Wells Fargo 2010 Annual Report Download - page 9

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identified more opportunities to serve them, and this benefits
communities and our shareholders. In 2010, we facilitated
hundreds of transactions to support municipalities, hospitals
and universities, including a $300 million credit facility for
the Los Angeles Department of Water & Power, part of a
comprehensive, long-term relationship with the city.
Helping American business grow
We serve thousands of companies across America that have
annual revenue from $10 million to $750 million. Bankers may
call this the “middle market,” but it’s really The Big Middle.
Companies such as this are at the forefront of the U.S. economic
recovery. They employ tens of millions of Americans. They
make things people use every day. They’re the lifeblood of
the tax base in our communities. Their shop floors are where
America gets things done, makes things better and makes
better things. As CEO of Wells Fargo, I’m privileged to visit
the plants and oces of many of our commercial customers
every year across the country. They appreciate our relationship
approach, consistent underwriting through the business
cycle, local decision-making, and the depth and breadth of our
products, which we believe are the best in our industry.
The CEOs and CFOs of many of our commercial customers,
and many of our large corporate customers, are telling us
they see the economy improving. Many are adding inventory,
expanding operations, using lines of credit and qualifying
for new credit. One example is Aetna Plywood, a wholesale
distributor of wood and composite products based in Maywood,
Illinois. It’s been a loyal customer of Wells Fargo for several
years. Its sales declined during the recession, but its owner
and president, Larry Rassin, says sales picked up in 2010 as its
clients began making delayed improvements in their stores.
“It’s a slow progression of continued growth,” he says, “and we
believe it will continue.”
We want to be the commercial bank of choice for companies
like Aetna Plywood in every one of our markets. We want to
have more lead relationships than any competitor in every
market we serve. We want to satisfy every financial need of
commercial customers, large and small. We made significant
progress toward these ambitious goals in 2010. We’re already
#1 in market share for middle-market companies. Our
Commercial Banking team attracted more new customers in
2010 than in any single year in our company’s history.
Our average Commercial Banking relationship in the West
(legacy Wells Fargo) had eight products with us in 2010. In the
East, where the Wachovia conversion is in the home stretch,
customer relationships are strong and we’re earning more
of their business.
Average core deposits for Wholesale Banking customers
rose 15 percent. Loan balances grew in asset-backed finance
and global financial institutions. New loan commitments rose
in commercial real estate. Our commercial customers have
scanned, sent and deposited from their oces more than
$1 trillion of checks with us the last three years securely via the
internet through our Desktop Deposit service. This saved them,
and our environment, 1.64 million miles driving back and forth
to the bank, and 91,000 gallons of gas.
we forgave $3.8 billion in principal (by far, the industry leader
in this measure). That was an average reduction of $51,000 per
loan. To do this work, we hired 10,000 home preservation sta
for a total of 16,000. We assign one specialist to work with
a customer from start-to-finish on a modification.
In 2010 however, we didn’t always measure up. For example,
when we became aware we hadn’t managed some aspects of
the foreclosure adavit process well, our first concern was
to confirm that no customer experienced an unwarranted
foreclosure because of an incorrect adavit. We then reviewed
certain pending foreclosure adavits, and enhanced our
policies and processes to help ensure full consistency and
compliance.
We plan to double in 2011 the number of home preservation
events we hosted last year. Through 19 large-scale events since
the beginning of 2009, we’ve worked face-to-face with 19,000
customers struggling to make their mortgage payments. We
met with 31,000 more customers at our 27 home preservation
centers across the country.
Our commitment to our customers and our country in
managing home loan challenges has been unwavering, and it
will continue in 2011.
Wholesale Banking: Ripe with opportunity
Our Wholesale bankers were careful planners and stewards
of their businesses during the economic downturn. As a
result, they’re now earning even more of our customers’
business as the economy revives. For example, they managed
Microsoft’s $4.7 billion senior notes oering. They’re providing
$750 million to finance LEED® certified commercial buildings
and community development projects. They’re providing
insurance to help reduce customers’ business risks. They’re
satisfying the global financial needs of more of our clients
through our international group’s 36 oces in 34 countries.
Investment Banking
Helping our corporate and middle market clients raise capital
to grow their businesses is an art and a science. You have to
focus on what’s best for the customer. You have to provide
extensive research and deep, thoughtful knowledge about the
client’s industry. You have to have a very experienced team that
can provide superior execution. All this has to be supported by
a strong capital position. Because of our strength in all these
areas many large companies are now entrusting billions of
dollars of bond and equity financing with Wells Fargo, including
MetLife, HSBC, Walmart, Hewlett Packard and Hertz. Many
other companies turned to Wells Fargo Securities in 2010
for their mergers and acquisitions, including Penske, Capital
Source, Snyder’s of Hanover, Lance, Inergy, and Atlas Pipeline.
Supporting municipalities, healthcare and education
Many banks are averse to doing business with governments,
education, healthcare and non-profits because of what they
perceive as high risk and low returns. We’re proud to serve
these sectors. We provide a wide range of financial solutions
for our 4,400 government, education, healthcare and non-
profit clients. Our loans to these institutions rose 40 percent
for the year. Their deposits with us rose 35 percent. We also