Prepared by MERRILL CORPORATION

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QskqQHpOnrPKfgZPrhP3MfPEwnUVExV0wlEL7Mhu2wu+3hhUa9wa8s3uMVu+SnZu eDQsgI88r8Q3F+EpbwdErw== 0000912057-02-001408.txt : 20020413 0000912057-02-001408.hdr.sgml : 20020413 ACCESSION NUMBER: 0000912057-02-001408 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20020115 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020115 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WELLS FARGO & CO/MN CENTRAL INDEX KEY: 0000072971 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 410449260 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-02979 FILM NUMBER: 2509712 BUSINESS ADDRESS: STREET 1: 420 MONTGOMERY ST STREET 2: SIXTH AND MARQUETTE CITY: SAN FRANCISCO STATE: CA ZIP: 94163 BUSINESS PHONE: 6126671234 MAIL ADDRESS: STREET 1: WELLS FARAGO CENTER STREET 2: SIXTH & MARQUETTE CITY: MINNEAPOLIS STATE: MN ZIP: 55479 FORMER COMPANY: FORMER CONFORMED NAME: NORTHWEST BANCORPORATION DATE OF NAME CHANGE: 19830516 FORMER COMPANY: FORMER CONFORMED NAME: NORWEST CORP DATE OF NAME CHANGE: 19920703 8-K 1 a2067743z8-k.htm FORM 8-K Prepared by MERRILL CORPORATION
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (date of earliest event reported): January 15, 2002

WELLS FARGO & COMPANY
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction
of incorporation)

001-2979
(Commission File Number)

No. 41-0449260
(I.R.S. Employer
Identification No.)

420 Montgomery Street, San Francisco, California 94163
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: 1-800-411-4932

Item 5. Other Events

Wells Fargo & Company is placing on file as Exhibit 99 a copy of the Company's financial results for the quarter ended December 31, 2001. Final financial statements with additional analyses will be filed as part of the Company's Form 10-K for the year ended December 31, 2001.

Item 7. Exhibits

99 Wells Fargo & Company's financial results for the quarter ended December 31, 2001

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

Dated: January 15, 2002		WELLS FARGO & COMPANY
		By:	/s/ LES L. QUOCK Les L. Quock Senior Vice President and Controller

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Item 5. Other Events

Item 7. Exhibits

SIGNATURE
EX-99 3 a2067743zex-99.htm EXHIBIT 99 Prepared by MERRILL CORPORATION
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EXHIBIT 99

Wells Fargo & Company's financial results for the quarter ended December 31, 2001

Wells Fargo & Company reported fourth quarter 2001 net income of $1.18 billion, up 5 percent from last year. Cash earnings per share were $.80, up 7 percent from last year and up 10 percent (annualized) from third quarter 2001. Earnings per share in the fourth quarter were $.69, up 6 percent from last year and up 12 percent (annualized) from third quarter 2001. Cash earnings are earnings before goodwill and nonqualifying core deposit intangible amortization and the reduction of unamortized goodwill due to sales of assets.

For the full year 2001, net income was $3.42 billion, cash earnings per share were $2.41, and earnings per share were $1.97. Net income for the full year 2001 included $1.16 billion after-tax, or $.67 per share, of non-cash impairment and other special charges recorded in the second quarter.

Core revenue, which excludes market-sensitive revenue and acquisitions, grew 16 percent in the fourth quarter, compared with the fourth quarter of 2000. For the full year 2001, excluding the second quarter non-cash impairment charge, earnings per share were $2.64, up 13 percent over last year, and core revenue increased 13 percent over 2000.

Financial Performance

"Despite the impact of September 11, challenging economic and credit conditions, and turbulent financial markets, earnings per share trended higher in the fourth quarter," said Chief Financial Officer Howard Atkins. "This strong performance was broad-based, reflecting the solid efforts of our team members and the breadth of the Company's product line. During the fourth quarter, the Company realized gains of $154 million on available for sale securities. In addition, the venture capital portfolio had a net loss of $37 million, comprised of a small amount of realized gains offset by write-downs on several other investments. The net of the available for sale securities portfolio gains and venture portfolio losses was offset by $100 million of integration, acquisition and other non-recurring charges."

Revenue

Revenue of $5.88 billion for fourth quarter 2001 increased 9 percent from fourth quarter 2000. For the full year 2001, revenue was $20.15 billion, compared with $19.71 billion in 2000. Excluding the effect of market-sensitive income and acquisitions completed in 2001, revenue for fourth quarter 2001 increased 16 percent from fourth quarter 2000. On the same basis, revenue for full year 2001 increased 13 percent from the prior year. The revenue growth was driven by continued strong loan growth, a wider net interest margin and continued growth in virtually all business sources of noninterest income.

Loans

Loans averaged $167 billion for fourth quarter 2001, 7 percent greater than a year ago. From third quarter 2001 to fourth quarter 2001, annualized average loan growth was 8 percent.

Deposits

Average core deposits of $176 billion for fourth quarter 2001 grew $24 billion, or 16 percent, since last year and $5 billion, or 12 percent (annualized), from third quarter 2001. After adjusting for acquisitions and off-balance sheet sweep deposits, core deposit growth was $6 billion, or 13 percent (annualized), since third quarter 2001. The growth in mortgage escrow accounts accounted for almost half of the increase from the third quarter.

Net Interest Income

Net interest income on a taxable equivalent basis was $3.45 billion in fourth quarter 2001, up 23 percent from the fourth quarter of last year. Net interest income was $12.54 billion in the full year 2001, up 15 percent from 2000. The increase in net interest income was driven by the growth in loans and core deposits described above, and by a wider net interest income margin, 5.50 percent in fourth quarter 2001, compared with 5.40 percent in third quarter 2001 and 5.30 percent in fourth quarter 2000. According to Atkins, "The margin expansion in the fourth quarter reflected a combination of higher yielding consumer loans and lower cost core and mortgage escrow deposits in our mix of assets and liabilities, continued disciplined pricing of our loan and deposit products and the decline in short term rates relative to longer term rates in the fourth quarter." Average funding costs declined by 70 basis points in fourth quarter 2001, while average net asset yields declined 60 basis points.

