Wells Fargo Reports Record Annual and Quarterly Earnings Per Share and

Wells Fargo Reports Record Annual and Quarterly Earnings Per Share and Revenue

    Business Editors

    SAN FRANCISCO--(BUSINESS WIRE)--Jan. 18, 2005--Wells Fargo & Company (NYSE:WFC)

Year 2004 Highlights:

-- Record diluted earnings per share of $4.09, up 12 percent from prior year's $3.65

-- Record net income of $7.0 billion, up 13 percent from prior year's $6.2 billion

-- Return on equity of 19.6 percent

-- Record revenue of $30.1 billion, up 6 percent from prior year; 11 percent revenue growth in businesses other than Wells Fargo Home Mortgage

-- Noninterest expense up 2 percent from prior year

Fourth Quarter 2004 Highlights:

-- Record diluted earnings per share of $1.04, up 10 percent from prior year's $.95

-- Record net income of $1.8 billion, up 10 percent from prior year's $1.6 billion

-- Record revenue of $8.2 billion, up 10 percent from prior year

-- Strong loan and deposit growth

-- Average loans up 19 percent from prior year

-- Average commercial and commercial real estate loans up 10 percent from prior year

-- Average core deposits up 10 percent from prior year

-- Solid asset quality

-- Nonperforming assets down $90 million, or 5 percent, from prior year

-- Net charge-offs flat from prior year

Selected Financial Full Year Fourth Quarter Information ------------------------ ---------------------- % % Earnings 2004 2003 Change 2004 2003 Change -------- -------- ------ ------- ------- ------ Diluted earnings per share $ 4.09 $ 3.65 12% $ 1.04 $ .95 10% Net income (in millions) 7,014 6,202 13 1,785 1,624 10

Asset Quality Net charge-offs (in millions) $ 1,666 $ 1,719 (3) $ 465 $ 465 -- Net charge-off rate .62% .81% (23) .66% .78% (15) Nonperforming assets as % of total loans .55 .66 (17) .55 .66 (17)

Other Revenue (in millions) $30,059 $28,389 6 $8,168 $7,445 10 Average loans (in billions) 269.6 213.1 26 281.2 236.0 19 Average core deposits (in billions) 223.4 207.0 8 230.2 210.0 10

    Wells Fargo & Company (NYSE:WFC) reported record diluted earnings per common share (EPS) of $4.09 for 2004, compared with $3.65 in 2003, up 12 percent. Net income was a record $7.0 billion, up 13 percent from $6.2 billion in 2003. For fourth quarter 2004, net income was a record $1.8 billion, or $1.04 per share, compared with $1.6 billion, or $.95 per share, for fourth quarter 2003, an increase in earnings per share of 10 percent.
    "This was another exceptional year for our company, among the very best not just in financial services but in any industry, with record diluted earnings per share of $4.09, record net income of $7.0 billion and solid market share growth across our more than 80 businesses," said Chairman and CEO Dick Kovacevich. "Because these results would not have been possible without the customer focus and dedication of our exceptional team, today we're announcing a special contribution of Wells Fargo common stock to the 401(k) Plan for eligible team members, equaling one percent of a team member's pay, up to a maximum contribution of $750, totaling $44 million.
    "Combined revenue in all of our businesses other than Wells Fargo Home Mortgage (Home Mortgage), which had extraordinary revenue in 2003 due to the refinance boom, grew 11 percent this year -- 6 percent including Home Mortgage. In addition to double-digit growth in EPS, we also had double-digit growth in loans and retail core deposits and continued strong credit quality for the year. Even more remarkable, our company has been achieving outstanding results not just for one, two or even five years, as many admired companies have done, but for the past 20 years, through many different economic cycles. In fact, due to our consistent vision, strong culture and time-tested business model, our annual compound growth over the past 20 years has averaged 13 percent in revenue and averaged 14 percent in diluted EPS, and our total annual compound stockholder return has been 23 percent compared with 13 percent for the S&P 500. Our total annual stockholder return has been about 10 percentage points above the S&P 500 for each of the past five, ten, 15 and 20 year periods.
    "We have a 20-year history of investing in our company, and 2004 was one of our highest investment years ever. You must reinvest to consistently grow profit and revenue at double-digit rates for 20 years. We achieved record results while making very significant investments throughout the year to benefit the future, including opening 177 new stores, increasing the number of team members serving our customers by over 5,000, adding Wells Fargo stock to every eligible team member's 401(k) account to thank them for all their efforts, making significant incremental investments in electronic imaging, call centers and other technology projects, integrating acquisitions, and improving future margins by incurring the costs of extinguishing high interest rate debt and selling low interest rate assets. We continued to support our communities by taking a $217 million charitable contribution expense in the fourth quarter, to be funded by tax-advantaged venture capital gains, helping ensure that our Foundation remains well funded for eight to ten years.
    "In 2004, we became one of the nation's 20 largest mutual fund companies with the acquisition of $29 billion in assets under management from Strong Financial Corporation (Strong Financial). Our stock hit a record high close of $63.25 last month. Our solid financial performance enables us to be one of the top givers to non-profits among all U.S. companies. We continue to be the only 'Aaa' rated bank in the U.S., the highest possible credit rating. We begin 2005 with good earnings momentum in our major businesses."

    Financial Performance

    "Our financial results for 2004 were outstanding and continued in the fourth quarter with strong earnings per share and accelerated revenue growth," said Chief Financial Officer Howard Atkins. "Earnings growth was broad based across our businesses led by strong growth in consumer lending, deposits, asset management, commercial lending and consumer finance, and solid results from Home Mortgage."
    During fourth quarter 2004, the Company made a special 401(k) contribution of $44 million ($.02 EPS) in recognition of our team members' outstanding performance. In addition, the Company recorded a $217 million ($.08 EPS) charitable contribution expense that is projected to leave the Wells Fargo Foundation well funded for the next eight to ten years. As previously announced, the Company also incurred $19 million ($.01 EPS) in integration expense related to the closing of the Strong Financial transaction in fourth quarter 2004. In 2005, the Company expects integration expense of approximately $.02 per share for the balance of the Strong Financial transaction and for the pending acquisition of Houston-based First Community Capital Corporation. "Although we believe that stock options should not be treated as an expense," said Atkins, "we will expense stock options as required, beginning July 1, 2005. Using the 'modified prospective' method of adoption, we estimate the effect of expensing current outstanding options will reduce earnings by three cents per share for the last half of 2005."

    Revenue

    Revenue of $8.2 billion for fourth quarter 2004 grew $723 million, or 10 percent, from a year ago. "Revenue growth was broad based, with particularly strong growth in consumer lending, deposits, small business banking, credit and debit cards, consumer finance, market-sensitive revenues and mortgage banking," said Atkins.
    Full-year 2004 revenue of $30 billion -- a new record -- grew 6 percent from 2003 despite a 37 percent decrease in mortgage originations as the refinance driven market declined from its exceptional 2003 level. Balance sheet repositioning actions during the year, designed to improve earning asset yields and to reduce long-term debt costs, reduced annual revenue growth by approximately one percentage point. For the year, Home Mortgage revenue declined $807 million, or 16 percent, from $5.2 billion in 2003 to $4.4 billion in 2004. Combined revenue of businesses other than Home Mortgage grew 11 percent in 2004 from 2003. On a linked-quarter basis, consolidated revenue increased $850 million, or 12 percent, due to particularly strong growth in trust and investments, consumer loan fees, mortgage banking, equity investments, trading and other capital market activities.

    Loans

    Average loans of $281.2 billion in fourth quarter 2004 increased 19 percent from $236.0 billion in fourth quarter 2003, and $6.9 billion, or 10 percent (annualized), on a linked-quarter basis. Average commercial and commercial real estate loans increased $8.6 billion, or 10 percent, from fourth quarter 2003, and loan growth accelerated to 13 percent (annualized), up $3.1 billion, on a linked-quarter basis.
    "For the third straight quarter, commercial loan growth was broad based across virtually all of our businesses, including small business direct, middle market, commercial real estate, leasing, trade finance and asset-based lending," said Atkins. "We also saw continued strong demand for consumer credit," said Atkins. Average consumer loans increased $34.9 billion, or 24 percent, from fourth quarter 2003, and $3.3 billion, or 7 percent (annualized), on a linked-quarter basis. Most of the difference between the linked-quarter and year-over-year growth in both total and consumer loans was due to sales of lower yielding adjustable rate mortgages (ARMs). Home equity, credit card, revolving credit and installment loans grew solidly in fourth quarter 2004.

    Deposits

    Average core deposits of $230.2 billion for fourth quarter 2004 grew $20.2 billion, or 10 percent, from fourth quarter 2003, and increased $5.2 billion, or 9 percent (annualized), on a linked-quarter basis. Average mortgage escrow deposits were $14.5 billion for fourth quarter 2004, essentially unchanged from fourth quarter 2003 and third quarter 2004. Average retail core deposits for fourth quarter 2004 grew 10 percent from fourth quarter 2003 and 8 percent (annualized) on a linked-quarter basis. Average consumer checking account balances for fourth quarter 2004 grew 11 percent from fourth quarter 2003.

    Net Interest Income

    Net interest income for fourth quarter 2004 increased 10 percent from a year ago. Earning assets for the fourth quarter were up 12 percent from a year ago due to the 19 percent growth in average loans. On a linked-quarter basis, net interest income was up $38 million, or 3 percent (annualized), driven by a 4 percent (annualized) increase in earning assets.
    "Earning asset growth on a linked-quarter basis was below our solid 10 percent (annualized) loan growth due to a $2.5 billion decline in average mortgages held for sale and a $1.3 billion decline in average debt securities available for sale," said Atkins. The fourth quarter net interest margin remained essentially flat linked-quarter at 4.88 percent in part due to the positive impact of the balance sheet repositioning in 2004. At December 31, 2004, the Company had $1.4 billion in unrealized gains on securities available for sale, unchanged from September 30, 2004.

    Noninterest Income

    Noninterest income increased $311 million, or 9 percent, from fourth quarter 2003. "The increase in fee income was driven by growth across our businesses, with particular strength in consumer loans, trust and investments, credit and debit cards, mortgage banking, equity investments and trading activities on behalf of our customers," said Atkins. These same businesses led to an increase in noninterest income of $812 million, or 28 percent, on a linked-quarter basis. Mortgage banking servicing fees in fourth quarter 2004 included $234 million from a mortgage servicing rights valuation reserve release offset by $189 million of ineffective hedge losses. Despite the reserve release, mortgage servicing rights were valued at 1.15 percent of loans serviced for others, down from 1.18 percent at September 30, 2004.

    Noninterest Expense

    Noninterest expense was up $471 million, or 10 percent, from fourth quarter 2003 and $751 million, or 18 percent, on a linked-quarter basis. These increases were primarily due to the $217 million charitable contribution expense, the $44 million special 401(k) contribution, the $19 million Strong Financial integration expense, growth in stores and team members, and a step-up in technology investments for electronic imaging, call centers and other activities in the fourth quarter.
    "Despite the balance sheet repositioning actions taken during the year, which reduced revenue by approximately one percent, and our significant level of investment spending, which will benefit sales and revenue growth going forward, operating leverage improved during 2004 with consolidated revenue growing six percent and consolidated expense up only two percent, including all investment spending," said Atkins.

