Wells Fargo 2005 Annual Report Download - page 78

Download and view the complete annual report

Please find page 78 of the 2005 Wells Fargo annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 120

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120

(in millions) December 31,
2005 2004
Impairment measurement based on:
Collateral value method $115 $183
Discounted cash flow method 75 126
Total (1) $190 $309
(1) Includes $56 million and $107 million of impaired loans with a related allowance
of $10 million and $17 million at December 31, 2005 and 2004, respectively.
The average recorded investment in impaired loans during
2005, 2004 and 2003 was $260 million, $481 million and
$668 million, respectively.
All of our impaired loans are on nonaccrual status. When
the ultimate collectibility of the total principal of an impaired
loan is in doubt, all payments are applied to principal, under
the cost recovery method. When the ultimate collectibility
of the total principal of an impaired loan is not in doubt,
contractual interest is credited to interest income when
received, under the cash basis method. Total interest income
recognized for impaired loans in 2005, 2004 and 2003 under
the cash basis method was not significant.
Nonaccrual loans were $1,338 million and $1,358 million
at December 31, 2005 and 2004, respectively. Loans past due
90 days or more as to interest or principal and still accruing
interest were $3,606 million at December 31, 2005, and
$2,578 million at December 31, 2004. The 2005 and 2004
balances included $2,923 million and $1,820 million,
respectively, in advances pursuant to our servicing agree-
ments to the Government National Mortgage Association
mortgage pools whose repayments are insured by the Federal
Housing Administration or guaranteed by the Department of
Veteran Affairs.
The recorded investment in impaired loans and the
methodology used to measure impairment was:
76