gov.

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

Wells Fargo & Company is a diversified financial services company with $1.3 trillion in assets, providing banking, insurance, investments, mortgage and consumer finance through more than 11,000 stores, over 12,000 ATMs and the internet (wellsfargo.com) across North America and internationally. Wells Fargo Bank, N.A. has the highest credit rating currently given to U.S. banks by Moody’s Investors Service, "Aa1,” and Standard & Poor’s Ratings Services, "AA+.”

Wells Fargo & Company and Subsidiaries SUMMARY FINANCIAL DATA (1)
		Quarter ended December 31,							%				Year ended December 31,						%
($ in millions, except per share amounts)			2008				2007		Change					2008			2007		Change
For the Period
Net income (loss)		$	(2,547	)		$	1,361		NM		%		$	2,842		$	8,057		(65	)	%
Net income (loss) applicable to common stock			(2,833	)			1,361		NM					2,556			8,057		(68	)
Diluted earnings (loss) per common share			(0.79	)			0.41		NM					0.75			2.38		(68	)
Profitability ratios (annualized):
Net income (loss) to average total assets (ROA)			(1.60	)	%		0.97	%	NM					0.47	%		1.55	%	(70	)
Net income (loss) applicable to common stock to average common stockholders' equity (ROE)			(20.93	)			11.25		NM					5.17			17.12		(70	)
Efficiency ratio (2)			59.3				57.8		3					53.7			57.9		(7	)
Total revenue		$	9,824			$	10,205		(4	)			$	42,225		$	39,390		7
Pre-tax pre-provision profit (3)			4,002				4,305		(7	)				19,564			16,566		18
Dividends declared per common share			0.34				0.31		10					1.30			1.18		10
Average common shares outstanding			3,582.4				3,327.6		8					3,378.1			3,348.5		1
Diluted average common shares outstanding			3,593.6				3,352.2		7					3,391.3			3,382.8		--
Average loans		$	413,940			$	374,372		11				$	398,460		$	344,775		16
Average assets			633,223				555,647		14					604,396			520,752		16
Average core deposits (4)			344,957				314,808		10					325,212			303,091		7
Average retail core deposits (5)			243,464				226,180		8					234,130			221,076		6
Net interest margin			4.90		%		4.62	%	6					4.83	%		4.74	%	2
At Period End
Securities available for sale		$	151,569			$	72,951		108				$	151,569		$	72,951		108
Loans			864,830				382,195		126					864,830			382,195		126
Allowance for loan losses			21,013				5,307		296					21,013			5,307		296
Goodwill			22,627				13,106		73					22,627			13,106		73
Assets			1,309,639				575,442		128					1,309,639			575,442		128
Core deposits (4)			745,432				311,731		139					745,432			311,731		139
Common stockholders' equity			68,256				47,628		43					68,256			47,628		43
Stockholders' equity			99,068				47,628		108					99,068			47,628		108
Capital ratios:
Common stockholders' equity to assets			5.21		%		8.28	%	(37	)				5.21	%		8.28	%	(37	)
Risk-based capital (6)
Tier 1 capital			7.88				7.59		4					7.88			7.59		4
Total capital			11.88				10.68		11					11.88			10.68		11
Tier 1 leverage (6)			14.51				6.83		112					14.51			6.83		112
Book value per common share		$	23.43			$	14.45		62				$	23.43		$	14.45		62
Team members (active, full-time equivalent) (7)			158,900				159,800		(1	)				158,900			159,800		(1	)
Common Stock Price
High		$	38.95			$	37.78		3				$	44.68		$	37.99		18
Low			19.89				29.29		(32	)				19.89			29.29		(32	)
Period end			29.48				30.19		(2	)				29.48			30.19		(2	)
NM - Not meaningful
(1) Effective December 31, 2008, Wells Fargo & Company (Wells Fargo) acquired Wachovia Corporation (Wachovia). Wachovia's assets and liabilities are included in the consolidated balance sheet at their respective acquisition date fair value. Because the acquisition was completed at the end of 2008, Wachovia's results are not included in the income statement.
(2) The efficiency ratio is noninterest expense divided by total revenue (net interest income and noninterest income).
(3) Total revenue less noninterest expense.
(4) Core deposits are noninterest-bearing deposits, interest-bearing checking, savings certificates, market rate and other savings, and certain foreign deposits (Eurodollar sweep balances).
(5) Retail core deposits are total core deposits excluding Wholesale Banking core deposits and retail mortgage escrow deposits. To reflect the realignment of our corporate trust business from Community Banking into Wholesale Banking in first quarter 2008, balances for prior periods have been revised.
(6) The December 31, 2008, ratios are preliminary. Due to the Wachovia acquisition closing on December 31, 2008, the Tier 1 leverage ratio, which considers period-end Tier 1 capital and quarterly average assets in the computation of the ratio, does not reflect average assets of Wachovia for the full period.
(7) With the acquisition of Wachovia, we now have more than 281,000 active team members.

Wells Fargo & Company and Subsidiaries FIVE QUARTER SUMMARY FINANCIAL DATA (1)
		Quarter ended
($ in millions, except per share amounts)		Dec. 31, 2008				Sept. 30, 2008			June 30, 2008			Mar. 31, 2008			Dec. 31, 2007
For the Quarter
Net income (loss)		$	(2,547	)		$	1,637		$	1,753		$	1,999		$	1,361
Net income (loss) applicable to common stock			(2,833	)			1,637			1,753			1,999			1,361
Diluted earnings (loss) per common share			(0.79	)			0.49			0.53			0.60			0.41
Profitability ratios (annualized):
Net income (loss) to average total assets (ROA)			(1.60	)	%		1.06	%		1.19	%		1.40	%		0.97	%
Net income (loss) applicable to common stock to average common stockholders' equity (ROE)			(20.93	)			13.63			14.58			16.86			11.25
Efficiency ratio (2)			59.3				53.2			51.1			51.7			57.8
Total revenue		$	9,824			$	10,379		$	11,459		$	10,563		$	10,205
Pre-tax pre-provision profit (3)			4,002				4,862			5,599			5,101			4,305
Dividends declared per common share			0.34				0.34			0.31			0.31			0.31
Average common shares outstanding			3,582.4				3,316.4			3,309.8			3,302.4			3,327.6
Diluted average common shares outstanding			3,593.6				3,331.0			3,321.4			3,317.9			3,352.2
Average loans		$	413,940			$	404,203		$	391,545		$	383,919		$	374,372
Average assets			633,223				614,194			594,749			574,994			555,647
Average core deposits (4)			344,957				320,074			318,377			317,278			314,808
Average retail core deposits (5)			243,464				234,140			230,365			228,448			226,180
Net interest margin			4.90		%		4.79	%		4.92	%		4.69	%		4.62	%
At Quarter End
Securities available for sale		$	151,569			$	86,882		$	91,331		$	81,787		$	72,951
Loans			864,830				411,049			399,237			386,333			382,195
Allowance for loan losses			21,013				7,865			7,375			5,803			5,307
Goodwill			22,627				13,520			13,191			13,148			13,106
Assets			1,309,639				622,361			609,074			595,221			575,442
Core deposits (4)			745,432				334,076			310,410			327,360			311,731
Common stockholders' equity			68,256				46,957			47,964			48,159			47,628
Stockholders' equity			99,068				46,957			47,964			48,159			47,628
Capital ratios:
Common stockholders' equity to assets			5.21		%		7.54	%		7.87	%		8.09	%		8.28	%
Risk-based capital (6)
Tier 1 capital			7.88				8.59			8.24			7.92			7.59
Total capital			11.88				11.51			11.23			11.01			10.68
Tier 1 leverage (6)			14.51				7.54			7.35			7.04			6.83
Book value per common share		$	23.43			$	14.14		$	14.48		$	14.58		$	14.45
Team members (active, full-time equivalent) (7)			158,900				159,000			160,500			160,900			159,800
Common Stock Price
High		$	38.95			$	44.68		$	32.40		$	34.56		$	37.78
Low			19.89				20.46			23.46			24.38			29.29
Period end			29.48				37.53			23.75			29.10			30.19
(1) Effective December 31, 2008, Wells Fargo acquired Wachovia. Wachovia's assets and liabilities are included in the consolidated balance sheet at their respective acquisition date fair value. Because the acquisition was completed at the end of 2008, Wachovia's results are not included in the income statement.
(2) The efficiency ratio is noninterest expense divided by total revenue (net interest income and noninterest income).
(3) Total revenue less noninterest expense.
(4) Core deposits are noninterest-bearing deposits, interest-bearing checking, savings certificates, market rate and other savings, and certain foreign deposits (Eurodollar sweep balances).
(5) Retail core deposits are total core deposits excluding Wholesale Banking core deposits and retail mortgage escrow deposits. To reflect the realignment of our corporate trust business from Community Banking into Wholesale Banking in first quarter 2008, balances for prior periods have been revised.
(6) The December 31, 2008, ratios are preliminary. Due to the Wachovia acquisition closing on December 31, 2008, the Tier 1 leverage ratio, which considers period-end Tier 1 capital and quarterly average assets in the computation of the ratio, does not reflect average assets of Wachovia for the full period.
(7) With the acquisition of Wachovia, we now have more than 281,000 active team members.