    Credit Quality

    "Fourth quarter credit results were consistent with our expectations," said Chief Credit Officer Dave Munio. "Credit losses in the fourth quarter were $465 million (.66 percent of average loans outstanding, annualized), flat to the $465 million (.78 percent) losses a year ago despite a $45 billion increase in average total loans. Total credit losses and loss rates were up from third quarter's $407 million (.59 percent) due to the expected seasoning in the high-growth consumer portfolios at Wells Fargo Financial and Community Banking." Total consumer credit loss rates for fourth quarter 2004 were .75 percent, up from .67 percent in third quarter 2004, but down from .91 percent in fourth quarter 2003. The credit loss rate for junior lien mortgages (second mortgage home equity loans and lines) was 19 basis points in fourth quarter 2004, up from 12 basis points in third quarter 2004, but down from 25 basis points in fourth quarter 2003. "The fourth quarter 2004 loss rates in our consumer portfolios were within our expected normal range of losses and reflected the anticipated seasoning of high-growth portfolios," said Munio.
    "Our credit losses for full-year 2004 were below 2003 and flat compared with 2002 despite significant loan portfolio growth," said Munio. Credit losses for 2004 were $1.67 billion (.62 percent) compared with $1.72 billion (.81 percent) in 2003 and $1.68 billion (.96 percent) for 2002. "The majority of our loan growth was driven by consumer real estate, which inherently has lower losses that emerge over a longer time frame compared with other consumer products," he said. "We expect to see total credit losses increase in 2005 due to the seasoning of these portfolios and modest growth in our middle-market Wholesale Banking portfolios. Fourth quarter provision for credit losses matched net charge-offs. We believe the allowance was adequate for losses inherent in the loan portfolios at year-end 2004."
    "Total nonperforming assets remained stable," said Munio. At December 31, 2004, they totaled $1.57 billion, or .55 percent of total loans, compared with $1.57 billion (.56 percent) last quarter. "Wholesale Banking nonperformers continued to decline and were down over $300 million during 2004," continued Munio. "Offsetting this decline was an anticipated increase in consumer nonperformers, where nonperforming status is determined by certain delinquency limits, in our auto and real estate portfolios. These consumer nonperformers have limited loss content based on the strength of the underlying collateral. Consumer delinquencies remained consistent with our credit models, and Wells Fargo's losses have followed the national trend of lower consumer bankruptcies during 2004."

    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 was:

Full Year Fourth Quarter ---------------------- ---------------------- % % Net income (in millions) 2004 2003 Change 2004 2003 Change ------- ------- ------ ------- ------- ------ Community Banking $4,967 $4,364 14 $1,238 $1,182 5 Wholesale Banking 1,599 1,446 11 403 382 5 Wells Fargo Financial 507 451 12 129 119 8

    More financial information about the business segments is on the 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 Full Year Fourth Quarter Information ------------------------ ---------------------- % % (in millions) 2004 2003 Change 2004 2003 Change -------- -------- ------ ------- ------- ------ Total revenue $21,513 $20,713 4 $5,927 $5,408 10 Provision for credit losses 858 892 (4) 232 236 (2) Noninterest expense 13,077 13,214 (1) 3,814 3,385 13 Net income 4,967 4,364 14 1,238 1,182 5

Average loans (in billions) $ 187.0 $ 143.2 31 $191.7 $162.7 18 Average assets (in billions) 295.8 273.5 8 302.6 278.5 9

--	Record annual net income: $5.0 billion, up 14 percent from 2003
--	Average loans: up 18 percent from fourth quarter 2003
--	Average core deposits: up 10 percent from fourth quarter 2003

    Community Banking reported record net income of $4,967 million for 2004, up 14 percent over 2003. "This outstanding performance was largely due to record core product sales, market share growth across our businesses and the continued exceptional performance of our team members," said John Stumpf, Group EVP, Community Banking.
    Average loans were $187.0 billion in 2004, up 31 percent from $143.2 billion in 2003. Retail core deposits averaged $183.7 billion in 2004, up 11 percent over the prior year. Revenue in businesses other than Home Mortgage rose 10 percent on higher fee revenue, including deposit service charges, trust and investments, debit and credit cards and insurance. Home Mortgage revenue decreased from 2003, a year of record originations from strong refinancing activity. While total Community Banking noninterest expense included additional investments made in technology, store growth and additional team members, total noninterest expense decreased $137 million, or 1 percent, due to overall expense management, including a reduction in Home Mortgage production costs.
    For fourth quarter 2004, Community Banking reported net income of $1,238 million, compared with $1,182 million in fourth quarter 2003. Revenue increased 10 percent to $5,927 million in fourth quarter 2004 from the same period in 2003, primarily due to higher trust and investment fees, credit and debit card revenue, mortgage banking and other fees. Noninterest expense was $3,814 million in fourth quarter 2004, an increase of $429 million from fourth quarter 2003, and included the $217 million charitable contribution expense, the special 401(k) contribution, as well as expenditures to support technology investments and store growth.

    Regional Banking Highlights

    -- Record core product sales: 13.9 million, up 18 percent from
    2003

    -- Average household profit: up 17 percent over 2003

    -- Investments for future growth: opened 104 new stores and added
    1,800 retail bankers, up 18 percent over 2003

    -- Improved customer retention and increased team member
    engagement in 2004

    "Our talented, motivated and engaged team members achieved record annual core sales in 2004, up 18 percent from 2003, including selling more than one million core products each month during the year, another record," said Carrie Tolstedt, Group EVP, Regional Banking. "And, one in three of new checking account customers now has a Wells Fargo Pack(SM) -- a checking account and at least three other products. This is up from 25 percent in 2003. As a result of strong sales, customer cross-sell reached a record high of 4.6 products per consumer, up from about three in 1998. The number of products sold is important, but even more significant is that our average household profit was up 17 percent from 2003. We invested throughout the year in our business to better serve our customers and generate future growth. We opened 104 new banking stores, added 1,800 retail bankers, and doubled the number of licensed bankers. Our team members are energized to serve our customers, with team member engagement scores now in the 70th percentile in the Gallup data base, up from the 56th percentile in 2003. And, in 2004, customer retention for high value customers improved by six percent."

    Internet Highlights

-- Ranked Best Consumer Internet Bank in the World in 2004 by Global Finance

-- Active online customers of 6.2 million, up 27 percent from the prior year

-- Increased product sales in 2004:

-- Consumer product sales up 42 percent

-- Student loans up 123 percent

-- Personal lines and loans up 142 percent
    Wells Fargo continued to be recognized as the best internet bank and received awards from Global Finance as the "Best Consumer Online Bill Payment & Presentment" in the world, "Best Consumer Online Credit" in North America and "Best Corporation/Institutional Web Site Design" in North America. Additionally, we were ranked the "Number one Internet bank" on Watchfire(R) GomezPro's Online Banker Scorecard.
    Active internet customers increased to 6.2 million, up 27 percent from 2003, and an industry-leading 51 percent penetration of our consumer checking accounts. Online bill pay customers increased 35 percent to 2.2 million. Online consumer product sales increased 42 percent.

    Home Mortgage and Home Equity Highlights

--	$298 billion of mortgage originations in 2004, third highest ever
--	Record $805 billion owned mortgage servicing portfolio, up 13 percent from 2003
--	Ranked #1 nationally in home equity loan market share for the fourth consecutive year

    "We're very pleased with the overall performance and execution of our home financing businesses in 2004," said Mark Oman, Group EVP, Home and Consumer Finance. "We saw very strong loan growth with the first mortgage portfolio up 5 percent to $87.7 billion and the second mortgage portfolio up 42 percent to $52.2 billion. With lower refinancing demand in 2004, residential mortgage originations of $298 billion were down 37 percent from the industry record of $470 billion we established in 2003. Nevertheless, in 2004, we saw the benefit of our balanced business model at Home Mortgage, which includes both our residential mortgage servicing business and our residential mortgage origination business. As refinance originations moderated, so did prepayments of our servicing portfolio, resulting in significantly improved servicing profitability."
    The owned servicing portfolio, including commercial mortgages, grew to a record $805 billion at December 31, 2004, up $95 billion, or 13 percent, from December 31, 2003. The carrying value of mortgage servicing rights at year-end was $7.9 billion, 1.15 percent of loans serviced for others, compared with $6.9 billion (1.15 percent) at year-end 2003 and $7.8 billion (1.18 percent) at September 30, 2004. The weighted-average note rate declined 15 basis points in 2004 to end the year at 5.75 percent.
    The Company retained the number one market share in home equity in the U.S. for the fourth consecutive year. The home equity portfolio continued to perform better than expected with an average FICO score in the low 720s and an average combined loan to value of 70 percent assuming the entire equity line is drawn down.

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

Selected Financial Full Year Fourth Quarter Information ---------------------- ---------------------- % % (in millions) 2004 2003 Change 2004 2003 Change ------- ------- ------ ------- ------- ------ Total revenue $5,279 $4,994 6 $1,356 $1,311 3 Provision for credit losses 62 177 (65) 11 23 (52) Noninterest expense 2,728 2,579 6 718 694 3 Net income 1,599 1,446 11 403 382 5

Average loans (in billions) $ 53.1 $ 49.5 7 $ 56.4 $ 49.8 13 Average assets (in billions) 77.6 75.8 2 81.6 74.8 9

--	Record annual net income: $1.6 billion, up 11 percent from 2003, sixth consecutive year of record earnings
--	Broad-based average loan growth of 20 percent (annualized) from prior quarter
--	#1 market share of "middle market" companies in the West
--	Two-thirds of corporate customers now bank with us actively online through the CEO(R) (Commercial Electronic Office) portal
--	Acquired $29 billion in assets under management from Strong Financial making Wells Fargo a top 20 mutual fund company

    Wholesale Banking reported record net income of $1,599 million in 2004, an increase of 11 percent over 2003. Average loans rose 7 percent to $53.1 billion in 2004 from $49.5 billion in 2003. The quality of Wholesale Banking's loan portfolio improved as reflected in a lower level of nonperforming loans and a decrease in net credit losses from the prior year. The provision for credit losses was $62 million in 2004, compared with $177 million a year earlier. Noninterest income was $3,070 million in 2004, compared with $2,766 million in 2003, an increase of 11 percent. The increase in noninterest income included higher fee revenue, insurance brokerage and capital markets activity.
    For fourth quarter 2004, Wholesale Banking net income was $403 million, compared with $382 million in fourth quarter 2003. Average loans increased 13 percent to $56.4 billion in fourth quarter 2004 from the prior year. Wholesale Banking's fourth quarter 2004 results included a lower level of credit losses, higher capital markets activity and integration charges associated with the Strong Financial transaction.
    "We are very pleased with our results for 2004," said Dave Hoyt, Group EVP, Wholesale Banking. "Our net income increased 11 percent on a year over year basis. Our team achieved its third consecutive quarter of solid loan growth after a period of virtually flat loan balances for three years. Our businesses delivered double-digit noninterest income growth year over year. We continued to generate growth through solid new customer relationships and our focus on cross sell. We also benefited from exceptionally strong credit results. Wholesale Banking has delivered record profits for six consecutive years and during that time we have grown at a 12 percent compound rate. We're particularly proud of these long term results as they include a number of years when the economy was very difficult. The acquisition of assets under management from Strong Financial closed at year-end 2004. We have hired 650 of the former Strong Financial employees in Menomonee Falls, Wisconsin and substantially all of the portfolio managers. Wells Fargo mutual funds now total $100 billion in assets under management making us one of the top 20 mutual fund companies in the country."

