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Wells Fargo is a diversified company offering financial services with USD 1.3 trillion in assets. The current Fargo emerged in 1998 from Minneapolis-based Norwest Corporation and the original Wells Fargo. The decision made favored staying attached to the Wells Fargo name so that its 150-long history logo - the coach - could be used.

The Company ranked fourth position in terms of assets whereas the first in terms of the market value of the common stock if compared to the U.S. banks, as at December 31, 2011.

Wells Fargo has more than 9 thousand retail branches and over 12 thousand automated teller machines that are covering 39 states, as well as the District of Columbia. Today, according to the 2011 Wells Fargo & Company Annual Report, ‘Wells Fargo employs more than 270,000 team members. That is 1 out of 500 working population; thus, making Wells Fargo the 12th large scale employer in the United States, in the private sector. The Company is the highest market capitalization ratio within the banking industry in the U.S.

The annual report states, in 2011, Wells Fargo increased the Tier 1 common equity 1, (which is the bank’s core equity capital) by USD 13.8 billion, or 17 percent. The result is the greatest growth among the top four U.S. banks, based on assets.

Wells Fargo enjoyed net income at USD 15.9 billion whereas earnings per one common share constituted USD 2.82 in 2011, both went 28% up if compared to 2010 results. The growth of the net income versus 2010 was driven by lowering provisions for credit losses, as well as noninterest expenses, which enabled to offset low revenues. Return on average assets was 1.25% for 2011, as compared with 1.01% in 2010.

However, the total revenue decreased during the year, which reflects lowering of interest rates, new policies and regulations, and the sluggish trends in the economy. Wells Fargo does not intent to sell any securities. The report announced ‘it is more likely than not that we will not be required to sell prior to recovery of the amortized cost basis’ (Well Fargo Annual Rport 2011). The Company does not rely on bond insurers, and instead monitors all investments. During 2011, Company’s total assets increased by 4%, which was contributed by growth of core deposit at 9%, as well as generation of internal capital; however, this trend was partially offset with a reduced long-term borrowings. The total loans and main deposits were up as compared with the level of the previous year. Core deposits amounted to113% of the total loan portfolio, as at December 31, 2011. Total capital constituted 14.76% whereas Tier 1 leverage 9.03%; this corresponds respectively to 15.01% and 9.19%, as at December 2010. Capital management in Wells Fargo includes an active program for managing stockholders’ equity. Thus, the capital is generated primarily through the retention of earnings net of dividends. Retained earnings increased USD12.5 billion from December 31, 2010, predominantly from Wells Fargo net income of USD 15.9 billion. During 2011, the Company issued approximately 86 million shares of common stock, substantially all of which related to employee benefit plans.

In spite of the encouraging picture, the report emphasizes the risks: ‘The financial results have been and will continue being affected by overall economic condition, especially, level of unemployment and span of prices in the United States. Consequently, deterioration of the economic state or the financial market may adversely affect the lending power and other businesses and, respectively, the company’s financial results and affairs.

The Note 20 of the Annual Report is dedicated to employees: “Employee Benefits and Other Expenses”. Until 2009, accounts for eligible employe's cash balance plan allocated a compensation credit, which would depend on a percentage of the respective qualifying compensation (based on an employee’s age and years of service). Since 2009, the benefits plan under the company of Wells Fargo is frozen, the step that resulted in a re-measurement of the pension obligations. As a result of freezing, the amortization life for actuarial gains and losses from 5 years to 13 years was revised to reflect the estimated average remaining participation period.

Health care and life insurance benefits for certain retired employees are gauranteed.

Pre-tax pre-provisions profit is counted as total revenue deducted of noninterest expenses. Management assumes, pre-tax pre-provision of profit is an extremely useful financial indicator because it allows investors to assess the Company’s capability to increase capital in order to recover credit losses  that incur throughout a credit cycle. This is not the cash outflow of the bank, but pre-tax pre-provision profit will be lowered as soon as loan default are covered. The tendency over the last couple of years is in correlation with the common economical situation.

There is little doubt, in Well Fargo, due to  work dedicated people who do their best in hard times to achieve results. Overall, the achievements are impressive:

- In 2011, new loan commitments for small business grew up to USD 13.9 billion (which is an 8 percent increment versus the level of 2010).

- 92 percent of the overall mortgage customers could withhold their home payments.

- From 2009 through 2011, the Wells Fargo helped over 5 million homeowners, who had new low-rate loans, to buy a home or find the way to refinance the mortgage.

- In 2011, company increased Tier 1 common equity 1 by over USD13 billion, which is the highest rate among the leading fourU.S. banks, in terms of assets.

- Retail banking in the  household cross-selling hit a record of 5.92 products versus 5.70 in 2010.

- 7,000 LED signs installed coast to coast, saving an estimated USD1.5 million in reduced energy and maintenance costs.

However, the bank generates its revenue from the interest and fees, the loans and other products and services. A substantial amount of earnings comes from the fee income that is earned from consumers and commercial lending and banking businesses, including mortgage banking. However, the business have been, and will continue being affected by the overall state of the economy in the USA.

Therefore, the summary recognizes, a prolonged depression in the global economy, especially, in the United States, or any from of deterioration in the overall economic state and/or the financial markets or any other factors or eventsm which might  disrupt therecovery of the global economy, could adversely affect the company’s financial results and the overall business. The implications might be eroded consumers’ and investors’ confidence levels, as well as increased volatility of financial market, which would also adversely affect financial results for the fee-based businesses, including the company’s investment advisory, mutual fund, securities brokerage, wealth management, and investment banking businesses.

Nevertheless, I am inspired by the Company’s results and believe the Wells Fargo is a great company to work for and to work with.

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