<DOCUMENT>
<TYPE>EX-13
<SEQUENCE>7
<FILENAME>a2072635zex-13.txt
<DESCRIPTION>EXHIBIT 13
<TEXT>
<Page>

                               TABLE OF CONTENTS

<Table>

<S>  <C>                                           <C>  <C>
     FINANCIAL REVIEW
34   Overview                                      49   Asset/Liability and
36   Factors That May Affect Future Results             Market Risk Management
40   Earnings Performance                          49   Interest Rate Risk
40   Net Interest Income                           49   Mortgage Banking Interest Rate Risk
40   Noninterest Income                            50   Market Risk - Trading Activities
41   Noninterest Expense                           50   Market Risk - Equity Markets
44   Operating Segment Results                     50   Liquidity and Funding
44   Balance Sheet Analysis                        52   Capital Management
44   Securities Available for Sale                 53   Comparison of 2000 to 1999
     (table on page 64)                            53   Additional Information
45   Loan Portfolio (table on page 66)
45   Deposits                                           FINANCIAL STATEMENTS
45   Off Balance Sheet Transactions                54   Consolidated Statement of Income
45   Off Balance Sheet Arrangements                55   Consolidated Balance Sheet
46   Contractual Obligations and                   56   Consolidated Statement of
     Other Commitments                                  Changes in Stockholders' Equity
46   Transactions with Related Parties                  and Comprehensive Income
                                                   57   Consolidated Statement of Cash Flows
46   Risk Management                               58   Notes to Financial Statements
46   Credit Risk Management Process
47   Nonaccrual and Restructured Loans             97   INDEPENDENT AUDITORS' REPORT
     and Other Assets
48   Allowance for Loan Losses                     98   QUARTERLY FINANCIAL DATA
     (table on page 68)
</Table>


                                      33






<Page>

FINANCIAL REVIEW

OVERVIEW

Wells Fargo & Company is a $308 billion diversified financial services company
providing banking, insurance, investments, mortgage banking and consumer finance
through banking branches, the internet and other distribution channels to
consumers, commercial businesses and financial institutions in all 50 states of
the U.S. and in other countries. It ranked fifth in assets and third in market
capitalization among U.S. bank holding companies at December 31, 2001. In this
Annual Report, Wells Fargo & Company and Subsidiaries (consolidated) is referred
to as the Company and Wells Fargo & Company alone is referred to as the Parent.

  On October 25, 2000, the Company completed its merger with First Security
Corporation (the FSCO Merger). First Security Corporation (First Security or
FSCO) survived as a wholly owned subsidiary of the Company. The FSCO Merger was
accounted for under the pooling-of-interests method of accounting and,
accordingly, the information included in the financial review presents the
combined results as if the merger had been in effect for all periods presented.

  Certain amounts in the financial review for prior years have been reclassified
to conform with the current financial statement presentation.

  Net income in 2001 was $3.42 billion, compared with $4.03 billion in 2000.
Diluted earnings per common share were $1.97, compared with $2.33 in 2000. The
decreases in net income and earnings per share were due to second quarter 2001
non-cash impairment of public and private equity securities and other special
charges of $1.16 billion (after tax), or $.67 per share. Apart from these
charges, very strong growth in business revenue more than offset the impact of
higher credit losses on 2001 profits.

  Return on average assets (ROA) was 1.20% and return on average common equity
(ROE) was 12.79% in 2001, compared with 1.61% and 16.31%, respectively, in 2000.
Excluding non-cash impairment and other special charges ROA was 1.60% and ROE
was 17.13%.

  Net interest income on a taxable-equivalent basis was $12.54 billion in 2001,
compared with $10.93 billion a year ago. The Company's net interest margin was
5.36% for 2001, compared with 5.35% in 2000.

  Noninterest income was $7.69 billion in 2001, compared with $8.84 billion in
2000. The decrease was due to approximately $1.72 billion (before tax) of
impairment write-downs in the second quarter of 2001 reflecting
other-than-temporary impairment in the valuation of publicly traded securities
and private equity investments, partially offset by increases in gains on sales
of securities available for sale and mortgage banking income.

  Revenue, the total of net interest income and noninterest income adjusted for
the $1.72 billion (before tax) of non-cash impairment, increased from $19.71
billion to $21.87 billion, or 11%.

  Noninterest expense totaled $12.89 billion in 2001, compared with $11.83
billion in 2000, an increase of 9%. The increase was primarily due to an
increase in salaries and incentive compensation resulting from increases in
full-time equivalent staff and higher commissions due to record mortgage
originations. Expense growth also included the effect of acquisitions,
particularly Acordia, the fifth largest insurance broker in the U.S.

  The provision for loan losses was $1.78 billion in 2001, compared with $1.33
billion in 2000. During 2001, net charge-offs were $1.78 billion, or 1.09% of
average total loans, compared with $1.22 billion, or .84%, during 2000. The
allowance for loan losses was $3.76 billion, or 2.18% of total loans, at
December 31, 2001, compared with $3.72 billion, or 2.31%, at December 31, 2000.

  At December 31, 2001, total nonaccrual and restructured loans were $1.64
billion, or 1.0% of total loans, compared with $1.20 billion, or .7%, at
December 31, 2000. Foreclosed assets were $171 million at December 31, 2001,
compared with $128 million at December 31, 2000.

  The ratio of common stockholders' equity to total assets was 8.83% at
December 31, 2001, compared with 9.63% at December 31, 2000. The Company's
total risk-based capital (RBC) ratio at December 31, 2001 was 10.45% and
its Tier 1 RBC ratio was 6.99%, exceeding the minimum regulatory
guidelines of 8% and 4%, respectively, for bank holding companies. The
Company's RBC ratios at December 31, 2000 were 10.43% and 7.29%,
respectively. The Company's leverage ratios were 6.25% and 6.49% at
December 31, 2001 and 2000, respectively, exceeding the minimum regulatory
guideline of 3% for bank holding companies.


                                       34

<Page>

Recent Accounting Standards
In June 2001, the Financial Accounting Standards Board (FASB) issued
Statement No. 141 (FAS 141), BUSINESS COMBINATIONS, and Statement No. 142
(FAS 142), GOODWILL AND OTHER INTANGIBLE ASSETS.

  FAS 141, effective June 30, 2001, requires that all business combinations
initiated after June 30, 2001 be accounted for under the purchase method of
accounting; the use of the pooling-of-interests method of accounting is
eliminated. FAS 141 also establishes how the purchase method is to be applied
for business combinations completed after June 30, 2001. This guidance is
similar to previous generally accepted accounting principles (GAAP); however,
FAS 141 establishes additional disclosure requirements for transactions
occurring after the effective date.

  FAS 142 eliminates amortization of goodwill associated with business
combinations completed after June 30, 2001. During the transition period from
July 1, 2001 through December 31, 2001, goodwill associated with business
combinations completed prior to July 1, 2001 continued to be amortized through
the income statement. Effective January 1, 2002, goodwill amortization expense
ceased and goodwill will be assessed for impairment at least annually at the
reporting unit level by applying a fair-value-based test. FAS 142 also provides
additional guidance on acquired intangibles that should be separately recognized
and amortized, which could result in the recognition of additional intangible
assets, as compared with previous GAAP.

  After January 1, 2002, the elimination of goodwill amortization under FAS
142 is expected to reduce noninterest expense by approximately $600 million
(pretax) and increase net income by approximately $560 million (after tax),
for the year ended December 31, 2002, compared with 2001. The Company expects
to complete its initial goodwill impairment assessment to determine if a
transition impairment charge will be recognized under FAS 142 and record any
transition adjustment in first quarter 2002. At December 31, 2001, the
Company had $9.53 billion of goodwill, $5.50 billion of which related to the
1996 purchase of First Interstate Bancorp. The Company has determined that
impairment of the remaining First Interstate goodwill is not permitted under
FAS 142 since the former First Interstate operations must be combined with
other similar banking operations for impairment testing.

  In June 2001, the FASB issued Statement No. 143 (FAS 143), ACCOUNTING FOR
ASSET RETIREMENT OBLIGATIONS, which addresses the recognition and measurement
of obligations associated with the retirement of tangible long-lived assets.
FAS 143 applies to legal obligations associated with the retirement of
long-lived assets resulting from the acquisition, construction, development
or the normal operation of a long-lived asset. FAS 143 requires that the fair
value of an asset retirement obligation be recognized as a liability in the
period in which it is incurred. The asset retirement obligation is to be
capitalized as part of the carrying amount of the long-lived asset and the
expense is to be recognized over the useful life of the long-lived asset. FAS
143 is effective January 1, 2003, with early adoption permitted. The Company
plans to adopt FAS 143 effective January 1, 2003 and does not expect the
adoption of the statement to have a material effect on the financial
statements.

  In August 2001, the FASB issued Statement No. 144 (FAS 144), ACCOUNTING FOR
THE IMPAIRMENT OR DISPOSAL OF LONG-LIVED ASSETS, which supersedes Statement
No. 121 (FAS 121), ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS AND FOR
LONG-LIVED ASSETS TO BE DISPOSED OF. FAS 144 carries forward from FAS 121 the
fundamental guidance related to the recognition and measurement of an
impairment loss related to assets to be held and used and provides guidance
related to the disposal of long-lived assets to be abandoned or disposed of
by sale. FAS 144 became effective January 1, 2002 and was required to be
applied prospectively. Adoption of FAS 144 did not have a material effect on
the financial statements.

<Table>
<Caption>

TABLE 1  RATIOS AND PER COMMON SHARE DATA
-----------------------------------------------------------------------------------------------------------------
                                                                                           Year ended December 31,
                                                                            -------------------------------------
($ in millions, except per share amounts)                                     2001           2000            1999
-----------------------------------------------------------------------------------------------------------------
<S>                                                                         <C>            <C>             <C>
PROFITABILITY RATIOS
Net income to average total assets (ROA)                                      1.20%          1.61%           1.78%
Net income applicable to common stock
    to average common stockholders' equity (ROE)                             12.79          16.31           17.55
Net income to average stockholders' equity                                   12.75          16.20           17.35

EFFICIENCY RATIO (1)                                                          64.0%          60.0%           58.8%

CAPITAL RATIOS
At year end:
    Common stockholders' equity to assets                                     8.83%          9.63%           9.79%
    Stockholders' equity to assets                                            8.85           9.72            9.90
    Risk-based capital (2)
       Tier 1 capital                                                         6.99           7.29            8.00
       Total capital                                                         10.45          10.43           10.93
    Leverage (2)                                                              6.25           6.49            6.76
Average balances:
    Common stockholders' equity to assets                                     9.33           9.83           10.07
    Stockholders' equity to assets                                            9.41           9.93           10.27

PER COMMON SHARE DATA
Dividend payout (3)                                                          50.25%         38.14%          33.83%
Book value                                                                  $16.01         $15.29          $13.91
Market prices (4):
    High                                                                    $54.81         $56.38          $49.94
    Low                                                                      38.25          31.00           32.13
    Year end                                                                 43.47          55.69           40.44
-----------------------------------------------------------------------------------------------------------------

</Table>

(1)  The efficiency ratio is defined as noninterest expense divided by total
     revenue (net interest income and noninterest income).
(2)  See Note 22 to Financial Statements for additional information.
(3)  Dividends declared per common share as a percentage of earnings per common
     share.
(4)  Based on daily prices reported on the New York Stock Exchange Composite
     Transaction Reporting System.


                                        35

<Page>

<Table>
<Caption>

TABLE 2  SIX-YEAR SUMMARY OF SELECTED FINANCIAL DATA
-----------------------------------------------------------------------------------------------------------------------------
                                                                                                      % Change      Five-year
(in millions,                                                                                             2001/      compound
except per share amounts)               2001       2000       1999       1998       1997       1996       2000    growth rate
-----------------------------------------------------------------------------------------------------------------------------
<S>                                 <C>        <C>        <C>        <C>        <C>        <C>        <C>         <C>
INCOME STATEMENT
Net interest income                 $ 12,460   $ 10,865   $ 10,116   $  9,673   $  9,258   $  8,776         15 %            7%
Provision for loan losses              1,780      1,329      1,104      1,617      1,203        541         34             27
Noninterest income                     7,690      8,843      7,975      6,920      6,046      5,075        (13)             9
Noninterest expense                   12,891     11,830     10,637     11,311      9,580      9,256          9              7
Net income                             3,423      4,026      4,012      2,191      2,712      2,411        (15)             7

Earnings per common share           $   1.99   $   2.36   $   2.32   $   1.28   $   1.57   $   1.44        (16)             7
Diluted earnings
   per common share                     1.97       2.33       2.29       1.26       1.55       1.42        (15)             7
Dividends declared
   per common share                     1.00        .90       .785        .70       .615       .525         11             14

BALANCE SHEET
(at year end)
Securities available for sale       $ 40,308   $ 38,655   $ 43,911   $ 36,660   $ 32,151   $ 33,077          4 %            4%
Loans                                172,499    161,124    133,004    119,662    116,435    115,119          7              8
Allowance for loan losses              3,761      3,719      3,344      3,307      3,220      3,202          1              3
Goodwill                               9,527      9,303      8,046      7,889      8,237      8,307          2              3
Assets                               307,569    272,426    241,053    224,135    203,819    204,075         13              9
Core deposits                        182,295    156,710    138,247    144,179    133,051    137,409         16              6
Long-term debt                        36,095     32,046     26,866     22,662     18,820     18,936         13             14
Guaranteed preferred beneficial
   interests in Company's
   subordinated debentures             2,435        935        935        935      1,449      1,300        160             13
Common stockholders' equity           27,150     26,221     23,600     21,869     20,700     20,466          4              6
Stockholders' equity                  27,214     26,488     23,871     22,332     21,164     21,256          3              5
-----------------------------------------------------------------------------------------------------------------------------

</Table>

Factors That May Affect Future Results
--------------------------------------------------------------------------------

We make forward-looking statements in this report and in other reports and proxy
statements we file with the Securities and Exchange Commission (SEC). In
addition, our senior management might make forward-looking statements orally to
analysts, investors, the media and others. Broadly speaking, forward-looking
statements include:

   o  projections of our revenues, income, earnings per share,
      capital expenditures, dividends, capital structure or other
      financial items;
   o  descriptions of plans or objectives of our management for
      future operations, products or services, including pending
      acquisitions;
   o  forecasts of our future economic performance; and
   o  descriptions of assumptions underlying or relating to any of
      the foregoing.

In this report, for example, we make forward-looking statements discussing our
expectations about:

   o  future credit losses and non-performing assets;
   o  the future value of equity securities, including those in our
      venture capital portfolios;
   o  the impact of new accounting standards, including the impact
      of FAS 142 on future noninterest expense and net income; and
   o  future short-term and long-term interest rate levels and their
      impact on our net interest margin, net income, liquidity and
      capital.

  Forward-looking statements discuss matters that are not historical facts.
Because they discuss future events or conditions, forward-looking statements
often include words such as "anticipate," "believe," "estimate," "expect,"
"intend," "plan," "project," "target," "can," "could," "may," "should," "will,"
"would" or similar expressions. Do not unduly rely on forward-looking
statements. They give our expectations about the future and are not guarantees.
Forward-looking statements speak only as of the date they are made, and we might
not update them to reflect changes that occur after the date they are made.

  There are several factors--many beyond our control--that could cause
results to differ significantly from our expectations. Some of these factors
are described below. Other factors, such as credit, market, operational,
liquidity, interest rate and other risks, are described elsewhere in this
report (see, for example, "Financial Review--Balance Sheet Analysis").
Factors relating to the regulation and supervision of the Company are
described in our Annual Report on Form 10-K for the year ended December 31,
2001. Any factor described in this report or in our 2001 Form 10-K could by
itself, or together with one or more other factors, adversely affect our
business, results of operations and/or financial condition. There are factors
not described in this report or in our Form 10-K that could cause results to
differ from our expectations.


                                       36

<Page>

Industry Factors
AS A FINANCIAL SERVICES COMPANY, OUR EARNINGS ARE SIGNIFICANTLY AFFECTED BY
GENERAL BUSINESS AND ECONOMIC CONDITIONS.
Our business and earnings are impacted by general business and economic
conditions in the United States and abroad. These conditions include short-term
and long-term interest rates, inflation, monetary supply, fluctuations in both
debt and equity capital markets, and the strength of the U.S. economy and the
local economies in which we operate. For example, an economic downturn, increase
in unemployment, or other events that negatively impact household and/or
corporate incomes could decrease the demand for the Company's loan and non-loan
products and services and increase the number of customers who fail to pay
interest or principal on their loans.

TERRORIST ATTACKS. We cannot predict at this time the severity or duration of
the impact on the general economy or the Company of the September 11, 2001
terrorist attacks or any subsequent terrorist activities or any actions taken in
response to or as a result of those attacks or activities. The most immediate
impact has been decreased demand for air travel, which has adversely affected
not only the airline industry but also other travel-related and leisure
industries, such as lodging, gaming and tourism. To the extent the impact has
spread or might spread to the overall U.S. and global economies, it could
further decrease capital and consumer spending and deepen the U.S. and/or global
recession. Decreased capital and consumer spending and other recessionary
effects could adversely affect the Company in a number of ways including
decreased demand for our products and services and increased credit losses.

CALIFORNIA ENERGY CRISIS. California is an example of a local economy in which
we operate. During 2001, California and other western states experienced an
energy crisis, including increased energy costs, repeated episodes of diminished
or interrupted electrical power supply and the filing by a California utility
for protection under bankruptcy laws. We cannot predict whether this situation
will continue in 2002 and, if it does, how severe the situation will be.
Continuation or reoccurrence of the situation, however, could disrupt our
business and the businesses of our customers who have operations or facilities
in those states. It could also trigger an economic slowdown in those states,
decreasing the demand for our loans and other products and services and/or
increasing the number of customers who fail to repay their loans. Continuation
or reoccurrence of the situation could also impact other states in which we
operate, creating the same or similar concerns for us in those states.

  We discuss other business and economic conditions in more detail elsewhere in
this report.

OUR EARNINGS ARE SIGNIFICANTLY AFFECTED BY THE FISCAL AND MONETARY POLICIES OF
THE FEDERAL GOVERNMENT AND ITS AGENCIES.
The policies of the Board of Governors of the Federal Reserve System impact us
significantly. The Federal Reserve Board regulates the supply of money and
credit in the United States. Its policies directly and indirectly influence the
rate of interest earned on loans and paid on borrowings and interest-bearing
deposits and can also materially affect the value of financial instruments we
hold, such as debt securities and mortgage servicing rights. Those policies
determine to a significant extent our cost of funds for lending and investing.
Changes in those policies are beyond our control and are hard to predict.
Federal Reserve Board policies also can affect our borrowers, potentially
increasing the risk that they may fail to repay their loans. For example, a
tightening of the money supply by the Federal Reserve Board could reduce the
demand for a borrower's products and services. This could adversely affect the
borrower's earnings and ability to repay its loan.

THE FINANCIAL SERVICES INDUSTRY IS HIGHLY COMPETITIVE.
We operate in a highly competitive environment in the products and services we
offer and the markets in which we operate. The competition among financial
services companies to attract and retain customers is intense. Customer loyalty
can be easily influenced by a competitor's new products, especially offerings
that provide cost savings to the customer. Some of our competitors may be better
able to provide a wider range of products and services over a greater geographic
area.

  We believe the financial services industry will become even more
competitive as a result of legislative, regulatory and technological changes
and the continued consolidation of the industry. Technology has lowered
barriers to entry and made it possible for non-banks to offer products and
services traditionally provided by banks, such as automatic transfer and
automatic payment systems. Also, investment banks and insurance companies are
competing in more banking businesses such as syndicated lending and consumer
banking. Recently, a number of foreign banks have acquired financial services
companies in the United States, further increasing competition in the U.S.
market. Many of our competitors have fewer regulatory constraints and some
have lower cost structures. We expect the consolidation of the financial
services industry to result in larger, better capitalized companies offering
a wide array of financial services and products.

  The Gramm-Leach-Bliley Act (the Act) permits banks, securities firms and
insurance companies to merge by creating a new type of financial services
company called a "financial holding company." Financial holding companies can
offer virtually any type of financial service, including banking, securities
underwriting, insurance (both agency and underwriting) and merchant banking.
Under the Act, securities firms and insurance companies that elect to become a
financial holding company can acquire banks and other financial institutions.
The Act significantly changes our competitive environment.


                                       37

<Page>

WE ARE HEAVILY REGULATED BY FEDERAL AND STATE AGENCIES.
The holding company, its subsidiary banks and many of its non-bank subsidiaries
are heavily regulated at the federal and state levels. This regulation is to
protect depositors, federal deposit insurance funds and the banking system as a
whole, not security holders. Congress and state legislatures and federal and
state regulatory agencies continually review banking laws, regulations and
policies for possible changes. Changes to statutes, regulations or regulatory
policies, including changes in interpretation or implementation of statutes,
regulations or policies, could affect us in substantial and unpredictable ways
including limiting the types of financial services and products we may offer
and/or increasing the ability of non-banks to offer competing financial services
and products. Also, our failure to comply with laws, regulations or policies
could result in sanctions by regulatory agencies and damage to our reputation.
For more information, refer to the "Regulation and Supervision" section of our
Annual Report on Form 10-K for the year ended December 31, 2001 and to Notes 3
(Cash, Loan and Dividend Restrictions) and 22 (Risk-Based Capital) to Financial
Statements included in this report.

CONSUMERS MAY DECIDE NOT TO USE BANKS TO COMPLETE THEIR FINANCIAL TRANSACTIONS.
Technology and other changes are allowing parties to complete financial
transactions that historically have involved banks. For example, consumers can
now pay bills and transfer funds directly without banks. The process of
eliminating banks as intermediaries, known as "disintermediation," could result
in the loss of fee income, as well as the loss of customer deposits and income
generated from those deposits.

Company Factors
MAINTAINING OR INCREASING OUR MARKET SHARE DEPENDS ON MARKET ACCEPTANCE AND
REGULATORY APPROVAL OF NEW PRODUCTS AND SERVICES.
Our success depends, in part, on our ability to adapt our products and services
to evolving industry standards. There is increasing pressure on financial
services companies to provide products and services at lower prices. This can
reduce our net interest margin and revenues from our fee-based products and
services. In addition, the widespread adoption of new technologies, including
internet-based services, could require us to make substantial expenditures to
modify or adapt our existing products and services. We might not successfully
introduce new products and services, achieve market acceptance of our products
and services, and/or develop and maintain loyal customers.