    Wells Fargo Financial offers consumer installment and home equity lending, automobile financing, consumer and private-label credit cards and commercial services to consumers and businesses throughout the United States and in Canada, Latin America, the Caribbean, Guam and Saipan.

Selected Financial Full Year Fourth Quarter Information ---------------------- -------------------- % % (in millions) 2004 2003 Change 2004 2003 Change ------- ------- ------ ------ ------ ------ Total revenue $3,178 $2,689 18 $ 860 $ 734 17 Provision for credit losses 797 623 28 222 176 26 Noninterest expense 1,590 1,343 18 439 370 19 Net income 507 451 12 129 119 8

Average loans (in billions) $ 29.5 $ 20.4 45 $33.1 $23.5 41 Average assets (in billions) 31.2 22.2 41 35.1 25.3 39

-- Record annual net income: $507 million, up 12 percent from 2003

-- Average loans: up 41 percent from fourth quarter 2003

-- Sound credit quality: lower delinquencies and loan loss rates from a year ago

-- Investments for future growth

-- Opened 73 new stores in 2004

-- Added 2,579 team members in 2004, up 16 percent from a year ago

    Wells Fargo Financial reported record net income of $507 million in 2004, up 12 percent from $451 million in 2003. The 2004 results reflected a strong increase in real estate secured loans and auto lending, as average loans reached $29.5 billion, an increase of 45 percent over the prior year. Total revenue rose 18 percent in 2004, reaching $3,178 million, compared with $2,689 million in 2003 on higher net interest income. Wells Fargo Financial's provision for credit losses was $797 million in 2004, up from $623 million in 2003, reflecting the overall increase in loans and expected seasoning in the loan portfolio. Noninterest expense was $1,590 million in 2004, up from $1,343 million in 2003, reflecting investments in new consumer finance stores and additional team members.
    For fourth quarter 2004, Wells Fargo Financial's net income was $129 million, compared with $119 million in the same period of 2003, an increase of 8 percent. The fourth quarter 2004 results reflected a 17 percent increase in revenue, primarily in net interest income due to a 41 percent increase in average loans, partially offset by a higher level of noninterest expense and provision for credit losses. Average loans were $33.1 billion in fourth quarter 2004 compared with $23.5 billion in fourth quarter 2003.
    "Our receivables growth of $9.7 billion in 2004 was driven primarily by real estate-secured lending receivables growth of $5.1 billion and auto lending receivables growth of $3.3 billion," said Tom Shippee, president and CEO of Wells Fargo Financial. "We opened 73 consumer stores and increased our team member total 16 percent. The growth of our business -- surpassing half a billion dollars in net earnings for the first time -- is the result of our continued investment in the business. We also invested in the systems, governance and infrastructure needed to support our continued asset growth. Losses have increased consistent with the loan growth and product mix. We have maintained consistent credit quality standards and expect a measured increase in losses as the various loan portfolios season. Loss rates by product remained within acceptable and anticipated ranges."

    Recorded Message

    A recorded message reviewing Wells Fargo's results will be available at 5:30 a.m. Pacific time through January 21, 2005. Dial 800-642-1687 (domestic) or 706-645-9291 (international). Access code 3128015. The call is also available on the internet at www.wellsfargo.com/ir and www.vcall.com.

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

    This news release contains forward-looking statements about the Company. 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 this release include statements about future credit losses and credit quality, the estimated impact of expensing stock options on 2005 earnings per share, the amount of integration expense expected to be incurred in 2005 for the Strong Financial transaction and the pending acquisition of First Community Capital Corporation, and the projected funding needs of the Wells Fargo Foundation over the next eight to ten years.
    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 to update them to reflect changes that occur after that date.
    There are several factors -- many 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, 2004 and Annual Report on Form 10-K for the year ended December 31, 2003, including information incorporated into the Form 10-K from the Company's 2003 Annual Report to Stockholders, filed as Exhibit 13 to the Form 10-K. See, for example, "Financial Review -- Risk Management" included in the 2003 Annual Report to Stockholders and incorporated by reference into the Form 10-K.
    Other factors described in the Form 10-Q and Form 10-K include -- business and economic conditions -- fiscal and monetary policies -- legislation and 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 -- reliance on other companies for infrastructure components -- integration of acquired companies -- attracting and retaining key personnel -- stock price volatility. See, for example, "Factors That May Affect Future Results" in the September 30, 2004 Form 10-Q.
    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 $428 billion in assets, providing banking, insurance, investments, mortgage and consumer finance to more than 23 million customers from more than 6,000 stores, the internet (wellsfargo.com) and other distribution channels across North America and elsewhere internationally.

Wells Fargo & Company and Subsidiaries SUMMARY FINANCIAL DATA

---------------------------------------------------------------------- Quarter ended Year ended Dec. 31, Dec. 31, (in millions, ------------------- ------------------- except per % % share amounts) 2004 2003 Change 2004 2003 Change ----------------------------------------------------------------------

For the Period Net income $1,785 $1,624 10% $7,014 $6,202 13% Diluted earnings per common share 1.04 .95 10 4.09 3.65 12

Profitability ratios (annualized) Net income to average total assets (ROA) 1.67% 1.67% -- 1.71% 1.64% 4 Net income applicable to common stock to average common stockholders' equity (ROE) 19.07 19.20 (1) 19.56 19.36 1

Efficiency ratio (1) 60.9 60.5 1 58.5 60.6 (3)

Total revenue $8,168 $7,445 10 $30,059 $28,389 6

Dividends declared per common share .48 .45 7 1.86 1.50 24

Average common shares outstanding 1,692.7 1,690.2 -- 1,692.2 1,681.1 1 Diluted average common shares outstanding 1,715.0 1,712.6 -- 1,713.4 1,697.5 1

Average loans $281,167 $235,986 19 $269,570 $213,132 26 Average assets 425,259 384,744 11 410,579 377,613 9 Average core deposits (2) 230,249 210,026 10 223,359 207,046 8 Average retail core deposits (3) 189,788 172,603 10 183,716 165,881 11

Net interest margin 4.88% 4.97% (2) 4.89% 5.08% (4)

At Period End Securities available for sale $33,717 $32,953 2 $33,717 $32,953 2 Loans 287,586 253,073 14 287,586 253,073 14 Allowance for loan losses 3,762 3,891 (3) 3,762 3,891 (3) Goodwill 10,681 10,371 3 10,681 10,371 3 Assets 427,849 387,798 10 427,849 387,798 10 Core deposits 229,703 211,271 9 229,703 211,271 9 Stockholders' equity 37,866 34,469 10 37,866 34,469 10

Capital ratios Stockholders' equity to assets 8.85% 8.89% -- 8.85% 8.89% -- Risk-based capital (4) Tier 1 capital 8.42 8.42 -- 8.42 8.42 -- Total capital 12.08 12.21 (1) 12.08 12.21 (1) Tier 1 leverage (4) 7.08 6.93 2 7.08 6.93 2

Book value per common share $22.36 $20.31 10 $22.36 $20.31 10

Team members (active, full- time equivalent) 145,500 140,000 4 145,500 140,000 4

Common Stock Price High $64.04 $59.18 8 $64.04 $59.18 8 Low 57.55 51.68 11 54.32 43.27 26 Period end 62.15 58.89 6 62.15 58.89 6 ----------------------------------------------------------------------

(1) The efficiency ratio is defined as noninterest expense divided by total revenue (net interest income and noninterest income).

(2) Core deposits consist of noninterest-bearing deposits, interest-bearing checking, savings certificates and market rate and other savings.

(3) Retail core deposits consist of total core deposits excluding Wholesale core deposits and mortgage escrow deposits.

(4) The December 31, 2004 ratios are preliminary.

Wells Fargo & Company and Subsidiaries FIVE QUARTER SUMMARY FINANCIAL DATA

---------------------------------------------------------------------- Quarter ended ------------------------------------------------- (in millions, except Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31, per share amounts) 2004 2004 2004 2004 2003 ----------------------------------------------------------------------

For the Quarter Net income $1,785 $1,748 $1,714 $1,767 $1,624 Diluted earnings per common share 1.04 1.02 1.00 1.03 .95

Profitability ratios (annualized) Net income to average total assets (ROA) 1.67% 1.66% 1.68% 1.84% 1.67% Net income applicable to common stock to average common stockholders' equity (ROE) 19.07 19.34 19.57 20.31 19.20

Efficiency ratio (1) 60.9 57.7 58.6 56.4 60.5

Total revenue $8,168 $7,318 $7,426 $7,147 $7,445

Dividends declared per common share .48 .48 .45 .45 .45

Average common shares outstanding 1,692.7 1,688.9 1,688.1 1,699.3 1,690.2 Diluted average common shares outstanding 1,715.0 1,708.7 1,708.3 1,721.2 1,712.6

Average loans $281,167 $274,255 $266,231 $256,448 $235,986 Average assets 425,259 419,636 410,544 386,614 384,744 Average core deposits (2) 230,249 225,027 224,920 213,146 210,026 Average retail core deposits (3) 189,788 186,175 182,613 176,194 172,603

Net interest margin 4.88% 4.89% 4.83% 4.94% 4.97%

At Quarter End Securities available for sale $33,717 $35,121 $36,771 $32,857 $32,953 Loans 287,586 279,310 269,731 264,216 253,073 Allowance for loan losses 3,762 3,782 3,940 3,891 3,891 Goodwill 10,681 10,431 10,430 10,403 10,371 Assets 427,849 421,549 420,305 397,354 387,798 Core deposits 229,703 224,946 222,166 220,105 211,271 Stockholders' equity 37,866 36,680 35,478 35,442 34,469

Capital ratios Stockholders' equity to assets 8.85% 8.70% 8.44% 8.92% 8.89% Risk-based capital (4) Tier 1 capital 8.42 8.40 8.24 8.48 8.42 Total capital 12.08 12.15 11.86 12.18 12.21 Tier 1 leverage (4) 7.08 6.97 6.84 7.13 6.93

Book value per common share $22.36 $21.71 $21.03 $20.90 $20.31

Team members (active, full-time equivalent) 145,500 143,700 142,600 139,900 140,000

Common Stock Price High $64.04 $59.86 $59.72 $58.98 $59.18 Low 57.55 56.12 54.32 55.97 51.68 Period end 62.15 59.63 57.23 56.67 58.89 ----------------------------------------------------------------------

(1) The efficiency ratio is defined as noninterest expense divided by total revenue (net interest income and noninterest income).

(2) Core deposits consist of noninterest-bearing deposits, interest-bearing checking, savings certificates and market rate and other savings.

(3) Retail core deposits consist of total core deposits excluding Wholesale core deposits and mortgage escrow deposits.

(4) The December 31, 2004 ratios are preliminary.