Wells Fargo & Company and Subsidiaries CONSOLIDATED STATEMENT OF INCOME
		Quarter ended December 31,							%				Year ended December 31,							%
(in millions, except per share amounts)			2008				2007		Change					2008				2007		Change
INTEREST INCOME
Trading assets		$	51			$	36		42		%		$	177			$	173		2		%
Securities available for sale			1,534				981		56					5,287				3,451		53
Mortgages held for sale			362				456		(21	)				1,573				2,150		(27	)
Loans held for sale			14				19		(26	)				48				70		(31	)
Loans			6,726				7,699		(13	)				27,632				29,040		(5	)
Other interest income			41				51		(20	)				181				293		(38	)
Total interest income			8,728				9,242		(6	)				34,898				35,177		(1	)
INTEREST EXPENSE
Deposits			845				2,136		(60	)				4,521				8,152		(45	)
Short-term borrowings			204				380		(46	)				1,478				1,245		19
Long-term debt			955				1,238		(23	)				3,756				4,806		(22	)
Total interest expense			2,004				3,754		(47	)				9,755				14,203		(31	)
NET INTEREST INCOME			6,724				5,488		23					25,143				20,974		20
Provision for credit losses			8,444				2,612		223					15,979				4,939		224
Net interest income after provision for credit losses			(1,720	)			2,876		NM					9,164				16,035		(43	)
NONINTEREST INCOME
Service charges on deposit accounts			803				788		2					3,190				3,050		5
Trust and investment fees			661				802		(18	)				2,924				3,149		(7	)
Card fees			589				588		--					2,336				2,136		9
Other fees			535				577		(7	)				2,097				2,292		(9	)
Mortgage banking			(195	)			831		NM					2,525				3,133		(19	)
Operating leases			62				153		(59	)				427				703		(39	)
Insurance			337				370		(9	)				1,830				1,530		20
Net gains on debt securities available for sale			721				60		NM					1,037				209		396
Net gains (losses) from equity investments			(261	)			222		NM					(409	)			734		NM
Other			(152	)			326		NM					1,125				1,480		(24	)
Total noninterest income			3,100				4,717		(34	)				17,082				18,416		(7	)
NONINTEREST EXPENSE
Salaries			2,168				2,055		5					8,260				7,762		6
Incentive compensation			671				840		(20	)				2,676				3,284		(19	)
Employee benefits			338				558		(39	)				2,004				2,322		(14	)
Equipment			402				370		9					1,357				1,294		5
Net occupancy			418				413		1					1,619				1,545		5
Operating leases			81				124		(35	)				389				561		(31	)
Other			1,744				1,540		13					6,356				6,056		5
Total noninterest expense			5,822				5,900		(1	)				22,661				22,824		(1	)
INCOME (LOSS) BEFORE INCOME TAX EXPENSE (BENEFIT)			(4,442	)			1,693		NM					3,585				11,627		(69	)
Income tax expense (benefit)			(1,895	)			332		NM					743				3,570		(79	)
NET INCOME (LOSS)		$	(2,547	)		$	1,361		NM				$	2,842			$	8,057		(65	)
NET INCOME (LOSS) APPLICABLE TO COMMON STOCK		$	(2,833	)		$	1,361		NM				$	2,556			$	8,057		(68	)
EARNINGS (LOSS) PER COMMON SHARE		$	(0.79	)		$	0.41		NM				$	0.76			$	2.41		(68	)
DILUTED EARNINGS (LOSS) PER COMMON SHARE		$	(0.79	)		$	0.41		NM				$	0.75			$	2.38		(68	)
DIVIDENDS DECLARED PER COMMON SHARE		$	0.34			$	0.31		10				$	1.30			$	1.18		10
Average common shares outstanding			3,582.4				3,327.6		8					3,378.1				3,348.5		1
Diluted average common shares outstanding			3,593.6				3,352.2		7					3,391.3				3,382.8		--
NM - Not meaningful

Wells Fargo & Company and Subsidiaries FIVE QUARTER CONSOLIDATED STATEMENT OF INCOME
		Quarter ended
(in millions, except per share amounts)		Dec. 31, 2008				Sept. 30, 2008				June 30, 2008				Mar. 31, 2008			Dec. 31, 2007
INTEREST INCOME
Trading assets		$	51			$	41			$	38			$	47		$	36
Securities available for sale			1,534				1,397				1,224				1,132			981
Mortgages held for sale			362				394				423				394			456
Loans held for sale			14				12				10				12			19
Loans			6,726				6,888				6,806				7,212			7,699
Other interest income			41				42				46				52			51
Total interest income			8,728				8,774				8,547				8,849			9,242
INTEREST EXPENSE
Deposits			845				1,019				1,063				1,594			2,136
Short-term borrowings			204				492				357				425			380
Long-term debt			955				882				849				1,070			1,238
Total interest expense			2,004				2,393				2,269				3,089			3,754
NET INTEREST INCOME			6,724				6,381				6,278				5,760			5,488
Provision for credit losses			8,444				2,495				3,012				2,028			2,612
Net interest income after provision for credit losses			(1,720	)			3,886				3,266				3,732			2,876
NONINTEREST INCOME
Service charges on deposit accounts			803				839				800				748			788
Trust and investment fees			661				738				762				763			802
Card fees			589				601				588				558			588
Other fees			535				552				511				499			577
Mortgage banking			(195	)			892				1,197				631			831
Operating leases			62				102				120				143			153
Insurance			337				439				550				504			370
Net gains (losses) on debt securities available for sale			721				84				(91	)			323			60
Net gains (losses) from equity investments			(261	)			(507	)			46				313			222
Other			(152	)			258				698				321			326
Total noninterest income			3,100				3,998				5,181				4,803			4,717
NONINTEREST EXPENSE
Salaries			2,168				2,078				2,030				1,984			2,055
Incentive compensation			671				555				806				644			840
Employee benefits			338				486				593				587			558
Equipment			402				302				305				348			370
Net occupancy			418				402				400				399			413
Operating leases			81				90				102				116			124
Other			1,744				1,604				1,624				1,384			1,540
Total noninterest expense			5,822				5,517				5,860				5,462			5,900
INCOME (LOSS) BEFORE INCOME TAX EXPENSE (BENEFIT)			(4,442	)			2,367				2,587				3,073			1,693
Income tax expense (benefit)			(1,895	)			730				834				1,074			332
NET INCOME (LOSS)		$	(2,547	)		$	1,637			$	1,753			$	1,999		$	1,361
NET INCOME (LOSS) APPLICABLE TO COMMON STOCK		$	(2,833	)		$	1,637			$	1,753			$	1,999		$	1,361
EARNINGS (LOSS) PER COMMON SHARE		$	(0.79	)		$	0.49			$	0.53			$	0.61		$	0.41
DILUTED EARNINGS (LOSS) PER COMMON SHARE		$	(0.79	)		$	0.49			$	0.53			$	0.60		$	0.41
DIVIDENDS DECLARED PER COMMON SHARE		$	0.34			$	0.34			$	0.31			$	0.31		$	0.31
Average common shares outstanding			3,582.4				3,316.4				3,309.8				3,302.4			3,327.6
Diluted average common shares outstanding			3,593.6				3,331.0				3,321.4				3,317.9			3,352.2

Wells Fargo & Company and Subsidiaries CONSOLIDATED BALANCE SHEET (1)
		December 31,								%
(in millions, except shares)			2008				2007			Change
ASSETS
Cash and due from banks		$	23,763			$	14,757			61		%
Federal funds sold, securities purchased under resale agreements and other short-term investments			49,433				2,754			NM
Trading assets			54,884				7,727			610
Securities available for sale			151,569				72,951			108
Mortgages held for sale (includes $18,754 and $24,998 carried at fair value)			20,088				26,815			(25	)
Loans held for sale (includes $398 carried at fair value at December 31, 2008)			6,228				948			557
Loans			864,830				382,195			126
Allowance for loan losses			(21,013	)			(5,307	)		296
Net loans			843,817				376,888			124
Mortgage servicing rights:
Measured at fair value (residential MSRs)			14,714				16,763			(12	)
Amortized			1,446				466			210
Premises and equipment, net			11,269				5,122			120
Goodwill			22,627				13,106			73
Other assets			109,801				37,145			196
Total assets		$	1,309,639			$	575,442			128
LIABILITIES
Noninterest-bearing deposits		$	150,837			$	84,348			79
Interest-bearing deposits			630,565				260,112			142
Total deposits			781,402				344,460			127
Short-term borrowings			108,074				53,255			103
Accrued expenses and other liabilities			53,937				30,706			76
Long-term debt			267,158				99,393			169
Total liabilities			1,210,571				527,814			129
STOCKHOLDERS' EQUITY
Preferred stock			31,332				450			NM
Common stock - $1-2/3 par value, authorized 6,000,000,000 shares; issued 4,363,921,428 shares and 3,472,762,050 shares			7,273				5,788			26
Additional paid-in capital			36,026				8,212			339
Retained earnings			36,730				38,970			(6	)
Cumulative other comprehensive income (loss)			(7,072	)			725			NM
Treasury stock - 135,290,540 shares and 175,659,842 shares			(4,666	)			(6,035	)		(23	)
Unearned ESOP shares			(555	)			(482	)		15
Total stockholders' equity			99,068				47,628			108
Total liabilities and stockholders' equity		$	1,309,639			$	575,442			128
NM - Not meaningful
(1) Effective December 31, 2008, Wells Fargo acquired Wachovia. Wachovia's assets and liabilities are included in the consolidated balance sheet at their respective acquisition date fair value.

