Wells Fargo Reports Record Quarterly Earnings Per Share and Net Income

Wells Fargo Reports Record Quarterly Earnings Per Share and Net Income

    Business Editors

    SAN FRANCISCO--(BUSINESS WIRE)--April 19, 2005--Wells Fargo & Company (NYSE:WFC)

First Quarter 2005 Highlights:

-- Record diluted earnings per share of $1.08, up 5 percent from prior year's $1.03, up 15 percent (annualized) from fourth quarter 2004

-- Record net income of $1.86 billion, up 5 percent from prior year's $1.77 billion, up 16 percent (annualized) from fourth quarter 2004

-- Return on equity of 19.6 percent

-- Revenue up 13 percent from prior year

-- Strong balance sheet growth

-- Average loans up 12 percent from prior year

-- Average core deposits up 9 percent from prior year

-- Improved asset quality

-- Nonperforming assets down $167 million, or 11 percent, from prior quarter, and down 13 percent from a year ago

-- Net charge-offs up $120 million from prior quarter, including $163 million of credit losses to conform Wells Fargo Financial's credit write-off policies with Federal Financial Institutions Examination Council (FFIEC) standards

First Quarter ----------------------------- % 2005 2004 Change --------- --------- ---------

Earnings Diluted earnings per share $1.08 $1.03 5% Net Income (in billions) 1.86 1.77 5

Asset Quality Net charge-offs (in millions) $585 $404 45 Nonperforming assets as % of total loans .48% .61% (21)

Revenue-Related Revenue (in billions) $8.09 $7.15 13 Average loans (in billions) 287.3 256.4 12 Average core deposits (in billions) 231.8 213.1 9

    Wells Fargo & Company (NYSE:WFC) reported record diluted earnings per common share of $1.08 for first quarter 2005, compared with $1.03 in first quarter 2004, up 5 percent. Net income was a record $1.86 billion, up 5 percent from $1.77 billion in first quarter 2004.
    "This was another outstanding, record-breaking quarter with double-digit growth in loans, double-digit growth in revenue, the single most important measure of Wells Fargo's long-term success, continued strengthening of our already strong balance sheet and solid profit performance throughout all our major business groups," said Chairman and CEO Dick Kovacevich. "Our 153,000 talented team members continued to increase market share by satisfying the financial needs of our more than 23 million customers and earning more of their business. Our credit quality continued to be excellent and among the very best in our industry, and Wells Fargo Bank, N.A. remained the only U.S. bank with the highest possible credit rating, 'Aaa.' Continuing the pace of last year's store expansion, we opened 15 new banking stores during the quarter. New government data shows we've widened our lead as the nation's #1 lender to small-business owners, and we're also #1 in lending to small businesses in low-to-moderate income neighborhoods for loans less than $1 million. Business Ethics magazine named Wells Fargo one of the nation's top 10 corporate citizens among all industries, and we were only the second company, ever, to receive the United Way of America's highest possible recognition -- all four of its Summit awards for corporate community involvement."

    Financial Performance

    Diluted earnings per share were a record $1.08, up 5 percent from $1.03 in first quarter 2004 and up 15 percent (annualized) from $1.04 in fourth quarter 2004. "Profit growth continued to be broad based across our businesses, with particular strength in regional banking, mortgage, consumer finance, institutional investment management, and large corporate banking -- all of which had either double-digit revenue growth, double-digit profit growth, or both," said Chief Financial Officer Howard Atkins.
    First quarter results included pre-tax charges or losses of $410 million for several actions designed to further strengthen the Company's balance sheet. First, in a step toward bringing the Company's mortgage, home equity and consumer finance businesses onto common systems and conforming credit charge-off practices with the more stringent standards of the Federal Financial Institutions Examination Council (FFIEC), Wells Fargo Financial recognized $163 million in credit losses in its portfolios. Second, the Company incurred $117 million in expenses upon shortening the estimated lives of certain depreciable assets. Finally, the Company realized $130 million of losses related to the sale of $18 billion of its lowest-yielding adjustable rate mortgages (ARMs) and auto loans.

    Revenue

    Revenue of $8.1 billion for first quarter 2005 grew $942 million, or 13 percent, from a year ago. "Reflecting the strength and breadth of our business model, revenue growth was broad based, with particularly strong double-digit growth in regional banking, institutional investments, debit cards, small business lending, insurance, corporate trust, consumer credit, consumer finance, home mortgage and corporate banking," said Atkins.

    Loans

    Despite the sale of $35 billion in ARMs and auto loans since first quarter 2004, average loans of $287.3 billion increased $30.8 billion, or 12 percent, from first quarter 2004, and $6.1 billion, or 9 percent (annualized), from fourth quarter 2004. Average commercial and commercial real estate loans increased $10.9 billion, or 12 percent, from first quarter 2004. Total commercial loan growth accelerated to 15 percent (annualized), up $3.7 billion on a linked-quarter basis. Commercial loans grew across virtually all customer segments, including double-digit increases, both linked-quarter (annualized) and year-over-year in small business direct, middle market, large corporate, commercial real estate and asset-based lending.
    "The commercial lending market remained competitive, but we continue to build volume by adding new customers and expanding relationships with existing customers," said Atkins. "As a result, commercial loans have grown at a double-digit rate for two consecutive quarters. Consumer loan growth also remained very strong despite some reduction in growth from last year's record pace." Average consumer loans increased 11 percent from first quarter 2004 and 5 percent (annualized) on a linked-quarter basis. Loan sales reduced year-over-year and linked-quarter consumer loan growth by 50 percent each.

    Deposits

    Average core deposits of $231.8 billion grew $18.7 billion, or 9 percent, from first quarter 2004, and increased $1.6 billion on a linked-quarter basis. Average consumer checking account balances grew 9 percent from first quarter 2004 and 7 percent (annualized) on a linked-quarter basis, reflecting a 5.5 percent net increase in consumer checking accounts from a year ago and higher average balances per account.

    Net Interest Income

    Net interest income increased 10 percent from a year ago and was essentially flat on a linked-quarter basis. "The double-digit year-over-year increase in net interest income was driven by a 12 percent increase in earning assets," said Atkins. "The impact on earning assets and net interest income from double-digit customer loan growth was moderated by the sale of $35 billion of our lowest-yielding, shorter duration ARMs and auto loans. During the past twelve months, we had unusually good market opportunities to improve asset yields and margins by selling our lowest-yielding loans. The note rates at which we are now beginning to replace these ARMs through new originations are 80-90 basis points higher than the note rates on the ARMs sold during the past twelve months." The yield on the Company's first mortgage portfolio increased to 6.0 percent at quarter end from 5.3 percent a year ago and 5.7 percent in fourth quarter 2004. At March 31, 2005, the Company had $930 million in unrealized gains on securities available for sale.

    Noninterest Income

    Noninterest income increased $539 million, or 17 percent, from first quarter 2004. "The double-digit increase in fee income was broad based across our businesses, with growth particularly high in trust and investments, credit and debit cards, consumer loans and mortgage banking," said Atkins. Substantially all of the increase in trust and investment fees was due to the acquisition of assets under management from Strong Financial Corporation (Strong), which closed December 31, 2004. Mortgage banking results reflected higher income from both servicing and mortgage loan originations and sales compared with first quarter 2004. Net mortgage banking servicing fees were $456 million, up $290 million from $166 million in first quarter 2004. Servicing fees included $271 million from a mortgage servicing rights valuation reserve release and $85 million of net derivative gains from hedging mortgage servicing rights, compared with a $400 million provision expense which increased the mortgage servicing rights valuation reserve and $538 million of net derivative gains in first quarter 2004. The valuation allowance had a balance of $1.3 billion at March 31, 2005, and mortgage servicing rights were valued at 1.24 percent of loans serviced for others, up from 1.15 percent at December 31, 2004.
    On a linked-quarter basis, noninterest income was down $76 million, with fee income growth in our business segments more than offset by the impact of the balance sheet repositioning actions, which reduced noninterest income by $130 million.