Wells Fargo & Company and Subsidiaries CONSOLIDATED STATEMENT OF INCOME

---------------------------------------------------------------------- Quarter ended Year ended Dec. 31, Dec. 31, (in millions, ----------------- ----------------- except per share % % amounts) 2004 2003 Change 2004 2003 Change ----------------------------------------------------------------------

INTEREST INCOME Trading assets $34 $47 (28)% $145 $156 (7)% Securities available for sale 485 458 6 1,883 1,816 4 Mortgages held for sale 443 551 (20) 1,737 3,136 (45) Loans held for sale 87 60 45 292 251 16 Loans 4,542 3,713 22 16,781 13,937 20 Other interest income 44 27 63 129 122 6 -------- -------- -------- -------- Total interest income 5,635 4,856 16 20,967 19,418 8 -------- -------- -------- --------

INTEREST EXPENSE Deposits 576 377 53 1,827 1,613 13 Short-term borrowings 126 68 85 353 322 10 Long-term debt 477 335 42 1,637 1,355 21 Guaranteed preferred beneficial interests in Company's subordinated debentures -- 32 (100) -- 121 (100) -------- -------- -------- -------- Total interest expense 1,179 812 45 3,817 3,411 12 -------- -------- -------- --------

NET INTEREST INCOME 4,456 4,044 10 17,150 16,007 7 Provision for credit losses 465 465 -- 1,717 1,722 -- -------- -------- -------- -------- Net interest income after provision for credit losses 3,991 3,579 12 15,433 14,285 8 -------- -------- -------- --------

NONINTEREST INCOME Service charges on deposit accounts 594 595 -- 2,417 2,297 5 Trust and investment fees 543 504 8 2,116 1,937 9 Card fees 321 273 18 1,230 1,079 14 Other fees 479 409 17 1,779 1,560 14 Mortgage banking 790 636 24 1,860 2,512 (26) Operating leases 211 211 -- 836 937 (11) Insurance 265 264 -- 1,193 1,071 11 Net gains (losses) on debt securities available for sale 3 (12) -- (15) 4 -- Net gains from equity investments 170 143 19 394 55 616 Other 336 378 (11) 1,099 930 18 -------- -------- -------- -------- Total noninterest income 3,712 3,401 9 12,909 12,382 4 -------- -------- -------- --------

NONINTEREST EXPENSE Salaries 1,438 1,351 6 5,393 4,832 12 Incentive compensation 526 483 9 1,807 2,054 (12) Employee benefits 451 417 8 1,724 1,560 11 Equipment 410 375 9 1,236 1,246 (1) Net occupancy 301 310 (3) 1,208 1,177 3 Operating leases 164 162 1 633 702 (10) Other 1,681 1,402 20 5,572 5,619 (1) -------- -------- -------- -------- Total noninterest expense 4,971 4,500 10 17,573 17,190 2 -------- -------- -------- --------

INCOME BEFORE INCOME TAX EXPENSE 2,732 2,480 10 10,769 9,477 14 Income tax expense 947 856 11 3,755 3,275 15 -------- -------- -------- --------

NET INCOME $1,785 $1,624 10% $7,014 $6,202 13% ======== ======== ======== ========

EARNINGS PER COMMON SHARE $1.06 $.96 10% $4.15 $3.69 12%

DILUTED EARNINGS PER COMMON SHARE $1.04 $.95 10% $4.09 $3.65 12%

DIVIDENDS DECLARED PER COMMON SHARE $.48 $.45 7% $1.86 $1.50 24%

Average common shares outstanding 1,692.7 1,690.2 --% 1,692.2 1,681.1 1% Diluted average common shares outstanding 1,715.0 1,712.6 --% 1,713.4 1,697.5 1% ----------------------------------------------------------------------

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

---------------------------------------------------------------------- Quarter ended -------------------------------------------- Dec. Sept. June Mar. Dec. (in millions, except per 31, 30, 30, 31, 31, share amounts) 2004 2004 2004 2004 2003 ----------------------------------------------------------------------

INTEREST INCOME Trading assets $34 $38 $39 $34 $47 Securities available for sale 485 496 457 445 458 Mortgages held for sale 443 490 470 334 551 Loans held for sale 87 76 66 63 60 Loans 4,542 4,271 4,011 3,957 3,713 Other interest income 44 34 26 25 27 -------- -------- -------- -------- -------- Total interest income 5,635 5,405 5,069 4,858 4,856 -------- -------- -------- -------- --------

INTEREST EXPENSE Deposits 576 487 394 370 377 Short-term borrowings 126 105 59 63 68 Long-term debt 477 395 390 375 335 Guaranteed preferred beneficial interests in Company's subordinated debentures -- -- -- -- 32 -------- -------- -------- -------- -------- Total interest expense 1,179 987 843 808 812 -------- -------- -------- -------- --------

NET INTEREST INCOME 4,456 4,418 4,226 4,050 4,044 Provision for credit losses 465 408 440 404 465 -------- -------- -------- -------- -------- Net interest income after provision for credit losses 3,991 4,010 3,786 3,646 3,579 -------- -------- -------- -------- --------

NONINTEREST INCOME Service charges on deposit accounts 594 618 611 594 595 Trust and investment fees 543 508 530 535 504 Card fees 321 319 308 282 273 Other fees 479 452 437 411 409 Mortgage banking 790 262 493 315 636 Operating leases 211 207 209 209 211 Insurance 265 264 347 317 264 Net gains (losses) on debt securities available for sale 3 10 (61) 33 (12) Net gains from equity investments 170 48 81 95 143 Other 336 212 245 306 378 -------- -------- -------- -------- -------- Total noninterest income 3,712 2,900 3,200 3,097 3,401 -------- -------- -------- -------- --------

NONINTEREST EXPENSE Salaries 1,438 1,383 1,295 1,277 1,351 Incentive compensation 526 449 441 391 483 Employee benefits 451 390 391 492 417 Equipment 410 254 271 301 375 Net occupancy 301 309 304 294 310 Operating leases 164 158 156 155 162 Other 1,681 1,277 1,495 1,119 1,402 -------- -------- -------- -------- -------- Total noninterest expense 4,971 4,220 4,353 4,029 4,500 -------- -------- -------- -------- --------

INCOME BEFORE INCOME TAX EXPENSE 2,732 2,690 2,633 2,714 2,480 Income tax expense 947 942 919 947 856 -------- -------- -------- -------- --------

NET INCOME $1,785 $1,748 $1,714 $1,767 $1,624 ======== ======== ======== ======== ========

EARNINGS PER COMMON SHARE $1.06 $1.03 $1.02 $1.04 $.96

DILUTED EARNINGS PER COMMON SHARE $1.04 $1.02 $1.00 $1.03 $.95

DIVIDENDS DECLARED PER COMMON SHARE $.48 $.48 $.45 $.45 $.45

Average common shares outstanding 1,692.7 1,688.9 1,688.1 1,699.3 1,690.2 Diluted average common shares outstanding 1,715.0 1,708.7 1,708.3 1,721.2 1,712.6 ----------------------------------------------------------------------

Wells Fargo & Company and Subsidiaries CONSOLIDATED BALANCE SHEET

---------------------------------------------------------------------- December 31, ------------------- % (in millions, except shares) 2004 2003 Change ----------------------------------------------------------------------

ASSETS Cash and due from banks $12,903 $15,547 (17)% Federal funds sold, securities purchased under resale agreements and other short- term investments 5,020 3,733 34 Trading assets 9,000 8,919 1 Securities available for sale 33,717 32,953 2 Mortgages held for sale 29,723 29,027 2 Loans held for sale 8,739 7,497 17

Loans 287,586 253,073 14 Allowance for loan losses (3,762) (3,891) (3) --------- --------- Net loans 283,824 249,182 14 --------- ---------

Mortgage servicing rights, net 7,901 6,906 14 Premises and equipment, net 3,850 3,534 9 Goodwill 10,681 10,371 3 Other assets 22,491 20,129 12 --------- ---------

Total assets $427,849 $387,798 10% ========= ========= ======

LIABILITIES Noninterest-bearing deposits $81,082 $74,387 9% Interest-bearing deposits 193,776 173,140 12 --------- --------- Total deposits 274,858 247,527 11 Short-term borrowings 21,962 24,659 (11) Accrued expenses and other liabilities 19,583 17,501 12 Long-term debt 73,580 63,642 16 --------- ---------

Total liabilities 389,983 353,329 10 --------- ---------

STOCKHOLDERS' EQUITY Preferred stock 270 214 26 Common stock - $1-2/3 par value, authorized 6,000,000,000 shares; issued 1,736,381,025 shares 2,894 2,894 -- Additional paid-in capital 9,806 9,643 2 Retained earnings 26,482 22,842 16 Cumulative other comprehensive income 950 938 1 Treasury stock - 41,789,388 shares and 38,271,651 shares (2,247) (1,833) 23 Unearned ESOP shares (289) (229) 26 --------- ---------

Total stockholders' equity 37,866 34,469 10 --------- ---------

Total liabilities and stockholders' equity $427,849 $387,798 10% ========= ========= ====== ----------------------------------------------------------------------

Wells Fargo & Company and Subsidiaries FIVE QUARTER CONSOLIDATED BALANCE SHEET

---------------------------------------------------------------------- Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31, (in millions) 2004 2004 2004 2004 2003 ----------------------------------------------------------------------

ASSETS Cash and due from banks $12,903 $13,249 $13,449 $13,972 $15,547 Federal funds sold, securities purchased under resale agreements and other short- term investments 5,020 5,029 4,222 3,206 3,733 Trading assets 9,000 8,107 7,238 10,538 8,919 Securities available for sale 33,717 35,121 36,771 32,857 32,953 Mortgages held for sale 29,723 30,783 39,424 26,361 29,027 Loans held for sale 8,739 8,434 8,156 8,037 7,497

Loans 287,586 279,310 269,731 264,216 253,073 Allowance for loan losses (3,762) (3,782) (3,940) (3,891) (3,891) --------- --------- --------- --------- --------- Net loans 283,824 275,528 265,791 260,325 249,182 --------- --------- --------- --------- ---------

Mortgage servicing rights, net 7,901 7,768 8,512 6,097 6,906 Premises and equipment, net 3,850 3,722 3,627 3,545 3,534 Goodwill 10,681 10,431 10,430 10,403 10,371 Other assets 22,491 23,377 22,685 22,013 20,129 --------- --------- --------- --------- ---------

Total assets $427,849 $421,549 $420,305 $397,354 $387,798 ========= ========= ========= ========= =========

LIABILITIES Noninterest-bearing deposits $81,082 $79,090 $78,926 $78,253 $74,387 Interest-bearing deposits 193,776 189,697 189,199 170,116 173,140 --------- --------- --------- --------- --------- Total deposits 274,858 268,787 268,125 248,369 247,527 Short-term borrowings 21,962 24,278 29,831 20,397 24,659 Accrued expenses and other liabilities 19,583 20,484 21,266 19,756 17,501 Long-term debt 73,580 71,320 65,605 73,390 63,642 --------- --------- --------- --------- ---------

Total liabilities 389,983 384,869 384,827 361,912 353,329 --------- --------- --------- --------- ---------

