Operating Segments

6 Months Ended

Jun. 30, 2011

Operating Segments [Abstract]

Operating Segments

Note 17: Operating Segments

We have three operating segments for management reporting: Community Banking; Wholesale Banking; and Wealth, Brokerage and Retirement. The results for these operating segments are based on our management accounting process, for which there is no comprehensive, authoritative guidance equivalent to GAAP for financial accounting. The management accounting process measures the performance of the operating segments based on our management structure and is not necessarily comparable with 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. In first quarter 2010, we conformed certain funding and allocation methodologies of legacy Wachovia to those of Wells Fargo; in addition, integration expense related to mergers other than the Wachovia merger is now included in segment results. In fourth quarter 2010, we aligned certain lending businesses into Wholesale Banking from Community Banking to reflect our previously announced restructuring of Wells Fargo Financial. In first quarter 2011, we realigned a private equity business into Wholesale Banking from Community Banking. The prior periods have been revised to reflect these changes.

Community Banking offers a complete line of diversified financial products and services to consumers and small businesses with annual sales generally up to $20 million in which the owner generally is the financial decision maker. Community Banking also offers investment management and other services to retail customers and securities brokerage through affiliates. These products and services include the Wells Fargo Advantage Funds^SM, a family of mutual funds. Loan products include lines of credit, auto floor plan lines, equity lines and loans, equipment and transportation loans, education loans, origination and purchase of residential mortgage loans and servicing of mortgage loans and credit cards. Other credit products and financial services available to small businesses and their owners include equipment leases, real estate and other commercial financing, Small Business Administration financing, venture capital financing, cash management, payroll services, retirement plans, Health Savings Accounts, credit cards, and merchant payment processing. Community Banking also purchases sales finance contracts from retail merchants throughout the United States and directly from auto dealers in Puerto Rico. Consumer and business deposit products include checking accounts, savings deposits, market rate accounts, Individual Retirement Accounts, time deposits and debit cards.

     Community Banking serves customers through a complete range of channels, including traditional banking stores, in-store banking centers, business centers, ATMs, Online and Mobile Banking, and Wells Fargo Customer Connection, a 24-hours a day, seven days a week telephone service.

Wholesale Banking provides financial solutions to businesses across the United States with annual sales generally in excess of $20 million and to financial institutions globally. Wholesale Banking provides a complete line of commercial, corporate, capital markets, cash management and real estate banking products and services. These include traditional commercial loans and lines of credit, letters of credit, asset-based lending, equipment leasing, international trade facilities, trade financing, collection services, foreign exchange services, treasury management, investment management, institutional fixed-income sales, interest rate, commodity and equity risk management, online/electronic products such as the Commercial Electronic Office^® (CEO^®) portal, insurance, corporate trust fiduciary and agency services, and investment banking services. Wholesale Banking manages customer investments through institutional separate accounts and mutual funds, including the Wells Fargo Advantage Funds and Wells Capital Management. Wholesale Banking also supports the CRE market with products and services such as construction loans for commercial and residential development, land acquisition and development loans, secured and unsecured lines of credit, interim financing arrangements for completed structures, rehabilitation loans, affordable housing loans and letters of credit, permanent loans for securitization, CRE loan servicing and real estate and mortgage brokerage services.

Wealth, Brokerage and Retirement provides a full range of financial advisory services to clients using a planning approach to meet each client’s needs. Wealth Management provides affluent and high net worth clients with a complete range of wealth management solutions, including financial planning, private banking, credit, investment management and trust. Family Wealth meets the unique needs of ultra high net worth customers. Brokerage serves customers’ advisory, brokerage and financial needs as part of one of the largest full-service brokerage firms in the United States. Retirement is a national leader in providing institutional retirement and trust services (including 401(k) and pension plan record keeping) for businesses, retail retirement solutions for individuals, and reinsurance services for the life insurance industry.

