Wells Fargo 2007 Annual Report Download - page 124

121
Note 24: Operating Segments
We have three lines of business for management reporting:
Community Banking, Wholesale Banking and Wells Fargo
Financial. The results for these lines of business are based
on our management accounting process, which assigns
balance sheet and income statement items to each responsible
operating segment. This process is dynamic and, unlike
financial accounting, there is no comprehensive, authoritative
guidance for management accounting equivalent to generally
accepted accounting principles. 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 segments. If the management
structure and/or the allocation process changes, allocations,
transfers and assignments may change. To reflect a change
in the allocation of income taxes for management reporting
adopted in 2007, results for prior periods have been revised.
The Community Banking Group 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 high
net worth individuals, securities brokerage through affiliates
and venture capital financing. These products and services
include the Wells Fargo Advantage FundsSM, a family of
mutual funds, as well as personal trust and agency assets.
Loan products include lines of credit, equity lines and loans,
equipment and transportation (recreational vehicle and
marine) 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
receivables and inventory financing, equipment leases, real
estate financing, Small Business Administration financing,
venture capital financing, cash management, payroll services,
retirement plans, Health Savings Accounts and merchant
payment processing. Consumer and business deposit products
include checking accounts, savings deposits, market rate
accounts, Individual Retirement Accounts (IRAs), time
deposits and debit cards.
Community Banking serves customers through a wide
range of channels, which include traditional banking stores,
in-store banking centers, business centers and ATMs. Also,
Phone BankSM centers and the National Business Banking
Center provide 24-hour telephone service. Online banking
services include single sign-on to online banking, bill pay
and brokerage, as well as online banking for small business.
The Wholesale Banking Group serves businesses across
the United States with annual sales generally in excess of
$10 million. Wholesale Banking provides a complete line
of commercial, corporate and real estate banking products
and services. These include traditional commercial loans
and lines of credit, letters of credit, asset-based lending,
equipment leasing, mezzanine financing, high-yield debt,
international trade facilities, 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
and investment banking services. Wholesale Banking manages
and administers institutional investments, employee benefit
trusts and mutual funds, including the Wells Fargo
Advantage Funds. Wholesale Banking includes the majority
ownership interest in the Wells Fargo HSBC Trade Bank,
which provides trade financing, letters of credit and collection
services and is sometimes supported by the Export-Import
Bank of the United States (a public agency of the United
States offering export finance support for American-made
products). Wholesale Banking also supports the commercial
real estate 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, commercial real estate loan servicing and
real estate and mortgage brokerage services.
Wells Fargo Financial includes consumer finance and auto
finance operations. Consumer finance operations make direct
consumer and real estate loans to individuals and purchase
sales finance contracts from retail merchants from offices
throughout the United States, and in Canada and the Pacific
Rim. Auto finance operations specialize in purchasing sales
finance contracts directly from auto dealers and making
loans secured by autos in the United States, Canada and
Puerto Rico. Wells Fargo Financial also provides credit cards
and lease and other commercial financing.
The Consolidated Company total of average assets
includes unallocated goodwill balances held at the
enterprise level.