Noninterest Income

Noninterest income was $2.45 billion for fourth quarter 2001, down 6 percent from $2.61 billion in the fourth quarter of last year, and up 29 percent (annualized) from third quarter 2001. Noninterest income for the full year 2001 was $7.69 billion, a decrease of 13 percent from 2000. Excluding market-sensitive income and acquisitions, full year 2001 noninterest income was up 6 percent from the same period a year ago and 32 percent (annualized) from the third quarter, reflecting across the board increases in fees from all operations, including deposit service charges, card usage fees and particularly, mortgage origination fees. "Despite the challenging markets early in the fourth quarter, trust and investment management fees continued to increase," said Atkins, "and we also benefited from strong fee growth at Acordia, our recently acquired insurance brokerage company."

Noninterest Expense

Noninterest expense was $3.45 billion in fourth quarter 2001, up 7 percent from the same period of last year. Fourth quarter expenses included approximately $60 million of integration, acquisition and other non-recurring costs, including $30 million for settlement of long-standing litigation. Adjusted for integration, acquisition and other non-recurring expenses, noninterest expense grew 8 percent from fourth quarter last year, almost all of which was due to growth in the mortgage company. On a similar basis, fourth quarter expenses were up $252 million from the third quarter 2001, the majority of which was due to record mortgage originations. Fourth quarter 2001 expenses also included approximately $155 million in goodwill amortization that will be discontinued effective January 1, 2002 under the new accounting standard FAS 142, Goodwill and Other Intangible Assets . Full year 2001 noninterest expense increased 9 percent compared with last year. Cash efficiency ratio for the fourth quarter was 55.4 percent, an improvement from 56.1 percent last year.

Credit Quality

"Our fourth quarter credit results remain consistent with current economic conditions," said Chief Credit Officer David Munio. "Our credit costs rose in the fourth quarter, in line with the weak economy, but remained in the expected range. To date, we have not had any material negative effect from industries affected most directly by September 11, but we will continue to closely monitor these segments."

The provision for loan losses was $536 million for fourth quarter 2001, compared with $352 million for fourth quarter 2000. Net charge-offs totaled $536 million, or 1.27 percent of average loans (annualized), in fourth quarter 2001, compared with $352 million, or .90 percent, for fourth quarter 2000 and $454 million, or 1.10 percent, for third quarter 2001. "The increase in credit losses was caused primarily by declining collateral and asset values and weakness in some retailing and manufacturing credits," said Munio. "We continued to benefit from a well-diversified portfolio, split nearly equally between consumer and commercial borrowers. Our consumer portfolio continued to perform solidly, in part due to its diversity and continued careful management." For the year ended December 31, 2001, the loan loss provision was $1.78 billion and net charge-offs totaled $1.78 billion, or 1.09 percent of total loans, compared with a loan loss provision of $1.33 billion and net charge-offs of $1.22 billion, or .84 percent, for the same period of 2000. The allowance for loan losses of $3.76 billion was 2.18 percent of total loans at December 31, 2001, compared with 2.31 percent at December 31, 2000 and 2.23 percent at September 30, 2001.

Non-performing assets increased $27 million, or 2 percent, during the quarter, ending at $1.81 billion. Total nonaccrual and restructured loans were $1.64 billion at December 31, 2001, compared with $1.20 billion at December 31, 2000 and $1.62 billion at September 30, 2001.

Special Topics

Wells Fargo had no lending relationship with Enron Corp., which filed for Chapter 11 reorganization in the fourth quarter, and all direct exposure to Enron was fully provided for in the fourth quarter through a $7 million write-down. Wells Fargo Financial decided last year to wind down its small consumer finance operations in Argentina and began running off its loan portfolio in mid-2001. The effects of the currency devaluation that recently occurred in Argentina on the remaining $50 million of assets was provided for in the fourth quarter through a $21 million charge to earnings.

The Company has been assessing the effect of the required adoption of FAS 142 and any goodwill impairment that may be recognized under the transition rules. The Company expects to complete that assessment and record any transition adjustment under FAS 142 in first quarter 2002. At year-end 2001, the Company had $9.5 billion of goodwill, $5.5 billion of which relates to the 1996 purchase of First Interstate Bancorp. The Company has determined that impairment for the First Interstate goodwill is not permitted under FAS 142 since the remaining First Interstate operations must be combined with other similar banking operations for impairment testing.

Business Segment Performance

Wells Fargo has three lines of business for management reporting: Community Banking, Wholesale Banking and Wells Fargo Financial. Net income of the three business segments, which excludes second quarter 2001 non-cash impairment and other special charges, was:

	Fourth Quarter				Full Year
(in millions)	Fourth Quarter				Full Year
(in millions)	2001		2000		2001(1)		2000
Community Banking (2)	$	962	$	898	$	3,657	$	3,106
Wholesale Banking (2)		248		237		990		1,007
Wells Fargo Financial		74		66		288		258

(1): Excludes second quarter 2001 non-cash impairment and other special charges of $1.16 billion (after tax)
(2): Results for Community Banking and Wholesale Banking have been restated for prior periods to reflect changes in management structure.

More financial information about the business segments is on page 15.

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.

