Wells Fargo 2008 Annual Report Download - page 159


(income/expense in millions,
average balances in billions) Community Wholesale Wells Fargo Other Consolidated
Banking Banking Financial Company
2008
Net interest income (1) $16,188 $4,474 $ 4,481 $ — $25,143
Provision for credit losses 9,560 1,115 4,063 1,241 15,979
Noninterest income 11,572 4,069 1,113 — 16,754
Noninterest expense 14,352 5,546 2,763 — 22,661
Income (loss) before income
tax expense (benefit) 3,848 1,882 (1,232) (1,241) 3,257
Income tax expense (benefit) 916 589 (468) (435) 602
Net income (loss) $ 2,932 $1,293 $ (764) $ (806) $ 2,655
2007
Net interest income (1) $ 13,099 $ 3,648 $ 4,227 $ — $ 20,974
Provision for credit losses 3,187 69 1,683 — 4,939
Noninterest income 11,832 5,300 1,284 — 18,416
Noninterest expense 14,695 5,077 3,052 — 22,824
Income before
income tax expense 7,049 3,802 776 — 11,627
Income tax expense 1,943 1,332 295 — 3,570
Net income $ 5,106 $ 2,470 $ 481 $ — $ 8,057
2006
Net interest income (1) $ 12,877 $ 3,164 $ 3,910 $ — $ 19,951
Provision for credit losses 887 16 1,301 — 2,204
Noninterest income 9,620 4,605 1,515 — 15,740
Noninterest expense 13,663 4,368 2,806 — 20,837
Income before
income tax expense 7,947 3,385 1,318 — 12,650
Income tax expense 2,571 1,193 466 — 4,230
Net income $ 5,376 $ 2,192 $ 852 $ — $ 8,420
2008
Average loans $ 218.8 $112.1 $ 67.6 $ — $ 398.5
Average assets 375.0 151.6 72.0 5.8 604.4
Average core deposits 254.6 70.6 — — 325.2
2007
Average loans $ 194.0 $ 85.6 $ 65.2 $ — $ 344.8
Average assets 330.6 113.3 71.1 5.8 520.8
Average core deposits 242.2 60.9 — — 303.1
(1) 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.
In general, Community Banking has excess liabilities and receives interest credits for the funding it provides to other segments.
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 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 Other column includes certain items recorded at
the enterprise level. The provision for credit losses for 2008
represents the $1.2 billion provision for credit losses to
conform Wachovia estimated loss emergence periods to
Wells Fargo policies. Average assets for 2008 and 2007
consist of unallocated goodwill.