THE HOLDING COMPANY RELIES ON DIVIDENDS FROM ITS SUBSIDIARIES FOR MOST OF ITS
REVENUE.
The holding company is a separate and distinct legal entity from its
subsidiaries. It receives substantially all of its revenue from dividends from
its subsidiaries. These dividends are the principal source of funds to pay
dividends on the holding company's common and preferred stock and interest and
principal on its debt. Various federal and/or state laws and regulations limit
the amount of dividends that our bank and certain of our non-bank subsidiaries
may pay to the holding company. Also, the holding company's right to participate
in a distribution of assets upon a subsidiary's liquidation or reorganization is
subject to the prior claims of the subsidiary's creditors. For more information,
refer to "Regulation and Supervision--Dividend Restrictions" and "--Holding
Company Structure" in our Annual Report on Form 10-K for the year ended December
31, 2001.

WE HAVE BUSINESSES OTHER THAN BANKING.
We are a diversified financial services company. In addition to banking, we
provide insurance, investments, mortgages and consumer finance. Although we
believe our diversity helps mitigate the impact to the Company when downturns
affect any one segment of our industry, it also means that our earnings could be
subject to different risks and uncertainties. We discuss some examples below.

MERCHANT BANKING. Our merchant banking activities including venture capital
investments have a much greater risk of capital losses than our traditional
banking activities. In addition, it is difficult to predict the timing of any
gains from these activities. For example, realization of gains from our venture
capital investments depends on a number of factors--many beyond our
control--including general economic conditions, the prospects of the companies
in which we invest, when these companies go public, the size of our position
relative to the public float, and whether we are subject to any resale
restrictions.

  Early in 2001, we experienced sustained declines in the market values of
some of our publicly traded and private equity securities, in particular
securities of companies in the technology and telecommunications industries.
In the second quarter of 2001, we recognized non-cash charges to reflect
other-than-temporary impairment in the valuation of securities. A number of
factors, including the continued deterioration in capital spending on
technology and telecommunications equipment and/or the impact of the recent
terrorist attacks and other terrorist activities and actions taken in
response to or as a result of those attacks and activities, could result in
additional declines in the market values of our publicly traded and private
equity securities. If we determine that the declines are
other-than-temporary, additional impairment charges would be recognized. In
addition, we will realize losses to the extent we sell securities at less
than book value. For more information, see in this report "Financial
Review--Overview," "--Earnings Performance--Noninterest Income," "--Balance
Sheet Analysis--Securities Available for Sale" and Note 4 to Financial
Statements.


                                       38

<Page>

MORTGAGE BANKING. The impact of interest rates on our mortgage banking business
can be large and complex. Loan origination fees and loan servicing fees account
for a significant portion of mortgage-related revenues. Changes in interest
rates can impact both types of fees. For example, we would expect a decline in
mortgage rates to increase the demand for mortgage loans as borrowers refinance,
but also lead to accelerated payoffs in our mortgage servicing portfolio.
Conversely, in a constant or increasing rate environment, we would expect fewer
loans to be refinanced and a decline in payoffs in our servicing portfolio.
While the Company uses dynamic and sophisticated models to assess the impact of
interest rates on mortgage fees, amortization of mortgage servicing rights, and
the value of mortgage servicing assets, the estimates of net income and fair
value produced by these models are dependent on estimates and assumptions of
future loan demand, prepayment speeds and other factors which may overstate or
understate actual subsequent experience. For more information, see in this
report "Financial Review--Risk Management--Mortgage Banking Interest Rate Risk."

WE HAVE AN ACTIVE ACQUISITION PROGRAM.
We regularly explore opportunities to acquire financial institutions and other
financial services providers. We cannot predict the number, size or timing of
future acquisitions. We typically do not comment publicly on a possible
acquisition or business combination until we have signed a definitive agreement
for the transaction.

  Our ability to successfully complete an acquisition generally is subject to
regulatory approval, and we cannot be certain when or if, or on what terms and
conditions, any required regulatory approvals will be granted. We might be
required to divest banks or branches as a condition to receiving regulatory
approval.

  Difficulty in integrating an acquired company may cause us not to realize
expected revenue increases, cost savings, increases in geographic or product
presence, and/or other projected benefits from the acquisition. Specifically,
the integration process could result in higher than expected deposit attrition
(run-off), loss of key employees, the disruption of our business or the business
of the acquired company, or otherwise adversely affect our ability to maintain
relationships with customers and employees or achieve the anticipated benefits
of the acquisition. Also, the negative impact of any divestitures required by
regulatory authorities in connection with acquisitions or business combinations
may be greater than expected.

OUR BUSINESS COULD SUFFER IF WE FAIL TO ATTRACT AND RETAIN SKILLED PEOPLE.
Our success depends, in large part, on our ability to attract and retain key
people. Competition for the best people in most activities engaged in by the
Company can be intense. We may not be able to hire people or to keep them.

OUR STOCK PRICE CAN BE VOLATILE.
Our stock price can fluctuate widely in response to a variety of factors
including:

   o  actual or anticipated variations in our quarterly operating
      results;
   o  new technology used, or services offered, by our competitors;
   o  significant acquisitions or business combinations, strategic
      partnerships, joint ventures or capital commitments by or
      involving us or our competitors;
   o  failure to integrate our acquisitions or realize anticipated
      benefits from our acquisitions; and
   o  changes in government regulations.

  General market fluctuations, industry factors and general economic and
political conditions and events, such as the recent terrorist attacks,
economic slowdowns or recessions, interest rate changes, credit loss trends
or currency fluctuations, also could cause our stock price to decrease
regardless of our operating results.


                                       39

<Page>

EARNINGS PERFORMANCE
--------------------------------------------------------------------------------
NET INTEREST INCOME
Net interest income is the difference between interest income (which includes
yield-related loan fees) and interest expense. Net interest income on a
taxable-equivalent basis was $12.54 billion in 2001, compared with $10.93
billion in 2000, an increase of 15%. The increase was primarily due to a 14%
increase in earning assets.

  Net interest income on a taxable-equivalent basis expressed as a percentage of
average total earning assets is referred to as the net interest margin, which
represents the average net effective yield on earning assets. For 2001, the net
interest margin was 5.36%, compared with 5.35% in 2000. On average for the year
2001, earning asset yields declined approximately the same as the decline in the
average cost of all funding sources, about 95 basis points. During 2001, the net
interest margin widened on a sequential quarterly basis from 5.21% in the first
quarter to 5.50% in the fourth quarter. Three factors account for the margin
increase during the year: (a) a greater proportion of consumer loans in the
total loan mix, (b) an increase in lower cost core deposits, particularly
mortgage escrow deposits as mortgage origination activity expanded, and (c) a
faster decline in deposit and borrowing costs than in loan yields as the general
level of market rates declined throughout the year.

  Table 5 presents the individual components of net interest income and the net
interest margin.

NONINTEREST INCOME

Table 3 shows the major components of noninterest income.

TABLE 3 NONINTEREST INCOME
<Table>
<Caption>
-------------------------------------------------------------------------------------------------------------------
                                                                                                           % Change
                                                                   Year ended December 31,         ----------------
                                                   --------------------------------------          2001/       2000/
(in millions)                                         2001           2000            1999          2000        1999
-------------------------------------------------------------------------------------------------------------------
<S>                                                <C>           <C>             <C>              <C>         <C>
Service charges on deposit accounts                $ 1,876         $1,704          $1,580            10%          8%
   Trust and investment fees:
     Asset management and custody fees                 731            735             784            (1)         (6)
   Mutual fund and annuity sales fees                  803            763             472             5          62
   All other                                           176            126             110            40          15
                                                   -------         ------          ------
       Total trust and investment fees               1,710          1,624           1,366             5          19

Credit card fees                                       796            721             694            10           4
Other fees:
   Cash network fees                                   202            187             151             8          24
   Charges and fees on loans                           445            347             314            28          11
   All other                                           597            579             505             3          15
                                                   -------         ------          ------
       Total other fees                              1,244          1,113             970            12          15

Mortgage banking:
   Origination and other closing fees                  737            350             406           111         (14)
   Servicing fees, net of amortization and
       impairment                                     (260)           665             404            --          65
   Net gains on securities available for sale          134             --              --            --          --
   Net gains on sales of mortgage
       servicing rights                                 --            159             193          (100)        (18)
   Net gains on mortgage loan
       origination/sales activities                    705             38             117            --         (68)
   All other                                           355            232             287            53         (19)
                                                   -------         ------          ------
       Total mortgage banking                        1,671          1,444           1,407            16           3

Insurance                                              745            411             395            81           4
Net venture capital (losses) gains                  (1,630)         1,943           1,008            --          93
Net gains (losses) on
   securities available for sale                       463           (722)           (228)           --         217
Net income (loss) from equity
   investments accounted for by the:
   Cost method                                         (55)           170             138            --          23
   Equity method                                       (51)            94              81            --          16
Net gains (losses) on sales of loans                    35           (134)             68            --          --
Net gains on dispositions of operations                122             23             107           430         (79)
All other                                              764            452             389            69          16
                                                   -------         ------          ------
       Total                                       $ 7,690         $8,843          $7,975           (13)%        11%
                                                   =======         ======          ======          ====         ===

-------------------------------------------------------------------------------------------------------------------
</Table>

Service charges on deposit accounts increased in line with the growth in core
consumer deposit balances and account activity.

The increase in trust and investment fees for 2001 was primarily due to the
acquisition of H.D. Vest and an increase in mutual fund fees resulting from the
overall growth in mutual fund assets. The Company managed mutual funds with $77
billion of assets at December 31, 2001, compared with $69 billion at December
31, 2000. The Company also managed or maintained personal trust, employee
benefit trust and agency assets of approximately $525 billion at December 31,
2001, compared with $480 billion at December 31, 2000.

The increase in mortgage origination and other closing fees was predominantly
due to increased refinancing activity resulting from the decline in fixed-rate
mortgage rates during the last three quarters of 2001. Mortgage servicing fees
before amortization and impairment provision increased in 2001 in line with
substantial growth in the servicing portfolio. However, these additional fees
were more than offset by increased amortization and impairment provisions for
mortgage servicing rights and other retained interests. Such valuation
adjustments are driven by higher estimated prepayments assumed to be associated
with the lower prevailing level of interest rates. (For additional disclosures
related to assumptions used to value mortgage servicing rights, see Note 1
(Transfers and Servicing of Financial Assets) and Note 19 to Financial
Statements.) The increase in gains on mortgage loan origination/sales activities
in 2001 was due to increased production volume.

The increase in insurance fees was predominantly due to the acquisition of
Acordia in the second quarter of 2001 and subsequent growth in that business.

Net venture capital losses for 2001 included approximately $1,500 million
(pretax) of non-cash impairment write-downs recognized in the second quarter of
2001 reflecting other-than-temporary impairment in the valuation of publicly
traded securities and private equity investments. Venture capital gains in 2000
included a $560 million (pretax) non-cash gain recognized during the first
quarter on the Company's investment in Siara Systems.


                                     40
<Page>


Net losses for 2001 from equity investments included approximately $215 million
of non-cash impairment write-downs recognized in the second quarter of 2001.

The Company routinely recognizes impairment in its venture capital portfolios.
During second quarter 2001, based on general economic and market conditions,
including those events occurring in the technology and telecommunications
industries, adverse changes occurred that impacted venture capital financing.
While the impairment recognized is based on all of the information available at
the time of the assessment, other information or economic developments in the
future could lead to further impairment.

The net losses on securities available for sale in 2000 were predominantly due
to the sales of securities associated with the restructuring of the debt
securities portion of the securities available for sale portfolio during the
first nine months of 2000.

Net losses on sales of loans in 2000 were due to sales of loans and loan asset
securitizations by First Security prior to the FSCO Merger.

The increase in net gains on dispositions of operations in 2001 was
predominantly due to a $96 million net gain in the first quarter of 2001, which
included a $54 million reduction of unamortized goodwill, related to the
divestiture of 39 stores (as a condition to the First Security merger) in Idaho,
New Mexico, Nevada and Utah.

"All other" noninterest income included writedowns of auto lease residuals of
about $80 million recorded in 2001, related to the portfolios acquired as part
of the FSCO Merger, compared with about $180 million in 2000. In 2000, the
Company began acquiring residual loss insurance, which is intended to cover most
of the risk of additional declines in residual values for the auto lease
portfolio in the foreseeable future.


NONINTEREST EXPENSE

Table 4 shows the major components of noninterest expense.

<Table>
<Caption>

TABLE 4 NONINTEREST EXPENSE

------------------------------------------------------------------------------------------------------------------
                                                                                                          % Change
                                                                   Year ended December 31,         ---------------
                                                  ---------------------------------------          2001/      2000/
(in millions)                                         2001           2000            1999          2000       1999
------------------------------------------------------------------------------------------------------------------
<S>                                               <C>             <C>             <C>             <C>        <C>
Salaries                                           $ 4,027         $ 3,652        $ 3,307            10%        10%
Incentive compensation                               1,195             846            643            41         32
Employee benefits                                      960             989            901            (3)        10
Equipment                                              909             948            928            (4)         2
Net occupancy                                          975             953            813             2         17
Goodwill                                               610             530            459            15         15
Core deposit intangible:
   Nonqualifying (1)                                   155             173            186           (10)        (7)
   Qualifying                                           10              13             20           (23)       (35)
Net gains on dispositions of
   premises and equipment                              (21)            (58)           (16)          (64)       263
Outside professional services                          486             447            381             9         17
Contract services                                      472             536            473           (12)        13
Telecommunications                                     355             303            286            17          6
Outside data processing                                319             343            312            (7)        10
Travel and entertainment                               286             287            262            --         10
Advertising and promotion                              276             316            251           (13)        26
Postage                                                242             252            239            (4)         5
Stationery and supplies                                242             223            191             9         17
Operating losses                                       234             179            150            31         19
Insurance                                              167             157            152             6          3
Security                                               156              98             95            59          3
All other                                              836             643            604            30          6
                                                   -------         -------        -------

   Total                                           $12,891         $11,830        $10,637             9%        11%
                                                   =======         =======        =======           ===        ===

------------------------------------------------------------------------------------------------------------------
</Table>

(1)  Represents amortization of core deposit intangible acquired after February
     1992 that is subtracted from stockholders' equity in computing regulatory
     capital for bank holding companies.

The increase in salaries in 2001 was due to a 10% increase in active full-time
equivalent staff, including employees from newly acquired companies.

The increase in incentive compensation was predominantly due to additional sales
and service team members, partially to originate record mortgage volume.

The slight decrease in employee benefits was due to the Company recognizing
net pension income of $49 million in 2001, compared with net pension cost of
$49 million in 2000. This decrease was substantially offset by the increase
in other employee benefits related to additional active full-time equivalent
staff and rising benefit costs. The net pension income in 2001 was due to
amortization of gains on pension plan assets due primarily to strong equity
and bond market performance in 2000. The Company expects to recognize
increased pension cost in 2002.


                                     41
<Page>


<Table>
<Caption>

TABLE 5  AVERAGE BALANCES, YIELDS AND RATES PAID (TAXABLE-EQUIVALENT BASIS) (1)(2)
----------------------------------------------------------------------------------------------------------------------
(in millions)                                                                 2001                                2000
                                                      ----------------------------        ----------------------------
                                                                          INTEREST                            Interest
                                                      AVERAGE    YIELDS/    INCOME/       Average    Yields/    income/
                                                      BALANCE     RATES    EXPENSE        balance     rates    expense
----------------------------------------------------------------------------------------------------------------------
<S>                                                  <C>         <C>      <C>            <C>         <C>      <C>
EARNING ASSETS
Federal funds sold and securities purchased
 under resale agreements                             $  2,583      3.69%   $    95       $  2,370      6.01%   $   143
Debt securities available for sale (3):
  Securities of U.S. Treasury and federal agencies      2,158      6.55        137          3,322      6.16        210
  Securities of U.S. states and political subdivisions  2,026      7.98        154          2,080      7.74        162
  Mortgage-backed securities:
    Federal agencies                                   27,433      7.19      1,917         26,054      7.22      1,903
    Private collateralized mortgage obligations         1,766      8.55        148          2,379      7.61        187
                                                     --------              -------       --------              -------
      Total mortgage-backed securities                 29,199      7.27      2,065         28,433      7.25      2,090
  Other debt securities (4)                             3,343      7.80        254          5,049      7.93        261
                                                     --------              -------       --------              -------
        Total debt securities available for sale (4)   36,726      7.32      2,610         38,884      7.24      2,723
Mortgages held for sale (3)                            23,677      6.72      1,595         10,725      7.85        849
Loans held for sale (3)                                 4,820      6.58        317          4,915      8.50        418
Loans:
  Commercial                                           48,648      8.01      3,896         45,352      9.40      4,263
  Real estate 1-4 family first mortgage                19,715      7.18      1,416         16,356      7.95      1,300
  Other real estate mortgage                           24,194      7.99      1,934         22,509      8.99      2,023
  Real estate construction                              8,073      8.10        654          6,934     10.02        695
  Consumer:
    Real estate 1-4 family junior lien mortgage        21,232      9.25      1,965         15,292     10.43      1,595
    Credit card                                         6,270     13.36        838          5,867     14.58        856
    Other revolving credit and monthly payment         23,459     11.40      2,674         21,824     12.06      2,631
                                                     --------              -------       --------              -------
      Total consumer                                   50,961     10.75      5,477         42,983     11.82      5,082
  Lease financing                                       9,930      7.67        761          9,822      7.66        752
  Foreign                                               1,603     20.82        333          1,621     21.15        343
                                                     --------              -------       --------              -------
        Total loans (5)(6)                            163,124      8.87     14,471        145,577      9.93     14,458
Other                                                   4,000      4.77        191          3,206      6.21        199
                                                     --------              -------       --------              -------
          Total earning assets                       $234,930      8.24     19,279       $205,677      9.19     18,790
                                                     ========              -------       ========              -------
FUNDING SOURCES
Deposits:
  Interest-bearing checking                          $  2,178      2.51         55       $  3,424      1.88         64
  Market rate and other savings                        80,585      2.05      1,655         63,577      2.81      1,786
  Savings certificates                                 29,850      5.13      1,530         30,101      5.37      1,616
  Other time deposits                                   1,332      5.04         67          4,438      5.69        253
  Deposits in foreign offices                           6,209      3.96        246          5,950      6.22        370
                                                     --------              -------       --------              -------
      Total interest-bearing deposits                 120,154      2.96      3,553        107,490      3.80      4,089
Short-term borrowings                                  33,885      3.76      1,273         28,222      6.23      1,758
Long-term debt                                         34,501      5.29      1,826         29,000      6.69      1,939
Guaranteed preferred beneficial interests in
 Company's subordinated debentures                      1,394      6.40         89            935      7.92         74
                                                     --------              -------       --------              -------
      Total interest-bearing liabilities              189,934      3.55      6,741        165,647      4.75      7,860
Portion of noninterest-bearing funding sources         44,996        --         --         40,030        --         --
                                                     --------              -------       --------              -------
          Total funding sources                      $234,930      2.88      6,741       $205,677      3.84      7,860
                                                     ========              -------       ========              -------
NET INTEREST MARGIN AND NET INTEREST INCOME ON
  A TAXABLE-EQUIVALENT BASIS (7)                                   5.36%   $12,538                     5.35%   $10,930
                                                                  =====    =======                     ====    =======
NONINTEREST-EARNING ASSETS
Cash and due from banks                              $ 14,608                            $ 13,103
Goodwill                                                9,514                               8,811
Other                                                  26,369                              22,597
                                                     --------                            --------
          Total noninterest-earning assets           $ 50,491                            $ 44,511
                                                     ========                            ========
NONINTEREST-BEARING FUNDING SOURCES
Deposits                                             $ 55,333                            $ 48,691
Other liabilities                                      13,301                              11,000
Preferred stockholders' equity                            210                                 266
Common stockholders' equity                            26,643                              24,584
Noninterest-bearing funding sources used to
 fund earning assets                                  (44,996)                            (40,030)
                                                     --------                            --------
          Net noninterest-bearing funding sources    $ 50,491                            $ 44,511
                                                     ========                            ========
TOTAL ASSETS                                         $285,421                            $250,188
                                                     ========                            ========
----------------------------------------------------------------------------------------------------------------------
</Table>

(1)  The average prime rate of the Company was 6.91%, 9.24%, 8.00%, 8.35% and
     8.44% for 2001, 2000, 1999, 1998 and 1997, respectively. The average
     three-month London Interbank Offered Rate (LIBOR) was 3.78%, 6.52%, 5.42%,
     5.56% and 5.74% for the same years, respectively.
(2)  Interest rates and amounts include the effects of hedge and risk management
     activities associated with the respective asset and liability categories.
(3)  Yields are based on amortized cost balances computed on a settlement date
     basis.