    Noninterest Expense

    Noninterest expense was up $663 million from first quarter 2004 and down $279 million on a linked-quarter basis. The year-over-year increase was primarily due to a $332 million increase in salary and benefit expense from adding 7,100 full-time equivalent (FTE) employees, largely sales people, across the Company's businesses. Higher occupancy and equipment costs reflected a $117 million expense incurred during first quarter 2005 to adjust the estimated lives for certain depreciable assets, primarily building improvements. The Strong transaction added about $74 million of noninterest expense, including $8 million of integration costs. On a linked-quarter basis, noninterest expense declined $279 million due primarily to the $217 million charitable contribution expense taken in fourth quarter 2004.

    Credit Quality

    "We continued to experience historically low loss rates in most of our wholesale business units, and our consumer credit loss rates remained stable and at the lower end of historic ranges," said Chief Credit Officer Dave Munio. Total first quarter net credit losses were $585 million (.83 percent of average loans outstanding, annualized), including $163 million (.23 percent) related to the timing of credit loss recognition at Wells Fargo Financial upon adoption of FFIEC guidelines, compared with $465 million (.66 percent) in fourth quarter 2004 and $404 million (.63 percent) in first quarter 2004. "Unlike our banks, Wells Fargo Financial is not subject to FFIEC guidelines, but we believe these are sound business practices that will also provide consistent loss recognition across all Wells Fargo business units," said Munio.
    Total nonperforming assets (NPAs) declined $206 million, or 13 percent, from March 31, 2004 and $167 million, or 11 percent, from December 31, 2004. NPAs were $1.41 billion, or .48 percent of total loans, at March 31, 2005, compared with $1.57 billion (.55 percent) at year-end 2004 and $1.61 billion (.61 percent) at March 31, 2004. The $167 million decline in NPAs from December 31, 2004 primarily reflected lower consumer NPAs due to the impact of the higher charge-offs at Wells Fargo Financial to conform its credit write-off practices with FFIEC standards and the continued decline in commercial NPAs due to overall economic improvements.
    At March 31, 2005, the allowance for credit losses was $3.95 billion, unchanged from year-end 2004, and represented over two times coverage for estimated annual loan losses. "We consider the allowance at quarter end to be adequate to cover losses inherent in the loan portfolios," said Munio.

    Business Segment Performance

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

First Quarter ----------------------------- % (in millions) 2005 2004 Change --------- --------- --------- Community Banking $1,404 $1,183 19% Wholesale Banking 425 448 (5) Wells Fargo Financial 27 136 (80)

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

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

Selected Financial Information

First Quarter ----------------------------- % (in millions) 2005 2004 Change --------- --------- --------- Total revenue $5,818 $5,011 16% Provision for credit losses 203 214 (5) Noninterest expense 3,507 2,994 17 Net income 1,404 1,183 19 Average loans (in billions) 192.6 180.3 7 Average assets (in billions) 302.9 277.7 9

--	Record quarterly net income of $1.40 billion, up 19 percent from prior year
--	Average core deposits up 10 percent from prior year
--	Average loans up 7 percent from prior year

    "The outstanding results in Community Banking are the direct result of the continued customer focus and hard work of our dedicated team members," said John Stumpf, Group EVP, Community Banking. "Through their efforts, we've been delivering consistent results thanks to their ability to do what's right for our customers."
    Community Banking reported record net income of $1.40 billion, up 19 percent from first quarter 2004. Net interest income increased $275 million, or 10 percent, compared with first quarter 2004, due primarily to growth in consumer loans and deposits, and mortgages held for sale. Noninterest income increased $532 million, or 25 percent, compared with first quarter 2004, due primarily to increased mortgage banking revenue and higher card fees, loan fees and other income. Noninterest expense was $3.51 billion, up $513 million from first quarter 2004, due to an increase in the number of team members and a $117 million charge taken in first quarter 2005 to shorten the estimated lives of certain depreciable assets. The first quarter provision for credit losses decreased $11 million, or 5 percent, from first quarter 2004. Average loans were $192.6 billion, up 7 percent from a year ago. Core deposits averaged $206.2 billion, up 10 percent over the prior year.

    Regional Banking Highlights

    -- Record core sales of 3.85 million, up 18 percent from prior
    year

    -- Banker productivity of 5.02 core sales per day

    -- 1,700 additional platform bankers from prior year

    -- Net consumer checking account growth of 5.5 percent from prior
    year

    "We achieved record sales this quarter, thanks to the dedication and hard work of our team, who focus on our vision of satisfying all of our customers' financial needs and helping them succeed financially," said Carrie Tolstedt, Group EVP, Regional Banking. "Core sales were 3.85 million, up 18 percent from the same period last year. The number of retail platform bankers increased 16 percent from a year ago, while our daily sales per platform banker remained strong at 5.02. We continued to enjoy strong net growth in consumer checking accounts, a core product for building customer relationships, up 5.5 percent from a year ago. Loan balances for small business grew 17 percent compared with a year ago."

    Internet Highlights

-- 6.5 million active online customers, up 24 percent from prior year

-- 2.5 million bill pay customers at quarter end, up 39 percent from prior year

-- 580,000 active online small business customers, up 21 percent from prior year

-- Online sales versus prior year:

-- Personal lines and loans up 76 percent

-- Student loans up 70 percent

-- Savings accounts sales up 19 percent

    Active internet customers increased to 6.5 million, up 24 percent from first quarter 2004, and an industry-leading 53 percent penetration of the Company's consumer checking accounts. Online bill pay customers increased 39 percent to 2.5 million.

    Home Mortgage and Home Equity Highlights

--	Mortgage originations of $65 billion
--	Mortgage applications of $91 billion, up 14 percent from prior quarter
--	Mortgage application pipeline of $59 billion, up 18 percent from prior quarter
--	Owned mortgage servicing portfolio of $840 billion, up 16 percent from March 31, 2004 and up 17 percent (annualized) from prior quarter
--	Home equity loans up 34 percent year-over-year

    "Home Mortgage saw a strong pick-up in application activity in the quarter, as applications of $91 billion increased 14 percent over fourth quarter 2004, and the March 31, 2005 pipeline of $59 billion was up 18 percent from year-end," said Mark Oman, Group EVP, Home and Consumer Finance. "The rise in interest rates during the quarter and the growth in the servicing portfolio resulted in an increase in the mortgage servicing rights asset to $9.0 billion, or 1.24 percent of loans serviced for others, up from $7.9 billion, or 1.15 percent, at year-end. Reflecting the increase in fair value of the servicing asset, a $271 million reversal of the valuation allowance was realized in the quarter."
    Home equity loans were $53.9 billion at quarter end, up 34 percent from first quarter 2004. The credit quality of this portfolio remained very strong, with nonaccrual loans of $101 million, or .2 percent of the portfolio.

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

Selected Financial Information First Quarter ----------------------------- % (in millions) 2005 2004 Change --------- --------- --------- Total revenue $1,410 $1,390 1% Provision for credit losses 4 23 (83) Noninterest expense 745 669 11 Net income 425 448 (5) Average loans (in billions) 59.5 50.3 18 Average assets (in billions) 85.1 75.7 12

--	Average loans up 18 percent
--	Improved asset quality: nonperforming assets down $144 million from prior year
--	Strong Funds become Wells Fargo Advantage Funds(SM)
--	Geographic territory expands with new offices on East and West Coasts

    Wholesale Banking reported net income of $425 million, down 5 percent from a year ago and up 5 percent on a linked-quarter basis. Revenue was $1,410 million, up 4 percent from $1,356 million in fourth quarter 2004 and up 1 percent from $1,390 million in first quarter 2004. First quarter 2004 included strong revenue in both asset-based lending and capital markets-related businesses. Average loans grew 18 percent to $59.5 billion from $50.3 billion in first quarter 2004 and average core deposits were up 4 percent to $25.6 billion from $24.7 billion in first quarter 2004. The provision for credit losses decreased 83 percent to $4 million from $23 million in first quarter 2004 and decreased 64 percent from $11 million in fourth quarter 2004. Expenses were $745 million, up 4 percent from $718 million in fourth quarter 2004 and up 11 percent from $669 million in first quarter 2004. This was the first full quarter to reflect the Strong acquisition.
    "We experienced another quarter of strong loan growth, up 18 percent over the prior year and 22 percent (annualized) over the last quarter of 2004," said Dave Hoyt, Group EVP, Wholesale Banking. "Credit quality also remained very strong, with net losses of $4 million and a decrease in nonperforming assets of $144 million from a year ago. On April 11, we completed the merger of Wells Fargo Funds(R) and certain Strong Funds creating a single fund family, the Wells Fargo Advantage Funds. Our new fund family will offer 120 mutual funds, with load and no-load options, including stock, fixed income, money market, municipal income and asset allocation funds, representing more than $100 billion in assets under management, as of March 31, 2005.
    "We continued our focus on growing our customer base. We continue to look for opportunities to expand our business model into new geographies, as well as expanding share in those markets where we have an existing presence. We've recently opened middle market offices in Boston, Atlanta, Grand Rapids and Nashville."

