Wells Fargo & Company is a diversified financial services company providing banking, insurance, investments, mortgage and consumer finance through almost 6,000 stores, the internet and other distribution channels across North America and internationally. Wells Fargo & Company is headquartered in San Francisco. Wells Fargo has $622 billion in assets and 159,000 total team members across our 80+ businesses. Wells Fargo & Company was founded in 1852.
Wells Fargo has $622 billion in assets.
The company employs approximately 167,500 employees.
The bank maintains 6,960 ATMs.
They operate 5,897 stores.
The bank has 3,339 branches in 23 states.
The bank operates 561 stores in supermarkets.
The company has 2,400 stores for mortgage operations.
And Wells Fargo has 999 consumer finance stores.
Retail, commercial and corporate banking services are provided through banking stores in Alaska, Arizona, California, Colorado, Idaho, Illinois, Indiana, Iowa, Michigan, Minnesota, Montana, Nebraska, Nevada, New Mexico, North Dakota, Ohio, Oregon, South Dakota, Texas, Utah, Washington, Wisconsin and Wyoming.
Wells Fargo & Company, through its subsidiaries, operates as a well diversified financial services company in the United States. It operates in three main segments: Community Banking, Wholesale Banking, and Wells Fargo Financial. Community Banking segment offers deposit products, including checking accounts, savings deposits, market rate accounts, retirement accounts, time deposits, and debit cards; and loan products comprising lines of credit, equity lines and loans, equipment and transportation loans, education loans, residential mortgage loans, and credit cards. This segment also provides receivables and inventory financing, equipment leases, real estate financing, small business financing, venture capital financing, cash management, payroll services, retirement plans, health savings accounts, merchant payment processing, and securities brokerage. Wholesale Banking segment provides a range of commercial, corporate, and real estate banking products and services, including commercial loans and lines of credit, letters of credit, asset-based lending, equipment leasing, mezzanine financing, high-yield debt, international trade facilities, foreign exchange services, treasury management, investment management, institutional fixed income sales, interest rate, commodity and equity risk management, online products, insurance, investment banking, and mortgage brokerage services. Wells Fargo Financial segment comprises consumer finance operations that make direct consumer and real estate loans to individuals and purchase sales finance contracts from retail merchants; and auto finance operations, which purchase sales finance contracts directly from auto dealers and make loans secured by autos. This segment also provides credit cards and lease, and other commercial financing services.
The Wells Fargo of today is the result of some large acquisitions and mergers throughout its history. In 1852 Henry Wells and William Fargo founded Wells, Fargo & Co. to serve the West. The new company offered banking (buying gold, and selling paper bank drafts as good as gold) – and express (rapid delivery of the gold and anything else valuable). Wells Fargo opened for business in the gold rush port of San Francisco, and soon Wells Fargo’s agents opened offices in the other new cities and mining camps of the West. In the boom and bust economy of the 1850s, Wells Fargo earned a reputation of trust by dealing rapidly and responsibly with people’s money. In the 1860s, it earned everlasting fame – and its corporate symbol – with the grand adventure of the overland stagecoach line. Wells Fargo separated its banking business from its express service in 1905, and has remained with banking since.
Wells Fargo first major acquisition was its 1996 with the hostile takeover of First Interstate, the largest such takeover in U.S. banking history. With more than $100 billion in assets, Wells Fargo became the second-largest bank in California. In February 2004, the company completed the consolidation of 19 of its national bank charters into a single national bank charter, Wells Fargo Bank, National Association.
On November 2, 1998 Wells Fargo completed a merger with Norwest Corporation.
On October 3, 2008, Wells Fargo announced it had agreed to acquire Wachovia for $15.1 billion in stock.
On October 15, 2008, Wells Fargo & Company reported net income of $1.64 billion compared with $1.75 billion in second quarter 2008 and $2.17 billion in third quarter 2007. Highlights of the third quarter report include the following.
“Despite the dramatic changes in our industry and economy, the Wells Fargo team rose to the challenge this quarter and achieved solid growth in loans and deposits, a truly remarkable accomplishment,” said President and CEO John Stumpf. “Revenue year to date was up 11 percent continuing our track record of strong, double-digit growth. Our strength, security and outstanding financial performance continued to compare favorably with our industry peers. Our vision and values and our diversified business model are time-tested over more than two decades. We’re focused, as always, on building lifelong relationships with our customers and communities, and because of that we continue to grow market share and wallet share. Barron’s ranks us one of the world’s 20 most admired companies.
“We’re known and admired for our conservative financial position, and a disciplined acquisition strategy that will not change. In that regard, we look forward with great anticipation and confidence to completing our merger with Wachovia Corporation by year end. The union of our two companies will provide compelling value for all our stakeholders, including Wachovia’s team members, combining the industry’s best in service and best in sales, an unbeatable combination that will create the nation’s premier coast-to-coast financial services company.”
Wells Fargo built our credit reserves by an additional $500 million bringing the allowance for credit losses to $8.0 billion, a $4.0 billion increase in the allowance since the credit crunch began a year ago. Business momentum remained strong in the quarter, with double-digit loan and earning asset growth (both up 15 percent year over year), double-digit growth in core deposits (up 10 percent from September 30, 2007), and 30 percent (annualized) from June 30, 2008, double-digit growth in assets under management, primarily mutual funds (up 12 percent year over year) and a record 5.7 cross-sell in our retail banking business.
Net interest margin remained among the best of the large bank holding companies at 4.79 percent, reflecting the decline in our funding costs since last year and continued above-market growth in core deposits. Finally, despite the strong growth in earning assets, investment write-downs and higher credit costs in the quarter, our capital ratios increased, with Tier 1 capital rising to 8.58 percent, one of the strongest capital positions in the industry. The strength of our franchise, earnings and balance sheet positions us well for the exciting merger about to take place with Wachovia.