Community Banking's net income increased to $962 million in fourth quarter 2001 from $898 million in fourth quarter 2000, an increase of 7 percent. The increase in net interest income was primarily due to the increase in mortgages held for sale and an increase in the margin on loans. Income from credit card, trust and investment fees and service charges was up significantly. These increases in revenue were partially offset by a decrease in venture capital results and gains on securities held for sale. On the expense side, there were significant decreases in contract services, equipment expense and other lines, as integration costs declined. A number of other expense lines in the banking regions showed only modest increases. This improvement, however, was more than offset by a significant expense increase in mortgage banking, driven by record volumes. For the full year 2001, net income, excluding second quarter 2001 impairment and other special charges of $1.09 billion (after tax), increased 18 percent to $3,657 million from $3,106 million in 2000.

Wholesale Banking provides businesses with annual sales in excess of $10 million across the United States with a complete line of commercial, corporate and real estate banking products and services.

Wholesale Banking's net income was $248 million in fourth quarter 2001, compared with $237 million in fourth quarter 2000. Net income, excluding second quarter 2001 impairment and other special charges of $62 million (after tax), was $990 million for the full year 2001, compared with $1,007 million for 2000, the reduction largely attributable to additional net credit costs in 2001.

Wells Fargo Financial offers consumer and commercial finance, leasing, private label credit cards and dealer financing in 47 states, Canada, the Caribbean and Latin America.

Wells Fargo Financial's net income increased 12 percent to $74 million in fourth quarter 2001, compared with $66 million for the same period in 2000. Net income increased to $288 million for the full year 2001 from $258 million in 2000, an increase of 12 percent.

Wells Fargo & Company is a diversified financial services company with $308 billion in assets, providing banking, insurance, investments, mortgage and consumer finance from more than 5,400 stores and the Internet (wellsfargo.com) across North America and elsewhere internationally.

Visit Wells Fargo at www.wellsfargo.com

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

This foregoing discussion contains forward-looking statements about the Company. Broadly speaking, forward- looking statements consist of descriptions of plans or objectives for future operations, products or services, forecasts of revenues, earnings or other measures of economic performance, and assumptions underlying or relating to any of the foregoing. Because forward-looking statements discuss future events or conditions and not historical facts, they often include words such as "anticipate," "believe," "estimate," "expect," "intend," "plan," "project," "target," "can," "could," "may," "should," "will," "would" or similar expressions. Examples of forward-looking statements in the foregoing discussion are the statements about future credit losses, including those related to customers impacted by the events of September 11, 2001.

Do not unduly rely on forward-looking statements. They give the Company's expectations about the future and are not guarantees. Forward-looking statements speak only as of the date they are made, and the Company does not undertake any obligation to update them to reflect changes that occur after that date.

There are several factors-many of which are beyond the Company's control-that could cause results to differ significantly from the Company's expectations. Factors such as credit, market, operational, liquidity, interest rate and other risks are described in the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2001, as amended on Form 10-Q/A, and the Company's Annual Report on Form 10-K for the year ended December 31, 2000, including information incorporated into the Form 10-K from the Company's 2000 Annual Report to Stockholders, filed as Exhibit 13 to the Form 10-K. See, for example, "Management's Discussion and Analysis of Financial Condition and Results of Operations-Balance Sheet Analysis" in the Form 10-Q/A and "Financial Review-Balance Sheet Analysis" incorporated into the Form 10-K from the 2000 Annual Report to Stockholders.

Other factors described in the Forms 10-Q, 10-Q/A and/or 10-K include • the recent terrorist attacks • business and economic conditions including the California energy crisis • fiscal and monetary policies • regulation • disintermediation • competition generally and in light of the Gramm-Leach-Bliley Act • potential dividend restrictions • market acceptance and regulatory approval of new products and services • non-banking activities • integration of acquired companies • attracting and retaining key personnel • stock price volatility. See "Factors That May Affect Future Results" included in the Form 10-Q/A and incorporated into the Form 10-K from the 2000 Annual Report to Stockholders and "Regulation and Supervision" included in the Form 10-K.

Any factor described in this document or in the Forms 10-Q, 10-Q/A or 10-K or in information incorporated by reference into those documents 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 and Subsidiaries
SUMMARY FINANCIAL DATA

			Quarter ended December 31,								Year ended December 31,
(in millions, except per share amounts)			Quarter ended December 31,						% Change		Year ended December 31,						% Change
(in millions, except per share amounts)			2001			2000			% Change		2001			2000			% Change
For the Period
Net income			$	1,181		$	1,128		5	%	$	3,423		$	4,026		(15	)%
Net income applicable to common stock				1,180			1,124		5			3,409			4,009		(15	)
Earnings per common share			$	.70		$	.66		6		$	1.99		$	2.36		(16	)
Diluted earnings per common share				.69			.65		6			1.97			2.33		(15	)
Dividends declared per common share				.26			.24		8			1.00			.90		11
Average common shares outstanding				1,696.7			1,710.5		(1	)		1,709.5			1,699.5		1
Diluted common shares outstanding				1,709.2			1,732.4		(1	)		1,726.9			1,718.4		—
Profitability ratios (annualized)
	Net income to average total assets (ROA)			1.54	%		1.73	%	(11	)		1.20	%		1.61	%	(25	)
	Net income applicable to common stock to average common stockholders' equity (ROE)			17.31			17.16		1			12.79			16.31		(22	)
Total revenue			$	5,879		$	5,405		9		$	20,150		$	19,708		2
Efficiency ratio (1)				58.7	%		59.5	%	(1	)		64.0	%		60.0	%	7
Average loans			$	167,203		$	155,860		7		$	163,124		$	145,577		12
Average assets				303,930			259,971		17			285,421			250,188		14
Average core deposits				175,752			151,847		16			167,946			145,793		15
Net interest margin				5.50	%		5.30	%	4			5.36	%		5.35	%	—
Cash Net Income and Ratios (2)
Net income applicable to common stock			$	1,362		$	1,291		5		$	4,169		$	4,646		(10	)
Earnings per common share				.80			.75		7			2.44			2.73		(11	)
Diluted earnings per common share				.80			.75		7			2.41			2.70		(11	)
ROA				1.84	%		2.06	%	(11	)		1.52	%		1.94	%	(22	)
ROE				32.07			31.85		1			25.31			30.89		(18	)
Efficiency ratio				55.4			56.1		(1	)		60.0			56.5		6
At Period End
Securities available for sale			$	40,308		$	38,655		4		$	40,308		$	38,655		4
Loans				172,499			161,124		7			172,499			161,124		7
Allowance for loan losses				3,761			3,719		1			3,761			3,719		1
Goodwill				9,527			9,303		2			9,527			9,303		2
Assets				307,569			272,426		13			307,569			272,426		13
Core deposits				182,295			156,710		16			182,295			156,710		16
Common stockholders' equity				27,150			26,221		4			27,150			26,221		4
Stockholders' equity				27,214			26,488		3			27,214			26,488		3
Capital ratios
	Common stockholders' equity to assets			8.83	%		9.63	%	(8	)		8.83	%		9.63	%	(8	)
	Stockholders' equity to assets			8.85			9.72		(9	)		8.85			9.72		(9	)
	Risk-based capital (3)
		Tier 1 capital		7.35			7.29		1			7.35			7.29		1
		Total capital		10.90			10.43		5			10.90			10.43		5
	Leverage (3)			6.25			6.49		(4	)		6.25			6.49		(4	)
Book value per common share			$	16.01		$	15.29		5		$	16.01		$	15.29		5
Staff (active, full-time equivalent)				119,714			108,727		10			119,714			108,727		10
Common Stock Price
High			$	45.14		$	56.38		(20	)	$	54.81		$	56.38		(3	)
Low				38.25			39.63		(3	)		38.25			31.00		23
Period end				43.47			55.69		(22	)		43.47			55.69		(22	)

