Working Together
Our customers—like Lisa Kluever (left, and page 12)—expect it of us every day. They say: Take the time to work with me. Understand my complete financial picture. Listen to me. Know me. Give me value. Make it easy for me to access my funds and move my money with one click. Help me manage my finances and wealth with savvy and integrity. Save me time and money. Reward me for giving you more business.

From these conversations with our customers, we discover even better ways to satisfy their needs. This is how new products and services are born at Wells Fargo. It doesn’t start with technology in search of a need. It starts with relationships with our customers. It starts with what they need. As a result, we’ve been at the forefront of every major innovation in financial services including internet banking—and we’ve built one of the most extensive and convenient distribution systems in all of financial services.

In this annual report, we showcase several of our latest products and services, created by our talented teams, to show you how every new idea we have for serving our customers better…starts by working together with them.

To Our Owners
Our 2007 results were disappointing. They were not what you, our owners, expect from Wells Fargo. They were not what we expect of ourselves. Our diluted earnings per share of $2.38 declined nine cents from 2006. Two items, in particular, caused this.

First, in the fourth quarter Visa Inc., the world’s largest credit and debit card provider, completed its global restructuring and announced it would be going public, contemplating an initial public offering early in 2008. Wells Fargo owns approximately 2.8 percent of Visa. With the concurrence of the U.S. Securities and Exchange Commission, Wells Fargo recorded a pretax charge of $203 million, or 4 cents per share, during the year (third and fourth quarters) for its share of Visa’s anticipated litigation expenses. These charges were not expected, but we anticipate they will be more than offset as a result of our ownership in the valuable Visa franchise. Second, in the fourth quarter Wells Fargo recorded a special credit provision of $1.4 billion pretax, or 27 cents per share, largely for higher loan losses we expect in our home equity portfolio from indirect channels through which we’re no longer accepting new business. These two items reduced our 2007 diluted earnings per share by 31 cents.

So, what happened and why did it happen? What did we do right? What did we do wrong?

For the last several years in our annual reports and other investor communications, we’ve been saying to you, our owners, that the financial credit markets were acting as if there’s little or no risk to lending money.* “Liquidity” —the amount of money readily available for investing—had reached unprecedented high levels for individuals, corporations and central banks worldwide.

This led, in part, to careless, undisciplined lending, borrowing, investing and overall risk management across many segments of the economy. Many categories of debt became significantly overvalued. Lenders were not being paid enough for credit risk.

Credit spreads were at record lows across all asset classes. Aggressive subprime mortgage lenders, many of them unregulated brokers, used “teaser” rates and “negative amortization” loans (which add to the unpaid balance) to put many people in homes they could not afford. Easy access to cheap money encouraged excessive risk taking, highly leveraged transactions and complex pools of mortgage-backed debt obligations (many of which were underestimated for risk by some rating agencies).

This foolishness could not go on forever. Something had to give. Housing prices—inflated by speculation and aggressive lending—plunged in many parts of the country. Trust and confidence in the mortgage securities market collapsed. Large global and domestic financial services companies took losses exceeding $163 billion, writing down mortgage loans, leveraged loan commitments and other assets. A long-overdue upward repricing of risk continues into 2008. Despite the pain it has caused many individuals and organizations, long term it is healthy for our industry and our economy. Credibility, trust and confidence in pricing for risk are being restored in the credit markets. This swift retribution is one of the strengths of capitalism. ...

On the Cover

Working Together Customer Troy Ledo of Danville, California, not only has five products with Wells Fargo, but thanks to Alicia Moore of our ATM Banking team, he now deposits his checks faster than ever. Please see page 19.

Download Wells Fargo 2007 Annual Report

PDF format, 4.5MB, 136Pages.

Wells Fargo & Company (NYSE: WFC)
We’re a diversified financial services company providing banking, insurance, investments, mortgage loans and consumer finance.

Our corporate headquarters is in San Francisco, but we’re decentralized so all Wells Fargo “convenience points”—stores, regional commercial banking centers, ATMs, Wells Fargo Phone BankSM centers and the internet—are headquarters for satisfying all our customers’ financial needs and helping them succeed financially.

Aaa, AAA
Wells Fargo Bank, N.A. is the only U.S. bank, and one of only two worldwide, to have the highest credit rating from both Moody’s Investors Service, “Aaa,” and Standard & Poor’s Ratings Service, “AAA.”

Assets: $575 billion (5th among U.S. peers)
Market value of stock: $112 billion (1/31/08) (4th among U.S. peers)
Fortune 500: Profit, 19th; Market cap, 19th Team members: 159,800 (U.S.’s 27th-largest private employer)
Stores: 6,000

2 To Our Owners
12 Working Together with Our Customers
24 Working Together with Our Communities
31 Board of Directors, Senior Leaders
34 Financial Review
72 Controls and Procedures
74 Financial Statements
129 Report of Independent Registered Public Accounting Firm
132 Stock Performance

Visit Wells Fargo Website

Wells Fargo & Company is a financial holding company and a bank holding company. It is a diversified financial services company. It provides retail, commercial and corporate banking services through banking stores located in 23 states: Alaska, Arizona, California, Colorado, Idaho, Illinois, Indiana, Iowa, Michigan, Minnesota, Montana, Nebraska, Nevada, New Mexico, North Dakota, Ohio, Oregon, South Dakota, Texas, Utah, Washington, Wisconsin and Wyoming.

It provides other financial services through subsidiaries engaged in various businesses, principally wholesale banking, mortgage banking, consumer finance, equipment leasing, agricultural finance, commercial finance, securities brokerage and investment banking, insurance agency and brokerage services, computer and data processing services, trust services, investment advisory services and venture capital investment.

It operates in three segments: Community Banking, Wholesale Banking and Wells Fargo Financial. (Google Finance)

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