Wells Fargo & Company and Subsidiaries FIVE QUARTER CONSOLIDATED BALANCE SHEET
(in millions)		Dec. 31, 2008				Sept. 30, 2008				June 30, 2008				Mar. 31, 2008				Dec. 31, 2007
ASSETS
Cash and due from banks		$	23,763			$	12,861			$	13,610			$	13,146			$	14,757
Federal funds sold, securities purchased under resale agreements and other short-term investments			49,433				8,093				4,088				4,171				2,754
Trading assets			54,884				9,097				9,681				8,893				7,727
Securities available for sale			151,569				86,882				91,331				81,787				72,951
Mortgages held for sale			20,088				18,739				25,234				29,708				26,815
Loans held for sale			6,228				635				680				813				948
Loans			864,830				411,049				399,237				386,333				382,195
Allowance for loan losses			(21,013	)			(7,865	)			(7,375	)			(5,803	)			(5,307	)
Net loans			843,817				403,184				391,862				380,530				376,888
Mortgage servicing rights:
Measured at fair value (residential MSRs)			14,714				19,184				19,333				14,956				16,763
Amortized			1,446				433				442				455				466
Premises and equipment, net			11,269				5,054				5,033				5,056				5,122
Goodwill			22,627				13,520				13,191				13,148				13,106
Other assets			109,801				44,679				34,589				42,558				37,145
Total assets		$	1,309,639			$	622,361			$	609,074			$	595,221			$	575,442
LIABILITIES
Noninterest-bearing deposits		$	150,837			$	89,446			$	85,062			$	90,793			$	84,348
Interest-bearing deposits			630,565				264,128				254,062				267,351				260,112
Total deposits			781,402				353,574				339,124				358,144				344,460
Short-term borrowings			108,074				85,187				86,139				53,983				53,255
Accrued expenses and other liabilities			53,937				29,293				31,919				31,760				30,706
Long-term debt			267,158				107,350				103,928				103,175				99,393
Total liabilities			1,210,571				575,404				561,110				547,062				527,814
STOCKHOLDERS' EQUITY
Preferred stock			31,332				625				723				837				450
Common stock			7,273				5,788				5,788				5,788				5,788
Additional paid-in capital			36,026				8,348				8,266				8,259				8,212
Retained earnings			36,730				40,853				40,534				39,896				38,970
Cumulative other comprehensive income (loss)			(7,072	)			(2,783	)			(1,060	)			120				725
Treasury stock			(4,666	)			(5,207	)			(5,516	)			(5,850	)			(6,035	)
Unearned ESOP shares			(555	)			(667	)			(771	)			(891	)			(482	)
Total stockholders' equity			99,068				46,957				47,964				48,159				47,628
Total liabilities and stockholders' equity		$	1,309,639			$	622,361			$	609,074			$	595,221			$	575,442
(1) Effective December 31, 2008, Wells Fargo acquired Wachovia. Wachovia's assets and liabilities are included in the consolidated balance sheet at their respective acquisition date fair value.

Wells Fargo & Company and Subsidiaries FIVE QUARTER AVERAGE BALANCES
		Quarter ended
(in millions)		Dec. 31, 2008				Sept. 30, 2008				June 30, 2008				Mar. 31, 2008				Dec. 31, 2007
EARNING ASSETS
Federal funds sold, securities purchased under resale agreements and other short-term investments		$	9,938			$	3,463			$	3,853			$	3,888			$	2,972
Trading assets			5,004				4,838				4,915				5,129				4,248
Debt securities available for sale:
Securities of U.S. Treasury and federal agencies			1,165				1,141				1,050				975				926
Securities of U.S. states and political subdivisions			7,124				7,211				7,038				6,290				5,995
Mortgage-backed securities:
Federal agencies			51,714				50,528				40,630				36,097				35,434
Private collateralized mortgage obligations			18,245				21,358				22,419				20,994				14,270
Total mortgage-backed securities			69,959				71,886				63,049				57,091				49,704
Other debt securities (1)			14,217				12,622				13,600				10,825				8,465
Total debt securities available for sale (1)			92,465				92,860				84,737				75,181				65,090
Mortgages held for sale (2)			23,390				24,990				28,004				26,273				28,327
Loans held for sale (2)			1,287				677				734				647				965
Loans:
Commercial and commercial real estate:
Commercial			107,325				100,688				95,263				91,085				86,958
Other real estate mortgage			45,555				43,616				39,977				37,426				35,863
Real estate construction			19,943				19,715				19,213				18,932				18,510
Lease financing			7,397				7,250				7,087				6,825				6,583
Total commercial and commercial real estate			180,220				171,269				161,540				154,268				147,914
Consumer:
Real estate 1-4 family first mortgage			78,251				76,197				73,663				72,308				69,262
Real estate 1-4 family junior lien mortgage			75,838				75,379				75,018				75,263				75,272
Credit card			20,626				19,948				19,037				18,776				17,689
Other revolving credit and installment			52,638				54,104				54,842				55,910				56,546
Total consumer			227,353				225,628				222,560				222,257				218,769
Foreign			6,367				7,306				7,445				7,394				7,689
Total loans (2)			413,940				404,203				391,545				383,919				374,372
Other			1,690				2,126				2,033				1,825				1,552
Total earning assets		$	547,714			$	533,157			$	515,821			$	496,862			$	477,526
FUNDING SOURCES
Deposits:
Interest-bearing checking		$	6,396			$	5,483			$	5,487			$	5,226			$	5,254
Market rate and other savings			178,301				166,710				161,760				159,865				156,260
Savings certificates			41,189				37,192				37,634				41,915				42,560
Other time deposits			8,128				7,930				5,773				4,763				10,874
Deposits in foreign offices			42,771				49,054				51,884				46,641				44,991
Total interest-bearing deposits			276,785				266,369				262,538				258,410				259,939
Short-term borrowings			60,210				83,458				66,537				52,970				34,074
Long-term debt			104,112				103,745				100,552				100,686				98,012
Total interest-bearing liabilities			441,107				453,572				429,627				412,066				392,025
Portion of noninterest-bearing funding sources			106,607				79,585				86,194				84,796				85,501
Total funding sources		$	547,714			$	533,157			$	515,821			$	496,862			$	477,526
NONINTEREST-EARNING ASSETS
Cash and due from banks		$	11,155			$	11,024			$	10,875			$	11,648			$	12,127
Goodwill			13,544				13,531				13,171				13,161				13,091
Other			60,810				56,482				54,882				53,323				52,903
Total noninterest-earning assets		$	85,509			$	81,037			$	78,928			$	78,132			$	78,121
NONINTEREST-BEARING FUNDING SOURCES
Deposits		$	91,229			$	87,095			$	88,041			$	84,886			$	86,632
Other liabilities			30,935				25,762				28,723				30,348				29,019
Preferred stockholders' equity			16,116				--				--				--				--
Common stockholders' equity			53,836				47,765				48,358				47,694				47,971
Noninterest-bearing funding sources used to fund earning assets			(106,607	)			(79,585	)			(86,194	)			(84,796	)			(85,501	)
Net noninterest-bearing funding sources		$	85,509			$	81,037			$	78,928			$	78,132			$	78,121
TOTAL ASSETS		$	633,223			$	614,194			$	594,749			$	574,994			$	555,647
(1) Includes certain preferred securities.
(2) Nonaccrual loans are included in their respective loan categories.