                                     42
<Page>


<Table>
<Caption>

TABLE 5  AVERAGE BALANCES, YIELDS AND RATES PAID (TAXABLE-EQUIVALENT BASIS) (1)(2)
--------------------------------------------------------------------------------------------------------------------------
                                                                                 1999                                1998
                                                      -------------------------------        ----------------------------
                                                                             Interest                            Interest
                                                       Average    Yields/      Income/        Average   Yields/    income/
                                                       Balance     Rates      Expense         balance    rates    expense
--------------------------------------------------------------------------------------------------------------------------
<S>                                                   <C>        <C>          <C>            <C>        <C>       <C>
EARNING ASSETS
Federal funds sold and securities purchased
 under resale agreements                              $  1,673      5.11%     $    86        $  1,770     5.57%   $    99
Debt securities available for sale (3):
  Securities of U.S. Treasury and federal agencies       6,124      5.51          348           5,916     6.02        353
  Securities of U.S. states and political subdivisions   2,119      8.12          168           1,855     8.39        148
  Mortgage-backed securities:
    Federal agencies                                    23,542      6.77        1,599          20,079     6.99      1,376
    Private collateralized mortgage obligations          3,945      6.77          270           3,072     6.72        205
                                                      --------                -------        --------             -------
    Total mortgage-backed securities                    27,487      6.77        1,869          23,151     6.95      1,581
  Other debt securities (4)                              3,519      7.49          209           1,570     7.94        105
                                                      --------                -------        --------             -------
        Total debt securities available for sale (4)    39,249      6.69        2,594          32,492     6.90      2,187
Mortgages held for sale (3)                             13,559      6.96          951          14,712     6.85      1,008
Loans held for sale (3)                                  5,154      7.31          377           4,876     7.71        376
Loans:
  Commercial                                            38,932      8.66        3,370          35,805     8.85      3,169
  Real estate 1-4 family first mortgage                 13,315      7.78        1,036          13,870     7.92      1,098
  Other real estate mortgage                            18,822      8.74        1,645          17,539     9.40      1,648
  Real estate construction                               5,260      9.56          503           4,270     9.71        415
  Consumer:
    Real estate 1-4 family junior lien mortgage         11,656      9.96        1,161          10,708    10.43      1,117
    Credit card                                          5,686     13.77          783           6,322    14.99        948
    Other revolving credit and monthly payment          19,561     11.88        2,324          19,992    12.15      2,428
                                                      --------                -------        --------             -------
      Total consumer                                    36,903     11.57        4,268          37,022    12.13      4,493
  Lease financing                                        8,852      7.81          691           7,039     8.13        572
  Foreign                                                1,554     20.65          321           1,353    20.65        279
                                                      --------                -------        --------             -------
        Total loans (5)(6)                             123,638      9.57       11,834         116,898     9.99     11,674
Other                                                    3,252      5.01          162           3,092     5.86        181
                                                      --------                -------        --------             -------
          Total earning assets                        $186,525      8.60       16,004        $173,840     8.97     15,525
                                                      ========                -------        ========             -------
FUNDING SOURCES
Deposits:
  Interest-bearing checking                           $  3,120       .99           31        $  3,034     1.35         41
  Market rate and other savings                         60,901      2.30        1,399          56,724     2.63      1,492
  Savings certificates                                  30,088      4.86        1,462          31,905     5.29      1,686
  Other time deposits                                    3,957      4.94          196           4,565     5.47        250
  Deposits in foreign offices                            1,658      4.76           79             948     4.84         46
                                                      --------                -------        --------             -------
      Total interest-bearing deposits                   99,724      3.17        3,167          97,176     3.62      3,515
Short-term borrowings                                   22,559      5.00        1,127          17,927     5.36        963
Long-term debt                                          24,646      5.90        1,453          19,294     6.29      1,214
Guaranteed preferred beneficial interests in
 Company's subordinated debentures                         935      7.73           72           1,160     8.12         94
                                                      --------                -------        --------             -------
      Total interest-bearing liabilities               147,864      3.94        5,819         135,557     4.27      5,786
Portion of noninterest-bearing funding sources          38,661        --           --          38,283       --         --
                                                      --------                -------        --------             -------
          Total funding sources                       $186,525      3.13        5,819        $173,840     3.34      5,786
                                                      ========                -------        ========             -------
NET INTEREST MARGIN AND NET INTEREST INCOME ON
  A TAXABLE-EQUIVALENT BASIS (7)                                    5.47%     $10,185                     5.63%   $ 9,739
                                                                   =====      =======                    =====    =======
NONINTEREST-EARNING ASSETS
Cash and due from banks                               $ 12,252                               $ 11,410
Goodwill                                                 7,983                                  8,069
Other                                                   18,339                                 14,255
                                                      --------                               --------
          Total noninterest-earning assets            $ 38,574                               $ 33,734
                                                      ========                               ========
NONINTEREST-BEARING FUNDING SOURCES
Deposits                                              $ 45,201                               $ 43,229
Other liabilities                                        8,909                                  7,314
Preferred stockholders' equity                             461                                    463
Common stockholders' equity                             22,664                                 21,011
Noninterest-bearing funding sources used to
 fund earning assets                                   (38,661)                               (38,283)
                                                      --------                               --------
          Net noninterest-bearing funding sources     $ 38,574                               $ 33,734
                                                      ========                               ========
TOTAL ASSETS                                          $225,099                               $207,574
                                                      ========                               ========
-------------------------------------------------------------------------------------------------------
</Table>

<Table>
<Caption>
-----------------------------------------------------------------------------------
                                                                               1997
                                                       ----------------------------
                                                                           Interest
                                                       Average    Yields/    income/
                                                       balance     rates    expense
-----------------------------------------------------------------------------------
<S>                                                   <C>           <C>     <C>
       <C>
EARNING ASSETS
Federal funds sold and securities purchased
 under resale agreements                              $  1,207      5.40%   $    65
Debt securities available for sale (3):
  Securities of U.S. Treasury and federal agencies       5,987      6.22        371
  Securities of U.S. states and political subdivisions   1,630      8.35        133
  Mortgage-backed securities:
    Federal agencies                                    22,173      7.08      1,559
    Private collateralized mortgage obligations          3,083      6.80        210
                                                      --------              -------
    Total mortgage-backed securities                    25,256      7.05      1,769
  Other debt securities (4)                              1,192      5.71         71
                                                      --------              -------
        Total debt securities available for sale (4)    34,065      6.91      2,344
Mortgages held for sale (3)                              7,314      7.27        532
Loans held for sale (3)                                  3,900      8.10        316
Loans:
  Commercial                                            31,939      9.22      2,943
  Real estate 1-4 family first mortgage                 16,924      8.46      1,432
  Other real estate mortgage                            17,603      9.61      1,692
  Real estate construction                               3,858     10.13        391
  Consumer:
    Real estate 1-4 family junior lien mortgage          9,882      9.61        950
    Credit card                                          6,960     14.59      1,015
    Other revolving credit and monthly payment          20,188     11.88      2,398
                                                      --------              -------
      Total consumer                                    37,030     11.78      4,363
  Lease financing                                        5,467      8.32        455
  Foreign                                                1,042     20.40        212
                                                      --------              -------
        Total loans (5)(6)                             113,863     10.09     11,488
Other                                                    2,558      5.93        152
                                                      --------              -------
          Total earning assets                        $162,907      9.16     14,897
                                                      ========              -------
FUNDING SOURCES
Deposits:
  Interest-bearing checking                           $  3,491      1.72         60
  Market rate and other savings                         54,753      2.62      1,433
  Savings certificates                                  32,143      5.32      1,711
  Other time deposits                                    4,112      5.61        231
  Deposits in foreign offices                            1,386      4.83         67
                                                      --------              -------
      Total interest-bearing deposits                   95,885      3.65      3,502
Short-term borrowings                                   14,038      5.36        756
Long-term debt                                          18,335      6.40      1,173
Guaranteed preferred beneficial interests in
 Company's subordinated debentures                       1,437      7.89        113
                                                      --------              -------
      Total interest-bearing liabilities               129,695      4.27      5,544
Portion of noninterest-bearing funding sources          33,212        --         --
                                                      --------              -------
          Total funding sources                       $162,907      3.41      5,544
                                                      ========              -------
NET INTEREST MARGIN AND NET INTEREST INCOME ON
  A TAXABLE-EQUIVALENT BASIS (7)                                    5.75%   $ 9,353
                                                                   =====    =======
NONINTEREST-EARNING ASSETS
Cash and due from banks                               $ 12,297
Goodwill                                                 8,325
Other                                                   14,689
                                                      --------
          Total noninterest-earning assets            $ 35,311
                                                      ========
NONINTEREST-BEARING FUNDING SOURCES
Deposits                                              $ 39,903
Other liabilities                                        7,688
Preferred stockholders' equity                             555
Common stockholders' equity                             20,377
Noninterest-bearing funding sources used to
 fund earning assets                                   (33,212)
                                                      --------
          Net noninterest-bearing funding sources     $ 35,311
                                                      ========
TOTAL ASSETS                                          $198,218
                                                      ========
-----------------------------------------------------------------------------------
</Table>

(4)  Includes certain preferred securities.
(5)  Interest income includes loan fees, net of deferred costs, of approximately
     $146 million, $194 million, $210 million, $148 million and $126 million in
     2001, 2000, 1999, 1998 and 1997, respectively.
(6)  Nonaccrual loans and related income are included in their respective loan
     categories.
(7)  Includes taxable-equivalent adjustments that primarily relate to income on
     certain loans and securities that is exempt from federal and applicable
     state income taxes. The federal statutory tax rate was 35% for all years
     presented.

                                     43
<Page>

OPERATING SEGMENT RESULTS
COMMUNITY BANKING net income was $2,568 million in 2001, compared with $3,106
million in 2000. Excluding second quarter 2001 impairment and other special
charges of $1,089 million (after tax), net income was $3,657 million in 2001,
an increase of 18% from 2000. Net interest income increased by $1,324
million, or 17%, compared with 2000, primarily due to an increase in
mortgages held for sale and mortgage loans, as well as lower borrowing costs.
The provision for loan losses increased by $166 million from 2000 due to
higher charge-offs and growth in the loan portfolio. Noninterest income was
$5,189 million in 2001, compared with $6,685 million in 2000. Excluding
second quarter 2001 impairment and other special charges of $1,742 million
(before tax), noninterest income was up $246 million in 2001, or 4%, compared
with 2000, due to increases in trust and investment fees, service charges on
deposit accounts, mortgage banking and credit card fees. Also, noninterest
income in 2000 included losses on sales of loans and securitizations by First
Security prior to the FSCO Merger. These improvements, plus a significant
increase in gains on securities available for sale more than offset the
decrease in venture capital gains, excluding approximately $1,500 million of
impairment charges taken in second quarter 2001. Noninterest expense
increased by $576 million over 2000 due to an increase in sales and services
staff related expenses as a result of record mortgage origination volume.

WHOLESALE BANKING net income was $928 million in 2001, compared with $1,007
million in 2000. Excluding second quarter 2001 impairment and other special
charges of $62 million (after tax), net income was $990 million in 2001, a
decrease of 2% from 2000. Net interest income increased $20 million, or 1%,
from 2000, due to higher loan volume, which was offset by the lower interest
rate environment that existed during 2001. Average outstanding loan balances
increased $4 billion, or 9%, from 2000. Noninterest income increased by $345
million, or 20%, compared with 2000, due to higher insurance revenue related
to the acquisition of Acordia in the second quarter of 2001. Noninterest
expense increased by $399 million, or 21%, compared with 2000, primarily as a
result of the Acordia acquisition along with increased personnel expenses
related to increased sales and service staff. The provision for loan losses
increased to $278 million in 2001, compared with $151 million in 2000.

WELLS FARGO FINANCIAL net income was $288 million in 2001, compared with $258
million in 2000, an increase of 12%. Net interest income increased by 18%
from 2000, due to growth in average loans. The provision for loan losses was
$487 million in 2001, compared with $329 million in 2000. The increase was
predominantly due to growth in average loans and higher net write-offs in the
loan portfolios.
     For a further discussion of operating segments see Note 17 to Financial
Statements.

BALANCE SHEET ANALYSIS

A comparison between the year-end 2001 and 2000 balance sheets is presented
below.

SECURITIES AVAILABLE FOR SALE
The Company holds both debt and marketable equity securities in its
securities available for sale portfolio. Debt securities available for sale
are primarily held for liquidity, interest rate risk management and yield
enhancement purposes. Given these purposes, the portfolio is primarily
comprised of very liquid, high quality federal agency debt securities. At
December 31, 2001, the Company held $38.7 billion of debt securities
available for sale, up from $35.4 billion at December 31, 2000. The Company
had a net unrealized gain of $655 million at December 31, 2001 compared with
a net unrealized gain of $718 million at December 31, 2000. Although the
Company realized $597 million in gains on securities sold during 2001, the
net unrealized gain declined only $63 million from December 31, 2000 because
of the favorable impact of lower long-term interests rates on the value of
debt securities not sold during 2001. The weighted average expected maturity
of the debt securities portion of the securities available for sale portfolio
was 5 years and 10 months at December 31, 2001. Since 80% of this portfolio
is held in mortgage-backed securities, the expected remaining maturity may
differ from contractual maturity because the issuers of such securities may
have the right to prepay obligations with or without penalty. The effect of a
200 basis point increase and a 200 basis point decrease on the fair value and
the expected remaining maturity of the mortgage-backed securities available
for sale portfolio is indicated in Table 6.

Table 6 MORTGAGE-BACKED SECURITIES
<Table>
<Caption>
-----------------------------------------------------------------------------------
($ in billions)                      Fair      Net unrealized             Remaining
                                    value         gain (loss)              maturity
-----------------------------------------------------------------------------------

<S>                                 <C>        <C>                   <C>
At December 31, 2001                $32.4               $  .5        5 yrs., 6 mos.
At December 31, 2001,
assuming a 200 basis point:
   Increase in interest rates        29.2                (2.7)       7 yrs., 4 mos.
   Decrease in interest rates        34.2                 2.3        2 yrs., 8 mos.

-----------------------------------------------------------------------------------
</Table>

     Equity securities available for sale are comprised of marketable common
stocks, largely distributed from the Company's private equity investment
activities. The decrease of $1.64 billion in cost between December 31, 2000
and December 31, 2001 was due to sales and dispositions and the non-cash
impairment charges taken in the second quarter of 2001. The fair value of
this portfolio exceeded cost by $176 million at December 31, 2001 and $72
million at December 31, 2000.

     See Note 4 to Financial Statements for securities available for sale by
security type.

                                       44

<Page>

LOAN PORTFOLIO
A comparative schedule of average loan balances is presented in Table 5;
year-end balances are presented in Note 5 to Financial Statements.

     Loans averaged $163.1 billion in 2001, compared with $145.6 billion in
2000, an increase of 12%. Total loans at December 31, 2001 were $172.5
billion, compared with $161.1 billion at year-end 2000, an increase of 7%.
The increase in average loans is due to increased consumer demand,
particularly for home finance. Mortgages held for sale increased from $11.8
billion to $30.4 billion due to record originations, including significant
refinancing activity. These increases were partially offset by a slow down in
commercial loan demand in line with the weakening U.S. economy.

DEPOSITS
Comparative detail of average deposit balances is presented in Table 5.
Average core deposits funded 58.8% and 58.3% of the Company's average total
assets in 2001 and 2000, respectively. Year-end deposit balances are
presented in Table 7. Total average interest-bearing deposits rose from
$107.5 billion in 2000 to $120.2 billion in 2001. For the same periods, total
average noninterest-bearing deposits rose from $48.7 billion to $55.3
billion. While savings certificates of deposits declined on average from
$30.1 billion in 2000 to $29.9 billion in 2001, noninterest-bearing checking
accounts and other core deposit categories increased substantially in 2001
reflecting the Company's success in growing customer accounts and balances
and reflecting growth in mortgage escrow deposits associated with the record
amount of mortgages originated in 2001. Deposit growth in 2001 was also
partly due to sweep accounts moved onto the balance sheet.

Table 7 DEPOSITS
<Table>
<Caption>
---------------------------------------------------------------------
(in millions)                                   December 31,
                                    -----------------------          %
                                        2001           2000    Change
---------------------------------------------------------------------

<S>                                 <C>            <C>         <C>
Noninterest-bearing                 $ 65,362       $ 55,096        19%
Interest-bearing checking              2,228          3,699       (40)
Market rate and other savings         89,251         66,859        33
Savings certificates                  25,454         31,056       (18)
                                    --------       --------
   Core deposits                     182,295        156,710        16
Other time deposits                      839          5,137       (84)
Deposits in foreign offices            4,132          7,712       (46)
                                    --------       --------
     Total deposits                 $187,266       $169,559        10%
                                    ========       ========       ===
----------------------------------------------------------------------
</Table>

OFF-BALANCE SHEET TRANSACTIONS

OFF-BALANCE SHEET ARRANGEMENTS
The Company consolidates majority-owned subsidiaries that it controls. Other
affiliates, including certain joint ventures, in which there is generally 20%
ownership are accounted for by the equity method of accounting and not
consolidated; those in which there is less than 20% ownership are generally
carried at cost.

     The Company's mortgage operation, in the routine course of business,
originates a portion of its mortgage loans through joint ventures. Such joint
ventures are used as a means to generate loans that are funded by Wells Fargo
Home Mortgage, Inc. or an affiliated entity and are subject to established
underwriting criteria. The Company has also entered into joint ventures to
provide title, escrow, appraisal and other real estate-related services.
These joint ventures were formed to provide certain operational efficiencies
due to scale and are managed by the Company's joint venture partner, an
unrelated third party. The Company has also formed alliances with other
unrelated third parties to gain economies of scale through other joint
ventures in areas such as credit card processing and related activities.
These joint ventures are accounted for under the equity method and the assets
and liabilities of such ventures are not significant.

     The Company does not dispose of troubled loans or problem assets by
means of unconsolidated special purpose entities.

     In the ordinary course of business, the Company routinely originates,
securitizes and sells into the secondary market mortgage loans, and from time
to time, other financial assets, including student loans, commercial
mortgages and auto receivables. The Company also structures investment
vehicles, typically in the form of collateralized debt obligations, which are
sold to customers to meet their specialized investment needs. Typically, all
securitizations are structured without recourse to the Company, without other
financial commitments from the Company and without restrictions on the
retained interests. At December 31, 2001, with respect to these
securitizations, the Company had issued a total of $15.6 million in liquidity
commitments in the form of demand notes and had committed to provide a total
of $19.8 million in credit enhancements related to four of these
securitizations. At December 31, 2001, the Company retained servicing rights
and other beneficial interests from these sales of approximately $1.6
billion, consisting of $415 million in securities, $330 million of mortgage
and other servicing assets and $825 million in other retained interests.
Refer to Note 18 to Financial Statements for additional information regarding
securitization activities.

                                       45
<Page>

CONTRACTUAL OBLIGATIONS AND OTHER COMMITMENTS
Through the normal course of operations, the Company has entered into certain
contractual obligations and other commitments. Such obligations generally
relate to funding of operations through debt issuances as well as leases for
premises and equipment. As a financial services provider, the Company
routinely enters into commitments to extend credit, including loan
commitments, standby letters of credit and financial guarantees. While
contractual obligations represent future cash requirements of the Company, a
significant portion of commitments to extend credit are likely to expire
without being drawn upon. Such commitments are subject to the same credit
policies and approval processes accorded to loans made by the Company. In the
merchant banking business, the Company makes commitments to fund equity
investments directly to investment funds and to specific private companies.
The timing of future cash requirements to fund such commitments is generally
dependent upon the venture capital investment cycle. This cycle, the period
over which privately-held companies are funded by venture capitalists and
ultimately taken public through an initial offering, can vary based on
overall market conditions as well as the nature and type of industry in which
the companies operate. It is anticipated that many private equity investments
would become liquid or would become public before the balance of unfunded
equity commitments is utilized. Other commitments include investments in
low-income housing and other community development initiatives undertaken by
the Company.

Table 8 summarizes significant contractual obligations and other commitments:

Table 8 CONTRACTUAL OBLIGATIONS AND OTHER COMMITMENTS
<Table>
<Caption>
---------------------------------------------------------------------------------------
(in millions)                        Long-term           Operating
                                       debt (1)             leases                Total
---------------------------------------------------------------------------------------

<S>                                  <C>                 <C>                    <C>
2002                                   $10,115              $  383              $10,498
2003                                     6,904                 304                7,208
2004                                     3,915                 253                4,168
2005                                     4,273                 190                4,463
2006                                     3,359                 158                3,517
Thereafter                               7,529                 736                8,265
                                       -------              ------              -------
Total                                  $36,095              $2,024              $38,119
                                       =======              ======              =======

Other commitments:
    Commitments to extend credit                                                $99,652
    Standby letters of credit and financial guarantees (2)                        5,467
    Commercial and similar letters of credit                                        577
    Credit lines to mortgage joint ventures                                         410
    Securitization liquidity commitments and related credit enhancements             35
    Equity and other investments                                                  1,227

---------------------------------------------------------------------------------------
</Table>
(1) Includes capital leases of $27 million
(2) Net of participations sold to other institutions of $736 million


The Company enters into derivative financial instruments as part of its
interest rate risk management process, customer accommodation or other
trading activities. See "Asset/Liability and Market Risk Management" herein
and refer to Note 23 to Financial Statements for additional information
regarding derivative financial instruments.

TRANSACTIONS WITH RELATED PARTIES
There are no related party transactions required to be disclosed in
accordance with FASB Statement No. 57, RELATED PARTY DISCLOSURES. Loans to
executive officers and directors of the Company and its banking subsidiaries
were made in the ordinary course of business and were made on substantially
the same terms as comparable transactions.

RISK MANAGEMENT

CREDIT RISK MANAGEMENT PROCESS
The Company's credit risk management is structured as an integrated process that
stresses decentralized line of business group management and accountability,
supported by the Chief Credit Officer's oversight, consistent credit policies,
and frequent and comprehensive risk measurement and modeling. The process is
also examined regularly by the Company's Chief Loan Examiner and Chief Auditor.

     Credit risk (including counterparty risk) is managed within the
framework and guidance of comprehensive company-wide policies. Credit
policies are in place for all banking and non-banking operations that have
exposure to credit risk. These policies provide a consistent and prudent
approach to credit risk management across the enterprise. They are routinely
reviewed and modified as appropriate.

     The Chief Credit Officer provides company-wide credit oversight. Each
business group with credit risks has a designated credit officer and retains
the primary responsibility for managing that risk. The Chief Credit Officer
delegates authority, limits, and requirements to the business units.

     All portfolios of credit risk are subject to periodic reviews, to ensure
that the risk identification processes are functioning properly and that
credit standards are being adhered to. Such reviews are conducted by the
business units themselves and by the office of the Chief Credit Officer. In
addition, all such portfolios are subject to the independent review of the
Chief Loan Examiner and/or the Chief Auditor.

                                       46

<Page>

     Quarterly asset quality forecasts are completed to quantify each
business group's intermediate-term outlook for loan losses and recoveries,
non-performing loans and market trends. Periodic stress tests are conducted
using a portfolio loss simulation model, which correlates the performance of
the Company's various sub-portfolios to validate the adequacy of the overall
allowance for loan losses.

     In addition, the Company routinely reviews and evaluates downside
scenarios for risks that are not borrower specific but that may influence the
behavior of a particular credit, group of credits, or entire sub-portfolios.
This evaluation includes assessments related to particular industries and
specific macroeconomic trends.

NONACCRUAL AND RESTRUCTURED LOANS AND OTHER ASSETS
Table 9 presents comparative data for nonaccrual and restructured loans and
other assets. Management's classification of a loan as nonaccrual or
restructured does not necessarily indicate that the principal of the loan is
uncollectible in whole or in part. Table 9 excludes loans that are
contractually past due 90 days or more as to interest or principal, but are
both well-secured and in the process of collection or are real estate 1-4
family first mortgage loans or consumer loans that are exempt under
regulatory rules from being classified as nonaccrual. This information is
presented in Table 10. Notwithstanding, real estate 1-4 family loans (first
and junior liens) are placed on nonaccrual within 120 days of becoming past
due and are shown in Table 9. (Note 1 to Financial Statements describes the
Company's accounting policy relating to nonaccrual and restructured loans.)