STOCKHOLDERS' EQUITY Preferred stock 270 325 387 452 214 Common stock 2,894 2,894 2,894 2,894 2,894 Additional paid-in capital 9,806 9,767 9,744 9,711 9,643 Retained earnings 26,482 25,564 24,669 23,796 22,842 Cumulative other comprehensive income 950 914 735 1,057 938 Treasury stock (2,247) (2,436) (2,537) (1,984) (1,833) Unearned ESOP shares (289) (348) (414) (484) (229) --------- --------- --------- --------- ---------

Total stockholders' equity 37,866 36,680 35,478 35,442 34,469 --------- --------- --------- --------- ---------

Total liabilities and stockholders' equity $427,849 $421,549 $420,305 $397,354 $387,798 ========= ========= ========= ========= ========= ----------------------------------------------------------------------

Wells Fargo & Company and Subsidiaries FIVE QUARTER AVERAGE BALANCES

---------------------------------------------------------------------- Quarter ended ------------------------------------------------- Dec, 31, Sept. 30, June 30, Mar. 31, Dec. 31, (in millions) 2004 2004 2004 2004 2003 ----------------------------------------------------------------------

EARNING ASSETS Federal funds sold, securities purchased under resale agreements and other short- term investments $4,967 $4,864 $3,662 $3,509 $3,217 Trading assets 5,040 4,869 5,296 5,946 6,936 Debt securities available for sale: Securities of U.S. Treasury and federal agencies 1,101 1,132 1,190 1,224 1,278 Securities of U.S. states and political subdivisions 3,624 3,586 3,456 3,338 3,141 Mortgage-backed securities: Federal agencies 21,916 22,965 20,076 20,635 21,149 Private collateralized mortgage obligations 3,787 3,836 4,077 2,713 2,014 --------- --------- --------- --------- --------- Total mortgage- backed securities 25,703 26,801 24,153 23,348 23,163 Other debt securities (1) 3,246 3,443 3,346 3,543 3,478 --------- --------- --------- --------- --------- Total debt securities available for sale (1) 33,674 34,962 32,145 31,453 31,060 Mortgages held for sale 32,373 34,844 36,782 25,023 41,055 Loans held for sale 8,536 8,276 8,074 7,911 7,373 Loans: Commercial and commercial real estate: Commercial 51,896 49,517 48,711 47,305 47,674 Other real estate mortgage 29,412 29,025 28,586 27,801 26,691 Real estate construction 9,246 8,949 8,428 8,264 8,151 Lease financing 5,109 5,084 5,027 5,053 4,508 --------- --------- --------- --------- --------- Total commercial and commercial real estate 95,663 92,575 90,752 88,423 87,024 Consumer: Real estate 1-4 family first mortgage 86,389 88,689 89,351 86,375 71,402 Real estate 1-4 family junior lien mortgage 50,909 46,367 41,964 38,328 35,152 Credit card 9,706 8,948 8,508 8,338 8,013 Other revolving credit and installment 34,475 34,168 32,975 32,477 31,975 --------- --------- --------- --------- --------- Total consumer 181,479 178,172 172,798 165,518 146,542 Foreign 4,025 3,508 2,681 2,507 2,420 --------- --------- --------- --------- --------- Total loans (2) 281,167 274,255 266,231 256,448 235,986 Other 1,698 1,683 1,702 1,754 1,715 --------- --------- --------- --------- --------- Total earning assets $367,455 $363,753 $353,892 $332,044 $327,342 ========= ========= ========= ========= =========

FUNDING SOURCES Deposits: Interest-bearing checking $3,244 $3,017 $3,011 $2,962 $2,744 Market rate and other savings 125,350 124,090 121,647 117,373 112,392 Savings certificates 18,697 18,490 18,724 19,495 19,949 Other time deposits 30,460 36,089 29,654 22,719 26,382 Deposits in foreign offices 10,026 8,856 9,306 7,171 5,992 --------- --------- --------- --------- --------- Total interest- bearing deposits 187,777 190,542 182,342 169,720 167,459 Short-term borrowings 26,315 29,840 22,689 25,630 28,367 Long-term debt 70,646 65,443 71,085 64,416 58,814 Guaranteed preferred beneficial interests in Company's subordinated debentures -- -- -- -- 3,591 --------- --------- --------- --------- --------- Total interest- bearing liabilities 284,738 285,825 276,116 259,766 258,231 Portion of noninterest-bearing funding sources 82,717 77,928 77,776 72,278 69,111 --------- --------- --------- --------- --------- Total funding sources $367,455 $363,753 $353,892 $332,044 $327,342 ========= ========= ========= ========= =========

NONINTEREST-EARNING ASSETS Cash and due from banks $13,366 $12,704 $12,997 $13,152 $13,083 Goodwill 10,436 10,431 10,413 10,394 10,209 Other 34,002 32,748 33,242 31,024 34,110 --------- --------- --------- --------- --------- Total noninterest- earning assets $57,804 $55,883 $56,652 $54,570 $57,402 ========= ========= ========= ========= =========

NONINTEREST-BEARING FUNDING SOURCES Deposits $82,958 $79,430 $81,538 $73,316 $74,941 Other liabilities 20,336 18,435 17,700 18,572 18,000 Stockholders' equity 37,227 35,946 35,190 34,960 33,572 Noninterest-bearing funding sources used to fund earning assets (82,717) (77,928) (77,776) (72,278) (69,111) --------- --------- --------- --------- --------- Net noninterest- bearing funding sources $57,804 $55,883 $56,652 $54,570 $57,402 ========= ========= ========= ========= =========

TOTAL ASSETS $425,259 $419,636 $410,544 $386,614 $384,744 ========= ========= ========= ========= ========= ----------------------------------------------------------------------

(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 Dec. 31, ------------------- (in millions) 2004 2003 ----------------------------------------------------------------------

Balance, beginning of period $34,469 $30,319 Net income 7,014 6,202 Other comprehensive income (loss), net of tax: Change in foreign currency translation adjustments 12 26 Change in valuation allowance related to: Investment securities and other retained interests (22) (117) Derivative instruments and hedging activities 22 53 Common stock issued 1,446 1,094 Common stock issued for acquisitions 9 651 Common stock repurchased (2,188) (1,482) Preferred stock released to ESOP 265 224 Preferred stock redeemed -- (73) Preferred stock dividends -- (3) Common stock dividends (3,150) (2,527) Other, net (11) 102 --------- --------- Balance, end of period $37,866 $34,469 ========= ========= ----------------------------------------------------------------------

Wells Fargo & Company and Subsidiaries FIVE QUARTER LOANS

---------------------------------------------------------------------- Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31, (in millions) 2004 2004 2004 2004 2003 ----------------------------------------------------------------------

Commercial and commercial real estate: Commercial $54,517 $50,750 $49,962 $48,034 $48,729 Other real estate mortgage 29,804 29,406 28,975 28,323 27,592 Real estate construction 9,025 9,211 8,646 8,259 8,209 Lease financing 5,169 5,075 5,045 5,018 4,477 --------- --------- --------- --------- --------- Total commercial and commercial real estate 98,515 94,442 92,628 89,634 89,007 Consumer: Real estate 1-4 family first mortgage 87,686 87,587 87,776 90,563 83,535 Real estate 1-4 family junior lien mortgage 52,190 49,557 44,289 40,281 36,629 Credit card 10,260 9,439 8,692 8,357 8,351 Other revolving credit and installment 34,725 34,435 33,458 32,755 33,100 --------- --------- --------- --------- --------- Total consumer 184,861 181,018 174,215 171,956 161,615 Foreign 4,210 3,850 2,888 2,626 2,451 --------- --------- --------- --------- ---------

Total loans (net of unearned income) $287,586 $279,310 $269,731 $264,216 $253,073 ========= ========= ========= ========= ========= ----------------------------------------------------------------------

FIVE QUARTER NONACCRUAL LOANS AND OTHER ASSETS

---------------------------------------------------------------------- Dec. Sept. June Mar. Dec. 31, 30, 30, 31, 31, (in millions) 2004 2004 2004 2004 2003 ----------------------------------------------------------------------

Nonaccrual loans: Commercial and commercial real estate: Commercial $345 $382 $422 $514 $592 Other real estate mortgage 229 258 324 263 285 Real estate construction 57 59 72 71 56 Lease financing 68 54 55 74 73 ------- ------- ------- ------- ------- Total commercial and commercial real estate 699 753 873 922 1,006 Consumer: Real estate 1-4 family first mortgage 386 360 317 281 274 Real estate 1-4 family junior lien mortgage 92 93 86 96 87 Other revolving credit and installment 160 155 97 85 88 ------- ------- ------- ------- ------- Total consumer 638 608 500 462 449 Foreign 21 16 6 3 3 ------- ------- ------- ------- ------- Total nonaccrual loans 1,358 1,377 1,379 1,387 1,458 As a percentage of total loans .47% .49% .51% .52% .58%

Foreclosed assets 212 190 235 222 198 Real estate investments 2 2 2 2 6 ------- ------- ------- ------- -------

Total nonaccrual loans and other assets $1,572 $1,569 $1,616 $1,611 $1,662 ======= ======= ======= ======= =======

As a percentage of total loans .55% .56% .60% .61% .66% ======= ======= ======= ======= ======= ----------------------------------------------------------------------

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

---------------------------------------------------------------------- Quarter ended Year ended ----------------------- --------------- Dec. Sept. Dec. Dec. Dec. 31, 30, 31, 31, 31, (in millions) 2004 2004 2003 2004 2003 ----------------------------------------------------------------------

Balance, beginning of period $3,945 $3,940 $3,854 $3,891 $3,819

Allowances related to business combinations/other 5 4 37 8 69

Provision for credit losses 465 408 465 1,717 1,722

Loan charge-offs: Commercial and commercial real estate: Commercial (103) (98) (161) (424) (597) Other real estate mortgage (7) (4) (10) (25) (33) Real estate construction (1) (1) (3) (5) (11) Lease financing (14) (24) (10) (62) (41) ------- ------- ------- ------- ------- Total commercial and commercial real estate (125) (127) (184) (516) (682) Consumer: Real estate 1-4 family first mortgage (15) (14) (15) (53) (47) Real estate 1-4 family junior lien mortgage (31) (20) (23) (107) (77) Credit card (126) (109) (139) (463) (476) Other revolving credit and installment (250) (233) (224) (919) (827) ------- ------- ------- ------- ------- Total consumer (422) (376) (401) (1,542) (1,427) Foreign (48) (37) (30) (143) (105) ------- ------- ------- ------- ------- Total loan charge-offs (595) (540) (615) (2,201) (2,214) ------- ------- ------- ------- -------

Loan recoveries: Commercial and commercial real estate: Commercial 33 31 72 150 177 Other real estate mortgage 3 8 4 17 11 Real estate construction 1 3 1 6 11 Lease financing 7 7 2 26 8 ------- ------- ------- ------- ------- Total commercial and commercial real estate 44 49 79 199 207 Consumer: Real estate 1-4 family first mortgage 2 1 1 6 10 Real estate 1-4 family junior lien mortgage 7 6 1 24 13 Credit card 17 15 13 62 50 Other revolving credit and installment 53 56 51 220 196 ------- ------- ------- ------- ------- Total consumer 79 78 66 312 269 Foreign 7 6 5 24 19 ------- ------- ------- ------- ------- Total loan recoveries 130 133 150 535 495 ------- ------- ------- ------- ------- Net loan charge-offs (465) (407) (465) (1,666) (1,719) ------- ------- ------- ------- -------

Balance, end of period $3,950 $3,945 $3,891 $3,950 $3,891 ======= ======= ======= ======= ======= Components: Allowance for loan losses $3,762 $3,782 $3,891 $3,762 $3,891 Reserve for unfunded credit commitments (1) 188 163 -- 188 -- ------- ------- ------- ------- ------- Allowance for credit losses $3,950 $3,945 $3,891 $3,950 $3,891 ======= ======= ======= ======= =======

Net loan charge-offs (annualized) as a percentage of average total loans .66% .59% .78% .62% .81% ======= ======= ======= ======= ======= ----------------------------------------------------------------------

(1) Effective September 30, 2004, we reclassified the portion of the allowance for loan losses related to commercial lending commitments and letters of credit, or $163 million, to other liabilities.