Wells Fargo & Company and Subsidiaries CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
		Year ended December 31,
(in millions)			2008				2007
Balance, beginning of period		$	47,628			$	45,814
Cumulative effect from adoption of:
FSP 13-2 (1)			--				(71	)
EITF 06-4 and 06-10 (2)			(20	)			--
FAS 158 change of measurement date (3)			(8	)			--
Net income			2,842				8,057
Other comprehensive income (loss), net of tax, related to:
Translation adjustments			(58	)			23
Investment securities			(6,813	)			(164	)
Derivative instruments and hedging activities			436				322
Defined benefit pension plans			(1,362	)			242
Common stock issued			14,171				1,876
Common stock issued for acquisitions			14,601				2,125
Common stock repurchased			(1,623	)			(7,418	)
Preferred stock issued			22,674				--
Preferred stock discount accretion			67				--
Preferred stock issued for acquisitions			8,071				--
Preferred stock released to ESOP			451				418
Stock warrants issued			2,326				--
Common stock dividends			(4,312	)			(3,955	)
Preferred stock dividends and accretion			(286	)			--
Other, net			283				359
Balance, end of period		$	99,068			$	47,628
(1) Financial Accounting Standards Board Staff Position 13-2, Accounting for a Change or Projected Change in the Timing of Cash Flows Related to Income Taxes Generated by a Leveraged Lease Transaction.
(2) Emerging Issues Task Force (EITF) Issue No. 06-4, Accounting for Deferred Compensation and Postretirement Benefit Aspects of Endorsement Split-Dollar Life Insurance Arrangements, and Issue No. 06-10, Accounting for Collateral Assignment Split-Dollar Life Insurance Arrangements.
(3) Statement of Financial Accounting Standards No. 158, Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans - an amendment of FASB Statements No. 87, 88, 106, and 132(R).

Wells Fargo & Company and Subsidiaries FIVE QUARTER LOANS
(in millions)		Dec. 31, 2008			Sept. 30, 2008			June 30, 2008			Mar. 31, 2008			Dec. 31, 2007
Commercial and commercial real estate:
Commercial		$	202,469		$	104,281		$	99,188		$	92,589		$	90,468
Other real estate mortgage			103,108			44,741			41,753			38,415			36,747
Real estate construction			34,676			19,681			19,528			18,885			18,854
Lease financing			15,829			7,271			7,160			6,885			6,772
Total commercial and commercial real estate			356,082			175,974			167,629			156,774			152,841
Consumer:
Real estate 1-4 family first mortgage			247,894			77,870			74,829			73,321			71,415
Real estate 1-4 family junior lien mortgage			110,164			75,617			75,261			74,840			75,565
Credit card			23,555			20,358			19,429			18,677			18,762
Other revolving credit and installment			93,253			54,327			54,575			55,505			56,171
Total consumer			474,866			228,172			224,094			222,343			221,913
Foreign			33,882			6,903			7,514			7,216			7,441
Total loans (net of unearned income) (1)		$	864,830		$	411,049		$	399,237		$	386,333		$	382,195
(1) Total loans at December 31, 2008, includes $93.9 billion of loans acquired from Wachovia accounted for under AICPA Statement of Position 03-3, Accounting for Certain Loans or Debt Securities Acquired in a Transfer (SOP 03-3). See page 38.
FIVE QUARTER NONACCRUAL LOANS AND OTHER ASSETS
(in millions)		Dec. 31, 2008			Sept. 30, 2008			June 30, 2008			Mar. 31, 2008			Dec. 31, 2007
Nonaccrual loans:
Commercial and commercial real estate:
Commercial		$	1,253		$	846		$	685		$	588		$	432
Other real estate mortgage			594			296			198			152			128
Real estate construction			989			736			563			438			293
Lease financing			92			69			59			57			45
Total commercial and commercial real estate			2,928			1,947			1,505			1,235			898
Consumer:
Real estate 1-4 family first mortgage (1)			2,648			1,975			1,638			1,398			1,272
Real estate 1-4 family junior lien mortgage			894			780			668			381			280
Other revolving credit and installment			273			232			207			196			184
Total consumer			3,815			2,987			2,513			1,975			1,736
Foreign			57			61			55			49			45
Total nonaccrual loans			6,800			4,995			4,073			3,259			2,679
As a percentage of total loans			0.79	%		1.22	%		1.02	%		0.84	%		0.70	%
Foreclosed assets:
GNMA loans (2)			667			596			535			578			535
Other			1,526			644			595			637			649
Real estate and other nonaccrual investments (3)			16			56			24			21			5
Total nonaccrual loans and other assets		$	9,009		$	6,291		$	5,227		$	4,495		$	3,868
As a percentage of total loans			1.04	%		1.53	%		1.31	%		1.16	%		1.01	%
(1) Includes nonaccrual mortgages held for sale.
(2) Consistent with regulatory reporting requirements, foreclosed real estate securing Government National Mortgage Association (GNMA) loans is classified as nonperforming. Both principal and interest for GNMA loans secured by the foreclosed real estate are collectible because the GNMA loans are insured by the Federal Housing Administration or guaranteed by the Department of Veterans Affairs.
(3) Includes real estate investments (contingent interest loans accounted for as investments) that would be classified as nonaccrual if these assets were recorded as loans.

Wells Fargo & Company and Subsidiaries CHANGES IN THE ALLOWANCE FOR CREDIT LOSSES
		Quarter ended												Year ended
(in millions)		Dec. 31, 2008				Sept. 30, 2008				Dec. 31, 2007				Dec. 31, 2008				Dec. 31, 2007
Balance, beginning of period		$	8,027			$	7,517			$	4,018			$	5,518			$	3,964
Provision for credit losses			8,444				2,495				2,612				15,979				4,939
Loan charge-offs:
Commercial and commercial real estate:
Commercial			(756	)			(305	)			(221	)			(1,653	)			(629	)
Other real estate mortgage			(10	)			(9	)			(4	)			(29	)			(6	)
Real estate construction			(85	)			(36	)			(9	)			(178	)			(14	)
Lease financing			(21	)			(19	)			(9	)			(65	)			(33	)
Total commercial and commercial real estate			(872	)			(369	)			(243	)			(1,925	)			(682	)
Consumer:
Real estate 1-4 family first mortgage			(210	)			(146	)			(38	)			(540	)			(109	)
Real estate 1-4 family junior lien mortgage			(728	)			(669	)			(291	)			(2,204	)			(648	)
Credit card			(485	)			(396	)			(253	)			(1,563	)			(832	)
Other revolving credit and installment			(683	)			(586	)			(532	)			(2,300	)			(1,913	)
Total consumer			(2,106	)			(1,797	)			(1,114	)			(6,607	)			(3,502	)
Foreign			(60	)			(59	)			(70	)			(245	)			(265	)
Total loan charge-offs			(3,038	)			(2,225	)			(1,427	)			(8,777	)			(4,449	)
Loan recoveries:
Commercial and commercial real estate:
Commercial			24				27				35				114				119
Other real estate mortgage			1				1				1				5				8
Real estate construction			1				--				--				3				2
Lease financing			4				3				5				13				17
Total commercial and commercial real estate			30				31				41				135				146
Consumer:
Real estate 1-4 family first mortgage			17				7				4				37				22
Real estate 1-4 family junior lien mortgage			26				28				14				89				53
Credit card			34				35				30				147				120
Other revolving credit and installment			118				117				111				481				504
Total consumer			195				187				159				754				699
Foreign			9				12				15				49				65
Total loan recoveries			234				230				215				938				910
Net loan charge-offs			(2,804	)			(1,995	)			(1,212	)			(7,839	)			(3,539	)
Allowances related to business combinations/other			8,044				10				100				8,053				154
Balance, end of period		$	21,711			$	8,027			$	5,518			$	21,711			$	5,518
Components:
Allowance for loan losses		$	21,013			$	7,865			$	5,307			$	21,013			$	5,307
Reserve for unfunded credit commitments			698				162				211				698				211
Allowance for credit losses		$	21,711			$	8,027			$	5,518			$	21,711			$	5,518
Net loan charge-offs (annualized) as a percentage of average total loans			2.69		%		1.96		%		1.28		%		1.97		%		1.03		%