(1): The efficiency ratio is defined as noninterest expense divided by total revenue (net interest income and noninterest income).
(2): Cash net income and ratios exclude goodwill amortization, the reduction of unamortized goodwill due to sales of assets and nonqualifying core deposit intangible (CDI) amortization. The ratios also exclude the balance of goodwill and nonqualifying CDI. Nonqualifying core deposit intangible amortization and average balance excluded from these calculations are, with the exception of the efficiency and ROA ratios, net of applicable taxes. The pretax amount for the average balance of nonqualifying CDI was $1,004 million and $1,062 million for the quarter and year ended December 31, 2001, respectively. The after-tax amounts for the amortization and average balance of nonqualifying CDI were $24 million and $622 million, respectively, for the quarter ended December 31, 2001 and $96 million and $659 million for the year ended December 31, 2001, respectively. Goodwill amortization, the reduction of unamortized goodwill due to the sales of assets and average balance (which are not tax effected) were $158 million, nil and $9,583 million, respectively, for the quarter ended December 31, 2001 and $610 million, $54 million and $9,514 million for the year ended December 31, 2001, respectively.
(3): The December 31, 2001 ratios are preliminary.

Wells Fargo & Company and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME

		Quarter ended December 31,							Year ended December 31,
(in millions, except per share amounts)		Quarter ended December 31,					% Change		Year ended December 31,						% Change
(in millions, except per share amounts)		2001			2000		% Change		2001			2000			% Change
INTEREST INCOME
Securities available for sale		$	659		$	625	5	%	$	2,544		$	2,671		(5	)%
Mortgages held for sale			540			232	133			1,595			849		88
Loans held for sale			66			95	(31	)		317			418		(24	)
Loans			3,367			3,902	(14	)		14,461			14,446		—
Other interest income			58			80	(28	)		284			341		(17	)

	Total interest income		4,690			4,934	(5	)		19,201			18,725		3

INTEREST EXPENSE
Deposits			604			1,133	(47	)		3,553			4,089		(13	)
Short-term borrowings			236			448	(47	)		1,273			1,758		(28	)
Long-term debt			387			540	(28	)		1,826			1,939		(6	)
Guaranteed preferred beneficial interests in Company's subordinated debentures			31			19	63			89			74		20

	Total interest expense		1,258			2,140	(41	)		6,741			7,860		(14	)

NET INTEREST INCOME			3,432			2,794	23			12,460			10,865		15
Provision for loan losses			536			352	52			1,780			1,329		34

Net interest income after provision for loan losses			2,896			2,442	19			10,680			9,536		12

NONINTEREST INCOME
Service charges on deposit accounts			506			437	16			1,876			1,704		10
Trust and investment fees			454			421	8			1,710			1,624		5
Credit card fees			216			187	16			796			721		10
Other fees			323			295	9			1,244			1,113		12
Mortgage banking			394			434	(9	)		1,671			1,444		16
Insurance			221			119	86			745			411		81
Net venture capital (losses) gains			(37	)		203	—			(1,630	)		1,943		—
Net gains (losses) on securities available for sale			154			259	(41	)		463			(722	)	—
Other			216			256	(16	)		815			605		35

	Total noninterest income		2,447			2,611	(6	)		7,690			8,843		(13	)

NONINTEREST EXPENSE
Salaries			1,012			920	10			4,027			3,652		10
Incentive compensation			411			222	85			1,195			846		41
Employee benefits			223			247	(10	)		960			989		(3	)
Equipment			237			307	(23	)		909			948		(4	)
Net occupancy			259			247	5			975			953		2
Goodwill			158			141	12			610			530		15
Core deposit intangible			40			45	(11	)		165			186		(11	)
Net (gains) losses on dispositions of premises and equipment			—			3	(100	)		(21	)		(58	)	(64	)
Other			1,114			1,086	3			4,071			3,784		8

	Total noninterest expense		3,454			3,218	7			12,891			11,830		9

INCOME BEFORE INCOME TAX EXPENSE			1,889			1,835	3			5,479			6,549		(16	)
Income tax expense			708			707	—			2,056			2,523		(19	)