    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 Information First Quarter ----------------------------- % (in millions) 2005 2004 Change --------- --------- --------- Total revenue $861 $746 15% Provision for credit losses 378 167 126 Noninterest expense 440 366 20 Net income 27 136 (80) Average loans (in billions) 35.2 25.8 36 Average assets (in billions) 37.2 27.4 36

-- Average loans up 36 percent from first quarter 2004

-- Real estate-secured receivables up 57 percent to $14.6 billion

-- Auto finance receivables up 42 percent to $10.4 billion

    Wells Fargo Financial reported net income of $27 million compared with $136 million in first quarter 2004. Results included $163 million in credit losses to conform Wells Fargo Financial's charge-off timing estimates with FFIEC guidelines. Total revenue was $861 million, up 15 percent from $746 million in first quarter 2004. Average loans grew to $35.2 billion from $25.8 billion a year ago, an increase of 36 percent. Noninterest expense increased 20 percent to $440 million from $366 million in first quarter 2004.
    "The FFIEC adjustment had a significant impact on our first-quarter bottom-line results, but from an operating standpoint our team had a very strong quarter," said Tom Shippee, president and chief executive officer of Wells Fargo Financial. "Real estate-secured lending and auto lending both exceeded projections. Our products and services continue to help our customers manage their finances, as we continue to enhance our value proposition to customers. Delinquency rates remained low."

    Recorded Message

    A recorded message reviewing Wells Fargo's results will be available at 5:30 a.m. Pacific Time through April 22, 2005. Dial 800-642-1687 (domestic) or 706-645-9291 (international). Access code 5171857. 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 the anticipated benefits of strategic actions taken in the quarter and various statements about future credit losses and credit quality.
    Do not unduly rely on forward-looking statements. They give the Company's expectations about the future and are not guarantees. Forward-looking statements speak only as of the date they are made, and the Company does not undertake any obligation to update them to reflect changes that occur after that date.
    There are a number of 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 Annual Report on Form 10-K for the year ended December 31, 2004, including information incorporated into the Form 10-K from the Company's 2004 Annual Report to Stockholders, filed as Exhibit 13 to the Form 10-K. See, for example, "Financial Review -- Risk Management" included in the 2004 Annual Report to Stockholders and incorporated by reference into the Form 10-K.
    Other factors described in the Form 10-K include -- business and economic conditions -- fiscal and monetary policies -- legislation and regulation including the Patriot Act and the Sarbanes-Oxley Act -- customers choosing not to use banks for transactions or choosing to take money out of the bank and investing it in the stock market or elsewhere -- 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 2004 Annual Report to Stockholders and incorporated by reference into the Form 10-K.
    Any factor described in this news release, in the Form 10-K, or in any information incorporated by reference therein, 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 $436 billion in assets, providing banking, insurance, investments, mortgage and consumer finance to more than 23 million customers from more than 6,000 stores and the internet (wellsfargo.com) across North America and elsewhere internationally. Wells Fargo Bank, N.A. is the only bank in the United States to receive the highest possible credit rating, "Aaa," from Moody's Investors Service.

Wells Fargo & Company and Subsidiaries SUMMARY FINANCIAL DATA ---------------------------------------------------------------------- % Change Quarter ended Mar. 31, 2005 from ----------------------------- ------------------- (in millions, except Mar. 31, Dec. 31, Mar. 31, Dec. 31, Mar. 31, per share amounts) 2005 2004 2004 2004 2004 ----------------------------------------------------------------------

For the Quarter Net income $1,856 $1,785 $1,767 4% 5% Diluted earnings per common share 1.08 1.04 1.03 4 5

Profitability ratios (annualized) Net income to average total assets (ROA) 1.75% 1.67% 1.84% 5 (5) Net income applicable to common stock to average common stockholders' equity (ROE) 19.60 19.07 20.31 3 (3)

Efficiency ratio (1) 58.0 60.9 56.4 (5) 3

Total revenue $8,089 $8,168 $7,147 (1) 13

Dividends declared per common share .48 .48 .45 -- 7

Average common shares outstanding 1,695.4 1,692.7 1,699.3 -- -- Diluted average common shares outstanding 1,715.7 1,715.0 1,721.2 -- --

Average loans $287,282 $281,167 $256,448 2 12 Average assets 430,990 425,259 386,614 1 11 Average core deposits (2) 231,847 230,249 213,146 1 9 Average retail core deposits (3) 192,621 189,788 176,194 1 9

Net interest margin 4.87% 4.88% 4.94% -- (1)

At Quarter End Securities available for sale $31,685 $33,717 $32,857 (6) (4) Loans 290,588 287,586 264,216 1 10 Allowance for loan losses 3,783 3,762 3,891 1 (3) Goodwill 10,645 10,681 10,403 -- 2 Assets 435,643 427,849 397,354 2 10 Core deposits 234,984 229,703 220,105 2 7 Stockholders' equity 38,477 37,866 35,442 2 9

Capital ratios Stockholders' equity to assets 8.83% 8.85% 8.92% -- (1) Risk-based capital (4) Tier 1 capital 8.40 8.41 8.48 -- (1) Total capital 12.37 12.07 12.18 2 2 Tier 1 leverage (4) 7.17 7.08 7.13 1 1

Book value per common share $22.76 $22.36 $20.90 2 9

Team members (active, full-time equivalent) 147,000 145,500 139,900 1 5

Common Stock Price High $62.75 $64.04 $58.98 (2) 6 Low 58.15 57.55 55.97 1 4 Period end 59.80 62.15 56.67 (4) 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 Banking core deposits and mortgage escrow deposits.

(4) The March 31, 2005 ratios are preliminary.

Wells Fargo & Company and Subsidiaries FIVE QUARTER SUMMARY FINANCIAL DATA ---------------------------------------------------------------------- Quarter ended ------------------------------------------------- (in millions, except Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31, per share amounts) 2005 2004 2004 2004 2004 ----------------------------------------------------------------------

For the Quarter Net income $1,856 $1,785 $1,748 $1,714 $1,767 Diluted earnings per common share 1.08 1.04 1.02 1.00 1.03

Profitability ratios (annualized) Net income to average total assets (ROA) 1.75% 1.67% 1.66% 1.68% 1.84% Net income applicable to common stock to average common stockholders' equity (ROE) 19.60 19.07 19.34 19.57 20.31

Efficiency ratio (1) 58.0 60.9 57.7 58.6 56.4

Total revenue $8,089 $8,168 $7,318 $7,426 $7,147

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

Average common shares outstanding 1,695.4 1,692.7 1,688.9 1,688.1 1,699.3 Diluted average common shares outstanding 1,715.7 1,715.0 1,708.7 1,708.3 1,721.2

Average loans $287,282 $281,167 $274,255 $266,231 $256,448 Average assets 430,990 425,259 419,636 410,544 386,614 Average core deposits (2) 231,847 230,249 225,027 224,920 213,146 Average retail core deposits (3) 192,621 189,788 186,175 182,613 176,194

Net interest margin 4.87% 4.88% 4.89% 4.83% 4.94%

At Quarter End Securities available for sale $31,685 $33,717 $35,121 $36,771 $32,857 Loans 290,588 287,586 279,310 269,731 264,216 Allowance for loan losses 3,783 3,762 3,782 3,940 3,891 Goodwill 10,645 10,681 10,431 10,430 10,403 Assets 435,643 427,849 421,549 420,305 397,354 Core deposits 234,984 229,703 224,946 222,166 220,105 Stockholders' equity 38,477 37,866 36,680 35,478 35,442

Capital ratios Stockholders' equity to assets 8.83% 8.85% 8.70% 8.44% 8.92% Risk-based capital (4) Tier 1 capital 8.40 8.41 8.40 8.24 8.48 Total capital 12.37 12.07 12.15 11.86 12.18 Tier 1 leverage (4) 7.17 7.08 6.97 6.84 7.13

Book value per common share $22.76 $22.36 $21.71 $21.03 $20.90

Team members (active, full-time equivalent) 147,000 145,500 143,700 142,600 139,900

Common Stock Price High $62.75 $64.04 $59.86 $59.72 $58.98 Low 58.15 57.55 56.12 54.32 55.97 Period end 59.80 62.15 59.63 57.23 56.67 ----------------------------------------------------------------------

(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 Banking core deposits and mortgage escrow deposits.