Wells Fargo & Company and Subsidiaries FIVE QUARTER CHANGES IN THE ALLOWANCE FOR CREDIT LOSSES

---------------------------------------------------------------------- Quarter ended --------------------------------------- Dec. Sept. June Mar. Dec. 31, 30, 30, 31, 31, (in millions) 2004 2004 2004 2004 2003 ----------------------------------------------------------------------

Balance, beginning of quarter $3,945 $3,940 $3,891 $3,891 $3,854

Allowances related to business combinations/other 5 4 (1) -- 37

Provision for credit losses 465 408 440 404 465

Loan charge-offs: Commercial and commercial real estate: Commercial (103) (98) (112) (111) (161) Other real estate mortgage (7) (4) (7) (7) (10) Real estate construction (1) (1) -- (3) (3) Lease financing (14) (24) (12) (12) (10) ------- ------- ------- ------- ------- Total commercial and commercial real estate (125) (127) (131) (133) (184) Consumer: Real estate 1-4 family first mortgage (15) (14) (11) (13) (15) Real estate 1-4 family junior lien mortgage (31) (20) (27) (29) (23) Credit card (126) (109) (119) (109) (139) Other revolving credit and installment (250) (233) (212) (224) (224) ------- ------- ------- ------- ------- Total consumer (422) (376) (369) (375) (401) Foreign (48) (37) (30) (28) (30) ------- ------- ------- ------- ------- Total loan charge-offs (595) (540) (530) (536) (615) ------- ------- ------- ------- -------

Loan recoveries: Commercial and commercial real estate: Commercial 33 31 44 42 72 Other real estate mortgage 3 8 4 2 4 Real estate construction 1 3 1 1 1 Lease financing 7 7 6 6 2 ------- ------- ------- ------- ------- Total commercial and commercial real estate 44 49 55 51 79 Consumer: Real estate 1-4 family first mortgage 2 1 2 1 1 Real estate 1-4 family junior lien mortgage 7 6 7 4 1 Credit card 17 15 15 15 13 Other revolving credit and installment 53 56 55 56 51 ------- ------- ------- ------- ------- Total consumer 79 78 79 76 66 Foreign 7 6 6 5 5 ------- ------- ------- ------- ------- Total loan recoveries 130 133 140 132 150 ------- ------- ------- ------- ------- Net loan charge-offs (465) (407) (390) (404) (465) ------- ------- ------- ------- -------

Balance, end of quarter $3,950 $3,945 $3,940 $3,891 $3,891 ======= ======= ======= ======= ======= Components: Allowance for loan losses $3,762 $3,782 $3,940 $3,891 $3,891 Reserve for unfunded credit commitments (1) 188 163 -- -- -- ------- ------- ------- ------- ------- Allowance for credit losses $3,950 $3,945 $3,940 $3,891 $3,891 ======= ======= ======= ======= =======

Net loan charge-offs (annualized) as a percentage of average total loans .66% .59% .59% .63% .78%

Allowance for loan losses: As a percentage of total loans 1.31% 1.35% 1.46% 1.47% 1.54% As a percentage of nonaccrual loans 277 275 286 281 267 As a percentage of nonaccrual loans and other assets 239 241 244 242 234

Allowance for credit losses: As a percentage of total loans 1.37% 1.41% 1.46% 1.47% 1.54% As a percentage of nonaccrual loans 291 286 286 281 267 As a percentage of nonaccrual loans and other assets 251 251 244 242 234 ----------------------------------------------------------------------

(1) Effective September 30, 2004, we reclassified the portion of the allowance for loan losses related to commercial lending commitments and letters of credit, or $163 million, to other liabilities.

Wells Fargo & Company and Subsidiaries NONINTEREST INCOME

---------------------------------------------------------------------- Quarter ended Year ended Dec. 31, Dec. 31, --------------- % ----------------- % (in millions) 2004 2003 Change 2004 2003 Change ----------------------------------------------------------------------

Service charges on deposit accounts $594 $595 --% $2,417 $2,297 5%

Trust and investment fees: Trust, investment and IRA fees 385 350 10 1,509 1,345 12 Commissions and all other fees 158 154 3 607 592 3 ------- ------- -------- -------- Total trust and investment fees 543 504 8 2,116 1,937 9

Card fees 321 273 18 1,230 1,079 14

Other fees: Cash network fees 44 44 -- 180 179 1 Charges and fees on loans 252 191 32 921 756 22 All other 183 174 5 678 625 8 ------- ------- -------- -------- Total other fees 479 409 17 1,779 1,560 14

Mortgage banking: Servicing fees, net of amortization and provision for impairment 434 312 39 1,037 (954) -- Net gains on mortgage loan origination/sales activities 281 229 23 539 3,019 (82) All other 75 95 (21) 284 447 (36) ------- ------- -------- -------- Total mortgage banking 790 636 24 1,860 2,512 (26)

Operating leases 211 211 -- 836 937 (11) Insurance 265 264 -- 1,193 1,071 11 Trading assets 185 157 18 523 502 4 Net gains (losses) on debt securities available for sale 3 (12) -- (15) 4 -- Net gains from equity investments 170 143 19 394 55 616 Net gains on sales of loans 4 5 (20) 11 28 (61) Net gains (losses) on dispositions of operations (17) 2 -- (15) 29 -- All other 164 214 (23) 580 371 56 ------- ------- -------- --------

Total $3,712 $3,401 9% $12,909 $12,382 4% ======= ======= ====== ======== ======== ====== ----------------------------------------------------------------------

NONINTEREST EXPENSE

---------------------------------------------------------------------- Quarter ended Year ended Dec. 31, Dec.31, --------------- % ----------------- % (in millions) 2004 2003 Change 2004 2003 Change ----------------------------------------------------------------------

Salaries $1,438 $1,351 6% $5,393 $4,832 12% Incentive compensation 526 483 9 1,807 2,054 (12) Employee benefits 451 417 8 1,724 1,560 11 Equipment 410 375 9 1,236 1,246 (1) Net occupancy 301 310 (3) 1,208 1,177 3 Operating leases 164 162 1 633 702 (10) Outside professional services 229 164 40 669 509 31 Contract services 172 191 (10) 626 866 (28) Advertising and promotion 144 118 22 459 392 17 Travel and entertainment 130 114 14 442 389 14 Outside data processing 104 98 6 418 404 3 Telecommunications 80 87 (8) 296 343 (14) Postage 68 71 (4) 269 336 (20) Charitable donations 224 21 967 248 237 5 Insurance 33 31 6 247 197 25 Stationery and supplies 63 68 (7) 240 241 -- Operating losses 48 44 9 192 193 (1) Loss (gain) from debt extinguishment (2) -- -- 174 -- -- Security 41 38 8 161 163 (1) Core deposit intangibles 33 35 (6) 134 142 (6) All other 314 322 (2) 997 1,207 (17) ------- ------- -------- --------

Total $4,971 $4,500 10% $17,573 $17,190 2% ======= ======= ====== ======== ======== ====== ----------------------------------------------------------------------

Wells Fargo & Company and Subsidiaries FIVE QUARTER NONINTEREST INCOME

---------------------------------------------------------------------- Quarter ended ----------------------------------------- Dec. Sept. June Mar. Dec. 31, 30, 30, 31, 31, (in millions) 2004 2004 2004 2004 2003 ----------------------------------------------------------------------

Service charges on deposit accounts $594 $618 $611 $594 $595

Trust and investment fees: Trust, investment and IRA fees 385 366 383 375 350 Commissions and all other fees 158 142 147 160 154 ------- ------- ------- -------- -------- Total trust and investment fees 543 508 530 535 504

Card fees 321 319 308 282 273

Other fees: Cash network fees 44 47 46 43 44 Charges and fees on loans 252 234 224 211 191 All other 183 171 167 157 174 ------- ------- ------- -------- -------- Total other fees 479 452 437 411 409

Mortgage banking: Servicing fees, net of amortization and provision for impairment 434 (24) 461 166 312 Net gains (losses) on mortgage loan origination/sales activities 281 212 (52) 98 229 All other 75 74 84 51 95 ------- ------- ------- -------- -------- Total mortgage banking 790 262 493 315 636

Operating leases 211 207 209 209 211 Insurance 265 264 347 317 264 Trading assets 185 94 101 143 157 Net gains (losses) on debt securities available for sale 3 10 (61) 33 (12) Net gains from equity investments 170 48 81 95 143 Net gains on sales of loans 4 3 -- 4 5 Net gains (losses) on dispositions of operations (17) -- 1 1 2 All other 164 115 143 158 214 ------- ------- ------- -------- --------

Total $3,712 $2,900 $3,200 $3,097 $3,401 ======= ======= ======= ======== ======== ----------------------------------------------------------------------

FIVE QUARTER NONINTEREST EXPENSE

---------------------------------------------------------------------- Quarter ended ----------------------------------------- Dec. Sept. June Mar. Dec. 31, 30, 30, 31, 31, (in millions) 2004 2004 2004 2004 2003 ----------------------------------------------------------------------

Salaries $1,438 $1,383 $1,295 $1,277 $1,351 Incentive compensation 526 449 441 391 483 Employee benefits 451 390 391 492 417 Equipment 410 254 271 301 375 Net occupancy 301 309 304 294 310 Operating leases 164 158 156 155 162 Outside professional services 229 165 156 119 164 Contract services 172 154 157 143 191 Advertising and promotion 144 113 118 84 118 Travel and entertainment 130 110 105 97 114 Outside data processing 104 109 106 99 98 Telecommunications 80 73 62 81 87 Postage 68 63 63 75 71 Charitable donations 224 7 10 7 21 Insurance 33 47 96 71 31 Stationery and supplies 63 57 60 60 68 Operating losses 48 45 82 17 44 Loss (gain) from debt extinguishment (2) -- 176 -- -- Security 41 40 40 40 38 Core deposit intangibles 33 33 34 34 35 All other 314 261 230 192 322 ------- ------- ------- -------- --------

Total $4,971 $4,220 $4,353 $4,029 $4,500 ======= ======= ======= ======== ======== ----------------------------------------------------------------------