Other includes corporate items (such as integration expenses related to the Wachovia merger) not specific to a business segment and elimination of certain items that are included in more than one business segment.

												Wealth,
												Brokerage
(income/expense in millions,			Community Banking					Wholesale Banking				and Retirement					Other (1)					Consolidated Company
average balances in billions)	2011		2010		2011			2010		2011		2010		2011			2010			2011		2010
Quarter ended June 30,
Net interest income (2)	$	7,359		8,063		2,968			3,028		691		684		(340	)		(326	)		10,678		11,449
Provision for credit losses		1,927		3,348		(97	)		635		61		81		(53	)		(75	)		1,838		3,989
Noninterest income		5,208		5,543		2,663			2,746		2,395		2,183		(558	)		(527	)		9,708		9,945
Noninterest expense		7,418		7,678		2,766			2,873		2,487		2,350		(196	)		(155	)		12,475		12,746
Income (loss) before income
tax expense (benefit)		3,222		2,580		2,962			2,266		538		436		(649	)		(623	)		6,073		4,659
Income tax expense (benefit)		1,031		783		1,012			803		204		165		(246	)		(237	)		2,001		1,514
Net income (loss) before
noncontrolling interests		2,191		1,797		1,950			1,463		334		271		(403	)		(386	)		4,072		3,145
Less: Net income from
noncontrolling interests		104		81		19			1		1		1		-			-			124		83
Net income (loss) (3)	$	2,087		1,716		1,931			1,462		333		270		(403	)		(386	)		3,948		3,062
Average loans	$	498.2		534.3		243.1			228.2		43.5		42.6		(33.5	)		(32.6	)		751.3		772.5
Average assets		752.5		771.3		415.7			369.5		147.7		141.0		(65.0	)		(57.6	)		1,250.9		1,224.2
Average core deposits		552.0		532.6		190.6			162.3		126.0		121.5		(61.1	)		(54.6	)		807.5		761.8
Six months ended June 30,
Net interest income (2)	$	14,902		16,316		5,723			5,582		1,387		1,348		(683	)		(650	)		21,329		22,596
Provision for credit losses		3,992		7,867		37			1,445		102		144		(83	)		(137	)		4,048		9,319
Noninterest income		10,302		11,254		5,368			5,615		4,849		4,429		(1,133	)		(1,052	)		19,386		20,246
Noninterest expense		15,023		14,883		5,566			5,558		5,046		4,740		(427	)		(318	)		25,208		24,863
Income (loss) before income
tax expense (benefit)		6,189		4,820		5,488			4,194		1,088		893		(1,306	)		(1,247	)		11,459		8,660
Income tax expense (benefit)		1,773		1,560		1,884			1,491		412		338		(496	)		(474	)		3,573		2,915
Net income (loss) before
noncontrolling interests		4,416		3,260		3,604			2,703		676		555		(810	)		(773	)		7,886		5,745
Less: Net income from
noncontrolling interests		154		129		21			4		4		3		-			-			179		136
Net income (loss) (3)	$	4,262		3,131		3,583			2,699		672		552		(810	)		(773	)		7,707		5,609
Average loans	$	504.0		542.3		238.9			232.6		43.1		43.2		(33.3	)		(33.2	)		752.7		784.9
Average assets		756.2		774.0		407.7			369.5		147.1		139.4		(64.9	)		(57.8	)		1,246.1		1,225.1
Average core deposits		550.1		532.0		187.7			162.0		125.7		121.3		(61.3	)		(54.8	)		802.2		760.5

(1)	Includes Wachovia integration expenses and the elimination of items that are included in both Community Banking and Wealth, Brokerage and Retirement, largely representing services and products for wealth management customers provided in Community Banking stores.
(2)	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.
(3)	Represents segment net income (loss) for Community Banking; Wholesale Banking; and Wealth, Brokerage and Retirement segments and Wells Fargo net income for the consolidated company.