(4) The March 31, 2005 ratios are preliminary.

Wells Fargo & Company and Subsidiaries CONSOLIDATED STATEMENT OF INCOME ---------------------------------------------------------------------- Quarter ended March 31, ----------------- % (in millions, except per share amounts) 2005 2004 Change ----------------------------------------------------------------------

INTEREST INCOME Trading assets $44 $34 29% Securities available for sale 456 445 2 Mortgages held for sale 430 334 29 Loans held for sale 112 63 78 Loans 4,780 3,957 21 Other interest income 51 25 104 -------- -------- Total interest income 5,873 4,858 21 -------- --------

INTEREST EXPENSE Deposits 692 370 87 Short-term borrowings 149 63 137 Long-term debt 579 375 54 -------- -------- Total interest expense 1,420 808 76

NET INTEREST INCOME 4,453 4,050 10 Provision for credit losses 585 404 45 -------- -------- Net interest income after provision for credit losses 3,868 3,646 6 -------- --------

NONINTEREST INCOME Service charges on deposit accounts 578 594 (3) Trust and investment fees 602 535 13 Card fees 326 282 16 Other fees 453 411 10 Mortgage banking 814 315 158 Operating leases 208 209 -- Insurance 337 317 6 Net gains (losses) on debt securities available for sale (4) 33 -- Net gains from equity investments 71 95 (25) Other 251 306 (18) -------- -------- Total noninterest income 3,636 3,097 17 -------- --------

NONINTEREST EXPENSE Salaries 1,480 1,277 16 Incentive compensation 465 391 19 Employee benefits 547 492 11 Equipment 370 301 23 Net occupancy 404 294 37 Operating leases 158 155 2 Other 1,268 1,119 13 -------- -------- Total noninterest expense 4,692 4,029 16 -------- --------

INCOME BEFORE INCOME TAX EXPENSE 2,812 2,714 4 Income tax expense 956 947 1 -------- --------

NET INCOME $1,856 $1,767 5 ======== ========

EARNINGS PER COMMON SHARE $1.09 $1.04 5

DILUTED EARNINGS PER COMMON SHARE $1.08 $1.03 5

DIVIDENDS DECLARED PER COMMON SHARE $.48 $.45 7

Average common shares outstanding 1,695.4 1,699.3 -- Diluted average common shares outstanding 1,715.7 1,721.2 -- ----------------------------------------------------------------------

Wells Fargo & Company and Subsidiaries FIVE QUARTER CONSOLIDATED STATEMENT OF INCOME ---------------------------------------------------------------------- Quarter ended --------------------------------------------- (in millions, except per Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31, share amounts) 2005 2004 2004 2004 2004 ----------------------------------------------------------------------

INTEREST INCOME Trading assets $44 $34 $38 $39 $34 Securities available for sale 456 485 496 457 445 Mortgages held for sale 430 443 490 470 334 Loans held for sale 112 87 76 66 63 Loans 4,780 4,542 4,271 4,011 3,957 Other interest income 51 44 34 26 25 -------- -------- --------- -------- -------- Total interest income 5,873 5,635 5,405 5,069 4,858 -------- -------- --------- -------- --------

INTEREST EXPENSE Deposits 692 576 487 394 370 Short-term borrowings 149 126 105 59 63 Long-term debt 579 477 395 390 375 -------- -------- --------- -------- -------- Total interest expense 1,420 1,179 987 843 808

NET INTEREST INCOME 4,453 4,456 4,418 4,226 4,050 Provision for credit losses 585 465 408 440 404 -------- -------- --------- -------- -------- Net interest income after provision for credit losses 3,868 3,991 4,010 3,786 3,646 -------- -------- --------- -------- --------

NONINTEREST INCOME Service charges on deposit accounts 578 594 618 611 594 Trust and investment fees 602 543 508 530 535 Card fees 326 321 319 308 282 Other fees 453 479 452 437 411 Mortgage banking 814 790 262 493 315 Operating leases 208 211 207 209 209 Insurance 337 265 264 347 317 Net gains (losses) on debt securities available for sale (4) 3 10 (61) 33 Net gains from equity investments 71 170 48 81 95 Other 251 336 212 245 306 -------- -------- --------- -------- -------- Total noninterest income 3,636 3,712 2,900 3,200 3,097 -------- -------- --------- -------- --------

NONINTEREST EXPENSE Salaries 1,480 1,438 1,383 1,295 1,277 Incentive compensation 465 526 449 441 391 Employee benefits 547 451 390 391 492 Equipment 370 410 254 271 301 Net occupancy 404 301 309 304 294 Operating leases 158 164 158 156 155 Other 1,268 1,681 1,277 1,495 1,119 -------- -------- --------- -------- -------- Total noninterest expense 4,692 4,971 4,220 4,353 4,029 -------- -------- --------- -------- --------

INCOME BEFORE INCOME TAX EXPENSE 2,812 2,732 2,690 2,633 2,714 Income tax expense 956 947 942 919 947 -------- -------- --------- -------- --------

NET INCOME $1,856 $1,785 $1,748 $1,714 $1,767 ======== ======== ========= ======== ========

EARNINGS PER COMMON SHARE $1.09 $1.06 $1.03 $1.02 $1.04

DILUTED EARNINGS PER COMMON SHARE $1.08 $1.04 $1.02 $1.00 $1.03

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

Average common shares outstanding 1,695.4 1,692.7 1,688.9 1,688.1 1,699.3 Diluted average common shares outstanding 1,715.7 1,715.0 1,708.7 1,708.3 1,721.2 ----------------------------------------------------------------------

Wells Fargo & Company and Subsidiaries CONSOLIDATED BALANCE SHEET ---------------------------------------------------------------------- % Change Mar. 31, 2005 from ------------------- (in millions, except Mar. 31, Dec. 31, Mar. 31, Dec. 31, Mar. 31, shares) 2005 2004 2004 2004 2004 ----------------------------------------------------------------------

ASSETS Cash and due from banks $13,467 $12,903 $13,972 4% (4)% Federal funds sold, securities purchased under resale agreements and other short- term investments 4,784 5,020 3,206 (5) 49 Trading assets 8,487 9,000 10,538 (6) (19) Securities available for sale 31,685 33,717 32,857 (6) (4) Mortgages held for sale 38,724 29,723 26,361 30 47 Loans held for sale 1,769 8,739 8,037 (80) (78)

Loans 290,588 287,586 264,216 1 10 Allowance for loan losses (3,783) (3,762) (3,891) 1 (3) --------- --------- --------- Net loans 286,805 283,824 260,325 1 10 --------- --------- ---------

Mortgage servicing rights, net 8,972 7,901 6,097 14 47 Premises and equipment, net 3,898 3,850 3,545 1 10 Goodwill 10,645 10,681 10,403 -- 2 Other assets 26,407 22,491 22,013 17 20 --------- --------- ---------

Total assets $435,643 $427,849 $397,354 2 10 ========= ========= =========

LIABILITIES Noninterest-bearing deposits $82,872 $81,082 $78,253 2 6 Interest-bearing deposits 190,291 193,776 170,116 (2) 12 --------- --------- --------- Total deposits 273,163 274,858 248,369 (1) 10 Short-term borrowings 24,451 21,962 20,397 11 20 Accrued expenses and other liabilities 22,649 19,583 19,756 16 15 Long-term debt 76,903 73,580 73,390 5 5 --------- --------- ---------