Revenue was $10.38 billion, up 5 percent from $9.85 billion a year ago. The write-downs for investments in Fannie Mae, Freddie Mac and Lehman Brothers reduced revenue by 7 percentage points. “Year-to-date revenue was up 11 percent, a remarkable accomplishment in this environment,” said Chief Financial Officer Howard Atkins. “Many of our businesses continued to generate double-digit, year-over-year revenue growth including asset-based lending, commercial banking, credit cards, mortgage banking, insurance, international and wealth management, and the significant growth this quarter in net new checking accounts positions us well with new accounts and new customers to continue our strong, double-digit revenue growth.”
Average loans of $404.2 billion increased $53.5 billion, or 15 percent, from a year ago. On a linked-quarter basis, average loans grew $12.7 billion, or 13 percent (annualized). Average commercial and commercial real estate loans increased $36.0 billion, or 27 percent, from third quarter 2007 and increased $9.7 billion, or 24 percent (annualized), from second quarter 2008, making this the 16th consecutive quarter of double-digit, year-over-year growth. Average consumer loans increased $17.8 billion, or 9 percent, from third quarter 2007, and increased $3.1 billion, or 5 percent (annualized), from second quarter 2008.
Core deposits increased $23.7 billion, or 30 percent (annualized), from June 30, 2008. Average core deposits of $320.1 billion increased $13.9 billion, or 5 percent, from a year ago and $1.7 billion, or 2 percent (annualized), linked quarter. Average mortgage escrow deposits were $21.2 billion, down $1.2 billion from third quarter 2007 and down $1.5 billion linked quarter. Average retail core deposits increased $13.2 billion, or 6 percent, from third quarter 2007 and increased $3.8 billion, or 7 percent (annualized), linked quarter. Average consumer checking accounts grew a net 6.1 percent from second quarter 2007, with 8 percent growth in California, the largest increase in net new checking accounts in California in almost four years. Wealth Management group average core deposits of $22.7 billion increased $7.7 billion, or 52 percent, from third quarter 2007.
Net interest income increased $1.1 billion, or 21 percent, from third quarter 2007 driven by double-digit earning asset growth (up 15 percent) and a 24 basis point increase in the net interest margin to 4.79 percent. Net interest income grew $103 million, or 7 percent (annualized), linked quarter due to 13 percent (annualized) linked-quarter growth in earning assets offset in part by a 13 basis point linked-quarter decline in the net interest margin.
Noninterest income decreased $575 million from third quarter 2007, including a $756 million decline in net investment gains. The $1.2 billion decrease in noninterest income linked quarter was primarily due to a $378 million decline in net investment gains, as well as lower linked-quarter mortgage banking income. Net investment losses of $423 million consisted of previously announced other-than-temporary impairment charges of $646 million for Fannie Mae, Freddie Mac and Lehman Brothers, an additional $247 million of other-than-temporary write-downs on debt securities and $470 million of realized bond and equity gains.
Despite the 24 percent decline in the S&P500® year over year, trust and investment fees declined only 5 percent. Card fees were up 7 percent year over year and 9 percent (annualized) linked quarter due to continued growth in new accounts and greater purchase activity. Insurance fees were up 33 percent year over year due to customer growth, higher crop insurance revenues and the fourth quarter 2007 acquisition of ABD Insurance, but declined 20 percent linked quarter due to seasonally lower crop insurance revenues. Charges and fees on loans were up 8 percent, primarily reflecting strong commercial loan demand. Net unrealized losses on securities available for sale were $4.9 billion at September 30, 2008, compared with net unrealized losses of $2.1 billion at June 30, 2008.
Mortgage banking noninterest income was a solid $892 million, the second best quarter ever. Mortgage banking noninterest income increased $69 million from third quarter 2007 and was down $305 million linked quarter, with higher servicing income offset by lower origination volumes. The owned mortgage servicing portfolio was $1.56 trillion at quarter end, up 6 percent from a year ago. Mortgage applications of $83 billion in the quarter were down 13 percent from a year ago but at wider margins.
Noninterest expense decreased $154 million, or 3 percent, from third quarter 2007 and decreased $343 million linked quarter.
Third quarter 2008 net charge-offs were $1,995 million (1.96 percent of average loans, annualized) compared with $1,512 million (1.55 percent) in second quarter 2008 and $892 million (1.01 percent) in third quarter 2007. A significant part of the sequential increase reflected the changes in the National Home Equity Group (Home Equity) charge-off policy in the second quarter, which deferred an estimated $265 million of charge-offs. After taking into account the impact of the new Home Equity policy, charge-offs rose at a more moderate pace in third quarter than in the last few quarters. Third quarter 2008 provision was $2.5 billion, including a $500 million credit reserve build primarily related to higher projected losses in several consumer credit businesses, as well as growth in the wholesale portfolios, bringing the allowance for credit losses to $8.0 billion, double its level from just before the credit crunch began a year ago.
Net charge-offs in the real estate 1-4 family first mortgage portfolio increased $43 million linked quarter, including the $19 million increase from Wells Fargo Financial’s residential real estate portfolio. Credit card charge-offs increased $32 million. Losses in the auto portfolio increased $74 million from second quarter 2008 in part due to seasonality and lower used car values.
Net charge-offs in the real estate 1-4 family junior lien portfolio increased $307 million from second quarter 2008 as the effect of the second quarter charge-off policy change dissipated. Of the combined $350 million increase in real estate first and second mortgage losses, approximately $265 million was due to the deferral of charge-offs from second quarter related to the change in the Home Equity charge-off policy.
Commercial and commercial real estate net charge-offs decreased $4 million linked quarter, including a modest decline in charge-offs on loans originated through our Business Direct small business lending group.
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