Table 9 NONACCRUAL AND RESTRUCTURED LOANS AND OTHER ASSETS
<Table>
<Caption>
-----------------------------------------------------------------------------------------------------------------
(in millions)                                                                                         December 31,
                                                   --------------------------------------------------------------
                                                     2001          2000           1999          1998         1997
-----------------------------------------------------------------------------------------------------------------

<S>                                                <C>           <C>              <C>           <C>          <C>
Nonaccrual loans:
   Commercial (1)                                  $  827        $  739           $374          $302         $224
   Real estate 1-4 family first mortgage              203           127            144           138          177
   Other real estate mortgage (2)                     210           113            118           204          263
   Real estate construction                           145            57             11            23           32
   Consumer:
      Real estate 1-4 family junior lien mortgage      24            23             17            17           17
      Other revolving credit and monthly payment       59            36             27            41           18
                                                   ------        ------           ----          ----         ----
         Total consumer                                83            59             44            58           35
   Lease financing                                    163            92             24            13           12
   Foreign                                              9             7              9            17           --
                                                   ------        ------           ----          ----         ----
      Total nonaccrual loans (3)                    1,640         1,194            724           755          743
Restructured loans                                     --             1              4             1            9
                                                   ------        ------           ----          ----         ----
Nonaccrual and restructured loans                   1,640         1,195            728           756          752
As a percentage of total loans                        1.0%           .7%            .5%           .6%          .6%

Foreclosed assets                                     171           128            161           152          216
Real estate investments (4)                             2            27             33             1            4
                                                   ------        ------           ----          ----         ----

Total nonaccrual and restructured
   loans and other assets                          $1,813        $1,350           $922          $909         $972
                                                   ======        ======           ====          ====         ====
------------------------------------------------------------------------------------------------------------------
</Table>
(1)  Includes commercial agricultural loans of $68 million, $44 million, $49
     million, $41 million and $32 million at December 31, 2001, 2000, 1999, 1998
     and 1997, respectively.
(2)  Includes agricultural loans secured by real estate of $43 million, $13
     million, $17 million, $12 million and $18 million at December 31, 2001,
     2000, 1999, 1998 and 1997, respectively.
(3)  Of the total nonaccrual loans, $995 million, $761 million, $372 million,
     $389 million and $416 million at December 31, 2001, 2000, 1999, 1998 and
     1997, respectively, were considered impaired under FAS 114, ACCOUNTING BY
     CREDITORS FOR IMPAIRMENT OF A LOAN.
(4)  Represents the amount of real estate investments (contingent interest loans
     accounted for as investments) that would be classified as nonaccrual if
     such assets were recorded as loans. Real estate investments totaled $24
     million, $56 million, $89 million, $128 million and $172 million at
     December 31, 2001, 2000, 1999, 1998 and 1997, respectively.

     The Company anticipates changes in the amount of nonaccrual loans that
result from increases in lending activity or from resolutions of loans in the
nonaccrual portfolio. The performance of any individual loan can be affected
by external factors, such as the interest rate environment or factors
particular to a borrower such as actions taken by a borrower's management. In
addition, from time to time, the Company purchases loans from other financial
institutions that may be classified as nonaccrual based on the Company's
policies.

     The Company generally identifies loans to be evaluated for impairment
under FASB Statement No. 114, ACCOUNTING BY CREDITORS FOR IMPAIRMENT OF A
LOAN, when such loans are on nonaccrual or have been restructured. However,
not all nonaccrual loans are impaired. Generally, a loan is placed on
nonaccrual status upon becoming 90 days past due as to interest or principal
(unless both well-secured and in the process of collection), when the full
timely collection of interest or principal becomes uncertain or when a
portion of the principal balance has been charged off. Real estate 1-4 family
loans (both first liens and junior liens) are placed on nonaccrual status
within 120 days of becoming past due as to interest or principal, regardless
of security.

                                       47
<Page>

     In contrast, under FAS 114, loans are considered impaired when
it is probable that the Company will be unable to collect all amounts due
according to the contractual terms of the loan agreement, including scheduled
interest payments. For a loan that has been restructured, the contractual
terms of the loan agreement refer to the contractual terms specified by the
original loan agreement, rather than the contractual terms specified by the
restructuring agreement. Consequently, not all impaired loans are necessarily
placed on nonaccrual status. That is, loans performing under restructured
terms beyond a specified performance period are classified as accruing but
may still be deemed impaired under FAS 114.

    For loans covered under FAS 114, the Company makes an assessment for
impairment when and while such loans are on nonaccrual, or when the loan has
been restructured. When a loan with unique risk characteristics has been
identified as being impaired, the Company will estimate the amount of
impairment using discounted cash flows, except when the sole (remaining)
source of repayment for the loan is the operation or liquidation of the
underlying collateral. In such cases, the current fair value of the
collateral, reduced by costs to sell, will be used in place of discounted
cash flows. Additionally, some impaired loans with commitments of less than
$1 million are aggregated for the purpose of estimating impairment using
historical loss factors as a means of measurement, which approximates the
discounted cash flow method.

     If the measurement of the impaired loan results in a value that is less
than the recorded investment in the loan (including accrued interest, net
deferred loan fees or costs and unamortized premium or discount), an
impairment is recognized by creating or adjusting an existing allocation of
the allowance for loan losses. FAS 114 does not change the timing of
charge-offs of loans to reflect the amount ultimately expected to be
collected.

     If interest that was due on the book balances of all nonaccrual and
restructured loans (including loans that were but are no longer on nonaccrual
or were restructured at year end) had been accrued under their original
terms, $123 million of interest would have been recorded in 2001, compared
with $29 million actually recorded.

     Foreclosed assets at December 31, 2001 were $171 million, compared with
$128 million at December 31, 2000. Most of the foreclosed assets at December
31, 2001 have been in the portfolio three years or less.

LOANS 90 DAYS OR MORE PAST DUE AND STILL ACCRUING
Table 10 shows loans that are contractually past due 90 days or more as to
interest or principal, but are not included in Table 9, Nonaccrual and
Restructured Loans and Other Assets.

Table 10  LOANS 90 DAYS OR MORE PAST DUE AND STILL ACCRUING
<Table>
<Caption>
------------------------------------------------------------------------------------------------------------------
(in millions)                                                                                          December 31,
                                                          --------------------------------------------------------
                                                           2001        2000         1999         1998         1997
------------------------------------------------------------------------------------------------------------------

<S>                                                        <C>         <C>          <C>          <C>          <C>
Commercial                                                 $ 60        $ 90         $ 27         $ 33         $ 37
Real estate 1-4 family first mortgage                       152          66           45           42           58
Other real estate mortgage                                   22          24           18           18           17
Real estate construction                                     47          12            4            6           14
Consumer:
    Real estate 1-4 family junior lien mortgage              56          27           36           65           75
    Credit card                                             117          96          105          145          165
    Other revolving credit and monthly payment              289         263          198          171          212
                                                           ----        ----         ----         ----         ----
      Total consumer                                        462         386          339          381          452
                                                           ----        ----         ----         ----         ----

    Total                                                  $743        $578         $433         $480         $578
                                                           ====        ====         ====         ====         ====
-------------------------------------------------------------------------------------------------------------------
</Table>

ALLOWANCE FOR LOAN LOSSES
An analysis of the changes in the allowance for loan losses, including
charge-offs and recoveries by loan category, is presented in Note 5 to Financial
Statements. At December 31, 2001, the allowance for loan losses was $3.76
billion, or 2.18% of total loans, compared with $3.72 billion, or 2.31%, at
December 31, 2000 and $3.34 billion, or 2.51%, at December 31, 1999. The
provision for loan losses totaled $1.78 billion in 2001, $1.33 billion in 2000
and $1.10 billion in 1999. Net charge-offs in 2001 were $1.78 billion, or 1.09%
of average total loans, compared with $1.22 billion, or .84%, in 2000 and $1.12
billion, or .90%, in 1999. Loan loss recoveries were $421 million in 2001,
compared with $428 million in 2000 and $473 million in 1999. Any loan that is
past due as to principal or interest and that is not both well-secured and in
the process of collection is generally charged off (to the extent that it
exceeds the fair value of any related collateral) after a predetermined period
of time that is based on loan category. Additionally, loans are charged off when
classified as a loss by either internal loan examiners or regulatory examiners.

     The Company considers the allowance for loan losses of $3.76 billion
adequate to cover losses inherent in loans, commitments to extend credit and
standby and other letters of credit at December 31, 2001. The process for
determining the adequacy for loan losses is critical to the financial results
of the Company and requires subjective and complex judgement by management,
as a result of the need to make estimates about the effect of matters that
are inherently uncertain. Therefore, no assurance can be given that the
Company will not, in any particular period, sustain loan losses that are
sizeable in relation to the amount reserved, or that subsequent evaluations
of the loan portfolio, in light of the factors then prevailing, including
economic conditions and the ongoing examination process by the Company and
its regulators, will not require significant increases in the allowance for
loan losses. For discussion of the process by which the Company determines
the adequacy of the allowance for loan losses, see Note 5 to Financial
Statements.

                                      48

<Page>

ASSET/LIABILITY AND MARKET RISK MANAGEMENT
Asset/liability management comprises the evaluation, monitoring, and management
of the Company's interest rate risk, market risk and liquidity and funding. The
Corporate Asset/Liability Management Committee (ALCO) maintains oversight of
these risks. The Committee is comprised of senior financial and senior business
executives. Each of the Company's principal business groups - Community Banking,
Mortgage Banking and Wholesale Banking - have individual asset/liability
management committees and processes that are linked to the Corporate ALCO
process.

INTEREST RATE RISK
Interest rate risk, one of the more prominent risks in terms of potential
earnings impact, is an inevitable part of being a financial intermediary. It can
occur for any one or more of the following reasons: (a) assets and liabilities
may mature or re-price at different times (for example, if assets re-price
faster than liabilities and interest rates are generally falling, Company
earnings will initially decline); (b) assets and liabilities may re-price at the
same time but by different amounts (when the general level of interest rates is
falling, the Company may choose for customer management, competitive, or other
reasons to reduce the rates paid on checking and savings deposit accounts by an
amount that is less than the general decline in market interest rates); (c)
short-term and long-term market interest rates may change by different amounts
(i.e. the shape of the yield curve may impact new loan yields and funding costs
differently); or (d) the remaining maturity of various assets or liabilities may
shorten or lengthen as interest rates change (for example, mortgage-backed
securities held in the securities available for sale portfolio may prepay
significantly earlier than anticipated - with an associated reduction in
portfolio yield and income - if long-term mortgage interest rates decline
sharply). In addition to the direct impact of interest rate changes on net
interest income through these channels, interest rates indirectly impact
earnings through their effect on loan demand, credit losses, mortgage
origination fees, the value of mortgage servicing rights and other sources of
Company earnings. The principal tool used to evaluate Company interest rate risk
is a simulation of net income under various economic and interest rate
scenarios. Table 11 depicts the Company's estimated net income at risk at
December 31, 2001, expressed as the variance from the Company's base net income
forecast.

Table 11  ESTIMATED NET INCOME AT RISK
<Table>
<Caption>
--------------------------------------------------------------------------------
                                             % increase (decrease) in net income
                                                  for the year ended December 31,
                                             -----------------------------------
                                                 2002                       2003
--------------------------------------------------------------------------------

<S>                                              <C>                        <C>
Short-term interest rates increase
   200 basis points by end of 2002;
   400 basis points by end of 2003               (4.4)%                     (5.3)%

Short-term interest rates decline
   100 basis points by end of 2002,
   then remain flat in 2003                        --(1)                      --(1)
--------------------------------------------------------------------------------
</Table>
(1) Less than 1%.

     These estimates are highly assumption-dependent, will change regularly
as the Company's asset-liability structure and business evolves from one
period to the next, will vary as different interest rate scenarios are used
and are measured relative to a base net income scenario that may change. At
December 31, 2001, the principal sources of risk from much higher interest
rates were the modeled slowdown in mortgage origination activity and the
flatter yield curve assumed in that higher interest rate scenario. The
principal sources of risk in the lower rate scenario were assumed slower loan
demand and assumed higher credit losses. (Any provision for impairment for
mortgage servicing rights is assumed to be offset by higher mortgage
origination fees and non-mortgage sources of earnings - see "Mortgage Banking
Interest Rate Risk" below and Note 19 to Financial Statements for analysis of
mortgage company earnings sensitivities to key interest rate risk model
assumptions.) As indicated in Table 11, the Company's modeling indicates
these risks would largely be offset by additional earnings from other sources
in each rate scenario.

     The Company uses exchange-traded and over-the-counter interest rate
derivatives to hedge its interest rate exposures. The notional or contractual
amount, credit risk amount and estimated net fair values of these derivatives
as of December 31, 2001 and 2000 are indicated in Note 23 to Financial
Statements. Derivatives are used for asset/liability management in three
ways: (a) most of the Company's long-term fixed-rate debt is converted to
floating-rate payments by entering into received-fixed swaps at issuance, (b)
the cash flows from selected asset and/or liability instruments/portfolios
are converted from fixed to floating payments or vice versa, and (c) the
Mortgage Company actively uses swaptions, futures, forwards and rate options
to hedge the Company's mortgage pipeline, funded mortgage loans, and mortgage
servicing rights asset.

MORTGAGE BANKING INTEREST RATE RISK
The home mortgage industry is subject to complex risks. Because Wells Fargo Home
Mortgage Company sells or securitizes most of the mortgage loans it originates,
credit risk is contained. Changes in interest rates, however, may have a
potentially large impact on Mortgage Banking earnings. In general, high or
rising interest rates may reduce mortgage loan demand and hence origination and
servicing fees, but may also lead to reduced servicing prepayments and hence
reduced amortization costs. Conversely, low or declining interest rates may lead
to increased origination and servicing fees, but would likely increase servicing
portfolio prepayments and, therefore, accelerate servicing amortization costs.
If large enough, declining mortgage rates and any associated increase in
refinancings may also require provisions for impairment of mortgage servicing
rights. These provisions may be offset by higher future origination fees but the
amount of provision and higher fees may not be exactly equal; the provision is
charged to net income immediately whereas the higher fees would occur over time,
and the size of any provision could be material to earnings in any one quarter
even if there are offsetting other sources of earnings

                                       49
<Page>

over a full twelve month period. Wells Fargo dynamically manages both the
risk to net income over time from all sources as well as the risk to an
immediate reduction in the fair value of its mortgage servicing rights. The
process for the valuation of mortgage servicing rights is critical to the
financial results of the Company and requires subjective and complex
judgement by management as a result of the need to make estimates about the
effect of matters that are inherently uncertain. Both mortgage loans held on
the Company's balance sheet and off-balance sheet derivative instruments are
used to maintain these risks within parameters established by Corporate ALCO.

MARKET RISK - TRADING ACTIVITIES
The Company incurs interest rate risk, foreign exchange risk and commodity price
risk in several trading businesses managed under limits set by Corporate ALCO.
The purpose of this business is to accommodate customers in the management of
their market price risks. All securities, loans, foreign exchange transactions,
commodity transactions and derivatives transacted with customers or used to
hedge capital market transactions done with customers are carried at fair value.
Counterparty risk limits are established and monitored by the Institutional Risk
Committee. The notional or contractual amount, credit risk amount and estimated
net fair value of all customer accommodation derivatives as of December 31, 2001
and 2000 are indicated in Note 23 to Financial Statements. Open, "at risk"
positions for all trading business are monitored by Corporate ALCO. During the
90 day period ending December 31, 2001 the maximum daily "value at risk", the
worst expected loss over a given time interval within a given confidence range
(99%), for all trading positions did not exceed $25 million.

MARKET RISK - EQUITY MARKETS
Equity markets impact the Company in both direct and indirect ways. The Company
makes and manages direct equity investments in start up businesses, emerging
growth companies, management buy-outs, acquisitions and corporate
recapitalizations. The Company also invests in non-affiliated funds that make
similar private equity investments. These private equity investments are made
within capital allocations approved by the Company's management and its Board of
Directors. Business developments, key risks and historical returns for the
private equity investments are reviewed with the Board at least annually.
Management reviews these investments at least quarterly and assesses for
possible other-than-temporary impairment. Other-than-temporary impairment is
subject to considerable judgment and analysis. For nonmarketable investments,
the analysis is based on facts and circumstances of each individual investment
and the expectations for that investment's cash flows and capital needs, the
viability of its business model and the Company's exit strategy. At December 31,
2001, the private equity investments were carried on the Company's balance sheet
at a total of $1.7 billion, compared with $2.0 billion at December 31, 2000.
Most of the decline was due to the $330 million in other-than-temporary
impairment recognized during second quarter 2001; new investments made during
2001 were very selective and in the aggregate immaterial.

     The Company also has marketable equity securities in its available for
sale investment portfolio, including shares distributed from the Company's
venture capital activities. These investments are managed within capital risk
limits approved by management and the Board and monitored by Corporate ALCO.
Gains and losses on these securities are recognized in net income when
realized and, in addition, other- than-temporary impairment may be
periodically recorded. The initial indicator of impairment for marketable
equity securities is a sustained decline in market price below the amount
recorded for that investment. The Company considers such factors as the
length of time and the extent to which the market value has been less than
cost; the financial condition, capital strength, and near-term prospects of
the issuer; any recent events specific to that issuer and economic conditions
of its industry; and, to a lesser degree, the Company's investment horizon in
relationship to an anticipated near-term recovery in the stock price, if any.
The decline in cost of the portfolio during 2001 of $1.64 billion was largely
due to the second quarter impairment writedown and dispositions. At December
31, 2001, the fair value of the marketable equity securities held as
available for sale was $991 million, exceeding cost by $176 million.

     Changes in equity market prices may also indirectly impact the Company's
net income by impacting the value of third party assets under management and
hence fee income, by impacting particular borrowers whose ability to repay
principal and/or interest may be impacted by the stock market, or by
impacting other business activities. These indirect risks are monitored and
managed as part of the operations of each business line.

LIQUIDITY AND FUNDING
The objective of effective liquidity management is to ensure that the Company
can meet customer loan requests, customer deposit maturities/withdrawals and
other cash commitments efficiently under both normal operating conditions as
well as under unforeseen and unpredictable circumstances of industry or market
stress. To achieve this objective, Corporate ALCO establishes and monitors
liquidity guidelines requiring sufficient asset based liquidity to cover
potential funding requirements and to avoid over-dependence on volatile, less
reliable funding markets. The Company sets liquidity management guidelines for
both the consolidated balance sheet as well as for the Parent Company
specifically to ensure that the Parent Company is a source of strength for its
regulated, deposit taking banking subsidiaries.

                                       50

<Page>

     In addition to the immediately liquid resources of cash and due
from banks and federal funds sold and securities purchased under resale
agreements, asset liquidity is provided by the debt securities in the
securities available for sale portfolio which is comprised of marketable
securities. The weighted average expected remaining maturity of the debt
securities within this portfolio was 5 years and 10 months at December 31,
2001. Of the $38.7 billion of debt securities in this portfolio at December
31, 2001, $5.4 billion, or 14%, is expected to mature or be prepaid in 2002
and an additional $3.9 billion, or 10%, is expected to mature or be prepaid
in 2003. Asset liquidity is further enhanced by the Company's ability to sell
loans in secondary markets through whole-loan sales and securitizations. In
2001, the Company sold residential mortgage loans of approximately $139
billion and securitized residential mortgage loans, commercial mortgage
loans, student loans and auto receivables of approximately $19 billion. The
amount of such assets, as well as home equity loans and certain commercial
loans, available to be securitized totaled approximately $35 billion at
December 31, 2001.

     Core customer deposits have historically provided the Company with a
sizeable source of relatively stable and low-cost funds. The Company's
average core deposits and stockholders' equity funded 68.3% and 68.2% of its
average total assets in 2001 and 2000, respectively.

     The remaining funding of average total assets was mostly provided by
long-term debt, deposits in foreign offices, short-term borrowings (federal
funds purchased and securities sold under repurchase agreements, commercial
paper and other short-term borrowings) and trust preferred securities.
Short-term borrowings averaged $33.9 billion and $28.2 billion in 2001 and
2000, respectively. Long-term debt averaged $34.5 billion and $29.0 billion
in 2001 and 2000, respectively. Trust preferred securities averaged $1.4
billion and $.9 billion in 2001 and 2000, respectively.

     Liquidity for the Company is also available through the Company's
ability to raise funds in a variety of domestic and international money and
capital markets. The Company accesses the capital markets for long-term
funding through the issuance of registered debt, private placements and
asset-based secured funding. Approximately $50 billion of the Company's debt
is rated by Fitch, Inc. and Moody's Investors Service as "AA" or equivalent,
which is among the highest ratings given to a company in the financial
services sector. The rating agencies base their ratings on many quantitative
and qualitative factors, including capital adequacy, liquidity, asset
quality, business mix, level and quality of earnings and other tools.
Material changes in these factors could result in a different debt rating.

     During 2001, the Parent issued $3.75 billion in senior debt and $750
million in subordinated notes under registration statements filed in 2000 and
1999. The remaining issuance authority at December 31, 2001 was $6.05 billion
under the 2000 registration statement. Proceeds from the issuance in 2001 of
the debt securities were, and with respect to any such securities issued in
the future are expected to be used for general corporate purposes. The Parent
issues commercial paper and has two back-up credit facilities amounting to $2
billion.

     In February 2001, Wells Fargo Financial, Inc. (WFFI) filed a shelf
registration statement with the SEC, under which WFFI may issue up to $4
billion in senior or subordinated debt securities. In 2001, WFFI issued a
total of $2.25 billion in senior notes. As of December 31, 2001, the
remaining issuance authority under that registration statement and the WFFI
shelf registration statements filed in 2000 and 1999 was $3.70 billion. In
October 2001, a subsidiary of WFFI filed a shelf registration statement with
the Canadian provincial securities authorities for the issuance of up to $1.5
billion (Canadian) in debt securities. In October 2001, the subsidiary issued
$200 million (Canadian) in debt securities.

     In February 2001, Wells Fargo Bank, N.A. established a $20 billion bank
note program under which it may issue up to $10 billion in short-term senior
notes outstanding at any time and up to an aggregate of $10 billion in
long-term senior and subordinated notes. Securities are issued under this
program as private placements in accordance with OCC regulations. Wells Fargo
Bank, N.A. began issuing under the short-term portion of the program in July
2001 and issued $2.3 billion under the long-term portion in 2001. During
2001, Wells Fargo Bank, N.A. called $750 million of subordinated notes. As of
December 31, 2001, the remaining issuance authority under the long-term
portion was $8.4 billion.

