Wells Fargo 2006 Annual Report Download - page 79

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77
We regularly explore opportunities to acquire financial services
companies and businesses. Generally, we do not make a
public announcement about an acquisition opportunity until
a definitive agreement has been signed.
Effective December 31, 2004, we completed the acquisition
of $29 billion in assets under management, consisting of
Note 2: Business Combinations
$24 billion in mutual fund assets and $5 billion in institutional
investment accounts, from Strong Financial Corporation.
Other business combinations completed in 2006, 2005 and
2004 are presented below.
For information on additional consideration related to
acquisitions, which is considered to be a guarantee, see Note 24.
(in millions) Date Assets
2006
Secured Capital Corp/Secured Capital LLC, Los Angeles, California January 18 $132
Martinius Corporation, Rogers, Minnesota March 1 91
Commerce Funding Corporation, Vienna, Virginia April 17 82
Fremont National Bank of Canon City/Centennial Bank of Pueblo,
Canon City and Pueblo, Colorado June 7 201
Certain assets of the Reilly Mortgage Companies, McLean, Virginia August 1 303
Barrington Associates, Los Angeles, California October 2 65
EFC Partners LP (Evergreen Funding), Dallas, Texas December 15 93
Other
(1)
Various 20
$987
2005
Certain branches of PlainsCapital Bank, Amarillo,Texas July 22 $190
First Community Capital Corporation, Houston, Texas July 31 644
Other
(2)
Various 40
$ 874
2004
Other
(3)
Various $ 74
(1) Consists of seven acquisitions of insurance brokerage businesses.
(2) Consists of eight acquisitions of insurance brokerage and lockbox processing businesses.
(3) Consists of 13 acquisitions of insurance brokerage and payroll services businesses.
In all other situations in which we discontinue hedge
accounting, the derivative will be carried at its fair value in
the balance sheet, with changes in its fair value recognized in
current period earnings.
We occasionally purchase or originate financial instru-
ments that contain an embedded derivative. At inception
of the financial instrument, we assess (1) if the economic
characteristics of the embedded derivative are not clearly and
closely related to the economic characteristics of the financial
instrument (host contract), (2) if the financial instrument
that embodies both the embedded derivative and the host
contract is not measured at fair value with changes in fair
value reported in earnings, and (3) if a separate instrument
with the same terms as the embedded instrument would meet
the definition of a derivative. If the embedded derivative
meets all of these conditions, we separate it from the host
contract and carry it as a free-standing derivative at fair
value with changes recorded in current period earnings.