Total liabilities 397,166 389,983 361,912 2 10 --------- --------- ---------

STOCKHOLDERS' EQUITY Preferred stock 535 270 452 98 18 Common stock - $1- 2/3 par value, authorized 6,000,000,000 shares; issued 1,736,381,025 shares 2,894 2,894 2,894 -- -- Additional paid-in capital 9,843 9,806 9,711 -- 1 Retained earnings 27,512 26,482 23,796 4 16 Cumulative other comprehensive income 693 950 1,057 (27) (34) Treasury stock - 44,059,109 shares, 41,789,388 shares and 39,199,710 shares (2,428) (2,247) (1,984) 8 22 Unearned ESOP shares (572) (289) (484) 98 18 --------- --------- ---------

Total stockholders' equity 38,477 37,866 35,442 2 9 --------- --------- ---------

Total liabilities and stockholders' equity $435,643 $427,849 $397,354 2 10 ========= ========= ========= ----------------------------------------------------------------------

Wells Fargo & Company and Subsidiaries FIVE QUARTER CONSOLIDATED BALANCE SHEET ---------------------------------------------------------------------- Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31, (in millions) 2005 2004 2004 2004 2004 ----------------------------------------------------------------------

ASSETS Cash and due from banks $13,467 $12,903 $13,249 $13,449 $13,972 Federal funds sold, securities purchased under resale agreements and other short- term investments 4,784 5,020 5,029 4,222 3,206 Trading assets 8,487 9,000 8,107 7,238 10,538 Securities available for sale 31,685 33,717 35,121 36,771 32,857 Mortgages held for sale 38,724 29,723 30,783 39,424 26,361 Loans held for sale 1,769 8,739 8,434 8,156 8,037

Loans 290,588 287,586 279,310 269,731 264,216 Allowance for loan losses (3,783) (3,762) (3,782) (3,940) (3,891) --------- --------- --------- --------- --------- Net loans 286,805 283,824 275,528 265,791 260,325 --------- --------- --------- --------- ---------

Mortgage servicing rights, net 8,972 7,901 7,768 8,512 6,097 Premises and equipment, net 3,898 3,850 3,722 3,627 3,545 Goodwill 10,645 10,681 10,431 10,430 10,403 Other assets 26,407 22,491 23,377 22,685 22,013 --------- --------- --------- --------- ---------

Total assets $435,643 $427,849 $421,549 $420,305 $397,354 ========= ========= ========= ========= =========

LIABILITIES Noninterest-bearing deposits $82,872 $81,082 $79,090 $78,926 $78,253 Interest-bearing deposits 190,291 193,776 189,697 189,199 170,116 --------- --------- --------- --------- --------- Total deposits 273,163 274,858 268,787 268,125 248,369 Short-term borrowings 24,451 21,962 24,278 29,831 20,397 Accrued expenses and other liabilities 22,649 19,583 20,484 21,266 19,756 Long-term debt 76,903 73,580 71,320 65,605 73,390 --------- --------- --------- --------- ---------

Total liabilities 397,166 389,983 384,869 384,827 361,912 --------- --------- --------- --------- ---------

STOCKHOLDERS' EQUITY Preferred stock 535 270 325 387 452 Common stock 2,894 2,894 2,894 2,894 2,894 Additional paid-in capital 9,843 9,806 9,767 9,744 9,711 Retained earnings 27,512 26,482 25,564 24,669 23,796 Cumulative other comprehensive income 693 950 914 735 1,057 Treasury stock (2,428) (2,247) (2,436) (2,537) (1,984) Unearned ESOP shares (572) (289) (348) (414) (484) --------- --------- --------- --------- ---------

Total stockholders' equity 38,477 37,866 36,680 35,478 35,442 --------- --------- --------- --------- ---------

Total liabilities and stockholders' equity $435,643 $427,849 $421,549 $420,305 $397,354 ========= ========= ========= ========= ========= ----------------------------------------------------------------------

Wells Fargo & Company and Subsidiaries FIVE QUARTER AVERAGE BALANCES ---------------------------------------------------------------------- Quarter ended ------------------------------------------------- Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31, (in millions) 2005 2004 2004 2004 2004 ----------------------------------------------------------------------

EARNING ASSETS Federal funds sold, securities purchased under resale agreements and other short- term investments $5,334 $4,967 $4,864 $3,662 $3,509 Trading assets 5,525 5,040 4,869 5,296 5,946 Debt securities available for sale: Securities of U.S. Treasury and federal agencies 930 1,101 1,132 1,190 1,224 Securities of U.S. states and political subdivisions 3,572 3,624 3,586 3,456 3,338 Mortgage-backed securities: Federal agencies 20,079 21,916 22,965 20,076 20,635 Private collateralized mortgage obligations 3,993 3,787 3,836 4,077 2,713 --------- --------- --------- --------- --------- Total mortgage- backed securities 24,072 25,703 26,801 24,153 23,348 Other debt securities (1) 3,388 3,246 3,443 3,346 3,543 --------- --------- --------- --------- --------- Total debt securities available for sale (1) 31,962 33,674 34,962 32,145 31,453 Mortgages held for sale 31,636 32,373 34,844 36,782 25,023 Loans held for sale 9,062 8,536 8,276 8,074 7,911 Loans: Commercial and commercial real estate: Commercial 55,178 51,896 49,517 48,711 47,305 Other real estate mortgage 29,869 29,412 29,025 28,586 27,801 Real estate construction 9,178 9,246 8,949 8,428 8,264 Lease financing 5,126 5,109 5,084 5,027 5,053 --------- --------- --------- --------- --------- Total commercial and commercial real estate 99,351 95,663 92,575 90,752 88,423 Consumer: Real estate 1-4 family first mortgage 84,589 86,389 88,689 89,351 86,375 Real estate 1-4 family junior lien mortgage 53,059 50,909 46,367 41,964 38,328 Credit card 10,157 9,706 8,948 8,508 8,338 Other revolving credit and installment 35,887 34,475 34,168 32,975 32,477 --------- --------- --------- --------- --------- Total consumer 183,692 181,479 178,172 172,798 165,518 Foreign 4,239 4,025 3,508 2,681 2,507 --------- --------- --------- --------- --------- Total loans (2) 287,282 281,167 274,255 266,231 256,448 Other 1,726 1,698 1,683 1,702 1,754 --------- --------- --------- --------- --------- Total earning assets $372,527 $367,455 $363,753 $353,892 $332,044 ========= ========= ========= ========= =========

FUNDING SOURCES Deposits: Interest-bearing checking $3,365 $3,244 $3,017 $3,011 $2,962 Market rate and other savings 127,346 125,350 124,090 121,647 117,373 Savings certificates 19,487 18,697 18,490 18,724 19,495 Other time deposits 28,814 30,460 36,089 29,654 22,719 Deposits in foreign offices 10,095 10,026 8,856 9,306 7,171 --------- --------- --------- --------- --------- Total interest- bearing deposits 189,107 187,777 190,542 182,342 169,720 Short-term borrowings 25,434 26,315 29,840 22,689 25,630 Long-term debt 75,680 70,646 65,443 71,085 64,416 --------- --------- --------- --------- --------- Total interest- bearing liabilities 290,221 284,738 285,825 276,116 259,766 Portion of noninterest-bearing funding sources 82,306 82,717 77,928 77,776 72,278 --------- --------- --------- --------- --------- Total funding sources $372,527 $367,455 $363,753 $353,892 $332,044 ========= ========= ========= ========= =========

NONINTEREST-EARNING ASSETS Cash and due from banks $13,090 $13,366 $12,704 $12,997 $13,152 Goodwill 10,657 10,436 10,431 10,413 10,394 Other 34,716 34,002 32,748 33,242 31,024 --------- --------- --------- --------- --------- Total noninterest- earning assets $58,463 $57,804 $55,883 $56,652 $54,570 ========= ========= ========= ========= =========

NONINTEREST-BEARING FUNDING SOURCES Deposits $81,649 $82,958 $79,430 $81,538 $73,316 Other liabilities 20,739 20,336 18,435 17,700 18,572 Stockholders' equity 38,381 37,227 35,946 35,190 34,960 Noninterest-bearing funding sources used to fund earning assets (82,306) (82,717) (77,928) (77,776) (72,278) --------- --------- --------- --------- --------- Net noninterest- bearing funding sources $58,463 $57,804 $55,883 $56,652 $54,570 ========= ========= ========= ========= =========

TOTAL ASSETS $430,990 $425,259 $419,636 $410,544 $386,614 ========= ========= ========= ========= ========= ----------------------------------------------------------------------