Wells Fargo & Company and Subsidiaries FIVE QUARTER CHANGES IN THE ALLOWANCE FOR CREDIT LOSSES
		Quarter ended
(in millions)		Dec. 31, 2008				Sept. 30, 2008				June 30, 2008				Mar. 31, 2008				Dec. 31, 2007
Balance, beginning of quarter		$	8,027			$	7,517			$	6,013			$	5,518			$	4,018
Provision for credit losses			8,444				2,495				3,012				2,028				2,612
Loan charge-offs:
Commercial and commercial real estate:
Commercial			(756	)			(305	)			(333	)			(259	)			(221	)
Other real estate mortgage			(10	)			(9	)			(6	)			(4	)			(4	)
Real estate construction			(85	)			(36	)			(28	)			(29	)			(9	)
Lease financing			(21	)			(19	)			(13	)			(12	)			(9	)
Total commercial and commercial real estate			(872	)			(369	)			(380	)			(304	)			(243	)
Consumer:
Real estate 1-4 family first mortgage			(210	)			(146	)			(103	)			(81	)			(38	)
Real estate 1-4 family junior lien mortgage			(728	)			(669	)			(352	)			(455	)			(291	)
Credit card			(485	)			(396	)			(369	)			(313	)			(253	)
Other revolving credit and installment			(683	)			(586	)			(488	)			(543	)			(532	)
Total consumer			(2,106	)			(1,797	)			(1,312	)			(1,392	)			(1,114	)
Foreign			(60	)			(59	)			(58	)			(68	)			(70	)
Total loan charge-offs			(3,038	)			(2,225	)			(1,750	)			(1,764	)			(1,427	)
Loan recoveries:
Commercial and commercial real estate:
Commercial			24				27				32				31				35
Other real estate mortgage			1				1				2				1				1
Real estate construction			1				--				1				1				--
Lease financing			4				3				3				3				5
Total commercial and commercial real estate			30				31				38				36				41
Consumer:
Real estate 1-4 family first mortgage			17				7				7				6				4
Real estate 1-4 family junior lien mortgage			26				28				18				17				14
Credit card			34				35				40				38				30
Other revolving credit and installment			118				117				121				125				111
Total consumer			195				187				186				186				159
Foreign			9				12				14				14				15
Total loan recoveries			234				230				238				236				215
Net loan charge-offs			(2,804	)			(1,995	)			(1,512	)			(1,528	)			(1,212	)
Allowances related to business combinations/other			8,044				10				4				(5	)			100
Balance, end of quarter		$	21,711			$	8,027			$	7,517			$	6,013			$	5,518
Components:
Allowance for loan losses		$	21,013			$	7,865			$	7,375			$	5,803			$	5,307
Reserve for unfunded credit commitments			698				162				142				210				211
Allowance for credit losses		$	21,711			$	8,027			$	7,517			$	6,013			$	5,518
Net loan charge-offs (annualized) as a percentage of average total loans			2.69		%		1.96		%		1.55		%		1.60		%		1.28		%
Allowance for loan losses as a percentage of:
Total loans (1)			2.43		%		1.91		%		1.85		%		1.50		%		1.39		%
Nonaccrual loans			309				157				181				178				198
Nonaccrual loans and other assets			233				125				141				129				137
Allowance for credit losses as a percentage of:
Total loans (1)			2.51		%		1.95		%		1.88		%		1.56		%		1.44		%
Nonaccrual loans			319				161				185				185				206
Nonaccrual loans and other assets			241				128				144				134				143
(1) Under SOP 03-3, total loans at December 31, 2008, include a non-accretable discount of $37 billion related to loans acquired from Wachovia. See page 38.

Wells Fargo & Company and Subsidiaries NONINTEREST INCOME
		Quarter ended December 31,							%					Year ended December 31,							%
(in millions)			2008				2007		Change						2008				2007		Change
Service charges on deposit accounts		$	803			$	788		2		%			$	3,190			$	3,050		5		%
Trust and investment fees:
Trust, investment and IRA fees			487				585		(17	)					2,161				2,305		(6	)
Commissions and all other fees			174				217		(20	)					763				844		(10	)
Total trust and investment fees			661				802		(18	)					2,924				3,149		(7	)
Card fees			589				588		--						2,336				2,136		9
Other fees:
Cash network fees			45				47		(4	)					188				193		(3	)
Charges and fees on loans			272				274		(1	)					1,037				1,011		3
All other fees			218				256		(15	)					872				1,088		(20	)
Total other fees			535				577		(7	)					2,097				2,292		(9	)
Mortgage banking:
Servicing income, net			(40	)			543		NM						979				1,511		(35	)
Net gains (losses) on mortgage loan
origination/sales activities			(236	)			220		NM						1,183				1,289		(8	)
All other			81				68		19						363				333		9
Total mortgage banking			(195	)			831		NM						2,525				3,133		(19	)
Operating leases			62				153		(59	)					427				703		(39	)
Insurance			337				370		(9	)					1,830				1,530		20
Net gains (losses) from trading activities			(409	)			62		NM						275				544		(49	)
Net gains on debt securities available for sale			721				60		NM						1,037				209		396
Net gains (losses) from equity investments			(261	)			222		NM						(409	)			734		NM
All other			257				264		(3	)					850				936		(9	)
Total		$	3,100			$	4,717		(34	)				$	17,082			$	18,416		(7	)
NM - Not meaningful
NONINTEREST EXPENSE
		Quarter ended December 31,							%					Year ended December 31,							%
(in millions)			2008				2007		Change						2008				2007		Change
Salaries		$	2,168			$	2,055		5		%			$	8,260			$	7,762		6		%
Incentive compensation			671				840		(20	)					2,676				3,284		(19	)
Employee benefits			338				558		(39	)					2,004				2,322		(14	)
Equipment			402				370		9						1,357				1,294		5
Net occupancy			418				413		1						1,619				1,545		5
Operating leases			81				124		(35	)					389				561		(31	)
Outside professional services			258				250		3						847				899		(6	)
Insurance			214				59		263						725				416		74
Outside data processing			127				127		--						480				482		--
Travel and entertainment			117				134		(13	)					447				474		(6	)
Contract services			107				114		(6	)					407				448		(9	)
Advertising and promotion			93				100		(7	)					378				412		(8	)
Postage			82				85		(4	)					338				345		(2	)
Telecommunications			83				80		4						321				321		--
Stationery and supplies			59				61		(3	)					218				220		(1	)
Core deposit and other customer relationship intangibles			47				48		(2	)					186				158		18
Security			44				47		(6	)					178				176		1
Operating losses			96				68		41						142				437		(68	)
All other			417				367		14						1,689				1,268		33
Total		$	5,822			$	5,900		(1	)				$	22,661			$	22,824		(1	)

Wells Fargo & Company and Subsidiaries FIVE QUARTER NONINTEREST INCOME
		Quarter ended
(in millions)		Dec. 31, 2008				Sept. 30, 2008				June 30, 2008				Mar. 31, 2008				Dec. 31, 2007
Service charges on deposit accounts		$	803			$	839			$	800			$	748			$	788
Trust and investment fees:
Trust, investment and IRA fees			487				549				566				559				585
Commissions and all other fees			174				189				196				204				217
Total trust and investment fees			661				738				762				763				802
Card fees			589				601				588				558				588
Other fees:
Cash network fees			45				48				47				48				47
Charges and fees on loans			272				266				251				248				274
All other fees			218				238				213				203				256
Total other fees			535				552				511				499				577
Mortgage banking:
Servicing income, net			(40	)			525				221				273				543
Net gains (losses) on mortgage loan origination/sales activities			(236	)			276				876				267				220
All other			81				91				100				91				68
Total mortgage banking			(195	)			892				1,197				631				831
Operating leases			62				102				120				143				153
Insurance			337				439				550				504				370
Net gains (losses) from trading activities			(409	)			65				516				103				62
Net gains (losses) on debt securities available for sale			721				84				(91	)			323				60
Net gains (losses) from equity investments			(261	)			(507	)			46				313				222
All other			257				193				182				218				264
Total		$	3,100			$	3,998			$	5,181			$	4,803			$	4,717
FIVE QUARTER NONINTEREST EXPENSE
		Quarter ended
(in millions)		Dec. 31, 2008				Sept. 30, 2008				June 30, 2008				Mar. 31, 2008				Dec. 31, 2007
Salaries		$	2,168			$	2,078			$	2,030			$	1,984			$	2,055
Incentive compensation			671				555				806				644				840
Employee benefits			338				486				593				587				558
Equipment			402				302				305				348				370
Net occupancy			418				402				400				399				413
Operating leases			81				90				102				116				124
Outside professional services			258				206				212				171				250
Insurance			214				144				206				161				59
Outside data processing			127				122				122				109				127
Travel and entertainment			117				113				112				105				134
Contract services			107				88				104				108				114
Advertising and promotion			93				96				104				85				100
Postage			82				83				84				89				85
Telecommunications			83				78				82				78				80
Stationery and supplies			59				53				54				52				61
Core deposit and other customer relationship intangibles			47				47				46				46				48
Security			44				45				45				44				47
Operating losses (reduction in losses)			96				63				56				(73	)			68
All other			417				466				397				409				367
Total		$	5,822			$	5,517			$	5,860			$	5,462			$	5,900