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

---------------------------------------------------------------------- Quarter ended Dec. 31, --------------------------------------------------- 2004 2003 ------------------------ -------------------------- Interest Interest Average Yields/ income/ Average Yields/ income/ (in millions) balance rates expense balance rates expense ---------------------------------------------------------------------- EARNING ASSETS Federal funds sold, securities purchased under resale agreements and other short- tem investments $4,967 2.01% $26 $3,217 .99% $8 Trading assets 5,040 2.73 34 6,936 2.72 48 Debt securities available for sale (3): Securities of U.S. Treasury and federal agencies 1,101 3.72 10 1,278 4.39 14 Securities of U.S. states and political subdivisions 3,624 8.31 71 3,141 8.02 60 Mortgage-backed securities: Federal agencies 21,916 6.08 321 21,149 6.25 318 Private collateralized mortgage obligations 3,787 5.35 49 2,014 5.53 27 --------- -------- --------- --------- Total mortgage- backed securities 25,703 5.97 370 23,163 6.19 345 Other debt securities (4) 3,246 7.91 59 3,478 7.69 60 --------- -------- --------- --------- Total debt securities available for sale (4) 33,674 6.32 510 31,060 6.46 479 Mortgages held for sale (3) 32,373 5.48 443 41,055 5.36 551 Loans held for sale (3) 8,536 4.05 87 7,373 3.22 60 Loans: Commercial and commercial real estate: Commercial 51,896 5.93 774 47,674 5.93 712 Other real estate mortgage 29,412 5.67 419 26,691 5.25 353 Real estate construction 9,246 5.80 135 8,151 4.96 102 Lease financing 5,109 5.84 75 4,508 6.13 69 --------- -------- --------- --------- Total commercial and commercial real estate 95,663 5.84 1,403 87,024 5.64 1,236 Consumer: Real estate 1-4 family first mortgage 86,389 5.70 1,233 71,402 5.32 952 Real estate 1-4 family junior lien mortgage 50,909 5.54 709 35,152 5.28 467 Credit card 9,706 11.57 281 8,013 11.85 237 Other revolving credit and installment 34,475 8.99 779 31,975 8.91 716 --------- -------- --------- --------- Total consumer 181,479 6.59 3,002 146,542 6.45 2,372 Foreign 4,025 14.00 141 2,420 17.74 107 --------- -------- --------- --------- Total loans (5) 281,167 6.44 4,546 235,986 6.27 3,715 Other 1,698 4.19 17 1,715 4.31 18 --------- -------- --------- --------- Total earning assets $367,455 6.16 5,663 $327,342 5.96 4,879 ========= -------- ========= ---------

FUNDING SOURCES Deposits: Interest-bearing checking $3,244 .68 5 $2,744 .21 1 Market rate and other savings 125,350 .83 262 112,392 .61 172 Savings certificates 18,697 2.32 108 19,949 2.31 116 Other time deposits 30,460 1.98 152 26,382 1.10 73 Deposits in foreign offices 10,026 1.95 49 5,992 .99 15 --------- -------- --------- --------- Total interest- bearing deposits 187,777 1.22 576 167,459 .89 377 Short-term borrowings 26,315 1.90 126 28,367 .95 68 Long-term debt 70,646 2.70 477 58,814 2.27 335 Guaranteed preferred beneficial interests in Company's subordinated debentures -- -- -- 3,591 3.60 32 --------- -------- --------- --------- Total interest- bearing liabilities 284,738 1.65 1,179 258,231 1.25 812 Portion of noninterest- bearing funding sources 82,717 -- -- 69,111 -- -- --------- -------- --------- --------- Total funding sources $367,455 1.28 1,179 $327,342 .99 812 ========= -------- ========= --------- Net interest margin and net interest income on a taxable-equivalent basis (6) 4.88% $4,484 4.97% $4,067 ====== ======== ====== ==========

NONINTEREST-EARNING ASSETS Cash and due from banks $13,366 $13,083 Goodwill 10,436 10,209 Other 34,002 34,110 --------- --------- Total noninterest- earning assets $57,804 $57,402 ========= =========

NONINTEREST-BEARING FUNDING SOURCES Deposits $82,958 $74,941 Other liabilities 20,336 18,000 Stockholders' equity 37,227 33,572 Noninterest-bearing funding sources used to fund earning assets (82,717) (69,111) --------- --------- Net noninterest- bearing funding sources $57,804 $57,402 ========= =========

TOTAL ASSETS $425,259 $384,744 ========= ========= ----------------------------------------------------------------------

(1) Our average prime rate was 4.94% and 4.00% for the quarters ended December 31, 2004 and 2003, respectively. The average three-month London Interbank Offered Rate (LIBOR) was 2.30% and 1.17% 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 Dec. 31, ------------------------------------------------- 2004 2003 ------------------------ ------------------------ Interest Interest Average Yields/ income/ Average Yields/ income/ (in millions) balance rates expense balance rates expense ---------------------------------------------------------------------- EARNING ASSETS Federal funds sold, securities purchased under resale agreements and other short-term investments $4,254 1.49% $64 $4,174 1.16% $49 Trading assets 5,286 2.75 145 6,110 2.56 156 Debt securities available for sale (3): Securities of U.S. Treasury and federal agencies 1,161 4.05 46 1,286 4.74 58 Securities of U.S. states and political subdivisions 3,501 8.00 267 2,424 8.62 196 Mortgage-backed securities: Federal agencies 21,404 6.03 1,248 18,283 7.37 1,276 Private collateralized mortgage obligations 3,604 5.16 180 2,001 6.24 120 --------- -------- --------- -------- Total mortgage- backed securities 25,008 5.91 1,428 20,284 7.26 1,396 Other debt securities (4) 3,395 7.72 236 3,302 7.75 240 --------- -------- --------- -------- Total debt securities available for sale (4) 33,065 6.24 1,977 27,296 7.32 1,890 Mortgages held for sale (3) 32,263 5.38 1,737 58,672 5.34 3,136 Loans held for sale (3) 8,201 3.56 292 7,142 3.51 251 Loans: Commercial and commercial real estate: Commercial 49,365 5.77 2,848 47,279 6.08 2,876 Other real estate mortgage 28,708 5.35 1,535 25,846 5.44 1,405 Real estate construction 8,724 5.30 463 7,954 5.11 406 Lease financing 5,068 6.23 316 4,453 6.22 277 --------- -------- --------- -------- Total commercial and commercial real estate 91,865 5.62 5,162 85,532 5.80 4,964 Consumer: Real estate 1-4 family first mortgage 87,700 5.44 4,772 56,252 5.54 3,115 Real estate 1-4 family junior lien mortgage 44,415 5.18 2,300 31,670 5.80 1,836 Credit card 8,878 11.80 1,048 7,640 12.06 922 Other revolving credit and installment 33,528 9.01 3,022 29,838 9.09 2,713 --------- -------- --------- -------- Total consumer 174,521 6.38 11,142 125,400 6.85 8,586 Foreign 3,184 15.30 487 2,200 18.00 396 --------- -------- --------- -------- Total loans (5) 269,570 6.23 16,791 213,132 6.54 13,946 Other 1,709 3.81 65 1,626 4.57 74 --------- -------- --------- -------- Total earning assets $354,348 5.97 $21,071 $318,152 6.16 19,502 ========= -------- ========= --------

FUNDING SOURCES Deposits: Interest-bearing checking $3,059 .44 13 $2,571 .27 7 Market rate and other savings 122,129 .69 838 106,733 .66 705 Savings certificates 18,850 2.26 425 20,927 2.53 529 Other time deposits 29,750 1.43 427 25,388 1.20 305 Deposits in foreign offices 8,843 1.40 124 6,060 1.11 67 --------- -------- --------- -------- Total interest- bearing deposits 182,631 1.00 1,827 161,679 1.00 1,613 Short-term borrowings 26,130 1.35 353 29,898 1.08 322 Long-term debt 67,898 2.41 1,637 53,823 2.52 1,355 Guaranteed preferred beneficial interests in Company's subordinated debentures -- -- -- 3,306 3.66 121 --------- -------- --------- -------- Total interest- bearing liabilities 276,659 1.38 3,817 248,706 1.37 3,411 Portion of noninterest-bearing funding sources 77,689 -- -- 69,446 -- -- --------- -------- --------- -------- Total funding sources $354,348 1.08 3,817 $318,152 1.08 3,411 ========= -------- ========= -------- Net interest margin and net interest income on a taxable- equivalent basis (6) 4.89% $17,254 5.08% $16,091 ====== ======== ====== ========

NONINTEREST-EARNING ASSETS Cash and due from banks $13,055 $13,433 Goodwill 10,418 9,905 Other 32,758 36,123 --------- --------- Total noninterest- earning assets $56,231 $59,461 ========= =========

NONINTEREST-BEARING FUNDING SOURCES Deposits $79,321 $76,815 Other liabilities 18,764 20,030 Stockholders' equity 35,835 32,062 Noninterest-bearing funding sources used to fund earning assets (77,689) (69,446) --------- --------- Net noninterest- bearing funding sources $56,231 $59,461 ========= =========

TOTAL ASSETS $410,579 $377,613 ========= ========= ----------------------------------------------------------------------

(1) Our average prime rate was 4.34% and 4.12% for the years ended December 31, 2004 and 2003, respectively. The average three-month London Interbank Offered Rate (LIBOR) was 1.62% and 1.22% 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

---------------------------------------------------------------------- income/expense in millions, average balances in Community Wholesale Wells Fargo billions) Banking Banking Financial ------------------------------------------------- Quarter ended December 31, 2004 2003 2004 2003 2004 2003

Net interest income (1) $3,145 $2,864 $557 $561 $754 $638 Provision for credit losses 232 236 11 23 222 176 Noninterest income 2,782 2,544 799 750 106 96 Noninterest expense 3,814 3,385 718 694 439 370 -------- -------- ------- ------- ------- ------- Income (loss) before income tax expense (benefit) 1,881 1,787 627 594 199 188 Income tax expense (benefit) 643 605 224 212 70 69 -------- -------- ------- ------- ------- ------- Net income (loss) $1,238 $1,182 $403 $382 $129 119 ======== ======== ======= ======= ======= =======

Average loans $191.7 $162.7 $56.4 $49.8 $33.1 $23.5 Average assets 302.6 278.5 81.6 74.8 35.1 25.3 Average core deposits 204.0 186.3 26.1 23.6 .1 .1

Year ended December 31,

Net interest income (1) $12,153 $11,495 $2,209 $2,228 $2,793 $2,311 Provision for credit losses 858 892 62 177 797 623 Noninterest income 9,360 9,218 3,070 2,766 385 378 Noninterest expense 13,077 13,214 2,728 2,579 1,590 1,343 -------- -------- ------- ------- ------- ------- Income (loss) before income tax expense (benefit) 7,578 6,607 2,489 2,238 791 723 Income tax expense (benefit) 2,611 2,243 890 792 284 272 -------- -------- ------- ------- ------- ------- Net income (loss) $4,967 $4,364 $1,599 $1,446 $507 $451 ======== ======== ======= ======= ======= =======

Average loans $187.0 $143.2 $53.1 $49.5 $29.5 $20.4 Average assets 295.8 273.5 77.6 75.8 31.2 22.2 Average core deposits 197.8 184.6 25.5 22.3 .1 .1

