Wells Fargo 2009 Annual Report Download - page 9

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every fi ve Fortune 1,000 companies. With Wachovia’s insurance
brokerage team, we gained signifi cant presence this year in 10
more metro markets, adding $200million in revenue. We serve
commercial customers in 130countries through 80 brokerage
partners in our Global Broker Network.
Where does the bank stop and the community begin?
How have we been able to grow earnings and capital internally,
and become even stronger, even while building a storehouse
for credit losses of almost $25billion? It’s because our business
model doesn’t run on just a few sources of revenue or even 20 or
30 sources of revenue, but on more than 80 di erent businesses
across fi nancial services. It’s because our loan portfolio is
diversifi ed across many di erent industries. It’s because we’re
not geographically concentrated in one region, but serve
70million customers across North America. It’s because of our
time-tested credit discipline. It’s because we have the deepest,
most talented, most experienced and people-focused team of
senior leaders in the industry. It’s because we believe our long-
term success depends on our ability to help our customers and
communities succeed fi nancially.
And often overlooked, it’s because all banks are not created
alike. We’re not a hedge fund disguised as a bank. We’re not
a proprietary trader (which produces no customer benefi t)
disguised as a bank. Nor are we simply a mortgage company
or an investment broker or an insurance broker or a credit
card company. What we are at our heart is community-based,
and relationship-oriented. We serve our customers online,
on the phone or at our ATMs, and we welcome them into our
10,000 stores. We greet them on neighborhood sidewalks. We
have breakfast with them at the neighborhood diner. We serve
alongside them on local chambers, Rotary, nonprofi t boards,
at community events. We worship with them in churches,
synagogues, mosques and temples. Many of our customers
know our tellers by their fi rst names, and we know them
by theirs. We want our banking stores to be more than just
storefronts, but like community centers where neighbors meet.
Call this old-fashioned if you like, but our customers can’t get
enough of it. They wouldn’t trade it for all the hedge funds in
the world. I could tell you a thousand real-life stories to prove
this point. You can read about just a few beginning on page24
of this Report and in our new Social Responsibility Report.
After the government’s investment: our view
The fi nancial crisis that began in the fall of 2008 was
unprecedented for our country and global markets. We
earned $5.4 billion in net income the fi rst nine months of
that year. We also acquired Wachovia Corporation without
any need for fi nancial help from the federal government. We
appreciated the magnitude of the situation our country was in.
We understood our role as Americans fi rst, bankers second.
That’s why we took part in the U.S. Treasury’s Troubled Asset
Relief Program (TARP), joining eight other fi nancial fi rms in
accepting government investments in our companies. We fully
repaid the government’s $25 billion investment in Wells Fargo,
including interest of $1.4 billion. We used the government’s
investment as it was intended to be used: we provided 32
times the government’s investment in loans and credit lines
Advantage and Wachovia’s Evergreen fund families in 2010, and
pending approval by Fund shareholders, we’ll have 133 mutual
funds, variable trust funds, and Wells Fargo Managed Account
CoreBuilder® Shares. Our combined business, with $245 billion
in assets under management, would have been the nation’s 10th
largest family of funds at year-end 2009. About half our long-
term mutual funds earn four or fi ve stars from Morningstar.
Our Funds team guides institutions, fi nancial advisors, and
individuals to help them reach their fi nancial objectives and
satisfy all their fi nancial needs. We believe agile, independent
investment teams, each with distinct strengths and disciplines,
can provide superior insight and expertise.
Investment Banking: customer-focused The merger with
Wachovia gives us an opportunity to become one of America’s
top customer-focused investment banks. We’re providing a
broader array of solutions for our commercial customers, our
corporate customers and our real estate relationships. The
merger combines our capital strength with across-the-board
solutions including debt and equity underwriting, debt and
equity sales and trading, strategic advice (including mergers
and acquisitions), loan syndications, tax-exempt products,
research and economic data, and hedging products.
Commercial Real Estate: relationship-based With the decline
in property values and rental payments, there’s been a lot in the
media lately about commercial real estate lending, a segment
of lending in the U.S. second in size only to home mortgages.
Our total portfolio was $135billion, down twopercent this year.
Our losses rose from historically low levels, but we believe the
quality of our portfolio is better than our competitors because
we’re well-diversifi ed by geography and property type, we’re
relationship-based, and we focus our underwriting on people,
cash fl ows and creditworthiness, not just property values. We
have a seasoned, experienced leadership team that’s been
together for decades, including the troubled commercial real
estate market of the early 1990s.
Insurance: a fundamental fi nancial need We’re the world’s
fourth-largest insurance brokerage and America’s largest
insurance broker owned by a bank holding company. Two-
and-a-half million banking households have bought insurance
through us. That equates, however, to just one of every 15 of
our banking customers, up from one of every 20 just a few
years ago (our long-term goal: one in fi ve). We can do much
better because insurance (with checking/debit, mortgage and
investments) is one of our four core products. It’s a fundamental
fi nancial need, one that customers value so much that if they
have it with us, they’re more likely to buy other products
from us. We provide a full line of insurance products that our
commercial business customers and our banking households
need to help them succeed fi nancially. Via the phone
(1-866-294-2571) and wellsfargo.com, we provide no-obligation
quotes in minutes for auto, renters’, homeowners’ and term life
insurance from multiple insurance companies.
This year, our bankers referred 2.5million customers to our
local commercial brokerage teams, sales centers and online
resources. The result: 280,000 customers purchased personal
insurance online (up 90percent from 2008). On the commercial
front, we serve some 40,000 businesses, including almost one of