Wells Fargo & Company and Subsidiaries AVERAGE BALANCES, YIELDS AND RATES PAID (TAXABLE-EQUIVALENT BASIS) (1) (2)
		Quarter ended December 31,
		2008									2007
(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		$	9,938			0.73	%	$	18		$	2,972			4.45	%	$	34
Trading assets			5,004			4.50			56			4,248			3.39			37
Debt securities available for sale (3):
Securities of U.S. Treasury and federal agencies			1,165			3.75			11			926			4.18			9
Securities of U.S. states and political subdivisions			7,124			6.73			139			5,995			7.41			110
Mortgage-backed securities:
Federal agencies			51,714			6.07			769			35,434			6.15			534
Private collateralized mortgage obligations			18,245			6.40			402			14,270			5.99			214
Total mortgage-backed securities			69,959			6.18			1,171			49,704			6.11			748
Other debt securities (4)			14,217			8.10			330			8,465			7.45			161
Total debt securities available for sale (4)			92,465			6.50			1,651			65,090			6.38			1,028
Mortgages held for sale (5)			23,390			6.19			362			28,327			6.44			456
Loans held for sale (5)			1,287			4.14			14			965			7.72			19
Loans:
Commercial and commercial real estate:
Commercial			107,325			5.66			1,525			86,958			7.88			1,726
Other real estate mortgage			45,555			5.49			628			35,863			7.22			652
Real estate construction			19,943			4.49			225			18,510			7.35			343
Lease financing			7,397			5.58			103			6,583			5.92			97
Total commercial and commercial real estate			180,220			5.48			2,481			147,914			7.57			2,818
Consumer:
Real estate 1-4 family first mortgage			78,251			6.37			1,247			69,262			7.12			1,235
Real estate 1-4 family junior lien mortgage			75,838			5.85			1,114			75,272			7.92			1,503
Credit card			20,626			12.21			629			17,689			12.79			565
Other revolving credit and installment			52,638			8.35			1,107			56,546			9.54			1,359
Total consumer			227,353			7.19			4,097			218,769			8.48			4,662
Foreign			6,367			9.73			156			7,689			11.55			224
Total loans (5)			413,940			6.48			6,734			374,372			8.18			7,704
Other			1,690			5.37			23			1,552			4.95			17
Total earning assets		$	547,714			6.34			8,858		$	477,526			7.75			9,295
FUNDING SOURCES
Deposits:
Interest-bearing checking		$	6,396			0.65			11		$	5,254			2.96			39
Market rate and other savings			178,301			0.96			430			156,260			2.63			1,035
Savings certificates			41,189			2.66			275			42,560			4.33			465
Other time deposits			8,128			2.74			54			10,874			4.45			122
Deposits in foreign offices			42,771			0.69			75			44,991			4.19			475
Total interest-bearing deposits			276,785			1.22			845			259,939			3.26			2,136
Short-term borrowings			60,210			1.35			204			34,074			4.42			380
Long-term debt			104,112			3.69			964			98,012			5.06			1,245
Total interest-bearing liabilities			441,107			1.82			2,013			392,025			3.81			3,761
Portion of noninterest-bearing funding sources			106,607			--			--			85,501			--			--
Total funding sources		$	547,714			1.44			2,013		$	477,526			3.13			3,761
Net interest margin and net interest income on a taxable-equivalent basis (6)						4.90	%	$	6,845						4.62	%	$	5,534
NONINTEREST-EARNING ASSETS
Cash and due from banks		$	11,155								$	12,127
Goodwill			13,544									13,091
Other			60,810									52,903
Total noninterest-earning assets		$	85,509								$	78,121
NONINTEREST-BEARING FUNDING SOURCES
Deposits		$	91,229								$	86,632
Other liabilities			30,935									29,019
Preferred stockholders' equity			16,116									--
Common stockholders' equity			53,836									47,971
Noninterest-bearing funding sources used to fund earning assets			(106,607	)								(85,501	)
Net noninterest-bearing funding sources		$	85,509								$	78,121
TOTAL ASSETS		$	633,223								$	555,647
(1) Our average prime rate was 4.06% and 7.52% for the quarters ended December 31, 2008 and 2007, respectively. The average three-month London Interbank Offered Rate (LIBOR) was 2.77% and 5.03% for the same quarters, respectively.
(2) Interest rates and amounts include the effects of hedge and risk management activities associated with the respective asset and liability categories.
(3) Yields are based on amortized cost balances computed on a settlement date basis.
(4) Includes certain preferred securities.
(5) Nonaccrual loans and related income are included in their respective loan categories.
(6) Includes taxable-equivalent adjustments primarily related to tax-exempt income on certain loans and securities. The federal statutory tax rate was 35% for the periods presented.

Wells Fargo & Company and Subsidiaries AVERAGE BALANCES, YIELDS AND RATES PAID (TAXABLE-EQUIVALENT BASIS) (1) (2)
		Year ended December 31,
		2008									2007
(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		$	5,293			1.71	%	$	90		$	4,468			4.99	%	$	223
Trading assets			4,971			3.80			189			4,291			4.37			188
Debt securities available for sale (3):
Securities of U.S. Treasury and federal agencies			1,083			3.84			41			848			4.26			36
Securities of U.S. states and political subdivisions			6,918			6.83			501			4,740			7.37			342
Mortgage-backed securities:
Federal agencies			44,777			5.97			2,623			38,592			6.10			2,328
Private collateralized mortgage obligations			20,749			6.04			1,412			6,548			6.12			399
Total mortgage-backed securities			65,526			5.99			4,035			45,140			6.10			2,727
Other debt securities (4)			12,818			7.17			1,000			6,295			7.52			477
Total debt securities available for sale (4)			86,345			6.22			5,577			57,023			6.34			3,582
Mortgages held for sale (5)			25,656			6.13			1,573			33,066			6.50			2,150
Loans held for sale (5)			837			5.69			48			896			7.76			70
Loans:
Commercial and commercial real estate:
Commercial			98,620			6.12			6,034			77,965			8.17			6,367
Other real estate mortgage			41,659			5.80			2,416			32,722			7.38			2,414
Real estate construction			19,453			5.08			988			16,934			7.80			1,321
Lease financing			7,141			5.62			401			5,921			5.84			346
Total commercial and commercial real estate			166,873			5.90			9,839			133,542			7.82			10,448
Consumer:
Real estate 1-4 family first mortgage			75,116			6.67			5,008			61,527			7.25			4,463
Real estate 1-4 family junior lien mortgage			75,375			6.55			4,934			72,075			8.12			5,851
Credit card			19,601			12.13			2,378			15,874			13.58			2,155
Other revolving credit and installment			54,368			8.72			4,744			54,436			9.71			5,285
Total consumer			224,460			7.60			17,064			203,912			8.71			17,754
Foreign			7,127			10.50			748			7,321			11.68			855
Total loans (5)			398,460			6.94			27,651			344,775			8.43			29,057
Other			1,920			4.73			91			1,402			5.07			71
Total earning assets		$	523,482			6.69			35,219		$	445,921			7.93			35,341
FUNDING SOURCES
Deposits:
Interest-bearing checking		$	5,650			1.12			64		$	5,057			3.16			160
Market rate and other savings			166,691			1.32			2,195			147,939			2.78			4,105
Savings certificates			39,481			3.08			1,215			40,484			4.38			1,773
Other time deposits			6,656			2.83			187			8,937			4.87			435
Deposits in foreign offices			47,578			1.81			860			36,761			4.57			1,679
Total interest-bearing deposits			266,056			1.70			4,521			239,178			3.41			8,152
Short-term borrowings			65,826			2.25			1,478			25,854			4.81			1,245
Long-term debt			102,283			3.70			3,789			93,193			5.18			4,824
Total interest-bearing liabilities			434,165			2.25			9,788			358,225			3.97			14,221
Portion of noninterest-bearing funding sources			89,317			--			--			87,696			--			--
Total funding sources		$	523,482			1.86			9,788		$	445,921			3.19			14,221
Net interest margin and net interest income on a taxable-equivalent basis (6)						4.83	%	$	25,431						4.74	%	$	21,120
NONINTEREST-EARNING ASSETS
Cash and due from banks		$	11,175								$	11,806
Goodwill			13,353									11,957
Other			56,386									51,068
Total noninterest-earning assets		$	80,914								$	74,831
NONINTEREST-BEARING FUNDING SOURCES
Deposits		$	87,820								$	88,907
Other liabilities			28,939									26,557
Preferred stockholders' equity			4,051									--
Common stockholders' equity			49,421									47,063
Noninterest-bearing funding sources used to fund earning assets			(89,317	)								(87,696	)
Net noninterest-bearing funding sources		$	80,914								$	74,831
TOTAL ASSETS		$	604,396								$	520,752
(1) Our average prime rate was 5.09% and 8.05% for the year ended December 31, 2008 and 2007, respectively. The average three-month London Interbank Offered Rate (LIBOR) was 2.93% and 5.30% for the same periods, respectively.
(2) Interest rates and amounts include the effects of hedge and risk management activities associated with the respective asset and liability categories.
(3) Yields are based on amortized cost balances computed on a settlement date basis.
(4) Includes certain preferred securities.
(5) Nonaccrual loans and related income are included in their respective loan categories.
(6) Includes taxable-equivalent adjustments primarily related to tax-exempt income on certain loans and securities. The federal statutory tax rate was 35% for the periods presented.