     In August 2001, the Company filed a registration statement with the SEC
to register an aggregate of $1.5 billion in the Company's debt and equity
securities, and preferred and common securities to be issued by one or more
trusts that are directly or indirectly owned by the Company and consolidated
in the financial statements. Following effectiveness of the registration
statement in August 2001, Wells Fargo Capital IV, a business trust
established by the Company for the purpose of issuing trust preferred
securities pursuant to the registration statement, issued $1.3 billion in
trust preferred securities to the public. In December 2001, Wells Fargo
Capital V, a business trust identical to Wells Fargo Capital IV, issued the
remaining $200 million in trust preferred securities to the public. Both
offerings were pursuant to the August 2001 registration statement.

     In late February 2002, the Company filed a universal shelf registration
statement to register an aggregate of $10.0 billion in the Company's debt and
equity securities, and certain other securities, including preferred and
common securities to be issued by one or more trusts that are directly or
indirectly owned by the Company and consolidated in the financial statements.

                                       51

<Page>

CAPITAL MANAGEMENT
The Company has an active program for managing stockholder capital. The
objective of effective capital management is to produce above market long term
returns by opportunistically utilizing capital when returns are perceived to be
high and issuing/accumulating capital when the costs of doing so is perceived to
be low.

     Uses of capital include investments for organic growth, acquisitions of
banks and non-bank companies, dividends and share repurchases. During 2001,
the Company's consolidated assets increased $35 billion, or 13%. Capital used
for acquisitions in 2001 totaled $803 million. During 2001, the Board of
Directors authorized the repurchase of up to 85 million additional shares of
the Company's outstanding common stock. At December 31, 2001 total remaining
common stock repurchase authority was approximately 50 million shares.
Effective July 1, 2001, FAS 141 eliminated pooling-of-interests accounting
for business combinations. Prior to this date, purchases of the Company's
common stock for unspecified purposes could have precluded
pooling-of-interests method of accounting treatment for acquisitions. On July
24, 2001, in response to FAS 141, the Board of Directors authorized the
repurchase of shares of the Company's outstanding common stock for general
corporate purposes including capital management. Total common stock dividend
payments in 2001 were $1.7 billion. In July 2001, the Board of Directors
approved an increase in the Company's quarterly common stock dividend to 26
cents per share from 24 cents per share, representing an 8% increase in the
quarterly dividend rate.

     Sources of capital include retained earnings, common stock issuance and
issuance of subordinated debt and preferred stock. In 2001, total net income
was $3.4 billion and retained earnings were $16.0 billion after payment of
$1.7 billion in common stock dividends. Total common stock issued in 2001
under various employee benefit and director plans and under the Company's
dividend reinvestment program amounted to 21 million shares. At the annual
meeting of stockholders held on April 24, 2001, the stockholders of the
Company approved an increase in the number of shares of common stock
authorized for issuance from 4 billion to 6 billion shares. Issuance of
subordinated debt amounted to $750 million, and two placements of trust
preferred securities amounting to $1.5 billion were completed late in 2001.
On October 1, 2001, the Company called all of the Adjustable-Rate
Noncumulative Preferred Stock, Series H. The redemption was completed at $50
per share plus accrued and unpaid dividends in accordance with its terms.

     The Company has a capital expenditure program to accommodate future
growth and current business needs. Capital expenditures for 2002 are
estimated to be approximately $575 million for equipment for stores,
relocation and remodeling of Company facilities, routine replacement of
furniture and equipment, and servers and other networking equipment related
to expansion of the Company's internet services business. The Company will
fund these expenditures from various sources, including retained earnings of
the Company and borrowings of various maturities.

     The Company and each of the subsidiary banks are subject to various
regulatory capital adequacy requirements administered by the Federal Reserve
Board and the Office of the Comptroller of the Currency. Risk-based capital
(RBC) guidelines establish a risk-adjusted ratio relating capital to
different categories of assets and off-balance sheet exposures. At December
31, 2001, the Company and each of the covered subsidiary banks were "well
capitalized" under regulatory standards. (See Note 22 to Financial Statements
for additional information.)

                                       52
<Page>

COMPARISON OF 2000 TO 1999
Net income in 2000 was $4.03 billion, which included a loss of $220 million
(after tax) for First Security for the first three quarters of 2000 and First
Security related integration and conversion costs of $110 million (after tax) in
the fourth quarter, compared with $4.01 billion in 1999. Diluted earnings per
common share were $2.33, compared with $2.29 in 1999, an increase of 2%.

  Return on average assets (ROA) was 1.61% and return on average common equity
(ROE) was 16.31% in 2000, compared with 1.78% and 17.55%, respectively, in 1999.

  Net interest income on a taxable-equivalent basis was $10.93 billion in 2000,
compared with $10.19 billion in 1999. The Company's net interest margin was
5.35% for 2000, compared with 5.47% in 1999. The decrease was mostly due to the
impact of funding strong loan growth with higher costing short- and long-term
borrowings, partially offset by improved yields within the investment securities
portfolio from the restructuring that occurred during the fourth quarter of 1999
and the first nine months of 2000.

  Noninterest income increased to $8.84 billion in 2000 from $7.98 billion in
1999, an increase of 11%, largely due to higher net venture capital gains,
increased trust and investment fees and service charges on deposit accounts,
primarily offset by net losses on sales of securities incurred in
restructuring the Company's securities available for sale portfolio and net
losses on sales of loans and securitizations associated with First Security
prior to the FSCO Merger.

  Noninterest expense totaled $11.83 billion in 2000, compared with $10.64
billion in 1999, an increase of 11%. The increase was primarily due to
integration and conversion costs related to the WFC Merger, the FSCO Merger
and other acquisitions.

  The provision for loan losses was $1.33 billion in 2000, compared with $1.10
billion in 1999. During 2000, net charge-offs were $1.22 billion, or .84% of
average total loans, compared with $1.12 billion, or .90%, during 1999. The
allowance for loan losses was $3.72 billion, or 2.31% of total loans, at
December 31, 2000, compared with $3.34 billion, or 2.51%, at December 31, 1999.

  At December 31, 2000, total nonaccrual and restructured loans were $1,195
million, or .7% of total loans, compared with $728 million, or .5%, at December
31, 1999. Foreclosed assets were $128 million at December 31, 2000, compared
with $161 million at December 31, 1999.

  The ratio of common stockholders' equity to total assets was 9.63% at December
31, 2000 and 9.79% at December 31, 1999. The Company's total risk-based capital
(RBC) ratio at December 31, 2000 was 10.43% and its Tier 1 RBC ratio was 7.29%,
exceeding the minimum regulatory guidelines of 8% and 4%, respectively, for bank
holding companies. The Company's RBC ratios at December 31, 1999 were 10.93% and
8.00%, respectively. The Company's leverage ratios were 6.49% and 6.76% at
December 31, 2000 and 1999, respectively, exceeding the minimum regulatory
guideline of 3% for bank holding companies.

ADDITIONAL INFORMATION
--------------------------------------------------------------------------------

Common stock of the Company is traded on the New York Stock Exchange and the
Chicago Stock Exchange. The high, low and end-of-period annual and quarterly
prices of the Company's common stock as reported on the New York Stock Exchange
Composite Transaction Reporting System are presented in the graphs. The number
of holders of record of the Company's common stock was 98,598 as of January 31,
2002.


--------------------------------------------------------------------------------
<Table>
<Caption>
                   1999    2000    2001
                 ----------------------
<S>              <C>     <C>     <C>
High             $49.94  $56.38  $54.81
Low               32.13   31.00   38.25
End of period     40.44   55.69   43.47

<Caption>
                                           2000                             2001
                 ------------------------------   ------------------------------
                     1Q      2Q      3Q      4Q       1Q      2Q      3Q      4Q
                 ------------------------------   ------------------------------
<S>              <C>     <C>     <C>     <C>      <C>     <C>     <C>     <C>
High             $43.75  $47.75  $47.13  $56.38   $54.81  $50.16  $48.30  $45.14
Low               31.00   37.31   38.73   39.63    42.55   42.65   40.50   38.25
End of period     40.75   38.75   45.94   55.69    49.47   46.43   44.45   43.47
</Table>
--------------------------------------------------------------------------------


                                      53
<Page>


<Table>
<Caption>

                                      WELLS FARGO & COMPANY AND SUBSIDIARIES
                                         CONSOLIDATED STATEMENT OF INCOME

-------------------------------------------------------------------------------------------------------------------
                                                                                             Year ended December 31,
                                                                             --------------------------------------
(in millions, except per share amounts)                                           2001          2000           1999
-------------------------------------------------------------------------------------------------------------------
<S>                                                                           <C>           <C>            <C>
INTEREST INCOME
Securities available for sale                                                 $  2,544      $  2,671       $  2,533
Mortgages held for sale                                                          1,595           849            951
Loans held for sale                                                                317           418            377
Loans                                                                           14,461        14,446         11,823
Other interest income                                                              284           341            250
                                                                              --------      --------       --------
      Total interest income                                                     19,201        18,725         15,934
                                                                              --------      --------       --------

INTEREST EXPENSE
Deposits                                                                         3,553         4,089          3,166
Short-term borrowings                                                            1,273         1,758          1,127
Long-term debt                                                                   1,826         1,939          1,452
Guaranteed preferred beneficial interests in Company's
   subordinated debentures                                                          89            74             73
                                                                              --------      --------       --------
      Total interest expense                                                     6,741         7,860          5,818
                                                                              --------      --------       --------

NET INTEREST INCOME                                                             12,460        10,865         10,116
Provision for loan losses                                                        1,780         1,329          1,104
                                                                              --------      --------       --------
Net interest income after provision for loan losses                             10,680         9,536          9,012
                                                                              --------      --------       --------

NONINTEREST INCOME
Service charges on deposit accounts                                              1,876         1,704          1,580
Trust and investment fees                                                        1,710         1,624          1,366
Credit card fees                                                                   796           721            694
Other fees                                                                       1,244         1,113            970
Mortgage banking                                                                 1,671         1,444          1,407
Insurance                                                                          745           411            395
Net venture capital (losses) gains                                              (1,630)        1,943          1,008
Net gains (losses) on securities available for sale                                463          (722)          (228)
Other                                                                              815           605            783
                                                                              --------      --------       --------
      Total noninterest income                                                   7,690         8,843          7,975
                                                                              --------      --------       --------

NONINTEREST EXPENSE
Salaries                                                                         4,027         3,652          3,307
Incentive compensation                                                           1,195           846            643
Employee benefits                                                                  960           989            901
Equipment                                                                          909           948            928
Net occupancy                                                                      975           953            813
Goodwill                                                                           610           530            459
Core deposit intangible                                                            165           186            206
Net gains on dispositions of premises and equipment                                (21)          (58)           (16)
Other                                                                            4,071         3,784          3,396
                                                                              --------      --------       --------
      Total noninterest expense                                                 12,891        11,830         10,637
                                                                              --------      --------       --------

INCOME BEFORE INCOME TAX EXPENSE                                                 5,479         6,549          6,350
Income tax expense                                                               2,056         2,523          2,338
                                                                              --------      --------       --------

NET INCOME                                                                    $  3,423      $  4,026       $  4,012
                                                                              ========      ========       ========

NET INCOME APPLICABLE TO COMMON STOCK                                         $  3,409      $  4,009       $  3,977
                                                                              ========      ========       ========

EARNINGS PER COMMON SHARE                                                     $   1.99      $   2.36       $   2.32
                                                                              ========      ========       ========

DILUTED EARNINGS PER COMMON SHARE                                             $   1.97      $   2.33       $   2.29
                                                                              ========      ========       ========

DIVIDENDS DECLARED PER COMMON SHARE                                           $   1.00      $    .90       $   .785
                                                                              ========      ========       ========

Average common shares outstanding                                              1,709.5       1,699.5        1,714.0
                                                                              ========      ========       ========

Diluted average common shares outstanding                                      1,726.9       1,718.4        1,735.4
                                                                              ========      ========       ========

-------------------------------------------------------------------------------------------------------------------
</Table>

The accompanying notes are an integral part of these statements.


                                     54
<Page>

                                      WELLS FARGO & COMPANY AND SUBSIDIARIES
                                            CONSOLIDATED BALANCE SHEET

<Table>
<Caption>

------------------------------------------------------------------------------------------------------------------
                                                                                                       December 31,
                                                                               -----------------------------------
(in millions, except shares)                                                        2001                      2000
------------------------------------------------------------------------------------------------------------------
<S>                                                                            <C>                      <C>
ASSETS
Cash and due from banks                                                         $ 16,968                  $ 16,978
Federal funds sold and securities purchased
   under resale agreements                                                         2,530                     1,598
Securities available for sale                                                     40,308                    38,655
Mortgages held for sale                                                           30,405                    11,812
Loans held for sale                                                                4,745                     4,539

Loans                                                                            172,499                   161,124
Allowance for loan losses                                                          3,761                     3,719
                                                                                --------                  --------
      Net loans                                                                  168,738                   157,405
                                                                                --------                  --------

Mortgage servicing rights                                                          6,241                     5,609
Premises and equipment, net                                                        3,549                     3,415
Core deposit intangible                                                            1,013                     1,183
Goodwill                                                                           9,527                     9,303
Interest receivable and other assets                                              23,545                    21,929
                                                                                --------                  --------

      Total assets                                                              $307,569                  $272,426
                                                                                ========                  ========

LIABILITIES
Noninterest-bearing deposits                                                    $ 65,362                  $ 55,096
Interest-bearing deposits                                                        121,904                   114,463
                                                                                --------                  --------
      Total deposits                                                             187,266                   169,559
Short-term borrowings                                                             37,782                    28,989
Accrued expenses and other liabilities                                            16,777                    14,409
Long-term debt                                                                    36,095                    32,046
Guaranteed preferred beneficial interests in Company's
   subordinated debentures                                                         2,435                       935

STOCKHOLDERS' EQUITY
Preferred stock                                                                      218                       385
Unearned ESOP shares                                                                (154)                     (118)
                                                                                --------                  --------
      Total preferred stock                                                           64                       267
Common stock - $1 2/3 par value, authorized
   6,000,000,000 shares; issued 1,736,381,025 shares
    and 1,736,381,025 shares                                                       2,894                     2,894
Additional paid-in capital                                                         9,436                     9,337
Retained earnings                                                                 16,005                    14,541
Cumulative other comprehensive income                                                752                       524
Treasury stock - 40,886,028 shares and 21,735,182 shares                          (1,937)                   (1,075)
                                                                                --------                  --------

      Total stockholders' equity                                                  27,214                    26,488
                                                                                --------                  --------

      Total liabilities and stockholders' equity                                $307,569                  $272,426
                                                                                ========                  ========

------------------------------------------------------------------------------------------------------------------

</Table>

The accompanying notes are an integral part of these statements.


                                              55
<Page>

WELLS FARGO & COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
AND COMPREHENSIVE INCOME
<Table>
<Caption>
--------------------------------------------------------------------------------------------------------------------------
(in millions, except shares)                                                        Unearned          Additional
                                                              Number of  Preferred      ESOP  Common     paid-in  Retained
                                                                 shares      stock    shares   stock     capital  earnings
--------------------------------------------------------------------------------------------------------------------------
<S>                                                          <C>         <C>        <C>       <C>     <C>         <C>
BALANCE DECEMBER 31, 1998                                                    $ 547     $(84)  $2,882      $8,981   $10,256
Comprehensive income                                                         -----     -----  ------      ------   -------
   Net income-1999                                                                                                   4,012
   Other comprehensive income, net of tax:
     Translation adjustments
     Net unrealized gains on securities
       available for sale, net of
       reclassification of $136 million of
       net losses included in net income
Total comprehensive income
Common stock issued                                          21,793,709                            1         119      (269)
Common stock issued for acquisitions                         11,059,131                           11         113         2
Common stock repurchased                                     48,974,800
Preferred stock redeemed                                                      (191)
Preferred stock issued to ESOP                                                  75       (80)                  5
Preferred stock released to ESOP                                                          91                  (5)
Preferred stock (86,358) converted
   to common shares                                           2,200,716        (87)
Preferred stock dividends                                                                                              (35)
Common stock dividends                                                                                              (1,401)
Cash payments received on
   notes receivable from ESOP
Change in Rabbi trust assets (classified as treasury stock)
                                                                             -----     -----  ------      ------   -------
Net change                                                                    (203)       11      12         232     2,309
                                                                             -----     -----  ------      ------   -------

BALANCE DECEMBER 31, 1999                                                      344       (73)  2,894       9,213    12,565
Comprehensive income                                                         -----     -----  ------      ------   -------
   Net income-2000                                                                                                   4,026
   Other comprehensive income, net of tax:
     Translation adjustments
     Net unrealized losses on securities
       available for sale, net of
       reclassification of $90 million of
       net gains included in net income
Total comprehensive income
Common stock issued                                          17,614,859                            1         295      (458)
Common stock issued for acquisitions                         75,554,229                                     (185)       (6)
Common stock repurchased                                     78,573,812                           (1)        (42)
Stock appreciation rights                                                                                     48
Preferred stock repurchased                                                     (1)
Preferred stock issued to ESOP                                                 170      (181)                 11
Preferred stock released to ESOP                                                         136                  (8)
Preferred stock (122,288) converted
   to common shares                                           3,036,660       (128)                            5
Preferred stock dividends                                                                                              (17)
Common stock dividends                                                                                              (1,569)
Cash payments received on
   notes receivable from ESOP
Change in Rabbi trust assets (classified as treasury stock)
                                                                             -----     -----  ------      ------   -------
Net change                                                                      41       (45)     --         124     1,976
                                                                             -----     -----  ------      ------   -------

BALANCE DECEMBER 31, 2000                                                      385      (118)  2,894       9,337    14,541
COMPREHENSIVE INCOME                                                         -----     -----  ------      ------   -------
   NET INCOME - 2001                                                                                                 3,423
   OTHER COMPREHENSIVE INCOME, NET OF TAX:
     TRANSLATION ADJUSTMENTS
     MINIMUM PENSION LIABILITY ADJUSTMENT
     NET UNREALIZED GAINS ON SECURITIES
       AVAILABLE FOR SALE, NET OF RECLASSIFICATION
       OF $373 MILLION OF NET LOSSES INCLUDED
       IN NET INCOME
     CUMULATIVE EFFECT OF THE CHANGE IN
       ACCOUNTING PRINCIPLE FOR DERIVATIVES
       AND HEDGING ACTIVITIES
     NET UNREALIZED GAINS ON DERIVATIVES AND
       HEDGING ACTIVITIES, NET OF RECLASSIFICATION
       OF $76 MILLION OF NET LOSSES ON CASH FLOW
       HEDGES INCLUDED IN NET INCOME
TOTAL COMPREHENSIVE INCOME
COMMON STOCK ISSUED                                          16,472,042                                       92      (236)
COMMON STOCK ISSUED FOR ACQUISITIONS                            428,343                                        1         1
COMMON STOCK REPURCHASED                                     39,474,053
PREFERRED STOCK (192,000) ISSUED TO ESOP                                       192      (207)                 15
PREFERRED STOCK RELEASED TO ESOP                                                         171                 (12)
PREFERRED STOCK (158,517) CONVERTED
   TO COMMON SHARES                                           3,422,822       (159)                            3
PREFERRED STOCK REDEEMED                                                      (200)
PREFERRED STOCK DIVIDENDS                                                                                              (14)
COMMON STOCK DIVIDENDS                                                                                              (1,710)
CHANGE IN RABBI TRUST ASSETS (CLASSIFIED AS TREASURY STOCK)
                                                                             -----     -----  ------      ------   -------
NET CHANGE                                                                    (167)      (36)     --          99     1,464
                                                                             -----     -----  ------      ------   -------

BALANCE DECEMBER 31, 2001                                                    $ 218     $(154) $2,894      $9,436   $16,005
                                                                             =====     =====  ======      ======   =======
---------------------------------------------------------------------------------------------------------------------------
</Table>

<Table>
<Caption>
---------------------------------------------------------------------------------------------------------------------
                                                                         Notes               Cumulative         Total
                                                                    receivable                    other         stock-
                                                                          from  Treasury  comprehensive       holders'
(in millions, except shares)                                              ESOP     stock         income        equity
---------------------------------------------------------------------------------------------------------------------
<S>                                                                 <C>         <C>       <C>                 <C>
BALANCE DECEMBER 31, 1998                                                  $(3)  $ (740)          $ 493       $22,332
                                                                           ---   -------          -----       -------
Comprehensive income
   Net income-1999                                                                                              4,012
   Other comprehensive income, net of tax:
     Translation adjustments                                                                          4             4
     Net unrealized gains on securities
       available for sale, net of
       reclassification of $136 million of
       net losses included in net income                                                            263           263
                                                                                                              -------
Total comprehensive income                                                                                      4,279
Common stock issued                                                                  781                          632
Common stock issued for acquisitions                                                 200                          326
Common stock repurchased                                                          (2,141)                      (2,141)
Preferred stock redeemed                                                                                         (191)
Preferred stock issued to ESOP                                                                                     --
Preferred stock released to ESOP                                                                                   86
Preferred stock (86,358) converted
   to common shares                                                                   87                           --
Preferred stock dividends                                                                                         (35)
Common stock dividends                                                                                         (1,401)
Cash payments received on notes
   receivable from ESOP                                                      2                                      2
Change in Rabbi trust assets (classified as treasury stock)                          (18)                         (18)
                                                                           ---   -------          -----       -------
Net change                                                                   2    (1,091)           267         1,539
                                                                           ---   -------          -----       -------

BALANCE DECEMBER 31, 1999                                                   (1)   (1,831)           760        23,871
Comprehensive income                                                       ---   -------          -----       -------
   Net income-2000                                                                                              4,026
   Other comprehensive income, net of tax:
     Translation adjustments                                                                         (2)           (2)
     Net unrealized losses on securities
       available for sale, net of
       reclassification of $90 million of
       net gains included in net income                                                            (234)         (234)
                                                                                                              -------
Total comprehensive income                                                                                      3,790
Common stock issued                                                                  716                          554
Common stock issued for acquisitions                                               3,128                        2,937
Common stock repurchased                                                          (3,195)                      (3,238)
Stock appreciation rights                                                                                          48
Preferred stock repurchased                                                                                        (1)
Preferred stock issued to ESOP                                                                                     --
Preferred stock released to ESOP                                                                                  128
Preferred stock (122,288) converted
   to common shares                                                                  123                           --
Preferred stock dividends                                                                                         (17)
Common stock dividends                                                                                         (1,569)
Cash payments received on
   notes receivable from ESOP                                                1                                      1
Change in Rabbi trust assets (classified as treasury stock)                          (16)                         (16)
                                                                           ---   -------          -----       -------
Net change                                                                   1       756           (236)        2,617
                                                                           ---   -------          -----       -------
BALANCE DECEMBER 31, 2000                                                   --    (1,075)           524        26,488
                                                                           ---   -------          -----       -------
COMPREHENSIVE INCOME
   NET INCOME - 2001                                                                                            3,423
   OTHER COMPREHENSIVE INCOME, NET OF TAX:
     TRANSLATION ADJUSTMENTS                                                                         (3)           (3)
     MINIMUM PENSION LIABILITY ADJUSTMENT                                                           (42)          (42)
     NET UNREALIZED GAINS ON SECURITIES
       AVAILABLE FOR SALE, NET OF RECLASSIFICATION
       OF $373 MILLION OF NET LOSSES INCLUDED
       IN NET INCOME                                                                                 10            10
     CUMULATIVE EFFECT OF THE CHANGE IN
       ACCOUNTING PRINCIPLE FOR DERIVATIVES
       AND HEDGING ACTIVITIES                                                                        71            71
     NET UNREALIZED GAINS ON DERIVATIVES AND
       HEDGING ACTIVITIES, NET OF RECLASSIFICATION
       OF $76 MILLION OF NET LOSSES ON CASH FLOW
       HEDGES INCLUDED IN NET INCOME                                                                192           192
                                                                                                              -------
TOTAL COMPREHENSIVE INCOME                                                                                      3,651
COMMON STOCK ISSUED                                                                  738                          594
COMMON STOCK ISSUED FOR ACQUISITIONS                                                  20                           22
COMMON STOCK REPURCHASED                                                          (1,760)                      (1,760)
PREFERRED STOCK (192,000) ISSUED TO ESOP                                                                           --
PREFERRED STOCK RELEASED TO ESOP                                                                                  159
PREFERRED STOCK (158,517) CONVERTED
   TO COMMON SHARES                                                                  156                           --
PREFERRED STOCK REDEEMED                                                                                         (200)
PREFERRED STOCK DIVIDENDS                                                                                         (14)
COMMON STOCK DIVIDENDS                                                                                         (1,710)
CHANGE IN RABBI TRUST ASSETS (CLASSIFIED AS TREASURY STOCK)                          (16)                         (16)
                                                                           ---   -------          -----       -------
NET CHANGE                                                                  --      (862)           228           726
                                                                           ---   -------          -----       -------
BALANCE DECEMBER 31, 2001                                                  $--   $(1,937)         $ 752       $27,214
                                                                           ===   =======          =====       =======
---------------------------------------------------------------------------------------------------------------------
</Table>


The accompanying notes are an integral part of these statements.