-------------------------------------------------------- (income/expense in millions, average balances in Consolidated billions) Other (2) Company -------------------------------------------------------- Quarter ended December 31, 2004 2003 2004 2003

Net interest income (1) $-- $(19) $4,456 $4,044 Provision for credit losses -- 30 465 465 Noninterest income 25 11 3,712 3,401 Noninterest expense -- 51 4,971 4,500 -------- -------- -------- -------- Income (loss) before income tax expense (benefit) 25 (89) 2,732 2,480 Income tax expense (benefit) 10 (30) 947 856 -------- -------- -------- -------- Net income (loss) $15 $(59) $1,785 $1,624 ======== ======== ======== ========

Average loans $-- $-- $281.2 $236.0 Average assets 6.0 6.1 425.3 384.7 Average core deposits -- -- 230.2 210.0

Year ended December 31,

Net interest income (1) $(5) $(27) $17,150 $16,007 Provision for credit losses -- 30 1,717 1,722 Noninterest income 94 20 12,909 12,382 Noninterest expense 178 54 17,573 17,190 -------- -------- -------- -------- Income (loss) before income tax expense (benefit) (89) (91) 10,769 9,477 Income tax expense (benefit) (30) (32) 3,755 3,275 -------- -------- -------- -------- Net income (loss) $(59) $(59) $7,014 $6,202 ======== ======== ======== ========

Average loans $-- $-- $269.6 $213.1 Average assets 6.0 6.1 410.6 377.6 Average core deposits -- -- 223.4 207.0 ----------------------------------------------------------------------

(1) Net interest income is the difference between interest earned on assets and the cost of liabilities to fund those assets. Interest earned includes actual interest earned on segment assets and, if the segment has excess liabilities, interest credits for providing funding to other segments. The cost of liabilities includes interest expense on segment liabilities and, if the segment does not have enough liabilities to fund its assets, a funding charge based on the cost of excess liabilities from another segment. In general, Community Banking has excess liabilities and receives interest credits for the funding it provides to other segments.

(2) The other income and expense items principally relate to Corporate level equity investment activities, and other separately identified transactions recorded at the enterprise level, including, for the second quarter of 2004, a $176 million loss on debt extinguishment and, for the fourth quarter of 2003, a $30 million non-recurring loss on sale of a sub-prime credit card portfolio and $51 million of other charges related to employee benefits and software. Average assets principally comprise unallocated goodwill held at the enterprise level.

Wells Fargo & Company and Subsidiaries FIVE QUARTER OPERATING SEGMENT RESULTS

---------------------------------------------------------------------- Quarter ended ------------------------------------ Dec. Sept. June Mar. Dec. (income/expense in millions, 31, 30, 30, 31, 31, average balances in billions) 2004 2004 2004 2004 2003 ----------------------------------------------------------------------

COMMUNITY BANKING Net interest income $3,145 $3,173 $2,989 $2,846 $2,864 Provision for credit losses 232 199 213 214 236 Noninterest income 2,782 2,079 2,359 2,140 2,544 Noninterest expense 3,814 3,143 3,126 2,994 3,385 ------ ------ ------ ------ ------- Income before income tax expense 1,881 1,910 2,009 1,778 1,787 Income tax expense 643 664 693 611 605 ------ ------ ------ ------ ------- Net income $1,238 $1,246 $1,316 $1,167 $1,182 ====== ====== ====== ====== ======= Average loans $191.7 $189.9 $185.9 $180.3 $162.7 Average assets 302.6 303.7 298.8 277.4 278.5 Average core deposits 204.0 199.6 198.9 188.3 186.3

WHOLESALE BANKING Net interest income $557 $531 $559 $562 $561 Provision for credit losses 11 10 18 23 23 Noninterest income 799 723 720 828 750 Noninterest expense 718 678 663 669 694 ------ ------ ------ ------ ------- Income before income tax expense 627 566 598 698 594 Income tax expense 224 203 213 250 212 ------ ------ ------ ------ ------- Net income $403 $363 $385 $448 $382 ====== ====== ====== ====== ======= Average loans $56.4 $53.7 $52.1 $50.3 $49.8 Average assets 81.6 77.4 75.8 75.7 74.8 Average core deposits 26.1 25.3 25.9 24.7 23.6

WELLS FARGO FINANCIAL Net interest income $754 $715 $680 $644 $638 Provision for credit losses 222 199 209 167 176 Noninterest income 106 93 84 102 96 Noninterest expense 439 398 387 366 370 ------ ------ ------ ------ ------- Income before income tax expense 199 211 168 213 188 Income tax expense 70 74 63 77 69 ------ ------ ------ ------ ------- Net income $129 $137 $105 $136 $119 ====== ====== ====== ====== ======= Average loans $33.1 $30.7 $28.2 $25.8 $23.5 Average assets 35.1 32.5 29.8 27.4 25.3 Average core deposits .1 .1 .1 .1 .1

OTHER (1) Net interest income $-- $(1) (2) $(2) $(19) Provision for credit losses -- -- -- -- 30 Noninterest income 25 5 37 27 11 Noninterest expense -- 1 177 -- 51 ------ ------ ------ ------ ------- Income (loss) before income tax expense (benefit) 25 3 (142) 25 (89) Income tax expense (benefit) 10 1 (50) 9 (30) ------ ------ ------ ------ ------- Net income (loss) $15 $2 $(92) $16 $(59) ====== ====== ====== ====== ======= Average loans $-- $-- $-- $-- $-- Average assets 6.0 6.0 6.1 6.1 6.1 Average core deposits -- -- -- -- --

CONSOLIDATED COMPANY Net interest income $4,456 $4,418 $4,226 $4,050 $4,044 Provision for credit losses 465 408 440 404 465 Noninterest income 3,712 2,900 3,200 3,097 3,401 Noninterest expense 4,971 4,220 4,353 4,029 4,500 ------ ------ ------ ------ ------- Income before income tax expense 2,732 2,690 2,633 2,714 2,480 Income tax expense 947 942 919 947 856 ------ ------ ------ ------ ------- Net income $1,785 $1,748 $1,714 $1,767 $1,624 ====== ====== ====== ====== ======= Average loans $281.2 $274.3 $266.2 $256.4 $236.0 Average assets 425.3 419.6 410.5 386.6 384.7 Average core deposits 230.2 225.0 224.9 213.1 210.0 ----------------------------------------------------------------------

(1) The other income and expense items principally relate to Corporate level equity investment activities, and other separately identified transactions recorded at the enterprise level, including, for the second quarter of 2004, a $176 million loss on debt extinguishment and, for the fourth quarter of 2003, a $30 million non-recurring loss on sale of a sub-prime credit card portfolio and $51 million of other charges related to employee benefits and software. Average assets principally comprise unallocated goodwill held at the enterprise level.

Wells Fargo & Company and Subsidiaries FIVE QUARTER CONSOLIDATED MORTGAGE SERVICING (1)

---------------------------------------------------------------------- Quarter ended ------------------------------------------ Dec. Sept. June Mar. Dec. 31, 30, 30, 31, 31, (in millions) 2004 2004 2004 2004 2003 ----------------------------------------------------------------------

Mortgage servicing rights: Balance, beginning of quarter $9,567 $10,100 $8,270 $8,848 $7,589 Originations 369 465 597 338 674 Purchases 358 261 466 268 410 Amortization (473) (411) (431) (511) (459) Write-down -- -- -- (169) -- Other (includes changes in mortgage servicing rights due to hedging) (355) (848) 1,198 (504) 634 -------- -------- -------- ------- ------- Balance, end of quarter $9,466 $9,567 $10,100 $8,270 $8,848 ======== ======== ======== ======= ======= Valuation allowance: Balance, beginning of quarter $1,799 $1,588 $2,173 $1,942 $1,824 Provision (reversal of provision) for mortgage servicing rights in excess of fair value (234) 211 (585) 400 118 Write-down of mortgage servicing rights -- -- -- (169) -- Balance, end of quarter $1,565 $1,799 $1,588 $2,173 $1,942 ======== ======== ======== ======= ======= Mortgage servicing rights, net $7,901 $7,768 $8,512 $6,097 $6,906 ======== ======== ======== ======= ======= Ratio of mortgage servicing rights to related loans serviced for others 1.15% 1.18% 1.37% 1.00% 1.15% ----------------------------------------------------------------------

---------------------------------------------------------------------- Dec. Sept. June Mar. Dec. 31, 30, 30, 31, 31, (in billions) 2004 2004 2004 2004 2003 ---------------------------------------------------------------------- Managed servicing portfolio: Loans serviced for others $688 $659 $622 $609 $598 Owned loans serviced (portfolio and held for sale) 117 118 127 116 112 ------ ------ ------ ------ ------- Total owned servicing 805 777 749 725 710 Sub-servicing 27 32 32 28 21 ------ ------ ------ ------ ------- Total managed servicing portfolio $832 $809 $781 $753 $731 ====== ====== ====== ====== ======= Weighted-average note rate (owned servicing only) 5.75% 5.75% 5.75% 5.84% 5.90% ----------------------------------------------------------------------

(1) Consists of residential and commercial mortgage servicing from all Wells Fargo channels.

Wells Fargo & Company and Subsidiaries SELECTED FIVE QUARTER RESIDENTIAL MORTGAGE PRODUCTION AND SERVICING DATA

---------------------------------------------------------------------- Quarter ended ------------------------------------ Dec. Sept. June Mar. Dec. 31, 30, 30, 31, 31, (in billions) 2004 2004 2004 2004 2003 ---------------------------------------------------------------------- Application Data: Wells Fargo Home Mortgage first mortgage quarterly applications $80 $83 $100 $119 $71 Refinances as a percentage of applications 44% 36% 33% 56% 45% Wells Fargo Home Mortgage first mortgage unclosed pipeline, at quarter end $50 $55 $57 $72 $46 ----------------------------------------------------------------------

---------------------------------------------------------------------- Quarter ended ------------------------------------ Dec. Sept. June Mar. Dec. 31, 30, 30, 31, 31, (in billions) 2004 2004 2004 2004 2003 ---------------------------------------------------------------------- Residential Real Estate Originations: (1) Quarter: Wells Fargo Home Mortgage first mortgage loans: Retail $30 $29 $45 $30 $31 Correspondent/Wholesale 28 27 39 25 30 Home equity loans and lines 9 10 10 8 8 Wells Fargo Financial 2 2 2 2 2 ------ ------ ------ ------ ------- Total $69 $68 $96 $65 $71 ====== ====== ====== ====== ======= Year-to-date $298 $229 $161 $65 $470 ====== ====== ====== ====== ======= ----------------------------------------------------------------------

(1) Consists of residential real estate originations from all Wells Fargo channels.

--30--LO/sf*

CONTACT: Wells Fargo & Company Janis Smith, 415-396-7711 (Media) Bob Strickland, 415-396-0523 (Investors)

KEYWORD: IDAHO COLORADO CALIFORNIA WYOMING ARIZONA ALASKA WASHINGTON UTAH TEXAS OREGON NEW MEXICO NEVADA MONTANA MINNESOTA INDUSTRY KEYWORD: BANKING CONFERENCE CALLS EARNINGS SOURCE: Wells Fargo & Company

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