Wells Fargo 2009 Annual Report Download - page 7

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“ What counts isn’t just how
many stores and ATMs we
have. What counts is the
way all our channels work
together for our customers,
and our talented and caring
teammembers...”
To seize this opportunity to satisfy even more of our
customers’ fi nancial needs, we’re adding personal bankers
in our Wachovia stores. The average legacy WellsFargo
banking store serves about 20percent more households than
the average Wachovia store, but has 70percent more bankers
serving customers.
As a result, we added 1,250 more bankers to serve
customers in our Wachovia stores this year alone. In
Florida, we plan to hire 275 more in 2010. In Alabama, 150;
Connecticut, 30; Delaware, 10; Georgia, 110; New York 30;
North Carolina 125; Pennsylvania, 110; South Carolina, 70;
and Virginia, 301. Because sales and service are strands of
the same rope, all our Wachovia banking stores have adopted
the WellsFargo model of one store manager responsible for
the store’s entire sales and service performance rather than
separating those roles. Our legacy WellsFargo banking stores
now use Wachovia’s processes and measures for the customer
experience. We’re also expanding a popular Wachovia product
across Community Banking — our Way2Save® account. It’s
a savings account that can be linked to checking, turning
purchases into automatic savings by transferring $1 from
checking to the Way2Save® account each time you make a
check card purchase or use Wells Fargo Bill Pay.
Credit cards: practices and pricing You’ve probably heard
about a new law2 that modifi es a number of credit card
practices. It also signifi cantly improves the information in
credit card statements and disclosures. This should make credit
card statements and fee disclosures easier to understand. It
could reduce interest and fees for some customers who carry a
balance. It does, however, make it more di cult for card issuers
to charge higher rates for riskier customers, especially if their
credit-worthiness declines. As a result, some borrowers may
have less access to credit than before and pricing on virtually
all accounts likely will be higher than before.
We’re a relationship-based card issuer so we market credit
cards as a key element in a broader relationship. We o er
our credit card accounts only to new and existing customers.
We want every one of our creditworthy customers to have a
Wells Fargo credit card (only one of every four does now) and
Wells Fargo debit card. We’re working to provide credit to as
many creditworthy customers as possible. We’re also adding
new ways for customers to earn rewards for their spending on
debit and credit card accounts and to help them save more and
pay down debt. For example, our customers can direct their
Wells Fargo credit card rewards points to pay down debt on
their Wells Fargo mortgage or other Wells Fargo loans. Unlike
most of our competitors, our credit card business remained
profi table in 2009. Our credit card portfolio is only three
percent of our total loans.
Banking-mortgage cross-sell
Our mortgage business — with its natural earnings counterbalance
between originations and servicing — enters 2010 with good
momentum. When interest rates decline, customers take
advantage of the lower rates and originations increase. When
interest rates rise, pre-payment rates slow and our servicing
portfolio increases in value. We originated $420billion in
mortgages this year, up 83percent. We were the nation’s largest
mortgage originator, funding one of every four mortgages in
the U.S. We serviced $1.8trillion in mortgages and nine million
loans, one of every six mortgage holders nationwide.
Regardless of where interest rates go in 2010 and beyond,
we have a huge opportunity for market share growth in the 15
eastern states and the District of Columbia through Wachovia.
Fourteen percent of WellsFargo banking households have
their mortgage with WellsFargo, but only ten percent of
Wachovia’s have either a WellsFargo or Wachovia home
mortgage. Opportunity!
Helping homeowners
Much work lies ahead, but we’ve made signifi cant progress
helping struggling mortgage customers stay in their homes.
We changed terms, lowered rates, or lowered principal (or
some combination) for a half-million customers on a trial or
permanent basis, including 119,000 using federal programs.
We have 15,000 U.S.-based team members focused exclusively
on helping mortgage customers stay in their homes, more than
double a year ago, including 8,000 hired and trained this year
alone. We make every reasonable e ort to avoid foreclosure —
that’s what’s best for our customers, our communities, and our
shareholders. In fact, we modifi ed three mortgages for every
foreclosure sale on an owner-occupied property in the fourth
quarter of this year.
We’re optimistic about the performance of the Wachovia
Pick-a-Payment mortgage portfolio. It includes loans that had
allowed customers to make monthly payments that might not
cover interest charges, a product WellsFargo has not o ered
and will not o er. We modifi ed one of every three Wachovia
Pick-a-Payment loans likely to default and reduced payments
for 98 percent of those customers by adjusting term rates or
forgiving some of the principal they owed on their adjustable-
rate mortgages. We believe the losses on these loans over their
lifetimes actually will be lower than we fi rst estimated. The
re-default rate on mortgage loans we restructured was less
than half the rate for similar loans in our industry.
We held home preservation workshops in Atlanta, Baltimore,
Chicago, Saint Paul and Phoenix — attracting more than 6,300
customers. In our fi rst four events, we helped about half of the
1 Full-time equivalents
2 Credit Card Accountability Responsibility and Disclosure Act (CARD Act)