                                       56
<Page>

                                      WELLS FARGO & COMPANY AND SUBSIDIARIES
                                       CONSOLIDATED STATEMENT OF CASH FLOWS

<Table>
<Caption>
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Year ended December 31,
                                                                                           --------------------------------------
(in millions)                                                                                  2001           2000           1999
---------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                       <C>              <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                                                              $   3,423        $ 4,026       $  4,012
  Adjustments to reconcile net income to net cash (used) provided by operating activities:
    Provision for loan losses                                                                 1,780          1,329          1,104
    Depreciation and amortization                                                             2,961          1,790          1,971
    Net (gains) losses on securities available for sale                                        (597)           722            228
    Net venture capital losses (gains)                                                        1,630         (1,943)        (1,008)
    Net gains on mortgage loan origination/sales activities                                    (705)           (38)          (117)
    Net (gains) losses on sales of loans                                                        (35)           134            (68)
    Net gains on dispositions of premises and equipment                                         (21)           (58)           (16)
    Net gains on dispositions of operations                                                    (122)           (23)          (107)
    Release of preferred shares to ESOP                                                         159            128             86
    Net increase in trading assets                                                           (1,219)        (1,087)          (462)
    Deferred income tax (benefit) expense                                                      (589)           873          1,611
    Net decrease (increase) in accrued interest receivable                                      232           (230)          (113)
    Net (decrease) increase in accrued interest payable                                        (269)           290            (36)
    Originations of mortgages held for sale                                                (179,475)       (62,095)       (94,988)
    Proceeds from sales of mortgages held for sale                                          157,884         62,873        105,159
    Net increase in loans held for sale                                                        (206)        (1,498)          (874)
    Other assets, net                                                                          (349)        (2,060)        (1,428)
    Other accrued expenses and liabilities, net                                               4,292          2,436          1,321
                                                                                          ---------        -------       --------
Net cash (used) provided by operating activities                                            (11,226)         5,569         16,275
                                                                                          ---------        -------       --------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Securities available for sale:
     Proceeds from sales                                                                     19,586         23,624         15,150
     Proceeds from prepayments and maturities                                                 6,730          6,247          8,757
     Purchases                                                                              (29,053)       (19,770)       (29,917)
   Net cash (paid for) acquired from acquisitions                                              (459)           469            (69)
   Net decrease (increase) in banking subsidiaries' loans
     resulting from originations and collections                                            (11,596)       (36,076)       (11,494)
   Proceeds from sales (including participations) of banking subsidiaries' loans              2,305         11,898          3,986
   Purchases (including participations) of banking subsidiaries' loans                       (1,104)          (409)        (1,246)
   Principal collected on nonbank subsidiaries' loans                                         9,964          8,305          4,844
   Nonbank subsidiaries' loans originated                                                   (11,651)        (9,300)        (9,002)
   Proceeds from (paid for) dispositions of operations                                        1,191             13           (731)
   Proceeds from sales of foreclosed assets                                                     279            255            234
   Net (increase) decrease in federal funds sold and securities
     purchased under resale agreements                                                         (932)           124             25
   Net increase in mortgage servicing rights                                                 (3,405)        (1,460)        (2,094)
   Other, net                                                                                   512         (4,688)        (2,366)
                                                                                          ---------        -------       --------
Net cash used by investing activities                                                       (17,633)       (20,768)       (23,923)
                                                                                          ---------        -------       --------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Net increase (decrease) in deposits                                                       17,707         20,745         (4,868)
   Net increase (decrease) in short-term borrowings                                           8,793         (3,511)        11,912
   Proceeds from issuance of long-term debt                                                  14,658         15,544         13,325
   Repayment of long-term debt                                                              (10,625)        (9,849)        (8,981)
   Proceeds from issuance of guaranteed preferred beneficial interests
     in Company's subordinated debentures                                                     1,500             --             --
   Proceeds from issuance of common stock                                                       484            422            528
   Redemption of preferred stock                                                               (200)            --           (191)
   Repurchase of common stock                                                                (1,760)        (3,238)        (2,141)
   Payment of cash dividends on preferred and common stock                                   (1,724)        (1,586)        (1,436)
   Other, net                                                                                    16           (468)           (34)
                                                                                          ---------        -------       --------
Net cash provided by financing activities                                                    28,849         18,059          8,114
                                                                                          ---------        -------       --------
   NET CHANGE IN CASH AND DUE FROM BANKS                                                        (10)         2,860            466
Cash and due from banks at beginning of year                                                 16,978         14,118         13,652
                                                                                          ---------        -------       --------
CASH AND DUE FROM BANKS AT END OF YEAR                                                    $  16,968        $16,978       $ 14,118
                                                                                          =========        =======       ========

Supplemental disclosures of cash flow information:
   Cash paid during the year for:
     Interest                                                                             $   6,472        $ 8,150       $  5,855
     Income taxes                                                                         $   2,552        $   817       $  1,022
   Noncash investing and financing activities:
     Transfers from mortgages held for sale to loans                                      $   1,230        $   129       $     67
     Transfers from loans held for sale to loans                                          $      --        $ 1,388       $  1,221
     Transfers from loans to foreclosed assets                                            $     325        $   189       $    220
---------------------------------------------------------------------------------------------------------------------------------
</Table>

The accompanying notes are an integral part of these statements.


                                        57
<Page>

NOTES TO FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Wells Fargo & Company and Subsidiaries (consolidated) (the Company) is a
diversified financial services company providing banking, insurance,
investments, mortgage banking and consumer finance through banking branches, the
internet and other distribution channels to consumers, commercial businesses and
financial institutions in all 50 states of the U.S., and in other countries.
Wells Fargo & Company (the Parent) is a financial holding company and a bank
holding company.

  The accounting and reporting policies of the Company conform with generally
accepted accounting principles (GAAP) and prevailing practices within the
financial services industry. The preparation of financial statements in
conformity with GAAP requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and income and expenses during the reporting period. Actual
results could differ from those estimates. Certain amounts in the financial
statements for prior years have been reclassified to conform with the current
financial statement presentation.

  The following is a description of the significant accounting policies of the
Company.

CONSOLIDATION
The consolidated financial statements of the Company include the accounts of the
Parent, and its majority-owned subsidiaries, which are consolidated on a
line-by-line basis. Significant intercompany accounts and transactions are
eliminated in consolidation. Other subsidiaries in which there is generally 20%
ownership are accounted for by the equity method; those in which there is less
than 20% ownership are generally carried at cost, except for marketable equity
securities, which are carried at fair value with changes in fair value included
in other comprehensive income. These assets that are accounted for by either the
equity or cost method are included in other assets.

SECURITIES
Securities are accounted for according to their purpose and holding period.

SECURITIES AVAILABLE FOR SALE Debt securities that may not be held until
maturity and marketable equity securities are classified as securities
available for sale and are reported at fair value, with unrealized gains and
losses, after applicable taxes, reported as a component of cumulative other
comprehensive income. The estimated fair value of a security is determined
based on current quotations, where available. Where current quotations are
not available, the estimated fair value is determined based primarily on the
present value of future cash flows, adjusted for the quality rating of the
securities, prepayment assumptions and other factors. Declines in the value
of debt securities and marketable equity securities that are considered other
than temporary are recorded in noninterest income. Realized gains and losses
are recorded in noninterest income using the identified certificate method.
For certain debt securities (for example, Government National Mortgage
Association securities), the Company anticipates prepayments of principal in
the calculation of the effective yield.

TRADING SECURITIES Securities acquired for short-term appreciation or other
trading purposes are recorded in a trading portfolio and are carried at fair
value, with unrealized gains and losses recorded in noninterest income.

NONMARKETABLE EQUITY SECURITIES Nonmarketable equity securities include the
venture capital equity securities that are not publicly traded and securities
acquired for various purposes, such as troubled debt restructurings or to meet
regulatory requirements (for example, Federal Reserve Bank stock). These assets
are reviewed at least quarterly for possible other-than-temporary impairment.
Management's review typically includes an analysis of the facts and
circumstances of each individual investment, the expectations for that
investment's performance and the Company's exit strategy. These securities are
generally accounted for at cost and are included in other assets. The asset
value is reduced when declines in value are considered to be other than
temporary and the estimated loss is recorded in noninterest income as a loss
from equity investments along with income recognized on these assets.

MORTGAGES HELD FOR SALE
Mortgages held for sale are stated at the lower of aggregate cost or market
value. The determination of any write-down to market value includes
consideration of all open positions, outstanding commitments from investors and
interest rate lock commitment value already recorded.

LOANS HELD FOR SALE
Loans held for sale include those student loans which are classified as held for
sale because the Company does not intend to hold these loans until maturity or
sales of the loans are pending. Such loans are carried at the lower of aggregate
cost or market value. Gains and losses are recorded in noninterest income, based
on the difference between sales proceeds and carrying value.

LOANS
Loans are reported at the principal amount outstanding, net of unearned income.
Unearned income, which includes deferred fees net of deferred direct incremental
loan origination costs, is amortized to interest income generally over the
contractual life of the loan using an interest method or the straight-line
method if it is not materially different.

                                       58

<Page>

NONACCRUAL LOANS Generally, loans are placed on nonaccrual status upon
becoming 90 days past due as to interest or principal (unless both
well-secured and in the process of collection), when the full timely
collection of interest or principal becomes uncertain or when a portion of
the principal balance has been charged off. Real estate 1-4 family loans
(both first liens and junior liens) are placed on nonaccrual status within
120 days of becoming past due as to interest or principal, regardless of
security. Generally, consumer loans not secured by real estate are placed on
nonaccrual status only when a portion of the principal has been charged off.
Such loans are entirely charged off when deemed uncollectible or when they
reach a predetermined number of days past due depending upon loan product,
industry practice, country, terms and other factors.

  When a loan is placed on nonaccrual status, the accrued and unpaid interest
receivable is reversed and the loan is accounted for on the cash or cost
recovery method thereafter, until qualifying for return to accrual status.
Generally, a loan may be returned to accrual status when all delinquent interest
and principal become current in accordance with the terms of the loan agreement
or when the loan is both well-secured and in the process of collection and
collectibility is no longer doubtful.

IMPAIRED LOANS Loans, other than those included in large groups of
smaller-balance homogeneous loans, are considered impaired when, based on
current information and events, it is probable that the Company will be unable
to collect all amounts due according to the contractual terms of the loan
agreement, including scheduled interest payments. For a loan that has been
restructured, the contractual terms of the loan agreement refer to the
contractual terms specified by the original loan agreement, not the contractual
terms specified by the restructuring agreement.

  This assessment for impairment occurs when and while such loans are on
nonaccrual, or the loan has been restructured. When a loan with unique risk
characteristics has been identified as being impaired, the amount of impairment
will be measured by the Company using discounted cash flows, except when it is
determined that the sole (remaining) source of repayment for the loan is the
operation or liquidation of the underlying collateral. In such cases, the
current fair value of the collateral, reduced by costs to sell, will be used in
place of discounted cash flows. Additionally, some impaired loans with
commitments of less than $1 million are aggregated for the purpose of measuring
impairment using historical loss factors as a means of measurement, which
approximates the discounted cash flow method.

  If the measurement of the impaired loan is less than the recorded
investment in the loan (including accrued interest, net deferred loan fees or
costs and unamortized premium or discount), an impairment is recognized by
creating or adjusting an existing allocation of the allowance for loan losses.

RESTRUCTURED LOANS In cases where a borrower experiences financial difficulties
and the Company makes certain concessionary modifications to contractual terms,
the loan is classified as a restructured (accruing) loan. Loans restructured at
a rate equal to or greater than that of a new loan with comparable risk at the
time the contract is modified may be excluded from the impairment assessment and
may cease to be considered impaired loans in the calendar years subsequent to
the restructuring if they are not impaired based on the modified terms.

  Generally, a nonaccrual loan that is restructured remains on nonaccrual for a
period of six months to demonstrate that the borrower can meet the restructured
terms. However, performance prior to the restructuring, or significant events
that coincide with the restructuring, are included in assessing whether the
borrower can meet the new terms and may result in the loan being returned to
accrual at the time of restructuring or after a shorter performance period.

If the borrower's ability to meet the revised payment schedule is uncertain,
the loan remains classified as a nonaccrual loan.

ALLOWANCE FOR LOAN LOSSES The allowance for loan losses is a valuation allowance
for probable losses inherent in the portfolio as of the balance sheet date. The
Company's determination of the level of the allowance for loan losses rests upon
various judgments and assumptions, including general economic conditions, loan
portfolio composition, prior loan loss experience, evaluation of credit risk
related to certain individual borrowers and the Company's ongoing examination
process and that of its regulators. The Company considers the allowance for loan
losses adequate to cover losses inherent in loans, loan commitments and standby
and other letters of credit.

TRANSFERS AND SERVICING OF FINANCIAL ASSETS
A transfer of financial assets is accounted for as a sale when control is
surrendered over the assets transferred. Servicing rights and other retained
interests in the assets sold are recorded by allocating the previous recorded
investment between the asset sold and the interest retained based on their
relative fair values, if practicable to determine, at the date of transfer. Fair
values of servicing rights and other retained interests are determined using
present value of estimated future cash flows valuation techniques, incorporating
assumptions that market participants would use in their estimates of values.

                                       59
<Page>

  The Company recognizes as assets the rights to service mortgage loans for
others, whether the servicing rights are acquired through purchases or retained
upon sales of loan originations. For purposes of evaluating and measuring
impairment of mortgage servicing rights, the Company stratifies its portfolio on
the basis of certain risk characteristics including loan type and note rate.
Based upon current fair values, mortgage servicing rights are periodically
assessed for impairment. Any such indicated impairment is recognized in income,
during the period in which it occurs, in a mortgage servicing rights valuation
account which is adjusted each subsequent period to reflect any increase or
decrease in the indicated impairment. The current fair values of mortgage
servicing rights and other retained interests are determined using present value
of estimated future cash flows valuation techniques, incorporating assumptions
that market participants would use in their estimates of values. Mortgage
servicing rights are amortized over the period of estimated net servicing income
and take into account appropriate prepayment assumptions.

PREMISES AND EQUIPMENT
Premises and equipment are stated at cost less accumulated depreciation and
amortization. Capital leases are included in premises and equipment at the
capitalized amount less accumulated amortization.

  Depreciation and amortization are computed primarily using the straight-line
method. Estimated useful lives range up to 40 years for buildings, up to 10
years for furniture and equipment, and the shorter of the estimated useful
life or lease term for leasehold improvements. Capitalized leased assets are
amortized on a straight-line basis over the lives of the respective leases,
which generally range from 20 to 35 years.

GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS
Goodwill, representing the excess of purchase price over the fair value of net
assets acquired, results from purchase acquisitions made by the Company.
Substantially all of the Company's goodwill is being amortized using the
straight-line method over 25 years. Goodwill resulting from acquisitions with
effective dates after June 30, 2001 has not been amortized. Core deposit
intangibles are amortized on an accelerated basis based on an estimated useful
life of 10 to 15 years. Certain identifiable intangible assets that are included
in other assets are generally amortized using an accelerated method over an
original life of 10 to 15 years.

  The Company reviews its intangible assets periodically for
other-than-temporary impairment. If such impairment is indicated,
recoverability of the asset is assessed based on expected undiscounted net
cash flows.

INCOME TAXES
The Company files a consolidated federal income tax return. Federal income tax
is generally allocated to individual subsidiaries as if each had filed a
separate return. Combined state tax returns are filed in certain states. State
taxes are also allocated to individual subsidiaries.

  Deferred income tax assets and liabilities are determined using the liability
(or balance sheet) method. Under this method, the net deferred tax asset or
liability is determined based on the tax effects of the differences between the
book and tax bases of the various balance sheet assets and liabilities and gives
current recognition to changes in tax rates and laws. Foreign taxes paid are
applied as credits to reduce federal income taxes payable.

EARNINGS PER COMMON SHARE
Earnings per common share are presented under two formats: earnings per common
share and diluted earnings per common share. Earnings per common share are
computed by dividing net income (after deducting dividends on preferred stock)
by the average number of common shares outstanding during the year. Diluted
earnings per common share are computed by dividing net income (after deducting
dividends on preferred stock) by the average number of common shares outstanding
during the year, plus the impact of those common stock equivalents (i.e., stock
options, restricted share rights and convertible subordinated debentures) that
are dilutive.

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
On January 1, 2001, the Company adopted Financial Accounting Standards Board
(FASB) Statement No. 133 (FAS 133), ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND
HEDGING ACTIVITIES, and FASB Statement No. 138, ACCOUNTING FOR CERTAIN
DERIVATIVE INSTRUMENTS AND CERTAIN HEDGING ACTIVITIES-AN AMENDMENT OF FASB
STATEMENT NO. 133. All derivative instruments are recognized on the balance
sheet at fair value. On the date the Company enters into a derivative
contract the Company designates the derivative instrument as (1) a hedge of
the fair value of a recognized asset or liability or of an unrecognized firm
commitment ("fair value" hedge), (2) a hedge of a forecasted transaction or
of the variability of cash flows to be received or paid related to a
recognized asset or liability ("cash flow" hedge) or (3) held for trading,
customer accommodation or not qualifying for hedge accounting ("free-standing
derivative instruments"). For a fair value hedge, changes in the fair value
of the derivative instrument and changes in the fair value of the hedged
asset or liability or of an unrecognized firm commitment attributable to the
hedged risk are recorded in current period net income in the same financial
statement category as the hedged item. For a cash flow hedge, changes in the
fair value of the derivative instrument to the extent that it is effective
are recorded in other comprehensive income within stockholders' equity and
subsequently reclassified to net income in the same period(s) that the hedged
transaction impacts net income in the same financial statement category as
the hedged item. For free-standing derivative instruments, changes in the
fair values are reported in current period noninterest income.


                                       60
<Page>

  The Company formally documents the relationship between hedging instruments
and hedged items, as well as the risk management objective and strategy for
undertaking various hedge transactions. This process includes linking all
derivative instruments that are designated as fair value or cash flow hedges
to specific assets and liabilities on the balance sheet or to specific
forecasted transactions. The Company also formally assesses, both at the
inception of the hedge and on an ongoing basis, whether the derivative
instruments used are highly effective in offsetting changes in fair values or
cash flows of hedged items. If it is determined that the derivative
instrument is not highly effective as a hedge, hedge accounting is
discontinued.

  The Company discontinues hedge accounting prospectively when (1) it
determines that a derivative instrument is no longer effective in offsetting
changes in the fair value or cash flows of a hedged item; (2) a derivative
instrument expires or is sold, terminated, or exercised; (3) a derivative
instrument is dedesignated as a hedge instrument, because it is unlikely that
a forecasted transaction will occur; or (4) management determines that
designation of a derivative instrument as a hedge instrument is no longer
appropriate.

  When hedge accounting is discontinued because it is determined that a
derivative instrument no longer qualifies as an effective fair value hedge,
the derivative instrument will continue to be carried on the balance sheet at
its fair value with changes in fair value included in earnings, and the
previously hedged asset or liability will no longer be adjusted for changes
in fair value. Previous adjustments to the hedged item will be accounted for
in the same manner as other components of the carrying amount of the asset or
liability. When hedge accounting is discontinued because it is probable that
a forecasted transaction will not occur, the derivative instrument will
continue to be carried on the balance sheet at its fair value with changes in
fair value included in earnings, and gains and losses that were accumulated
in other comprehensive income will be recognized immediately in earnings.
When hedge accounting is discontinued because the hedging instrument is sold,
terminated, or dedesignated the amount reported in other comprehensive income
to the date of sale, termination, or dedesignation will continue to be
reported in other comprehensive income until the forecasted transaction
impacts earnings. In all other situations in which hedge accounting is
discontinued, the derivative instrument will be carried at its fair value on
the balance sheet, with changes in its fair value recognized in current
period earnings.

