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Wells Fargo Reports $2.5 Billion In Net Income

• Strong, broad-based earnings

- Net income of $2.5 billion after integration expenses of $247 million after-tax

- Earnings per common share of $0.45 after integration expenses of $0.05 per common share

- All business segments contributed to the strong earnings results: Net income from Community

Banking of $1.5 billion; Wholesale Banking of $1.2 billion; and Wealth, Brokerage and Retirement

of $282 million

- Pre-tax pre-provision profit1 (PTPP) of $9.3 billion; fifth consecutive quarter PTPP exceeded

$9 billion

• Revenue of $21.4 billion, up 2 percent from first quarter 2009

- Fee income up 7 percent year over year, led by 20 percent growth in trust and investment fees,

7 percent growth in insurance revenue and 14 percent growth in processing and other fees

- Net interest margin of 4.27 percent, up 11 basis points from a year ago, highest among large bank

peers

- Average checking and savings deposits up 14 percent from a year ago

- Mortgage application pipeline of $59 billion at March 31, 2010, up $2 billion from

December 31, 2009

• Credit believed to have "turned the corner"

- Provision expense down $583 million from prior quarter and currently expected to continue to

decline over the course of 2010; provision for credit losses equaled net charge-offs in first quarter

- Net charge-offs declined $83 million to $5.3 billion. First quarter charge-offs included

$123 million related to newly consolidated loans due to the adoption of FAS 1672 and $145 million

related to newly issued regulatory charge-off guidance applicable to collateral-dependent

residential real estate loan modifications. All other charge-offs were $5.1 billion, down from

$5.4 billion in fourth quarter. Commercial and commercial real estate charge-offs declined

$356 million from fourth quarter 2009

- Early-stage delinquencies improved across major consumer loan portfolios, including home

equity, auto dealer services, credit card and Wells Fargo Financial consumer real estate and auto

portfolios

- New inflows to nonaccruals declined in first quarter, including declines in non-FAS 167 consumer

real estate inflows, a decline in total commercial and commercial real estate inflows, with a

27 percent decline in commercial real estate inflows. Growth in nonaccrual balances largely

reflected the time required to work with homeowners to modify loans before foreclosing and

efforts to work with developers rather than foreclose

- Allowance for credit losses increased to $25.7 billion, primarily due to $693 million addition to

allowance upon adoption of FAS 167; allowance at 3.3 percent of loans and almost 5 times

quarterly net charge-offs

- Remaining purchased credit impaired (PCI) nonaccretable balance was $19.9 billion at

March 31, 2010; PCI portfolio in the aggregate continued to perform at or better than original

assumptions

- Provided $402 million to mortgage repurchase reserve (charged to mortgage origination income)

• Wachovia merger integration on track

- Converted banking stores in Arizona, Illinois and Nevada in March; credit card business

converted April 10-11; California banking store conversions scheduled for April 24-25, 2010

- Estimated total merger expenses of approximately $5 billion, including approximately $2 billion

in 2010

- Achieved over 70 percent of targeted consolidated run-rate savings

• Continued to build capital and strengthen the balance sheet

- Tier 1 capital of $98.3 billion and Tier 1 capital ratio of 10.0 percent, up from 9.3 percent at

December 31, 2009

- Tier 1 leverage ratio of 8.3 percent, up from 7.9 percent at December 31, 2009

- Tier 1 common equity of $70.1 billion, Tier 1 common equity ratio of 7.1 percent, up from

$65.5 billion and 6.5 percent at December 31, 2009 (see page 37 for more information on Tier 1

common equity)

- Reduced high-risk/non-strategic consumer loans by $4.3 billion in the quarter, $23.2 billion

cumulatively since Wachovia acquisition

- Unrealized gains on securities available for sale portfolio of $7.4 billion

• Supplied more than $128 billion in credit during the quarter, including mortgage originations and

consumer and commercial loans and lines of credit

- 3 -

• Loan modification efforts continued to help homeowners remain in their homes

- 523,336 active and completed trial modifications between January 2009 and March 31, 2010:

o 144,932 Home Affordability Modification Program (HAMP) active trial and completed

modifications, including 30,014 permanent HAMP modifications

o Nearly 380,000 proprietary trial and completed modifications

- Since January 2009, added more than 10,000 staff focused on home preservation for total of

17,400 as of March 31, 2010

- On March 17th, Wells Fargo announced its participation in the government's Second-Lien

Modification Program (2MP) under HAMP to help struggling homeowners with a reduction in

their home equity loan payments

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