NET INCOME		$	1,181		$	1,128	5	%	$	3,423		$	4,026		(15	)%

NET INCOME APPLICABLE TO COMMON STOCK		$	1,180		$	1,124	5	%	$	3,409		$	4,009		(15	)%

EARNINGS PER COMMON SHARE		$	.70		$	.66	6	%	$	1.99		$	2.36		(16	)%

DILUTED EARNINGS PER COMMON SHARE		$	.69		$	.65	6	%	$	1.97		$	2.33		(15	)%

DIVIDENDS DECLARED PER COMMON SHARE		$	.26		$	.24	8	%	$	1.00		$	.90		11	%

Average common shares outstanding			1,696.7			1,710.5	(1	)%		1,709.5			1,699.5		1	%

Diluted average common shares outstanding			1,709.2			1,732.4	(1	)%		1,726.9			1,718.4		—	%

Wells Fargo & Company and Subsidiaries
CONSOLIDATED BALANCE SHEET

			December 31,
(in millions, except shares)			December 31,						% Change
(in millions, except shares)			2001			2000			% Change
ASSETS
Cash and due from banks			$	16,968		$	16,978		—	%
Federal funds sold and securities purchased under resale agreements				2,530			1,598		58
Securities available for sale				40,308			38,655		4
Mortgages held for sale				30,405			11,812		157
Loans held for sale				4,745			4,539		5
Loans				172,499			161,124		7
Allowance for loan losses				3,761			3,719		1

	Net loans			168,738			157,405		7

Mortgage servicing rights				6,241			5,609		11
Premises and equipment, net				3,549			3,415		4
Core deposit intangible				1,013			1,183		(14	)
Goodwill				9,527			9,303		2
Interest receivable and other assets				23,545			21,929		7

	Total assets		$	307,569		$	272,426		13	%

LIABILITIES
Noninterest-bearing deposits			$	65,362		$	55,096		19	%
Interest-bearing deposits				121,904			114,463		7

	Total deposits			187,266			169,559		10
Short-term borrowings				37,782			28,989		30
Accrued expenses and other liabilities				16,777			14,409		16
Long-term debt				36,095			32,046		13
Guaranteed preferred beneficial interests in Company's subordinated debentures				2,435			935		160
STOCKHOLDERS' EQUITY
Preferred stock				218			385		(43	)
Unearned ESOP shares				(154	)		(118	)	31

	Total preferred stock			64			267		(76	)
Common stock — $1²/3 par value, authorized 6,000,000,000 shares; issued 1,736,381,025 shares and 1,736,381,025 shares				2,894			2,894		—
Additional paid-in capital				9,436			9,337		1
Retained earnings				16,005			14,541		10
Cumulative other comprehensive income				752			524		44
Treasury stock—40,886,028 shares and 21,735,182 shares				(1,937	)		(1,075	)	80

	Total stockholders' equity			27,214			26,488		3

		Total liabilities and stockholders' equity	$	307,569		$	272,426		13	%

Wells Fargo & Company and Subsidiaries
CONDENSED CONSOLIDATED STATEMENT OF
CHANGES IN STOCKHOLDERS' EQUITY

			Year ended December 31,
(in millions)			Year ended December 31,
(in millions)			2001			2000
Balance, beginning of year			$	26,488		$	23,871
Net income				3,423			4,026
Other comprehensive income (loss), net of tax:
	Change in foreign currency translation adjustments			(3	)		(2	)
	Minimum pension liability adjustment			(42	)		—
	Change in valuation allowance related to:
		Derivative instruments and hedging activities		192			—
		Investment securities		10			(234	)
		Cumulative effect of the change in accounting principle related to derivative instruments and hedging activities		71			—
Common stock issued				594			554
Common stock issued for acquisitions				—			—
Common stock issued for acquisitions				22			2,937
Common stock repurchased				(1,760	)		(3,238	)
Stock appreciation rights				—			48
Preferred stock released to ESOP				159			128
Preferred stock repurchased				—			(1	)
Preferred stock redeemed				(200	)		—
Preferred stock dividends				(14	)		(17	)
Common stock dividends				(1,710	)		(1,569	)
Cash payments received on notes receivable from ESOP				—			1
Change in Rabbi trust assets (classified as treasury stock)				(16	)		(16	)

Balance, end of year			$	27,214		$	26,488

LOANS

			December 31,
(in millions)			December 31,
(in millions)			2001		2000
Commercial			$	47,547	$	50,518
Real estate 1-4 family first mortgage				25,588		18,464
Other real estate mortgage				24,808		23,972
Real estate construction				7,806		7,715
Consumer:
	Real estate 1-4 family junior lien mortgage			25,530		18,218
	Credit card			6,700		6,616
	Other revolving credit and monthly payment			23,502		23,974

		Total consumer		55,732		48,808
Lease financing				9,420		10,023
Foreign				1,598		1,624

		Total loans (net of unearned income)	$	172,499	$	161,124

Wells Fargo & Company and Subsidiaries
CHANGES IN THE ALLOWANCE FOR LOAN LOSSES

					Quarter ended									Year ended
(in millions)					Dec. 31, 2001			Sept. 30, 2001			Dec. 31, 2000			Dec. 31, 2001			Dec. 31, 2000
Balance, beginning of period					$	3,761		$	3,760		$	3,665		$	3,719		$	3,344
Allowance related to business combinations						—			—			54			41			265
Provision for loan losses						536			455			352			1,780			1,329
Loan charge-offs:
	Commercial					(232	)		(178	)		(115	)		(692	)		(429	)
	Real estate 1-4 family first mortgage					(8	)		(14	)		(4	)		(29	)		(16	)
	Other real estate mortgage					(20	)		(3	)		(6	)		(32	)		(32	)
	Real estate construction					(27	)		(7	)		(1	)		(37	)		(8	)
	Consumer:
		Real estate 1-4 family junior lien mortgage				(13	)		(11	)		(11	)		(47	)		(34	)
		Credit card				(102	)		(100	)		(103	)		(421	)		(367	)
		Other revolving credit and monthly payment				(209	)		(195	)		(167	)		(770	)		(623	)