  The Company occasionally purchases or originates financial instruments that
contain an embedded derivative instrument. At inception of the financial
instrument, the Company assesses whether the economic characteristics of the
embedded derivative instrument are clearly and closely related to the
economic characteristics of the financial instrument (host contract), whether
the financial instrument that embodies both the embedded derivative
instrument and the host contract is currently measured at fair value with
changes in fair value reported in earnings, and whether a separate instrument
with the same terms as the embedded instrument would meet the definition of a
derivative instrument. If the embedded derivative instrument is determined
not to be clearly and closely related to the host contract, is not currently
measured at fair value with changes in fair value reported in earnings, and
the embedded derivative instrument would qualify as a derivative instrument,
the embedded derivative instrument is separated from the host contract and
carried at fair value with changes recorded in current period earnings. The
Company has elected to not apply FAS 133, as permitted by the FASB, to all
embedded derivative instruments that existed on January 1, 2001 and were
issued or acquired before January 1, 1999 and not substantially modified
thereafter.

  Prior to the adoption of FAS 133, the Company primarily used interest rate
derivative contracts to hedge mismatches in the rate maturity of loans and
their funding sources and the price risk of interest-rate sensitive assets.
Interest rate derivative contracts were accounted for by the deferral or
accrual method if designated as hedges and expected to be effective in
reducing risk. The resulting gains or losses were deferred and recognized in
income along with effects of related hedged asset or liability. If the hedge
was no longer deemed to be effective, hedge accounting was discontinued;
previously unrecognized hedge results and the net settlement upon close-out
were deferred and amortized over the life of the hedged asset or liability.
If the hedged asset or liability settled before maturity of the interest rate
derivative contract and the derivative contract was closed out or settled,
the net settlement amount was accounted for as part of the gains and losses
on the hedged item. The Company also entered into various derivative
contracts to provide derivative products as customer accommodations.
Derivative contracts used for this purpose were marked to market and recorded
as a component of noninterest income.

FOREIGN CURRENCY TRANSLATION
The accounts of the Company's foreign consumer finance subsidiaries are measured
using local currency as the functional currency. Assets and liabilities are
translated into United States dollars at period-end exchange rates, and income
and expense accounts are translated at average monthly exchange rates. Net
exchange gains or losses resulting from such translation are excluded from net
income and included as a component of cumulative other comprehensive income.


                                       61
<Page>

2. BUSINESS COMBINATIONS

The Company regularly explores opportunities to acquire financial institutions
and related financial services businesses. Generally, management of the Company
does not make a public announcement about an acquisition opportunity until a
definitive agreement has been signed.

Excluding the FSCO Merger, the table below includes transactions completed in
the years ended December 31, 2001, 2000 and 1999:

<Table>
<Caption>
---------------------------------------------------------------------------------------------------------------------
(in millions)                                                               Date        Assets              Method of
                                                                                                           accounting
<S>                                                                 <C>                <C>      <C>
2001
Conseco Finance Vendor Services Corporation                           January 31       $   860     Purchase of assets
Buffalo Insurance Agency Group, Inc.                                     March 1             1               Purchase
SCI Financial Group, Inc.                                               March 29            21               Purchase
Midland Trust Company, National Association                              April 7            10               Purchase
ACO Brokerage Holdings Corporation
   (Acordia Group of Insurance Agencies)                                   May 1           866               Purchase
H.D. Vest, Inc.                                                           July 2           182               Purchase
CarFinance America, Inc.                                                 July 25             6     Purchase of assets
H & R Phillips, Inc.                                                  December 6             4               Purchase
                                                                                       -------
                                                                                       $ 1,950
                                                                                       =======
2000
First Place Financial Corporation, Farmington, New Mexico             January 18       $   733               Purchase
North County Bancorp, Escondido, California                           January 27           413               Purchase
Prime Bancshares, Inc., Houston, Texas                                January 28         1,366               Purchase
Ragen MacKenzie Group Incorporated, Seattle, Washington                 March 16           901               Purchase
Napa National Bancorp, Napa, California                                 March 17           188               Purchase
Servus Financial Corporation, Herndon, Virginia                         March 17           168               Purchase
Michigan Financial Corporation, Marquette, Michigan                     March 30           975               Purchase
Bryan, Pendleton, Swats & McAllister, LLC, Nashville, Tennessee         March 31            12               Purchase
Black & Company, Inc., Portland, Oregon                                    May 1             4               Purchase
1st Choice Financial Corp., Greeley, Colorado                            June 13           483               Purchase
First Commerce Bancshares, Inc., Lincoln, Nebraska                       June 16         2,868               Purchase
National Bancorp of Alaska, Inc., Anchorage, Alaska                      July 14         3,518               Purchase
Charter Financial, Inc., New York, New York                          September 1           532               Purchase
Buffalo National Bancshares, Inc., Buffalo, Minnesota               September 28           123               Purchase
Brenton Banks, Inc., Des Moines, Iowa                                 December 1         2,191               Purchase
Paragon Capital, LLC, Needham, Massachusetts                         December 15            13               Purchase
Flagship Credit Corporation, Philadelphia, Pennsylvania              December 21           841     Purchase of assets
                                                                                       -------
                                                                                       $15,329
                                                                                       =======
---------------------------------------------------------------------------------------------------------------------
                                                                                                          (continued)
</Table>

                                       62
<Page>

<Table>
<Caption>
---------------------------------------------------------------------------------------------------------------------
                                                                            Date        Assets              Method of
(in millions)                                                                                              accounting
<S>                                                                 <C>                <C>      <C>
1999
Mid-Penn Consumer Discount Company, Philadelphia, Pennsylvania        January 21       $    11               Purchase
Century Business Credit Corporation, New York, New York               February 1           342               Purchase
Van Kasper & Company, San Francisco, California                      February 12            20               Purchase
Metropolitan Bancshares, Inc., Aurora, Colorado                      February 23            64               Purchase
Mercantile Financial Enterprises, Inc., Brownsville, Texas           February 26           779  Pooling of interests*
Riverton State Bank Holding Company, Riverton, Wyoming                  March 12            81               Purchase
Comstock Bancorp, Reno, Nevada                                            June 1           208               Purchase
Greater Midwest Leasing Company, Minneapolis, Minnesota                   June 3            24               Purchase
XEON Financial Corporation, Stateline, Nevada                            June 14           122               Purchase
Mustang Financial Corporation, Rio Vista, Texas                          June 25           254               Purchase
Eastern Heights Bank, St. Paul, Minnesota                                 July 1           453               Purchase
Goodson Insurance Agency, Denver, Colorado                              August 1            --     Purchase of assets
SB Insurance Company, Marshall, Minnesota                             October 15            --               Purchase
Allied Leasing Company, Burnsville, Minnesota                         November 1            17               Purchase
Eastdil Realty Company, L.L.C., New York, New York                   November 16             9               Purchase
Texas Bancshares, Inc., San Antonio, Texas                           December 16           370               Purchase
                                                                                       -------
                                                                                       $ 2,754
                                                                                       =======
----------------------------------------------------------------------------------------------------------------------
</Table>
*  Pooling-of-interests transaction was not material to the Company's
   consolidated financial statements; accordingly, previously reported results
   were not restated.


  In connection with the foregoing transactions, the Company paid cash in the
aggregate amount of $803 million, $396 million and $541 million in 2001, 2000
and 1999, respectively, and issued aggregate common shares of .4 million,
75.6 million and 11.1 million in 2001, 2000 and 1999, respectively.

  In the second quarter of 2001, the Company completed its acquisitions of
H.D. Vest, Inc. and ACO Brokerage Holdings Corporation, parent company of
Acordia, Inc.  H.D. Vest, Inc. provides comprehensive financial planning
services, including securities, insurance, money management and business
advice, through approximately 6,000 independent tax and financial advisors.
Acordia, Inc. is a property and casualty insurance agency with over $400
million in annual revenue and 112 offices in 29 states.

  As of December 31, 2001, the Company had 4 pending transactions with total
assets of approximately $6 billion and anticipates that approximately 12
million common shares will be issued and approximately $500 million in cash
will be paid upon consummation of these transactions.

MERGER INVOLVING THE COMPANY AND FIRST SECURITY CORPORATION (FSCO)
On October 25, 2000 the merger involving the Company and First Security
Corporation (FSCO Merger) was completed as a pooling-of-interests. Under the
terms of the merger agreement, stockholders of First Security received .355
shares of common stock of the Company for each share of common stock owned. As a
condition to the merger, the Company was required by regulatory agencies to
divest 39 stores in Idaho, New Mexico, Nevada and Utah having aggregate deposits
of approximately $1.5 billion. These sales were completed in the first quarter
of 2001 and the Company realized a net gain of $96 million, which included a $54
million reduction of goodwill.

                                       63

<Page>

3. CASH, LOAN AND DIVIDEND RESTRICTIONS

Federal Reserve Board (FRB) regulations require reserve balances on deposits to
be maintained with the Federal Reserve Banks by each of the banking
subsidiaries. The average required reserve balance was $2.1 billion and $2.0
billion in 2001 and 2000, respectively.

  Federal law prevents the Company and its nonbank subsidiaries from borrowing
from its subsidiary banks unless the loans are secured by specified collateral.
Such secured loans by any subsidiary bank are generally limited to 10% of the
subsidiary bank's capital and surplus (which for this purpose represents Tier 1
and Tier 2 capital, as calculated under the risk-based capital guidelines, plus
the balance of the allowance for loan losses excluded from Tier 2 capital) and
aggregate loans to the Company and its nonbank subsidiaries are limited to 20%
of the subsidiary bank's capital and surplus. (For further discussion of
risk-based capital, see Note 22 to Financial Statements.)

  The payment of dividends by subsidiary banks is subject to various federal and
state regulatory limitations. Dividends payable by a national bank without the
express approval of the Office of the Comptroller of the Currency (OCC) are
limited to that bank's retained net profits for the preceding two calendar years
plus retained net profits up to the date of any dividend declaration in the
current calendar year. Retained net profits are defined by the OCC as net income
less dividends declared during the period as determined based on regulatory
accounting principles. The Company also has state-chartered subsidiary banks
that are subject to state regulations that limit dividends. Under those
provisions, the Company's national and state-chartered subsidiary banks could
have declared dividends of $1,026 million and $650 million in 2001 and 2000,
respectively, without obtaining prior regulatory approval. In addition, the
Company's non-bank subsidiaries could have declared dividends of $1,292 million
and $1,889 million at December 31, 2001 and 2000, respectively.

4. SECURITIES AVAILABLE FOR SALE

The following table provides the cost and fair value for the major components of
securities available for sale carried at fair value. There were no securities
classified as held to maturity at the end of 2001 or 2000.

<Table>
<Caption>
--------------------------------------------------------------------------------------------------------------------------------
                                                                                                                     December 31,
                                  ----------------------------------------------------------------------------------------------
                                                                          2001                                              2000
                                  --------------------------------------------      --------------------------------------------
                                            ESTIMATED   ESTIMATED                             Estimated   Estimated
                                           UNREALIZED  UNREALIZED    ESTIMATED               unrealized  unrealized    Estimated
                                                GROSS       GROSS         FAIR                    gross       gross         fair
(in millions)                        COST       GAINS      LOSSES        VALUE         Cost       gains      losses        value
------------------------------------------------------------------------------      --------------------------------------------
<S>                               <C>          <C>           <C>       <C>          <C>          <C>           <C>       <C>
Securities of U.S. Treasury and
   federal agencies               $ 1,983      $   66        $  2      $ 2,047      $ 2,739      $   49        $  5      $ 2,783
Securities of U.S. states and
   political subdivisions           2,146          90          13        2,223        2,322          90          12        2,400
Mortgage-backed securities:
   Federal agencies                29,280         449           8       29,721       26,304         838         147       26,995
   Private collateralized
      mortgage obligations (1)      2,628          49          19        2,658        1,455          43          52        1,446
                                  -------      ------        ----      -------      -------      ------        ----      -------
      Total mortgage-backed
         securities                31,908         498          27       32,379       27,759         881         199       28,441
Other                               2,625          86          43        2,668        2,588          37         123        2,502
                                  -------      ------        ----      -------      -------      ------        ----      -------
         Total debt securities     38,662         740          85       39,317       35,408       1,057         339       36,126
Marketable equity securities          815         264          88          991        2,457         563         491        2,529
                                  -------      ------        ----      -------      -------      ------        ----      -------
            Total (2)             $39,477      $1,004        $173      $40,308      $37,865      $1,620        $830      $38,655
                                  =======      ======        ====      =======      =======      ======        ====      =======
--------------------------------------------------------------------------------------------------------------------------------
</Table>

(1)  Substantially all private collateralized mortgage obligations are AAA-rated
     bonds collateralized by 1-4 family residential first mortgages.
(2)  At December 31, 2001, the Company held no securities of any single issuer
     (excluding the U.S. Treasury and federal agencies) with a book value that
     exceeded 10% of stockholders' equity.


  The decrease in marketable equity securities of $1.64 billion in cost between
December 31, 2000 and December 31, 2001 was due to dispositions and the non-cash
impairment charges taken in the second quarter of 2001 primarily in the venture
capital portfolio. The Company experienced sustained declines in the market
values of publicly traded securities, particularly in the technology and
telecommunication industries. In the second quarter of 2001, the Company
recognized non-cash charges of $1.18 billion to reflect other-than-temporary
impairment. (See Note 1(Securities Available for Sale) for further information.)

  Securities pledged where the secured party has the right to sell or repledge
totaled $6.2 billion at December 31, 2001 and $1.3 billion at December 31, 2000.
Securities pledged where the secured party does not have the right to sell or
repledge totaled $15.7 billion at December 31, 2001 and $17 billion at December
31, 2000 and are primarily pledged to secure trust and public deposits and for
other purposes as required or permitted by law. The Company has accepted
collateral in the form of securities that it has the right to sell or repledge
of $2.7 billion at December 31, 2001 and $1.6 billion at December 31, 2000.


                                      64

<Page>

  The table to the right provides the components of the realized net gains
(losses) on securities from the securities available for sale portfolio.
Realized gains (losses) on securities are also reported in mortgage banking
noninterest income. Realized gains (losses) on marketable equity securities from
venture capital investments, which include other-than-temporary impairment, are
reported as net venture capital gains (losses) (not included in the table to the
right).

<Table>
<Caption>
----------------------------------------------------------------------------
                                                      Year ended December 31,
                                               -----------------------------
(in millions)                                  2001           2000      1999
----------------------------------------------------------------------------
<S>                                            <C>         <C>         <C>
Realized gross gains                           $688 (1)    $   334     $  91
Realized gross losses                           (91)(2)     (1,056)     (319)
                                               ----        -------     -----
Realized net gains (losses)                    $597        $  (722)    $(228)
                                               ====        =======     =====
----------------------------------------------------------------------------
</Table>
(1)  Includes $148 million of gross gains reported in mortgage banking
     noninterest income.
(2)  Includes $14 million of gross losses reported in mortgage banking
     noninterest income.

The table below provides the remaining contractual principal maturities and
yields (taxable-equivalent basis) of debt securities available for sale. The
remaining contractual principal maturities for mortgage-backed securities were
allocated assuming no prepayments. Expected remaining maturities will differ
from contractual maturities because debt issuers may have the right to prepay
obligations with or without penalties.

<Table>
<Caption>
----------------------------------------------------------------------------------------------------------------------------------
                                                                                                                 December 31, 2001
                                         -----------------------------------------------------------------------------------------
                                                                                          Remaining contractual principal maturity
                                                           -----------------------------------------------------------------------

                                                                                After one year   After five years
                                                 Weighted  Within one year  through five years  through ten years  After ten years
                                           Total  average  ---------------  ------------------  -----------------  ---------------
(in millions)                             amount    yield  Amount    Yield  Amount       Yield  Amount      Yield   Amount   Yield
----------------------------------------------------------------------------------------------------------------------------------
<S>                                      <C>        <C>     <C>      <C>    <C>          <C>    <C>         <C>    <C>       <C>
Securities of U.S. Treasury and
   federal agencies                      $ 2,047     6.55%  $ 698     6.35% $1,146        6.64% $  188       6.70% $    15    6.81%
Securities of U.S. states and
   political subdivisions                  2,223     7.98     143     8.46     341        8.22     171       7.91    1,568    7.89
Mortgage-backed securities:
   Federal agencies                       29,721     7.19      55     8.23     134        8.37     395       8.91   29,137    7.16
   Private collateralized
      mortgage obligations                 2,658     8.55     897     7.03       1       10.75      97       9.17    1,663    9.33
                                         -------           ------           ------              ------             -------
        Total mortgage-backed securities  32,379     7.31     952     7.10     135        8.39     492       8.96   30,800    7.28
Other                                      2,668     7.80      26     6.90      94        6.22     166       7.17    2,382    7.91
                                         -------           ------           ------              ------             -------

ESTIMATED FAIR VALUE
   OF DEBT SECURITIES (1)                $39,317     7.46% $1,819     7.06% $1,716        7.27% $1,017       8.23% $34,765    7.47%
                                         =======     ====  ======     ====  ======       =====  ======       ====  =======    ====
TOTAL COST OF DEBT SECURITIES            $38,662           $1,781           $1,668              $  997             $34,216
                                         =======           ======           ======              ======             =======
----------------------------------------------------------------------------------------------------------------------------------
</Table>

(1)  The weighted average yield is computed using the amortized cost of debt
     securities available for sale.


                                      65

<Page>

5. LOANS AND ALLOWANCE FOR LOAN LOSSES

A summary of the major categories of loans outstanding and related unfunded
commitments is shown in the table below. Unfunded commitments are defined as all
legally binding agreements to extend credit, net of all funds lent, and all
standby and commercial letters of credit issued under the terms of those
commitments. At December 31, 2001 and 2000, the commercial loan category and
related unfunded commitments did not have a concentration in any industry that
exceeded 10% of total loans and unfunded commitments. At December 31, 2001 and
2000, the real estate 1-4 family first mortgage and junior lien mortgage
categories and related unfunded commitments did not have a concentration in any
state that exceeded 10% of total loans and unfunded commitments.

<Table>
<Caption>
---------------------------------------------------------------------------------------------------------------
                                                                                                    December 31,
                                                     ----------------------------------------------------------
                                                                            2001                           2000
                                                     ---------------------------    ---------------------------
                                                                     COMMITMENTS                    Commitments
                                                                       TO EXTEND                      to extend
(in millions)                                         OUTSTANDING         CREDIT    Outstanding          credit
---------------------------------------------------------------------------------------------------------------
<S>                                                      <C>             <C>           <C>              <C>
Commercial                                               $ 47,547        $52,682       $ 50,518         $47,597
Real estate 1-4 family first mortgage                      25,588            479         18,464             238
Other real estate mortgage                                 24,808          2,081         23,972           3,134
Real estate construction                                    7,806          4,237          7,715           6,181
Consumer:
     Real estate 1-4 family junior lien mortgage           25,530         14,038         18,218           7,899
     Credit card                                            6,700         16,817          6,616          19,004
     Other revolving credit and monthly payment            23,502          9,104         23,974           6,549
                                                         --------        -------       --------         -------
        Total consumer                                     55,732         39,959         48,808          33,452
Lease financing                                             9,420             --         10,023           1,847
Foreign                                                     1,598            214          1,624             260
                                                         --------        -------       --------         -------
        Total loans (1)                                  $172,499        $99,652       $161,124         $92,709
                                                         ========        =======       ========         =======
-------------------------------------------------------------------------------------------------------------------
</Table>

(1)  Outstanding loan balances at December 31, 2001 and 2000 are net of
     unearned income, including net deferred loan fees, of $4,143 million and
     $4,231 million, respectively.


  In the course of evaluating the credit risk presented by a customer and the
pricing that will adequately compensate the Company for assuming that risk,
management may require a certain amount of collateral support. The type of
collateral held varies, but may include accounts receivable, inventory, land,
buildings, equipment, income-producing commercial properties and residential
real estate. The Company has the same collateral policy for loans whether they
are funded immediately or on a delayed basis (commitment).

  A commitment to extend credit is a legally binding agreement to lend funds
to a customer usually at a stated interest rate and for a specified purpose.
Such commitments have fixed expiration dates and generally require a fee. The
extension of a commitment gives rise to credit risk. The actual liquidity
requirements or credit risk that the Company will experience will be lower
than the contractual amount of commitments to extend credit shown in the
table above because a significant portion of those commitments are expected
to expire without being drawn upon. Certain commitments are subject to loan
agreements containing covenants regarding the financial performance of the
customer that must be met before the Company is required to fund the
commitment. The Company uses the same credit policies in making commitments
to extend credit as it does in making loans.

  In addition, the Company manages the potential credit risk in commitments to
extend credit by limiting the total amount of arrangements, both by individual
customer and in the aggregate; by monitoring the size and maturity structure of
these portfolios; and by applying the same credit standards maintained for all
of its related credit activities. The credit risk associated with these
commitments is considered in management's determination of the allowance for
loan losses.

  Standby letters of credit totaled $5.5 billion and $5.6 billion at December
31, 2001 and 2000, respectively. Standby letters of credit are issued on
behalf of customers in connection with contracts between the customers and
third parties. Under standby letters of credit, the Company assures that the
third parties will receive specified funds if customers fail to meet their
contractual obligations. The liquidity risk to the Company arises from its
obligation to make payment in the event of a customer's contractual default.
The credit risk involved in issuing standby letters of credit and the
Company's management of that credit risk is considered in management's
determination of the allowance for loan losses. Standby letters of credit are
reported net of participations sold to other institutions of $736 million in
2001 and $623 million in 2000.


                                      66

<Page>

  Included in standby letters of credit are those that back financial
instruments (financial guarantees). The Company had issued or purchased
participations in financial guarantees of approximately $1.6 billion and $2.3
billion at December 31, 2001 and 2000, respectively. The Company also had
commitments for commercial and similar letters of credit of $577 million and
$729 million at December 31, 2001 and 2000, respectively. Substantially all
fees received from the issuance of financial guarantees are deferred and
amortized on a straight-line basis over the term of the guarantee.

  The Company has an established process to determine the adequacy of the
allowance for loan losses which assesses the risk and losses inherent in its
portfolio. This process provides an allowance consisting of two components,
allocated and unallocated. To arrive at the allocated component of the
allowance, the Company combines estimates of the allowances needed for loans
analyzed individually (including impaired loans subject to Statement of
Financial Accounting Standards No. 114 (FAS 114), ACCOUNTING BY CREDITORS FOR
IMPAIRMENT OF A LOAN) and loans analyzed on a pool basis.