(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 ---------------------------------------------------------------------- Quarter ended Mar. 31, ----------------- (in millions) 2005 2004 ----------------------------------------------------------------------

Balance, beginning of period $37,866 $34,469 Net income 1,856 1,767 Other comprehensive income (loss), net of tax: Change in foreign currency translation adjustments (1) (2) Change in valuation allowance related to: Investment securities and other retained interests (292) 106 Derivative instruments and hedging activities 36 15 Common stock issued 353 404 Common stock repurchased (623) (633) Preferred stock released to ESOP 97 83 Common stock dividends (815) (765) Other, net -- (2) -------- -------- Balance, end of period $38,477 $35,442 ======== ======== ----------------------------------------------------------------------

Wells Fargo & Company and Subsidiaries FIVE QUARTER LOANS ---------------------------------------------------------------------- Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31, (in millions) 2005 2004 2004 2004 2004 ----------------------------------------------------------------------

Commercial and commercial real estate: Commercial $56,245 $54,517 $50,750 $49,962 $48,034 Other real estate mortgage 29,941 29,804 29,406 28,975 28,323 Real estate construction 9,392 9,025 9,211 8,646 8,259 Lease financing 5,121 5,169 5,075 5,045 5,018 --------- --------- --------- --------- --------- Total commercial and commercial real estate 100,699 98,515 94,442 92,628 89,634 Consumer: Real estate 1-4 family first mortgage 77,281 87,686 87,587 87,776 90,563 Real estate 1-4 family junior lien mortgage 53,867 52,190 49,557 44,289 40,281 Credit card 10,128 10,260 9,439 8,692 8,357 Other revolving credit and installment 44,250 34,725 34,435 33,458 32,755 --------- --------- --------- --------- --------- Total consumer 185,526 184,861 181,018 174,215 171,956 Foreign 4,363 4,210 3,850 2,888 2,626 --------- --------- --------- --------- ---------

Total loans (net of unearned income) $290,588 $287,586 $279,310 $269,731 $264,216 ========= ========= ========= ========= ========= ----------------------------------------------------------------------

FIVE QUARTER NONACCRUAL LOANS AND OTHER ASSETS ---------------------------------------------------------------------- Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31, (in millions) 2005 2004 2004 2004 2004 ----------------------------------------------------------------------

Nonaccrual loans: Commercial and commercial real estate: Commercial $357 $345 $382 $422 $514 Other real estate mortgage 191 229 258 324 263 Real estate construction 51 57 59 72 71 Lease financing 59 68 54 55 74 --------- --------- --------- --------- --------- Total commercial and commercial real estate 658 699 753 873 922 Consumer: Real estate 1-4 family first mortgage 327 386 360 317 281 Real estate 1-4 family junior lien mortgage 101 92 93 86 96 Other revolving credit and installment 87 160 155 97 85 --------- --------- --------- --------- --------- Total consumer 515 638 608 500 462 Foreign 23 21 16 6 3 --------- --------- --------- --------- --------- Total nonaccrual loans 1,196 1,358 1,377 1,379 1,387 As a percentage of total loans .41% .47% .49% .51% .52%

Foreclosed assets 207 212 190 235 222 Real estate investments 2 2 2 2 2 --------- --------- --------- --------- ---------

Total nonaccrual loans and other assets $1,405 $1,572 $1,569 $1,616 $1,611 ========= ========= ========= ========= =========

As a percentage of total loans .48% .55% .56% .60% .61% ========= ========= ========= ========= ========= ----------------------------------------------------------------------

Wells Fargo & Company and Subsidiaries FIVE QUARTER CHANGES IN THE ALLOWANCE FOR CREDIT LOSSES ---------------------------------------------------------------------- Quarter ended --------------------------------------- Mar. Dec. Sept. June Mar. 31, 31, 30, 30, 31, (in millions) 2005 2004 2004 2004 2004 ----------------------------------------------------------------------

Balance, beginning of quarter $3,950 $3,945 $3,940 $3,891 $3,891

Provision for credit losses 585 465 408 440 404

Loan charge-offs: Commercial and commercial real estate: Commercial (84) (103) (98) (112) (111) Other real estate mortgage (3) (7) (4) (7) (7) Real estate construction (5) (1) (1) -- (3) Lease financing (10) (14) (24) (12) (12) ------- ------- ------- ------- ------- Total commercial and commercial real estate (102) (125) (127) (131) (133) Consumer: Real estate 1-4 family first mortgage (36) (15) (14) (11) (13) Real estate 1-4 family junior lien mortgage (33) (31) (20) (27) (29) Credit card (127) (126) (109) (119) (109) Other revolving credit and installment (350) (250) (233) (212) (224) ------- ------- ------- ------- ------- Total consumer (546) (422) (376) (369) (375) Foreign (81) (48) (37) (30) (28) ------- ------- ------- ------- ------- Total loan charge-offs (729) (595) (540) (530) (536) ------- ------- ------- ------- -------

Loan recoveries: Commercial and commercial real estate: Commercial 30 33 31 44 42 Other real estate mortgage 8 3 8 4 2 Real estate construction -- 1 3 1 1 Lease financing 5 7 7 6 6 ------- ------- ------- ------- ------- Total commercial and commercial real estate 43 44 49 55 51 Consumer: Real estate 1-4 family first mortgage 3 2 1 2 1 Real estate 1-4 family junior lien mortgage 6 7 6 7 4 Credit card 21 17 15 15 15 Other revolving credit and installment 63 53 56 55 56 ------- ------- ------- ------- ------- Total consumer 93 79 78 79 76 Foreign 8 7 6 6 5 ------- ------- ------- ------- ------- Total loan recoveries 144 130 133 140 132 ------- ------- ------- ------- ------- Net loan charge-offs (585) (465) (407) (390) (404) ------- ------- ------- ------- ------- Other -- 5 4 (1) -- ------- ------- ------- ------- -------

Balance, end of quarter $3,950 $3,950 $3,945 $3,940 $3,891 ======= ======= ======= ======= =======

Components: Allowance for loan losses $3,783 $3,762 $3,782 $3,940 $3,891 Reserve for unfunded credit commitments (1) 167 188 163 -- -- ------- ------- ------- ------- ------- Allowance for credit losses $3,950 $3,950 $3,945 $3,940 $3,891 ======= ======= ======= ======= =======

Net loan charge-offs (annualized) as a percentage of average total loans .83% .66% .59% .59% .63%

Allowance for loan losses: As a percentage of total loans 1.30% 1.31% 1.35% 1.46% 1.47% As a percentage of nonaccrual loans 316 277 275 286 281 As a percentage of nonaccrual loans and other assets 269 239 241 244 242

Allowance for credit losses: As a percentage of total loans 1.36% 1.37% 1.41% 1.46% 1.47% As a percentage of nonaccrual loans 330 291 286 286 281 As a percentage of nonaccrual loans and other assets 281 251 251 244 242 ----------------------------------------------------------------------

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

Wells Fargo & Company and Subsidiaries NONINTEREST INCOME ---------------------------------------------------------------------- Quarter ended Mar. 31, ----------------------- % (in millions) 2005 2004 Change ----------------------------------------------------------------------

Service charges on deposit accounts $578 $594 (3)%

Trust and investment fees: Trust, investment and IRA fees 445 375 19 Commissions and all other fees 157 160 (2) ----------- ----------- Total trust and investment fees 602 535 13

Card fees 326 282 16

Other fees: Cash network fees 43 43 -- Charges and fees on loans 245 211 16 All other 165 157 5 ----------- ----------- Total other fees 453 411 10

Mortgage banking: Servicing fees, net of amortization and provision for impairment 456 166 175 Net gains on mortgage loan origination/sales activities 293 98 199 All other 65 51 27 ----------- ----------- Total mortgage banking 814 315 158

Operating leases 208 209 -- Insurance 337 317 6 Trading assets 143 143 -- Net gains (losses) on debt securities available for sale (4) 33 -- Net gains from equity investments 71 95 (25) Net gains (losses) on sales of loans (39) 4 -- Net gains on dispositions of operations 1 1 -- All other 146 158 (8) ----------- -----------

Total $3,636 $3,097 17 =========== =========== ----------------------------------------------------------------------