			Total consumer			(324	)		(306	)		(281	)		(1,238	)		(1,024	)
	Lease financing					(27	)		(23	)		(21	)		(94	)		(52	)
	Foreign					(22	)		(20	)		(21	)		(78	)		(86	)

			Total loan charge-offs			(660	)		(551	)		(449	)		(2,200	)		(1,647	)

Loan recoveries:
	Commercial					38			19			27			96			98
	Real estate 1-4 family first mortgage					—			1			1			3			4
	Other real estate mortgage					10			4			3			22			13
	Real estate construction					1			—			1			3			4
	Consumer:
		Real estate 1-4 family junior lien mortgage				3			2			4			11			14
		Credit card				10			10			10			40			39
		Other revolving credit and monthly payment				52			50			43			203			213

			Total consumer			65			62			57			254			266
	Lease financing					6			7			4			25			13
	Foreign					4			4			4			18			30

			Total loan recoveries			124			97			97			421			428

				Total net loan charge-offs		(536	)		(454	)		(352	)		(1,779	)		(1,219	)

Balance, end of period					$	3,761		$	3,761		$	3,719		$	3,761		$	3,719

Total net loan charge-offs as a percentage of average total loans (annualized)						1.27	%		1.10	%		.90	%		1.09	%		.84	%

Allowance as a percentage of total loans						2.18	%		2.23	%		2.31	%		2.18	%		2.31	%

Wells Fargo & Company and Subsidiaries
NONACCRUAL AND RESTRUCTURED LOANS AND OTHER ASSETS

(in millions)				Dec. 31, 2001			Dec. 31, 2000
Nonaccrual loans:
	Commercial			$	827		$	739
	Real estate 1-4 family first mortgage				203			127
	Other real estate mortgage				210			113
	Real estate construction				145			57
	Consumer:
		Real estate 1-4 family junior lien mortgage			24			23
		Other revolving credit and monthly payment			59			36

			Total consumer		83			59
	Lease financing				163			92
	Foreign				9			7

			Total nonaccrual loans		1,640			1,194
Restructured loans					—			1

Nonaccrual and restructured loans					1,640			1,195
As a percentage of total loans					1.0	%		.7	%
Foreclosed assets					171			128
Real estate investments (1)					2			27

Total nonaccrual and restructured loans and other assets				$	1,813		$	1,350

(1): Represents the amount of real estate investments (contingent interest loans accounted for as investments) that would be classified as nonaccrual if such assets were recorded as loans. Real estate investments totaled $24 million and $56 million at December 31, 2001 and December 31, 2000, respectively.

Wells Fargo & Company and Subsidiaries
NONINTEREST INCOME

			Quarter ended December 31,							Year ended December 31,
(in millions)			2001			2000		% Change		2001			2000			% Change
Service charges on deposit accounts			$	506		$	437	16	%	$	1,876		$	1,704		10	%
Trust and investment fees:
	Asset management and custody fees			180			196	(8	)		731			735		(1	)
	Mutual fund and annuity sales fees			207			200	4			803			763		5
	All other			67			25	168			176			126		40

		Total trust and investment fees		454			421	8			1,710			1,624		5
Credit card fees				216			187	16			796			721		10
Other fees:
	Cash network fees			49			45	9			202			187		8
	Charges and fees on loans			129			95	36			445			347		28
	All other			145			155	(6	)		597			579		3

		Total other fees		323			295	9			1,244			1,113		12
Mortgage banking:
	Origination and other closing fees			247			92	168			737			350		111
	Servicing fees, net of amortization and impairment			(238	)		165	—			(260	)		665		—
	Net gains on securities available for sale			—			—	—			134			—		—
	Net gains on sales of mortgage servicing rights			—			61	(100	)		—			159		(100	)
	Net gains on sales of mortgage loans			100			54	85			376			38		889
	All other			285			62	360			684			232		195

		Total mortgage banking		394			434	(9	)		1,671			1,444		16
Insurance				221			119	86			745			411		81
Net venture capital (losses) gains				(37	)		203	—			(1,630	)		1,943		—
Net gains (losses) on securities available for sale				154			259	(41	)		463			(722	)	—
Net income (loss) from equity investments accounted for by the:
	Cost method			(28	)		26	—			(55	)		170		—
	Equity method			31			6	417			(51	)		94		—
Net gains (losses) on sales of loans				25			15	67			35			(134	)	—
Net gains on dispositions of operations				17			15	13			122			23		430
All other				171			194	(12	)		764			452		69

		Total	$	2,447		$	2,611	(6	)%	$	7,690		$	8,843		(13	)%

NONINTEREST EXPENSE

			Quarter ended December 31,						Year ended December 31,
(in millions)			2001		2000		% Change		2001			2000			% Change
Salaries			$	1,012	$	920	10	%	$	4,027		$	3,652		10	%
Incentive compensation				411		222	85			1,195			846		41
Employee benefits				223		247	(10	)		960			989		(3	)
Equipment				237		307	(23	)		909			948		(4	)
Net occupancy				259		247	5			975			953		2
Goodwill				158		141	12			610			530		15
Core deposit intangible:
	Nonqualifying (1)			38		42	(10	)		155			173		(10	)
	Qualifying			2		3	(33	)		10			13		(23	)
Net (gains) losses on dispositions of premises and equipment				—		3	(100	)		(21	)		(58	)	(64	)
Outside professional services				151		150	1			486			447		9
Contract services				106		172	(38	)		472			536		(12	)
Telecommunications				95		93	2			355			303		17
Outside data processing				81		97	(16	)		319			343		(7	)
Travel and entertainment				76		80	(5	)		286			287		—
Advertising and promotion				87		88	(1	)		276			316		(13	)
Postage				63		66	(5	)		242			252		(4	)
Stationery and supplies				61		64	(5	)		242			223		9
Operating losses				85		57	49			234			179		31
Insurance				21		30	(30	)		167			157		6
Security				40		26	54			156			98		59
All other				248		163	52			836			643		30

		Total	$	3,454	$	3,218	7	%	$	12,891		$	11,830		9	%

(1): Represents amortization of core deposit intangible acquired after February 1992 that is subtracted from stockholders' equity in computing regulatory capital for bank holding companies.

