Double-Digit Revenue, Loan Growth; Strong Deposit, Fee Income Growth

Wells Fargo & Company (NYSE:WFC):

-- Diluted earnings per share of $0.60
-- Net income of $2.0 billion
-- Record revenue of $10.6 billion, up 12 percent from prior year, up
14 percent (annualized) from prior quarter
-- Provision for credit losses increased $500 million above net
charge-offs
-- Positive operating leverage (revenue up 12 percent from prior year,
expenses down 1 percent)
-- Average loans up 19 percent from prior year, up 10 percent
(annualized) from prior quarter
-- Average earning assets up 21 percent from prior year, up 16 percent
(annualized) from prior quarter
-- Average core deposits up 9 percent from prior year, up 3 percent
(annualized) from prior quarter
-- Net interest margin of 4.69 percent, up 7 basis points from prior
quarter

Wells Fargo & Company (NYSE:WFC) reported diluted earnings per common share of $0.60 for first quarter 2008 compared with $0.66 in first quarter 2007 and $0.41 in fourth quarter 2007. Net income was $2.00 billion compared with $2.24 billion in first quarter 2007 and $1.36 billion in fourth quarter 2007.

“Despite a weakening economy, the continued downturn in housing and expected higher charge-offs, this was a remarkably strong quarter of growth for our company – very impressive growth in loans at wider spreads, a 9 percent increase in core deposits, double-digit revenue growth once again exceeding expense growth, and increases in both our capital and liquidity levels,” said President and CEO John Stumpf. “Our talented team set new records in products per customer for both retail and wholesale because our time-tested business model is built on satisfying all our customers’ financial needs and helping them succeed financially. We may not have seen the last of the challenges for this cycle, but we’re very excited about our opportunities to continue to gain market share prudently in our core businesses at a time when many of our competitors are struggling. With our more than 80 businesses pulling the stagecoach, we believe we’re among the best positioned in our industry to prosper and grow through adversity and to build an even stronger franchise for our team members, customers and shareholders.”

Financial Performance

“Our first quarter results reflected a great combination of solid business growth, strong operating margins and further balance sheet strengthening,” said Chief Financial Officer Howard Atkins. “Despite a $2.0 billion pre-tax provision for credit losses – including an additional $500 million credit reserve build in the quarter – the Company earned $2.0 billion after-tax, or $0.60 per share. Our ability to earn through these higher net credit losses reflected the benefit of our diversified business model, as well as the attractive growth opportunities we are realizing in this challenging environment. Our pre-tax pre-provision profit (revenue less noninterest expense) of $5.1 billion – a quarterly record – grew 30 percent from a year ago, driven by double-digit revenue growth (up 12 percent year over year) and positive operating leverage. Even with higher credit costs, return on assets (1.40 percent) and return on equity (16.86 percent) remained strong. Our net interest margin improved 7 basis points to 4.69 percent, one of the highest among large U.S. bank holding companies. Credit reserves were bolstered this quarter with an additional $500 million reserve build, capital ratios increased from year-end 2007 notwithstanding a 16 percent (annualized) linked-quarter increase in earning assets and liquidity remained strong due largely to continued core deposit growth.”

Revenue

Revenue of $10.6 billion was another record, up $1.1 billion, or 12 percent, from a year ago. On a linked-quarter basis, revenue grew 14 percent (annualized). “Once again, many of our businesses achieved double-digit, year-over-year revenue growth, including commercial banking, asset-based lending, insurance, international, wealth management, regional banking, debit and credit cards, mortgage banking, business direct, SBA lending and business payroll services,” said Atkins. “We continued to have a good balance between loan and deposit spread revenue and fee-based revenue, reflecting record cross-sell in both our retail and wholesale businesses.”

Wells Fargo & Company is a diversified financial services company with $595 billion in assets, providing banking, insurance, investments, mortgage and consumer finance through almost 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 U.S., and one of only two banks worldwide, to have the highest possible credit rating from both Moody’s Investors Service, “Aaa,” and Standard & Poor’s Ratings Services, “AAA.”

For more information, visit http://www.wellsfargo.com/ir