NONINTEREST EXPENSE ---------------------------------------------------------------------- Quarter ended Mar. 31, ----------------------- % (in millions) 2005 2004 Change ----------------------------------------------------------------------

Salaries $1,480 $1,277 16% Incentive compensation 465 391 19 Employee benefits 547 492 11 Equipment 370 301 23 Net occupancy 404 294 37 Operating leases 158 155 2 Outside professional services 163 119 37 Contract services 139 143 (3) Advertising and promotion 89 84 6 Travel and entertainment 110 97 13 Outside data processing 106 99 7 Telecommunications 72 81 (11) Postage 72 75 (4) Charitable donations 22 7 214 Insurance 79 71 11 Stationery and supplies 45 60 (25) Operating losses 78 17 359 Net gains from debt extinguishment (1) -- -- Security 41 40 3 Core deposit intangibles 32 34 (6) All other 221 192 15 ----------- -----------

Total $4,692 $4,029 16 =========== =========== ----------------------------------------------------------------------

Wells Fargo & Company and Subsidiaries FIVE QUARTER NONINTEREST INCOME ---------------------------------------------------------------------- Quarter ended --------------------------------------- Mar. Dec. Sept. June Mar. 31, 31, 30, 30, 31, (in millions) 2005 2004 2004 2004 2004 ----------------------------------------------------------------------

Service charges on deposit accounts $578 $594 $618 $611 $594

Trust and investment fees: Trust, investment and IRA fees 445 385 366 383 375 Commissions and all other fees 157 158 142 147 160 ------- ------- ------- ------- ------- Total trust and investment fees 602 543 508 530 535

Card fees 326 321 319 308 282

Other fees: Cash network fees 43 44 47 46 43 Charges and fees on loans 245 252 234 224 211 All other 165 183 171 167 157 ------- ------- ------- ------- ------- Total other fees 453 479 452 437 411

Mortgage banking: Servicing fees, net of amortization and provision for impairment 456 434 (24) 461 166 Net gains (losses) on mortgage loan origination/sales activities 293 281 212 (52) 98 All other 65 75 74 84 51 ------- ------- ------- ------- ------- Total mortgage banking 814 790 262 493 315

Operating leases 208 211 207 209 209 Insurance 337 265 264 347 317 Trading assets 143 185 94 101 143 Net gains (losses) on debt securities available for sale (4) 3 10 (61) 33 Net gains from equity investments 71 170 48 81 95 Net gains (losses) on sales of loans (39) 4 3 -- 4 Net gains (losses) on dispositions of operations 1 (17) -- 1 1 All other 146 164 115 143 158 ------- ------- ------- ------- -------

Total $3,636 $3,712 $2,900 $3,200 $3,097 ======= ======= ======= ======= ======= ----------------------------------------------------------------------

FIVE QUARTER NONINTEREST EXPENSE ---------------------------------------------------------------------- Quarter ended --------------------------------------- Mar. Dec. Sept. June Mar. 31, 31, 30, 30, 31, (in millions) 2005 2004 2004 2004 2004 ----------------------------------------------------------------------

Salaries $1,480 $1,438 $1,383 $1,295 $1,277 Incentive compensation 465 526 449 441 391 Employee benefits 547 451 390 391 492 Equipment 370 410 254 271 301 Net occupancy 404 301 309 304 294 Operating leases 158 164 158 156 155 Outside professional services 163 229 165 156 119 Contract services 139 172 154 157 143 Advertising and promotion 89 144 113 118 84 Travel and entertainment 110 130 110 105 97 Outside data processing 106 104 109 106 99 Telecommunications 72 80 73 62 81 Postage 72 68 63 63 75 Charitable donations 22 224 7 10 7 Insurance 79 33 47 96 71 Stationery and supplies 45 63 57 60 60 Operating losses 78 48 45 82 17 Net losses (gains) from debt extinguishment (1) (2) -- 176 -- Security 41 41 40 40 40 Core deposit intangibles 32 33 33 34 34 All other 221 314 261 230 192 ------- ------- ------- ------- -------

Total $4,692 $4,971 $4,220 $4,353 $4,029 ======= ======= ======= ======= ======= ----------------------------------------------------------------------

Wells Fargo & Company and Subsidiaries AVERAGE BALANCES, YIELDS AND RATES PAID (TAXABLE-EQUIVALENT BASIS) (1)(2) ---------------------------------------------------------------------- Quarter ended Mar. 31, --------------------------------------------------- 2005 2004 ------------------------- ------------------------- 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 $5,334 2.40% $32 $3,509 1.15% $10 Trading assets 5,525 3.22 44 5,946 2.29 34 Debt securities available for sale (3): Securities of U.S. Treasury and federal agencies 930 3.93 9 1,224 4.16 12 Securities of U.S. states and political subdivisions 3,572 8.41 71 3,338 7.92 62 Mortgage-backed securities: Federal agencies 20,079 6.01 291 20,635 6.01 298 Private collateralized mortgage obligations 3,993 5.44 53 2,713 5.29 35 --------- -------- --------- -------- Total mortgage- backed securities 24,072 5.91 344 23,348 5.93 333 Other debt securities (4) 3,388 7.20 57 3,543 7.60 60 --------- -------- --------- -------- Total debt securities available for sale (4) 31,962 6.26 481 31,453 6.24 467 Mortgages held for sale (3) 31,636 5.44 430 25,023 5.34 334 Loans held for sale (3) 9,062 5.02 112 7,911 3.19 63 Loans: Commercial and commercial real estate: Commercial 55,178 6.20 844 47,305 5.87 690 Other real estate mortgage 29,869 5.88 433 27,801 5.19 359 Real estate construction 9,178 6.08 138 8,264 4.94 101 Lease financing 5,126 6.14 79 5,053 6.51 82 --------- -------- --------- -------- Total commercial and commercial real estate 99,351 6.09 1,494 88,423 5.60 1,232 Consumer: Real estate 1-4 family first mortgage 84,589 6.00 1,261 86,375 5.34 1,151 Real estate 1-4 family junior lien mortgage 53,059 6.01 787 38,328 5.10 486 Credit card 10,157 11.92 303 8,338 11.92 249 Other revolving credit and installment 35,887 8.95 793 32,477 9.03 730 --------- -------- --------- -------- Total consumer 183,692 6.91 3,144 165,518 6.34 2,616 Foreign 4,239 13.82 146 2,507 17.71 111 --------- -------- --------- -------- Total loans (5) 287,282 6.73 4,784 256,448 6.20 3,959 Other 1,726 4.32 19 1,754 3.55 15 --------- -------- --------- -------- Total earning assets $372,527 6.42 5,902 $332,044 5.92 4,882 ========= -------- ========= --------

FUNDING SOURCES Deposits: Interest-bearing checking $3,365 1.05 9 $2,962 .32 2 Market rate and other savings 127,346 1.04 325 117,373 .61 179 Savings certificates 19,487 2.48 119 19,495 2.25 109 Other time deposits 28,814 2.53 180 22,719 1.08 61 Deposits in foreign offices 10,095 2.38 59 7,171 1.04 19 --------- -------- --------- -------- Total interest- bearing deposits 189,107 1.48 692 169,720 .88 370 Short-term borrowings 25,434 2.38 149 25,630 .99 63 Long-term debt 75,680 3.08 579 64,416 2.33 375 --------- -------- --------- -------- Total interest- bearing liabilities 290,221 1.98 1,420 259,766 1.25 808 Portion of noninterest- bearing funding sources 82,306 -- -- 72,278 -- -- --------- -------- --------- -------- Total funding sources $372,527 1.55 1,420 $332,044 .98 808 ========= -------- ========= -------- Net interest margin and net interest income on a taxable-equivalent basis (6) 4.87% $4,482 4.94% $4,074 ======= ======== ======= ========

NONINTEREST-EARNING ASSETS Cash and due from banks $13,090 $13,152 Goodwill 10,657 10,394 Other 34,716 31,024 --------- --------- Total noninterest- earning assets $58,463 $54,570 ========= =========

NONINTEREST-BEARING FUNDING SOURCES Deposits $81,649 $73,316 Other liabilities 20,739 18,572 Stockholders' equity 38,381 34,960 Noninterest-bearing funding sources used to fund earning assets (82,306) (72,278) --------- --------- Net noninterest- bearing funding sources $58,463 $54,570 ========= =========