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

				Quarter ended December 31,
				2001							2000
(in millions)				Average balance			Yields/ rates		Interest income/ expense		Average balance			Yields/ rates		Interest income/ expense
EARNING ASSETS
Federal funds sold and securities purchased under resale agreements				$	2,320		2.19	%	$	13	$	2,128		5.48	%	$	29
Debt securities available for sale (3):
	Securities of U.S. Treasury and federal agencies				2,057		5.97			30		2,808		6.60			46
	Securities of U.S. states and political subdivisions				2,055		8.09			39		1,984		7.31			36
	Mortgage-backed securities:
		Federal agencies			29,424		7.24			512		24,981		7.35			454
		Private collateralized mortgage obligations			2,137		7.23			38		1,333		10.01			34

			Total mortgage-backed securities		31,561		7.24			550		26,314		7.48			488
	Other debt securities (4)				3,210		7.62			59		4,205		8.00			65

			Total debt securities available for sale (4)		38,883		7.25			678		35,311		7.45			635
Mortgages held for sale (3)					33,892		6.36			540		11,895		7.74			232
Loans held for sale (3)					4,875		5.41			66		4,410		8.59			95
Loans:
	Commercial				47,252		6.87			818		48,576		9.48			1,157
	Real estate 1-4 family first mortgage				22,221		6.80			378		18,293		7.97			365
	Other real estate mortgage				24,494		7.10			438		23,597		8.86			525
	Real estate construction				8,053		6.65			135		7,576		10.01			191
	Consumer:
		Real estate 1-4 family junior lien mortgage			24,748		8.29			517		17,510		10.67			468
		Credit card			6,392		12.51			199		6,160		15.14			233
		Other revolving credit and monthly payment			22,904		10.87			626		22,576		12.25			692

			Total consumer		54,044		9.88			1,342		46,246		12.04			1,393
	Lease financing				9,537		7.35			176		9,984		7.46			186
	Foreign				1,602		20.63			83		1,588		21.18			84

			Total loans (5)		167,203		8.02			3,370		155,860		9.98			3,901
Other					4,709		3.79			45		3,049		6.64			51

			Total earning assets	$	251,882		7.50			4,712	$	212,653		9.33			4,943

FUNDING SOURCES
Deposits:
	Interest-bearing checking			$	2,002		1.33			7	$	3,664		2.24			21
	Market rate and other savings				87,497		1.24			272		65,404		3.02			497
	Savings certificates				26,656		4.27			287		30,923		5.66			440
	Other time deposits				922		4.21			10		4,932		5.98			73
	Deposits in foreign offices				5,578		1.99			28		6,327		6.38			102

			Total interest-bearing deposits		122,655		1.95			604		111,250		4.05			1,133
Short-term borrowings					41,635		2.25			236		27,253		6.54			448
Long-term debt					34,624		4.45			387		31,336		6.88			540
Guaranteed preferred beneficial interests in Company's subordinated debentures					2,291		5.38			31		935		7.97			19

			Total interest-bearing liabilities		201,205		2.48			1,258		170,774		4.99			2,140
Portion of noninterest-bearing funding sources					50,677		—			—		41,879		—			—

			Total funding sources	$	251,882		2.00			1,258	$	212,653		4.03			2,140

Net interest margin and net interest income on a taxable-equivalent basis (6)							5.50	%	$	3,454				5.30	%	$	2,803

NONINTEREST-EARNING ASSETS
Cash and due from banks				$	14,913						$	13,758
Goodwill					9,583							9,215
Other					27,552							24,345

			Total noninterest-earning assets	$	52,048						$	47,318

NONINTEREST-BEARING FUNDING SOURCES
Deposits				$	59,597						$	51,856
Other liabilities					16,015							11,028
Preferred stockholders' equity					62							266
Common stockholders' equity					27,051							26,047
Noninterest-bearing funding sources used to fund earning assets					(50,677	)						(41,879	)

			Net noninterest-bearing funding sources	$	52,048						$	47,318

TOTAL ASSETS				$	303,930						$	259,971

(1): The average prime rate of the Company was 5.16% and 9.50% for the quarters ended December 31, 2001 and 2000 respectively. The average three-month London Interbank Offered Rate (LIBOR) was 2.15% and 6.69% 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 that primarily relate to income on certain loans and securities that is exempt from federal and applicable state income taxes. The federal statutory tax rate was 35% for all periods presented.

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

				Year ended December 31,
				2001							2000
(in millions)				Average balance			Yields/ rates		Interest income/ expense		Average balance			Yields/ rates		Interest income/ expense
EARNING ASSETS
Federal funds sold and securities purchased under resale agreements				$	2,583		3.69	%	$	95	$	2,370		6.01	%	$	143
Debt securities available for sale (3):
	Securities of U.S. Treasury and federal agencies				2,158		6.55			137		3,322		6.16			210
	Securities of U.S. states and political subdivisions				2,026		7.98			154		2,080		7.74			162
	Mortgage-backed securities:
		Federal agencies			27,433		7.19			1,917		26,054		7.22			1,903
		Private collateralized mortgage obligations			1,766		8.55			148		2,379		7.61			187

			Total mortgage-backed securities		29,199		7.27			2,065		28,433		7.25			2,090
	Other debt securities (4)				3,343		7.80			254		5,049		7.93			261

