Wells Fargo 2005 Annual Report Download - page 39

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On August 11, 2005, the FASB issued for public
comment an Exposure Draft that would amend FAS 140,
Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities. This Exposure Draft,
Accounting for Servicing of Financial Assets – An Amendment
of FASB Statement No. 140, would require that all separately
recognized servicing rights be initially measured at fair value,
if practicable. For each class of separately recognized servicing
assets and liabilities, this proposed standard would permit an
entity to choose from two subsequent measurement methods.
Specifically, an entity could amortize servicing assets and
liabilities in proportion to and over the period of estimated
net servicing income or servicing loss (effectively the existing
requirement in FAS 140) or an entity could report servicing
assets or liabilities at fair value at each reporting date with
any changes reported currently in operations. We expect this
guidance to be finalized and issued in early 2006. Based on
the guidance in the current Exposure Draft, it is likely that
we will adopt the fair value alternative upon issuance of
the standard. We will continue to monitor this emerging
guidance in order to finalize our decision and determine
the impact on our financial statements.
Table 2: Six-Year Summary of Selected Financial Data
(in millions, except % Change Five-year
per share amounts) 2005/ compound
2005 2004 2003 2002 2001 2000 2004 growth rate
INCOME STATEMENT
Net interest income $ 18,504 $ 17,150 $ 16,007 $ 14,482 $ 11,976 $ 10,339 8% 12%
Noninterest income 14,445 12,909 12,382 10,767 9,005 10,360 12 7
Revenue 32,949 30,059 28,389 25,249 20,981 20,699 10 10
Provision for credit losses 2,383 1,717 1,722 1,684 1,727 1,284 39 13
Noninterest expense 19,018 17,573 17,190 14,711 13,794 12,889 88
Before effect of change in
accounting principle (1)
Net income $ 7,671 $ 7,014 $ 6,202 $ 5,710 $ 3,411 $ 4,012 914
Earnings per common share 4.55 4.15 3.69 3.35 1.99 2.35 10 14
Diluted earnings
per common share 4.50 4.09 3.65 3.32 1.97 2.32 10 14
After effect of change in
accounting principle
Net income $ 7,671 $ 7,014 $ 6,202 $ 5,434 $ 3,411 $ 4,012 914
Earnings per common share 4.55 4.15 3.69 3.19 1.99 2.35 10 14
Diluted earnings
per common share 4.50 4.09 3.65 3.16 1.97 2.32 10 14
Dividends declared
per common share 2.00 1.86 1.50 1.10 1.00 .90 817
BALANCE SHEET
(at year end)
Securities available for sale $ 41,834 $ 33,717 $ 32,953 $ 27,947 $ 40,308 $ 38,655 24 2
Loans 310,837 287,586 253,073 192,478 167,096 155,451 815
Allowance for loan losses 3,871 3,762 3,891 3,819 3,717 3,681 31
Goodwill 10,787 10,681 10,371 9,753 9,527 9,303 13
Assets 481,741 427,849 387,798 349,197 307,506 272,382 13 12
Core deposits (2) 253,341 229,703 211,271 198,234 182,295 156,710 10 10
Long-term debt 79,668 73,580 63,642 47,320 36,095 32,046 820
Guaranteed preferred beneficial
interests in Company’s
subordinated debentures (3) —— — 2,885 2,435 935 ——
Stockholders’ equity 40,660 37,866 34,469 30,319 27,175 26,461 79
(1) Change in accounting principle is for a transitional goodwill impairment charge recorded in 2002 upon adoption of FAS 142, Goodwill and Other Intangible Assets.
(2) Core deposits consist of noninterest-bearing deposits, interest-bearing checking, savings certificates and market rate and other savings.
(3) At December 31, 2003, upon adoption of FIN 46 (revised December 2003), Consolidation of Variable Interest Entities (FIN 46R), these balances were reflected in long-term
debt. See Note 12 (Long-Term Debt) to Financial Statements for more information.