Wells Fargo & Company and Subsidiaries OPERATING SEGMENT RESULTS (1)
(income/expense in millions, average balances in billions)		Community Banking								Wholesale Banking						Wells Fargo Financial							Other (2)							Consolidated Company
Quarter ended December 31,			2008				2007				2008			2007			2008				2007			2008				2007			2008				2007
Net interest income		$	4,211			$	3,421			$	1,368		$	987		$	1,145			$	1,080		$	--			$	--		$	6,724			$	5,488
Provision for credit losses			4,820				2,082				415			36			1,968				494			1,241				--			8,444				2,612
Noninterest income			2,116				3,101				763			1,293			221				323			--				--			3,100				4,717
Noninterest expense			3,832				3,822				1,318			1,294			672				784			--				--			5,822				5,900
Income (loss) before income tax expense (benefit)			(2,325	)			618				398			950			(1,274	)			125			(1,241	)			--			(4,442	)			1,693
Income tax expense (benefit)			(1,102	)			(40	)			126			325			(484	)			47			(435	)			--			(1,895	)			332
Net income (loss)		$	(1,223	)		$	658			$	272		$	625		$	(790	)		$	78		$	(806	)		$	--		$	(2,547	)		$	1,361
Average loans		$	223.6			$	210.9			$	124.0		$	95.1		$	66.3			$	68.4		$	--			$	--		$	413.9			$	374.4
Average assets			396.7				346.8				161.3			128.3			69.4				74.7			5.8				5.8			633.2				555.6
Average core deposits			262.9				245.3				82.1			69.5			--				--			--				--			345.0				314.8
Year ended December 31,
Net interest income		$	16,188			$	13,099			$	4,474		$	3,648		$	4,481			$	4,227		$	--			$	--		$	25,143			$	20,974
Provision for credit losses			9,560				3,187				1,115			69			4,063				1,683			1,241				--			15,979				4,939
Noninterest income			11,748				11,832				4,221			5,300			1,113				1,284			--				--			17,082				18,416
Noninterest expense			14,352				14,695				5,546			5,077			2,763				3,052			--				--			22,661				22,824
Income (loss) before income tax expense (benefit)			4,024				7,049				2,034			3,802			(1,232	)			776			(1,241	)			--			3,585				11,627
Income tax expense (benefit)			999				1,943				647			1,332			(468	)			295			(435	)			--			743				3,570
Net income (loss)		$	3,025			$	5,106			$	1,387		$	2,470		$	(764	)		$	481		$	(806	)		$	--		$	2,842			$	8,057
Average loans		$	218.8			$	194.0			$	112.1		$	85.6		$	67.6			$	65.2		$	--			$	--		$	398.5			$	344.8
Average assets			375.0				330.6				151.6			113.3			72.0				71.1			5.8				5.8			604.4				520.8
Average core deposits			254.6				242.2				70.6			60.9			--				--			--				--			325.2				303.1
(1) The management accounting process measures the performance of the operating segments based on our management structure and is not necessarily comparable with other similar information for other financial services companies. We define our operating segments by product type and customer segment. If the management structure and/or the allocation process changes, allocations, transfers and assignments may change. To reflect the realignment of our corporate trust business into Wholesale Banking in first quarter 2008, results for prior periods have been revised.
(2) The $1.2 billion provision for credit losses recorded at the enterprise level for 2008 represents a provision to conform Wachovia estimated loss emergence coverage periods to Wells Fargo policies. Average assets include unallocated goodwill held at the enterprise level.

Wells Fargo & Company and Subsidiaries FIVE QUARTER OPERATING SEGMENT RESULTS (1)
				Quarter ended
(income/expense in millions, average balances in billions)				Dec. 31, 2008				Sept. 30, 2008				June 30, 2008				Mar. 31, 2008			Dec. 31, 2007
COMMUNITY BANKING
Net interest income				$	4,211			$	4,205			$	4,136			$	3,636		$	3,421
Provision for credit losses					4,820				1,431				1,996				1,313			2,082
Noninterest income					2,116				2,998				3,411				3,223			3,101
Noninterest expense					3,832				3,447				3,737				3,336			3,822
Income (loss) before income tax expense (benefit)					(2,325	)			2,325				1,814				2,210			618
Income tax expense (benefit)					(1,102	)			738				580				783			(40	)
Net income (loss)				$	(1,223	)		$	1,587			$	1,234			$	1,427		$	658
Average loans				$	223.6			$	220.5			$	215.9			$	214.9		$	210.9
Average assets					396.7				380.4				365.9				356.7			346.8
Average core deposits					262.9				254.9				252.6				248.4			245.3
WHOLESALE BANKING
Net interest income				$	1,368			$	1,054			$	1,020			$	1,032		$	987
Provision for credit losses					415				294				245				161			36
Noninterest income					763				728				1,480				1,250			1,293
Noninterest expense					1,318				1,393				1,420				1,415			1,294
Income before income tax expense					398				95				835				706			950
Income tax expense					126				12				278				231			325
Net income				$	272			$	83			$	557			$	475		$	625
Average loans				$	124.0			$	116.2			$	107.6			$	100.6		$	95.1
Average assets					161.3				156.6				149.9				138.5			128.3
Average core deposits					82.1				65.2				65.8				68.9			69.5
WELLS FARGO FINANCIAL
Net interest income				$	1,145			$	1,122			$	1,122			$	1,092		$	1,080
Provision for credit losses					1,968				770				771				554			494
Noninterest income					221				272				290				330			323
Noninterest expense					672				677				703				711			784
Income (loss) before income tax expense (benefit)					(1,274	)			(53	)			(62	)			157			125
Income tax expense (benefit)					(484	)			(20	)			(24	)			60			47
Net income (loss)				$	(790	)		$	(33	)		$	(38	)		$	97		$	78
Average loans				$	66.3			$	67.5			$	68.0			$	68.4		$	68.4
Average assets					69.4				71.4				73.1				74.0			74.7
OTHER
Net interest income				$	--			$	--			$	--			$	--		$	--
Provision for credit losses					1,241				--				--				--			--
Noninterest income					--				--				--				--			--
Noninterest expense					--				--				--				--			--
Income (loss) before income tax expense (benefit)					(1,241	)			--				--				--			--
Income tax expense (benefit)					(435	)			--				--				--			--
Net income (loss)				$	(806	)		$	--			$	--			$	--		$	--
Average assets (2)				$	5.8			$	5.8			$	5.8			$	5.8		$	5.8
CONSOLIDATED COMPANY
Net interest income				$	6,724			$	6,381			$	6,278			$	5,760		$	5,488
Provision for credit losses					8,444				2,495				3,012				2,028			2,612
Noninterest income					3,100				3,998				5,181				4,803			4,717
Noninterest expense					5,822				5,517				5,860				5,462			5,900
Income (loss) before income tax expense (benefit)					(4,442	)			2,367				2,587				3,073			1,693
Income tax expense (benefit)					(1,895	)			730				834				1,074			332
Net income (loss)				$	(2,547	)		$	1,637			$	1,753			$	1,999		$	1,361
Average loans				$	413.9			$	404.2			$	391.5			$	383.9		$	374.4
Average assets					633.2				614.2				594.7				575.0			555.6
Average core deposits					345.0				320.1				318.4				317.3			314.8
(1) The management accounting process measures the performance of the operating segments based on our management structure and is not necessarily comparable with other similar information for other financial services companies. We define our operating segments by product type and customer segment. If the management structure and/or the allocation process changes, allocations, transfers and assignments may change. To reflect the realignment of our corporate trust business into Wholesale Banking in first quarter 2008, results for prior periods have been revised.
(2) The $1.2 billion provision for credit losses recorded at the enterprise level for 2008 represents a provision to conform Wachovia estimated loss emergence coverage periods to Wells Fargo policies. Average assets include unallocated goodwill held at the enterprise level.

Wells Fargo & Company and Subsidiaries FIVE QUARTER CONSOLIDATED MORTGAGE SERVICING
		Quarter ended
(in millions)		Dec. 31, 2008				Sept. 30, 2008				June 30, 2008				Mar. 31, 2008				Dec. 31, 2007
Residential MSRs measured using the fair value method:
Fair value, beginning of quarter		$	19,184			$	19,333			$	14,956			$	16,763			$	18,223
Purchases			--				57				82				52				314
Acquired from Wachovia			479				--				--				--				--
Servicing from securitizations or asset transfers			808				851				994				797				872
Sales			--				--				(177	)			(92	)			--
Net additions			1,287				908				899				757				1,186
Changes in fair value:
Due to changes in valuation model inputs or assumptions (1)			(5,129	)			(546	)			4,132				(1,798	)			(1,935	)
Other changes in fair value (2)			(628	)			(511	)			(654	)			(766	)			(711	)
Total changes in fair value			(5,757	)			(1,057	)			3,478				(2,564	)			(2,646	)
Fair value, end of quarter		$	14,714			$	19,184			$	19,333			$	14,956			$	16,763
(1) Principally reflects changes in discount rates and prepayment speed assumptions, mostly due to changes in interest rates.
(2) Represents changes due to collection/realization of expected cash flows over time.
		Quarter ended
(in millions)		Dec. 31, 2008				Sept. 30, 2008				June 30, 2008				Mar. 31, 2008				Dec. 31, 2007
Amortized MSRs:
Balance, beginning of quarter		$	433			$	442			$	455			$	466			$	460
Purchases			3				2				2				3				19
Acquired from Wachovia			1,021				--				--				--				--
Servicing from securitizations or asset transfers			6				8				4				5				7
Amortization			(18	)			(19	)			(19	)			(19	)			(20	)
Balance, end of quarter (1)		$	1,445			$	433			$	442			$	455			$	466
Fair value of amortized MSRs:
Beginning of quarter		$	622			$	595			$	601			$	573			$	602
End of quarter			1,555				622				595				601				573
(1) There was no valuation allowance recorded for the periods presented.