TOTAL ASSETS $430,990 $386,614 ========= ========= ----------------------------------------------------------------------

(1) Our average prime rate was 5.44% and 4.00% for the quarters ended March 31, 2005 and 2004, respectively. The average three-month London Interbank Offered Rate (LIBOR) was 2.84% and 1.12% 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 FIVE QUARTER OPERATING SEGMENT RESULTS (1) ---------------------------------------------------------------------- Quarter ended --------------------------------------- Mar. Dec. Sept. June Mar. (income/expense in millions, 31, 31, 30, 30, 31, average balances in billions) 2005 2004 2004 2004 2004 ----------------------------------------------------------------------

COMMUNITY BANKING Net interest income $3,119 $3,145 $3,172 $2,987 $2,844 Provision for credit losses 203 232 199 213 214 Noninterest income 2,699 2,807 2,084 2,396 2,167 Noninterest expense 3,507 3,814 3,144 3,127 2,994 ------- ------- ------- ------- ------- Income before income tax expense 2,108 1,906 1,913 2,043 1,803 Income tax expense 704 653 665 705 620 ------- ------- ------- ------- ------- Net income $1,404 $1,253 $1,248 $1,338 $1,183 ======= ======= ======= ======= =======

Average loans $192.6 $191.7 $189.9 $185.9 $180.3 Average assets 302.9 302.8 303.9 299.1 277.7 Average core deposits 206.2 204.0 199.6 198.9 188.3

WHOLESALE BANKING Net interest income $565 $557 $531 $559 $562 Provision for credit losses 4 11 10 18 23 Noninterest income 845 799 723 720 828 Noninterest expense 745 718 678 663 669 ------- ------- ------- ------- ------- Income before income tax expense 661 627 566 598 698 Income tax expense 236 224 203 213 250 ------- ------- ------- ------- ------- Net income $425 $403 $363 $385 $448 ======= ======= ======= ======= =======

Average loans $59.5 $56.4 $53.7 $52.1 $50.3 Average assets 85.1 81.6 77.4 75.8 75.7 Average core deposits 25.6 26.1 25.3 25.9 24.7

WELLS FARGO FINANCIAL Net interest income $769 $754 $715 $680 $644 Provision for credit losses 378 222 199 209 167 Noninterest income 92 106 93 84 102 Noninterest expense 440 439 398 387 366 ------- ------- ------- ------- ------- Income before income tax expense 43 199 211 168 213 Income tax expense 16 70 74 63 77 ------- ------- ------- ------- ------- Net income $27 $129 $137 $105 $136 ======= ======= ======= ======= =======

Average loans $35.2 $33.1 $30.7 $28.2 $25.8 Average assets 37.2 35.1 32.5 29.8 27.4 Average core deposits -- .1 .1 .1 .1

OTHER (2) Net interest income $-- $-- -- $-- $-- Provision for credit losses -- -- -- -- -- Noninterest income -- -- -- -- -- Noninterest expense -- -- -- 176 -- ------- ------- ------- ------- ------- Income (loss) before income tax expense (benefit) -- -- -- (176) -- Income tax expense (benefit) -- -- -- (62) -- ------- ------- ------- ------- ------- Net income (loss) $-- $-- $-- $(114) $-- ======= ======= ======= ======= =======

Average loans $-- $-- $-- $-- $-- Average assets 5.8 5.8 5.8 5.8 5.8 Average core deposits -- -- -- -- --

CONSOLIDATED COMPANY Net interest income $4,453 $4,456 $4,418 $4,226 $4,050 Provision for credit losses 585 465 408 440 404 Noninterest income 3,636 3,712 2,900 3,200 3,097 Noninterest expense 4,692 4,971 4,220 4,353 4,029 ------- ------- ------- ------- ------- Income before income tax expense 2,812 2,732 2,690 2,633 2,714 Income tax expense 956 947 942 919 947 ------- ------- ------- ------- ------- Net income $1,856 $1,785 $1,748 $1,714 $1,767 ======= ======= ======= ======= =======

Average loans $287.3 $281.2 $274.3 $266.2 $256.4 Average assets 431.0 425.3 419.6 410.5 386.6 Average core deposits 231.8 230.2 225.0 224.9 213.1 ----------------------------------------------------------------------

(1) The management accounting process measures the performance of the operating segments based on our management structure and is not necessarily comparable with other similar information for other financial services companies. We define our operating segments by product type and customer segment. If the management structure and/or the allocation process changes, allocations, transfers and assignments may change. Due to a change in first quarter 2005, results for prior periods have been restated.

(2) The noninterest expense item for second quarter 2004 is a $176 million loss on debt extinguishment recorded at the enterprise level. Average assets consist of unallocated goodwill held at the enterprise level.

Wells Fargo & Company and Subsidiaries FIVE QUARTER CONSOLIDATED MORTGAGE SERVICING (1) ---------------------------------------------------------------------- Quarter ended --------------------------------------------- Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31, (in millions) 2005 2004 2004 2004 2004 ----------------------------------------------------------------------

Mortgage servicing rights: Balance, beginning of quarter $9,466 $9,567 $10,100 $8,270 $8,848 Originations 385 369 465 597 338 Purchases 535 358 261 466 268 Amortization (470) (473) (411) (431) (511) Write-down -- -- -- -- (169) Other (includes changes in mortgage servicing rights due to hedging) 350 (355) (848) 1,198 (504) -------- -------- --------- -------- -------- Balance, end of quarter $10,266 $9,466 $9,567 $10,100 $8,270 ======== ======== ========= ======== ========

Valuation allowance: Balance, beginning of quarter $1,565 $1,799 $1,588 $2,173 $1,942 Provision (reversal of provision) for mortgage servicing rights in excess of fair value (271) (234) 211 (585) 400 Write-down of mortgage servicing rights -- -- -- -- (169) -------- -------- --------- -------- -------- Balance, end of quarter $1,294 $1,565 $1,799 $1,588 $2,173 ======== ======== ========= ======== ========

Mortgage servicing rights, net $8,972 $7,901 $7,768 $8,512 $6,097 ======== ======== ========= ======== ========

Ratio of mortgage servicing rights to related loans serviced for others 1.24% 1.15% 1.18% 1.37% 1.00% ----------------------------------------------------------------------

---------------------------------------------------------------------- Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31, (in billions) 2005 2004 2004 2004 2004 ----------------------------------------------------------------------

Managed servicing portfolio: Loans serviced for others $724 $688 $659 $622 $609 Owned loans serviced (portfolio and held for sale) 116 117 118 127 116 -------- -------- --------- -------- -------- Total owned servicing 840 805 777 749 725 Sub-servicing 33 27 32 32 28 -------- -------- --------- -------- -------- Total managed servicing portfolio $873 $832 $809 $781 $753 ======== ======== ========= ======== ========

Weighted-average note rate (owned servicing only) 5.75% 5.75% 5.75% 5.75% 5.84% ----------------------------------------------------------------------

(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 ----------------------------- Mar. Dec. Sept. June Mar. 31, 31, 30, 30, 31, (in billions) 2005 2004 2004 2004 2004 ---------------------------------------------------------------------- Application Data: Wells Fargo Home Mortgage first mortgage quarterly applications $91 $80 $83 $100 $119 Refinances as a percentage of applications 41% 44% 36% 33% 56% Wells Fargo Home Mortgage first mortgage unclosed pipeline, at quarter end $59 $50 $55 $57 $72 ----------------------------------------------------------------------

---------------------------------------------------------------------- Quarter ended ----------------------------- Mar. Dec. Sept. June Mar. 31, 31, 30, 30, 31, (in billions) 2005 2004 2004 2004 2004 ----------------------------------------------------------------------

Residential Real Estate Originations: (1) Quarter: Wells Fargo Home Mortgage first mortgage loans: Retail $27 $30 $29 $45 $30 Correspondent/Wholesale 27 28 27 39 25 Home equity loans and lines 8 9 10 10 8 Wells Fargo Financial 3 2 2 2 2 ----- ----- ----- ----- ----- Total $65 $69 $68 $96 $65 ===== ===== ===== ===== =====

Year-to-date $65 $298 $229 $161 $65 ===== ===== ===== ===== ===== ----------------------------------------------------------------------

(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

Copyright Business Wire 2005