			Total debt securities available for sale (4)		36,726		7.32			2,610		38,884		7.24			2,723
Mortgages held for sale (3)					23,677		6.72			1,595		10,725		7.85			849
Loans held for sale (3)					4,820		6.58			317		4,915		8.50			418
Loans:
	Commercial				48,648		8.01			3,896		45,352		9.40			4,263
	Real estate 1-4 family first mortgage				19,715		7.18			1,416		16,356		7.95			1,300
	Other real estate mortgage				24,194		7.99			1,934		22,509		8.99			2,023
	Real estate construction				8,073		8.10			654		6,934		10.02			695
	Consumer:
		Real estate 1-4 family junior lien mortgage			21,232		9.25			1,965		15,292		10.43			1,595
		Credit card			6,270		13.36			838		5,867		14.58			856
		Other revolving credit and monthly payment			23,459		11.40			2,674		21,824		12.06			2,631

			Total consumer		50,961		10.75			5,477		42,983		11.82			5,082
	Lease financing				9,930		7.67			761		9,822		7.66			752
	Foreign				1,603		20.82			333		1,621		21.15			343

			Total loans (5)		163,124		8.87			14,471		145,577		9.93			14,458
Other					4,000		4.77			191		3,206		6.21			199

			Total earning assets	$	234,930		8.24			19,279	$	205,677		9.19			18,790

FUNDING SOURCES
Deposits:
	Interest-bearing checking			$	2,178		2.51			55	$	3,424		1.88			64
	Market rate and other savings				80,585		2.05			1,655		63,577		2.81			1,786
	Savings certificates				29,850		5.13			1,530		30,101		5.37			1,616
	Other time deposits				1,332		5.04			67		4,438		5.69			253
	Deposits in foreign offices				6,209		3.96			246		5,950		6.22			370

			Total interest-bearing deposits		120,154		2.96			3,553		107,490		3.80			4,089
Short-term borrowings					33,885		3.76			1,273		28,222		6.23			1,758
Long-term debt					34,501		5.29			1,826		29,000		6.69			1,939
Guaranteed preferred beneficial interests in Company's subordinated debentures					1,394		6.40			89		935		7.92			74

			Total interest-bearing liabilities		189,934		3.55			6,741		165,647		4.75			7,860
Portion of noninterest-bearing funding sources					44,996		—			—		40,030		—			—

			Total funding sources	$	234,930		2.88			6,741	$	205,677		3.84			7,860

Net interest margin and net interest income on a taxable-equivalent basis (6)							5.36	%	$	12,538				5.35	%	$	10,930

NONINTEREST-EARNING ASSETS
Cash and due from banks				$	14,608						$	13,103
Goodwill					9,514							8,811
Other					26,369							22,597

			Total noninterest-earning assets	$	50,491						$	44,511

NONINTEREST-BEARING FUNDING SOURCES
Deposits				$	55,333						$	48,691
Other liabilities					13,301							11,000
Preferred stockholders' equity					210							266
Common stockholders' equity					26,643							24,584
Noninterest-bearing funding sources used to fund earning assets					(44,996	)						(40,030	)

			Net noninterest-bearing funding sources	$	50,491						$	44,511

TOTAL ASSETS				$	285,421						$	250,188

(1): The average prime rate of the Company was 6.91% and 9.24% for the years ended December 31, 2001 and 2000, respectively. The average three-month London Interbank Offered Rate (LIBOR) was 3.78% and 6.52% 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 that primarily relate to income on certain loans and securities that is exempt from federal and applicable state income taxes. The federal statutory tax rate was 35% for all periods presented.

Wells Fargo & Company and Subsidiaries
OPERATING SEGMENT RESULTS (1)(2)

	Community Banking					Wholesale Banking					Wells Fargo Financial
(income/expense in millions, average balances in billions)	Community Banking					Wholesale Banking					Wells Fargo Financial
(income/expense in millions, average balances in billions)	2001			2000		2001			2000		2001		2000
Quarter ended December 31,
Net interest income	$	2,502		$	1,945	$	503		$	499	$	450	$	370
Provision for loan losses		286			212		106			38		144		102
Noninterest income		1,784			2,036		585			461		98		81
Noninterest expense		2,499			2,351		591			542		282		243

Income before income tax expense		1,501			1,418		391			380		122		106
Income tax expense		539			520		143			143		48		40

Net income	$	962		$	898	$	248		$	237	$	74	$	66

Average loans	$	103		$	96	$	50		$	49	$	14	$	11
Average assets		214			179		68			62		16		13
Average core deposits		159			136		17			16		—		—
Year ended December 31,
Net interest income	$	8,910		$	7,586	$	1,969		$	1,949	$	1,679	$	1,424
Provision for loan losses		1,015			849		278			151		487		329
Noninterest income		5,189			6,685		2,113			1,768		371		304
Noninterest expense		9,118			8,542		2,345			1,946		1,096		986

Income before income tax expense		3,966			4,880		1,459			1,620		467		413
Income tax expense		1,398			1,774		531			613		179		155

Net income		2,568		$	3,106		928		$	1,007		288	$	258

Less: Impairment and other special charges (after tax) (3)		(1,089	)				(62	)				—

Net income excluding impairment and other special charges	$	3,657				$	990				$	288

Average loans	$	100		$	89	$	50		$	46	$	13	$	11
Average assets		198			173		66			58		15		12
Average core deposits		152			131		16			15		—		—

(1): The differences between the results of the combined operating segments and the consolidated results of the Company consist of inter-segment eliminations and unallocated items.
(2): Results for Community Banking and Wholesale Banking have been restated for prior periods to reflect changes in management structure.
(3): Non-cash impairment and other special charges in the second quarter of 2001, which are included in noninterest income, mainly related to impairment of publicly traded and private equity securities, primarily in the venture capital portfolio.

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