Wells Fargo & Company and Subsidiaries FIVE QUARTER CONSOLIDATED MORTGAGE SERVICING (CONTINUED)
		Quarter ended
(in millions)		Dec. 31, 2008				Sept. 30, 2008				June 30, 2008				Mar. 31, 2008				Dec. 31, 2007
Servicing income, net:
Servicing fees (1)		$	952			$	980			$	959			$	964			$	994
Changes in fair value of residential MSRs:
Due to changes in valuation model inputs or assumptions (2)			(5,129	)			(546	)			4,132				(1,798	)			(1,935	)
Other changes in fair value (3)			(628	)			(511	)			(654	)			(766	)			(711	)
Total changes in fair value of residential MSRs			(5,757	)			(1,057	)			3,478				(2,564	)			(2,646	)
Amortization			(18	)			(19	)			(19	)			(19	)			(20	)
Net derivative gains (losses) from economic hedges (4)			4,783				621				(4,197	)			1,892				2,215
Total servicing income, net		$	(40	)		$	525			$	221			$	273			$	543
Market-related valuation changes to MSRs, net of hedge results (2) + (4)		$	(346	)		$	75			$	(65	)		$	94			$	280
(1) Includes contractually specified servicing fees, late charges and other ancillary revenues.
(2) Principally reflects changes in discount rates and prepayment speed assumptions, mostly due to changes in interest rates.
(3) Represents changes due to collection/realization of expected cash flows over time.
(4) Represents results from free-standing derivatives (economic hedges) used to hedge the risk of changes in fair value of MSRs.
(in billions)		Dec. 31, 2008				Sept. 30, 2008				June 30, 2008				Mar. 31, 2008				Dec. 31, 2007
Managed servicing portfolio:
Loans serviced for others (1)		$	1,860			$	1,464			$	1,446			$	1,431			$	1,430
Owned loans serviced (2)			268				97				100				103				98
Total owned servicing			2,128				1,561				1,546				1,534				1,528
Sub-servicing			26				19				20				21				23
Total managed servicing portfolio		$	2,154			$	1,580			$	1,566			$	1,555			$	1,551
Ratio of MSRs to related loans serviced for others			0.87		%		1.34		%		1.37		%		1.08		%		1.20		%
Weighted-average note rate (owned servicing only)			5.92		%		5.98		%		6.00		%		6.00		%		6.01		%
(1) Consists of 1-4 family first mortgage and commercial mortgage loans.
(2) Consists of mortgages held for sale and 1-4 family first mortgage loans.

Wells Fargo & Company and Subsidiaries SELECTED FIVE QUARTER RESIDENTIAL MORTGAGE PRODUCTION DATA
			Quarter ended
(in billions)			Dec. 31, 2008		Sept. 30, 2008		June 30, 2008		Mar. 31, 2008		Dec. 31, 2007
Application Data:
Wells Fargo Home Mortgage first mortgage quarterly applications			$ 116		$ 83		$ 100		$ 132		$ 91
Refinances as a percentage of applications			68	%	39	%	44	%	62	%	52	%
Wells Fargo Home Mortgage first mortgage unclosed pipeline, at quarter end			$ 71		$ 41		$ 47		$ 61		$ 43
			Quarter ended
(in billions)			Dec. 31, 2008		Sept. 30, 2008		June 30, 2008		Mar. 31, 2008		Dec. 31, 2007
Residential Real Estate Originations: (1)
Quarter:
Wells Fargo Home Mortgage first mortgage loans:
Retail			$ 20		$ 23		$ 31		$ 34		$ 28
Correspondent/Wholesale			28		25		27		27		22
Home equity loans and lines			1		2		3		3		4
Wells Fargo Financial			1		1		2		2		2
Total			$ 50		$ 51		$ 63		$ 66		$ 56
Year-to-date			$ 230		$ 180		$ 129		$ 66		$ 272
(1)  Consists of residential real estate originations from all Wells Fargo channels.

Wells Fargo & Company and Subsidiaries HOME EQUITY PORTFOLIOS (1)
									% of loans
									two payments				Annualized loss rate
			Outstanding balances						or more past due				Quarter ended
(in millions)			Dec. 31, 2008			Sept. 30, 2008			Dec. 31, 2008		Sept. 30, 2008		Dec. 31, 2008		Sept. 30, 2008
Liquidating portfolio
California			$	4,008		$	4,146		6.69	%	5.18	%	12.32	%	11.88	%
Florida				513			534		8.41		6.74		13.60		14.57
Arizona				244			255		7.40		5.02		13.19		10.45
Texas				191			199		1.27		0.96		1.67		1.64
Minnesota				127			130		3.79		3.29		5.25		6.25
Other				5,226			5,390		3.28		2.68		4.73		3.72
Total				10,309			10,654		4.93		3.89		8.27		7.59
Core portfolio (2)
California				31,544			27,640		2.95		2.50		3.94		3.61
Florida				11,781			2,536		3.36		5.20		4.39		6.28
New Jersey				7,888			1,844		1.41		1.56		0.78		1.79
Virginia				5,688			1,740		1.50		1.40		1.56		1.71
Pennsylvania				5,043			995		1.10		1.27		0.52		0.72
Other				56,415			38,540		1.97		1.60		1.59		1.44
Total				118,359			73,295		2.27		2.05		2.39		2.43
Total liquidating and core portfolios				128,668			83,949		2.48		2.29		2.87		3.09
SOP 03-3 portfolio				821			--
Total home equity portfolios			$	129,489		$	83,949
(1) Consists of real estate 1-4 family junior lien mortgages and lines of credit secured by real estate from all groups, including the National Home Equity Group, Wachovia, Wells Fargo Financial and Wealth Management.
(2) Loss rates for the core portfolio in the table above reflect fourth quarter 2008 results for Wachovia (not included in the Wells Fargo reported results) and Wells Fargo. For the Wells Fargo core portfolio on a stand-alone basis, outstanding balances and related annualized loss rates were $29,399 million (3.81%) for California, $2,677 million (6.87%) for Florida, $1,925 million (1.29%) for New Jersey, $1,827 million (1.26%) for Virginia, $1,073 million (1.17%) for Pennsylvania, $38,934 million (1.77%) for all other states, and $75,835 million (2.71%) in total, at December 31, 2008.

Wells Fargo & Company and Subsidiaries SELECTED WACHOVIA LOAN DATA
Loans from Wachovia acquisition
			December 31, 2008
									SOP 03-3 loans
(in millions)			Total (1)			Non- SOP 03-3 loans			Balance prior to non- accretable discount			Non- accretable discount
Pick-a-Pay			$	95,315		$	57,700		$	61,946		$	(24,331)
Other consumer				151,491			149,013			5,250			(2,772)
Total consumer				246,806			206,713			67,196			(27,103)
Commercial and commercial real estate				171,362			154,517			26,098			(9,253)
Foreign				27,897			26,038			2,717			(858)
Total			$	446,065		$	387,268		$	96,011		$	(37,214)
(1) Includes $6.7 billion to adjust contractual interest to market rates, including $2.1 billion related to the SOP 03-3 portfolio.

Pick-a-Pay Loan Portfolio
			December 31, 2008
			Non-SOP 03-3 loans					SOP 03-3 loans
(in millions)			Outstanding balance			Current LTV ratio (1)		Balance prior to non- accretable discount (2)			Current LTV ratio (1)		Carrying amount			Ratio of carrying amount to current value
California			$	28,107		86	%	$	42,650		133	%	$	25,472		85	%
Florida				6,099		89			5,992		119			3,439		76
New Jersey				3,545		74			1,809		94			1,246		60
Texas				2,231		61			562		72			385		49
Arizona				1,449		95			1,552		133			895		85
Other states				16,269		75			9,381		92			6,178		61
Total			$	57,700				$	61,946				$	37,615
(1) Current loan-to-value (LTV) ratio is based on collateral values updated quarterly by an independent vendor. LTV ratio includes outstanding balance on equity lines of credit (included in the Home Equity table) that share common collateral and are junior to the above Pick-a-Pay loans.
(2) Includes $2.1 billion to adjust contractual interest to market rates.