  The determination of the allocated allowance for portfolios of larger
commercial and commercial real estate loans involves a review of individual
higher-risk transactions, focusing on the accuracy of loan grading,
assessments of specific loss content, and, in some cases, strategies for
resolving problem credits. These considerations supplement the application of
loss factors delineated by individual loan grade to the existing distribution
of risk exposures, thus framing an assessment of inherent losses across the
entire wholesale lending portfolio segment which is responsive to shifts in
portfolio risk content. The loss factors used for this analysis have been
derived from migration models which track actual portfolio movements from
problem asset loan grades to loss over a 5 to 10 year period. In the case of
pass loan grades, the loss factors are derived from analogous loss experience
in public debt markets, calibrated to the long-term average loss experience
of the Company's portfolios. The loan loss allocations arrived at through
this factor methodology are adjusted by management's judgment concerning the
effect of recent economic events on portfolio performance.

  In the case of more homogeneous portfolios, such as consumer loans and
leases, residential mortgage loans, and some segments of small business
lending, the determination of the allocated allowance is conducted at an
aggregate, or pooled, level. For such portfolios, the risk assessment process
emphasizes the development of rigorous forecasting models, which focus on
recent delinquency and loss trends in different portfolio segments to project
relevant risk metrics over an intermediate-term horizon. Such analyses are
updated frequently to capture the most recent behavioral characteristics of
the subject portfolios, as well as any changes in management's loss
mitigation or customer solicitation strategies, in order to reduce the
differences between estimated and observed losses. An amount which
approximates one year of projected net losses is provided as the baseline
allocation for most homogeneous portfolios, to which management will add
certain adjustments to help ensure that a prudent amount of conservatism is
present in the specific assumptions underlying that forecast.

  While coverage of one year's losses is often adequate (particularly for
homogeneous pools of loans and leases), the time period covered by the allowance
may vary by portfolio, based on the Company's best estimate of the inherent
losses in the entire portfolio as of the evaluation date. To mitigate the
imprecision inherent in most estimates of expected credit losses, the allocated
component of the allowance is supplemented by an unallocated component. The
unallocated component includes management's judgmental determination of the
amounts necessary for concentrations, economic uncertainties and other
subjective factors; correspondingly, the relationship of the unallocated
component to the total allowance for loan losses may fluctuate from period to
period. Although management has allocated a portion of the allowance to specific
loan categories, the adequacy of the allowance must be considered in its
entirety.

  The Company's determination of the level of the allowance and,
correspondingly, the provision for loan losses rests upon various judgments
and assumptions, including general economic conditions, loan portfolio
composition, prior loan loss experience and the Company's ongoing examination
process and that of its regulators. The Company has an internal risk analysis
and review staff that continuously reviews loan quality and reports the
results of its examinations to executive management and the Board of
Directors. Such reviews also assist management in establishing the level of
the allowance. Like all national banks, subsidiary national banks continue to
be subject to examination by their primary regulator, the Office of the
Comptroller of the Currency (OCC), and some have OCC examiners in residence.
These examinations occur throughout the year and target various activities of
the subsidiary national banks, including specific segments of the loan
portfolio (for example, commercial real estate and shared national credits).
In addition to the subsidiary national banks being examined by the OCC, the
Parent and its nonbank subsidiaries are examined by the Federal Reserve Board.

  The Company considers the allowance for loan losses of $3.76 billion
adequate to cover losses inherent in loans, loan commitments and standby and
other letters of credit at December 31, 2001.


                                      67

<Page>

Changes in the allowance for loan losses were as follows:

<Table>
<Caption>
--------------------------------------------------------------------------------------------------------------
                                                                                        Year ended December 31,
                                                                       ---------------------------------------
(in millions)                                                             2001            2000            1999
--------------------------------------------------------------------------------------------------------------
<S>                                                                    <C>             <C>             <C>
BALANCE, BEGINNING OF YEAR                                             $ 3,719         $ 3,344         $ 3,307

Allowances related to business combinations                                 41             265              48

Provision for loan losses                                                1,780           1,329           1,104

Loan charge-offs:
  Commercial                                                              (692)           (429)           (395)
  Real estate 1-4 family first mortgage                                    (29)            (16)            (14)
  Other real estate mortgage                                               (32)            (32)            (28)
  Real estate construction                                                 (37)             (8)             (2)
  Consumer:
    Real estate 1-4 family junior lien mortgage                            (47)            (34)            (33)
    Credit card                                                           (421)           (367)           (403)
    Other revolving credit and monthly payment                            (770)           (623)           (585)
                                                                       -------         -------         -------
      Total consumer                                                    (1,238)         (1,024)         (1,021)
  Lease financing                                                          (94)            (52)            (38)
  Foreign                                                                  (78)            (86)            (90)
                                                                       -------         -------         -------
        Total loan charge-offs                                          (2,200)         (1,647)         (1,588)
                                                                       -------         -------         -------

Loan recoveries:
  Commercial                                                                96              98              90
  Real estate 1-4 family first mortgage                                      3               4               6
  Other real estate mortgage                                                22              13              38
  Real estate construction                                                   3               4               5
  Consumer:
    Real estate 1-4 family junior lien mortgage                             11              14              15
    Credit card                                                             40              39              49
    Other revolving credit and monthly payment                             203             213             243
                                                                       -------         -------         -------
      Total consumer                                                       254             266             307
  Lease financing                                                           25              13              12
  Foreign                                                                   18              30              15
                                                                       -------         -------         -------
        Total loan recoveries                                              421             428             473
                                                                       -------         -------         -------
         Total net loan charge-offs                                     (1,779)         (1,219)         (1,115)
                                                                       -------         -------         -------

BALANCE, END OF YEAR                                                   $ 3,761         $ 3,719         $ 3,344
                                                                       =======         =======         =======

Total net loan charge-offs as a percentage of
  average total loans                                                     1.09%            .84%            .90%
                                                                       =======         =======         =======

Allowance as a percentage of total loans                                  2.18%           2.31%           2.51%
                                                                       =======         =======         =======
--------------------------------------------------------------------------------------------------------------
</Table>

  In accordance with FAS 114, the following table shows the recorded
investment in impaired loans and the related methodology used to measure
impairment at December 31, 2001 and 2000:

<Table>
<Caption>
-----------------------------------------------------------
                                                December 31,
                                          -----------------
(in millions)                             2001         2000
-----------------------------------------------------------
<S>                                       <C>          <C>
Impairment measurement based on:
   Collateral value method                $485         $174
   Discounted cash flow method             338          331
   Historical loss factors                 172          257
                                          ----         ----
      Total (1)                           $995         $762
                                          ====         ====
-----------------------------------------------------------
</Table>

(1)  Includes $529 million and $345 million of impaired loans with a related
     FAS 114 allowance of $91 million and $74 million at December 31, 2001
     and 2000, respectively.


  The average recorded investment in impaired loans during 2001, 2000 and
1999 was $937 million, $470 million and $376 million, respectively. Total
interest income recognized on impaired loans during 2001, 2000 and 1999 was
$17 million, $4 million and $7 million, respectively, which was primarily
recorded using the cash method.

  The Company uses either the cash or cost recovery method to record cash
receipts on impaired loans that are on nonaccrual. Under the cash method,
contractual interest is credited to interest income when received. This
method is used when the ultimate collectibility of the total principal is not
in doubt. Under the cost recovery method, all payments received are applied
to principal. This method is used when the ultimate collectibility of the
total principal is in doubt. Loans on the cost recovery method may be changed
to the cash method when the application of the cash payments has reduced the
principal balance to a level where collection of the remaining recorded
investment is no longer in doubt.


                                      68

<Page>

6. PREMISES, EQUIPMENT, LEASE COMMITMENTS, INTEREST RECEIVABLE AND OTHER ASSETS

The following table presents comparative data for premises and equipment:

<Table>
<Caption>
--------------------------------------------------------------------
                                                         December 31,
                                                   -----------------
(in millions)                                        2001       2000
--------------------------------------------------------------------
<S>                                                <C>        <C>
Land                                               $  463     $  440
Buildings                                           2,593      2,553
Furniture and equipment                             3,012      2,942
Leasehold improvements                                874        761
Premises leased under capital leases                   54         75
                                                   ------     ------
  Total                                             6,996      6,771
Less accumulated depreciation and amortization      3,447      3,356
                                                   ------     ------
     Net book value                                $3,549     $3,415
                                                   ======     ======
--------------------------------------------------------------------
</Table>

  Depreciation and amortization expense was $561 million, $560 million and $499
million in 2001, 2000 and 1999, respectively.

  The Company is obligated under a number of noncancelable operating leases for
premises (including vacant premises) and equipment with terms, including renewal
options, up to 100 years, many of which provide for periodic adjustment of
rentals based on changes in various economic indicators. The following table
shows future minimum payments under noncancelable operating leases and capital
leases, net of sublease rentals, with terms in excess of one year as of December
31, 2001:

<Table>
<Caption>
-----------------------------------------------------------------------------------------
(in millions)                                    Operating leases         Capital leases
<S>                                                       <C>                       <C>
Year ended December 31,
2002                                                      $  383                    $  8
2003                                                         304                       6
2004                                                         253                       4
2005                                                         190                       3
2006                                                         158                       3
Thereafter                                                   736                      21
                                                          ------                    ----
Total minimum lease payments                              $2,024                      45
                                                          ======

Executory costs                                                                       (1)
Amounts representing interest                                                        (17)
                                                                                    ----

Present value of net minimum lease payments                                         $ 27
                                                                                    ====
----------------------------------------------------------------------------------------
</Table>

  Rental expense, net of rental income, for all operating leases was $473
million, $499 million and $418 million in 2001, 2000 and 1999, respectively.

  The components of interest receivable and other assets at December 31, 2001
and 2000 were as follows:

<Table>
<Caption>
----------------------------------------------------------------------------------------
                                                                             December 31,
                                                          ------------------------------
(in millions)                                                2001                   2000
----------------------------------------------------------------------------------------
<S>                                                       <C>                    <C>
Trading assets                                            $ 4,996                $ 3,777
Nonmarketable equity investments:
  Venture capital cost method investments                   1,696                  2,033
  Federal Reserve Bank stock                                1,295                  1,237
  All other                                                 1,071                    872
                                                          -------                -------
     Total nonmarketable equity investments                 4,062                  4,142

Government National Mortgage Association
   (GNMA) pool buy-outs                                     2,815                  1,510
Interest receivable                                         1,284                  1,516
Interest-earning deposits                                     206                     95
Foreclosed assets                                             171                    128
Certain identifiable intangible assets                        119                    227
Due from customers on acceptances                             104                     85
Other                                                       9,788                 10,449
                                                          -------                -------
     Total interest receivable and other assets           $23,545                $21,929
                                                          =======                =======
----------------------------------------------------------------------------------------
</Table>

  Trading assets consist largely of securities, including corporate debt, U.S.
government agency obligations and derivative instruments held for customer
accommodation purposes. Interest income from trading assets was $114 million,
$98 million and $81 million in 2001, 2000 and 1999, respectively. Noninterest
income from trading assets was $400 million, $238 million and $112 million in
2001, 2000 and 1999, respectively.

  Noninterest (loss) income from nonmarketable equity investments accounted for
using the cost method was $(55) million, $170 million and $138 million in 2001,
2000 and 1999, respectively. The decreases from 2000 to 2001 in noninterest
income and the balance of venture capital cost method investments was primarily
due to a $330 million second quarter 2001 impairment write-down of certain
venture capital cost method investments.

  GNMA pool buy-outs are advances made to GNMA mortgage pools that are
guaranteed by the Federal Housing Administration or by the Department of
Veterans Affairs (collectively, "the guarantors"). These advances are made to
buy out government agency-guaranteed delinquent loans, pursuant to the
Company's servicing agreements. The Company, on behalf of the guarantors,
undertakes the collection and foreclosure process. After the foreclosure
process is complete, the Company is reimbursed for substantially all costs
incurred, including the advances, by the guarantors.

  Amortization expense for certain identifiable intangible assets included in
other assets was $38 million, $42 million and $68 million in 2001, 2000 and
1999, respectively.


                                      69
<Page>

7. DEPOSITS

The aggregate amount of time certificates of deposit and other time deposits
issued by domestic offices was $26,454 million and $36,207 million at
December 31, 2001 and 2000, respectively. Substantially all of those deposits
were interest bearing. The contractual maturities of those deposits are shown
in the following table.

<Table>
<Caption>
------------------------------------------------------------------------------------------
(in millions)                                                            December 31, 2001
<S>                                                                     <C>
2002                                                                               $19,533
2003                                                                                 3,825
2004                                                                                 1,169
2005                                                                                   753
2006                                                                                   472
Thereafter                                                                             702
                                                                                 ---------

Total                                                                              $26,454
                                                                                 =========
------------------------------------------------------------------------------------------
</Table>



    Of the total above, the amount of time deposits with a denomination of
$100,000 or more was $6,427 million and $9,741 million at December 31, 2001
and 2000, respectively. The contractual maturities of these deposits are
shown in the following table.

<Table>
<Caption>
------------------------------------------------------------------------------------------
(in millions)                                                            December 31, 2001
<S>                                                                     <C>
Three months or less                                                                $2,534
After three months through six months                                                1,282
After six months through twelve months                                               1,172
After twelve months                                                                  1,439
                                                                                  --------

Total                                                                               $6,427
                                                                                  ========

------------------------------------------------------------------------------------------
</Table>

Time certificates of deposit and other time deposits issued by foreign
offices with a denomination of $100,000 or more represent most of the foreign
deposit liabilities of $4,132 million and $7,712 million at December 31, 2001
and 2000, respectively.

Demand deposit overdrafts that have been reclassified as loan balances were
$638 million and $749 million at December 31, 2001 and 2000, respectively.

8. SHORT-TERM BORROWINGS
-------------------------------------------------------------------------------

The table below shows selected information for short-term borrowings. These
borrowings generally mature in less than 30 days.

<Table>
<Caption>
-------------------------------------------------------------------------------------------------------------------
(in millions)                                                        2001                 2000                 1999
                                                        -----------------    -----------------    -----------------
                                                           AMOUNT    RATE      Amount     Rate    Amount       Rate
-------------------------------------------------------------------------------------------------------------------
<S>                                                     <C>        <C>      <C>        <C>       <C>          <C>
AS OF DECEMBER 31,
Commercial paper and other short-term borrowings          $13,965    2.01%    $15,844     6.64%    $17,246     6.06%

Federal funds purchased and securities sold under
   agreements to repurchase                                23,817    1.53      13,145     5.81      14,481     4.73
                                                         --------            --------             --------
     Total                                                $37,782    1.71     $28,989     6.26     $31,727     5.45
                                                         ========            ========             ========

YEAR ENDED DECEMBER 31,
AVERAGE DAILY BALANCE
Commercial paper and other short-term borrowings          $13,561    4.12%    $14,375     6.43%    $10,272     5.40%

Federal funds purchased and securities sold under
   agreements to repurchase                                20,324    3.51      13,847     6.03      12,287     4.69
                                                         --------            --------             --------
     Total                                                $33,885    3.76     $28,222     6.23     $22,559     5.00
                                                         ========            ========             ========

MAXIMUM MONTH-END BALANCE
Commercial paper and other short-term borrowings (1)      $19,818     N/A     $17,730      N/A     $17,246      N/A

Federal funds purchased and securities sold under
   agreements to repurchase (2)                            26,346     N/A      16,535      N/A      15,147      N/A

-------------------------------------------------------------------------------------------------------------------
</Table>
N/A - Not applicable.
(1)      Highest month-end balance in each of the last three years appeared in
         October 2001, January 2000 and December 1999, respectively.
(2)      Highest month-end balance in each of the last three years appeared in
         September 2001, August 2000 and August 1999, respectively.

    At December 31, 2001, the Company had available lines of credit totaling
$4.3 billion, of which $2.3 billion was obtained through a subsidiary, Wells
Fargo Financial, Inc. The remaining $2.0 billion was in the form of a
revolving credit facility. A portion of these financing arrangements require
the maintenance of compensating balances or payment of fees, which are not
material.

                                      70
<Page>

9. LONG-TERM DEBT

    The following is a summary of long-term debt (reflecting unamortized debt
discounts and premiums, where applicable) owed by the Parent and its
subsidiaries:

<Table>
<Caption>
                                                          Maturity                          Interest
(in millions)                                             date                              rate(s)               2001        2000
----------------------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>                               <C>                <C>         <C>
WELLS FARGO & COMPANY (PARENT ONLY)
SENIOR
Global Notes (1)                                          2002-2006                         6.50-7.25%         $ 4,996     $ 3,986
Global Notes                                              2002                              Various              1,250       1,997
Medium-Term Notes (1)                                     2002-2006                         5.75-6.875%          1,596       2,095
Medium-Term Notes                                         2002-2027                         3.375-7.75%          1,670         620
Floating-Rate Medium-Term Notes                           2002-2004                         Various              2,300       2,100
Floating-Rate Euro Medium-Term Notes                      2001                              Various                 --         300
Notes                                                     2004                              6.00%                    1           1
Extendable Notes (2)                                      2005                              Various              1,497       1,497
                                                                                                               -------     -------
   Total senior debt                                                                                            13,310      12,596
                                                                                                               -------     -------

SUBORDINATED
Global Notes (1)                                          2011                              6.375%                 748          --
Notes (1)                                                 2003                              6.625%                 200         199
Debentures                                                2023                              6.65%                  198         198
Other notes (1)                                           2003                              6.625-6.75%             --           1
                                                                                                               -------     -------
   Total subordinated debt                                                                                       1,146         398
                                                                                                               -------     -------
     Total long-term debt - Parent                                                                              14,456      12,994
                                                                                                               -------     -------

WFC HOLDINGS CORPORATION
SENIOR
Medium-Term Notes (1)                                     2002                              10.00%                   2         220
Medium-Term Notes                                         2002                              9.04-10.00%              2          15
                                                                                                               -------     -------

   Total senior debt                                                                                                 4         235
                                                                                                               -------     -------

SUBORDINATED
Medium-Term Notes (1)(3)                                  2013                              6.50-6.625%             50         173
Medium-Term Notes                                         2002                              9.375%                  30          30
Notes                                                     2002-2003                         6.125-8.75%            732         732
Notes (1)                                                 2004-2006                         6.875-9.125%           933         933
Notes (1)(3)                                              2008                              6.25%                  199         199
                                                                                                               -------     -------
   Total subordinated debt                                                                                       1,944       2,067
                                                                                                               -------     -------
     Total long-term debt - WFC Holdings                                                                       $ 1,948     $ 2,302
                                                                                                               -------     -------

----------------------------------------------------------------------------------------------------------------------------------
</Table>
(1)  The Company entered into interest rate swap agreements for substantially
     all of these notes, whereby the Company receives fixed-rate interest
     payments approximately equal to interest on the notes and makes interest
     payments based on an average three-month or six-month LIBOR rate.
(2)  The extendable notes are a floating rate security with an initial maturity
     of 13 months, which can be extended on a rolling basis, at the investor's
     option to a final maturity of 5 years.
(3)  The interest rate swap agreement for these notes is callable by the
     counterparty prior to the maturity of the notes.
(4)  The Company entered into an interest rate swap agreement for these notes,
     whereby the Company receives interest payments based on an average
     three-month LIBOR rate and makes fixed-rate interest payments ranging from
     5.625% to 5.65%.
(5)  The notes are tied to low-income housing funding.

(continued on page 72)

                                      71
<Page>


(continued from page 71)
<Table>
<Caption>
----------------------------------------------------------------------------------------------------------------------------------
                                                          Maturity                Interest
(in millions)                                             date                    rate(s)                         2001        2000
----------------------------------------------------------------------------------------------------------------------------------
<S>                                                     <C>                    <C>                            <C>          <C>
WELLS FARGO FINANCIAL, INC. AND ITS SUBSIDIARIES (WFFI)
SENIOR
Medium-Term Notes                                         2002-2008               5.1-7.47%                    $   801     $   881
Floating-Rate Notes                                       2002-2003               Various                          950       1,020
Notes                                                     2002-2009               5.375-8.56%                    6,395       5,068
                                                                                                               -------     -------
     Total long-term debt - WFFI                                                                                 8,146       6,969
                                                                                                               -------     -------

FIRST SECURITY CORPORATION AND ITS SUBSIDIARIES
SENIOR
Medium-Term Notes                                         2003                    6.40%                             15          24
Floating-Rate Euro Medium-Term Notes (4)                  2002                    Various                          300         300
Floating-Rate Euro Medium-Term Notes                      2003                    Various                          285         285
Federal Home Loan Bank (FHLB) Notes and Advances          2002-2010               2.02-6.47%                       351         796
Notes                                                     2003-2006               5.875-6.875%                     473         475
Other notes (5)                                           2002-2007                                                  3           5
                                                                                                               -------     -------
     Total senior debt                                                                                           1,427       1,885
                                                                                                               -------     -------

SUBORDINATED
Notes (1)                                                 2002-2006               7.00-7.50%                       234         234
                                                                                                               -------     -------
   Total subordinated debt                                                                                         234         234
                                                                                                               -------     -------
     Total long-term debt - FSCO                                                                                 1,661       2,119
                                                                                                               -------     -------

WELLS FARGO BANK, N.A.
SENIOR
Floating Rate Bank Notes                                  2002                    Various                        1,525          --
Notes payable by subsidiaries                             2003-2009               8.25-13.50%                       52          48
Other notes                                               2003                    8.5%                               3           3
Obligations of subsidiaries under capital leases (Note 6)                                                            8          11
                                                                                                               -------     -------
   Total senior debt                                                                                             1,588          62
                                                                                                               -------     -------

SUBORDINATED
Floating-Rate Notes (6)                                   2005                    Various                           --         750
FixFloat Notes (callable 6/15/2005) (1)                   2010                    7.8% through 2005, various       997         996
Notes (1)                                                 2010-2011               6.45-7.55%                     2,496         747
                                                                                                               -------     -------
   Total subordinated debt                                                                                       3,493       2,493
                                                                                                               -------     -------
     Total long-term debt - WFB, N.A.                                                                            5,081       2,555
                                                                                                               -------     -------

OTHER CONSOLIDATED SUBSIDIARIES
SENIOR
FHLB Notes and Advances (7)                               2002-2027               3.15-8.38%                     2,211         367
Floating-Rate FHLB Advances (7)                           2002-2011               1.824-2.174%                   2,334       4,409
Other notes and debentures                                2001-2015               3.00-12.00%                      239         316
Capital lease obligations (Note 6)                                                                                  19          15
                                                                                                               -------     -------
   Total long-term debt - other consolidated subsidiaries                                                        4,803       5,107
                                                                                                               -------     -------
     Total consolidated long-term debt                                                                         $36,095     $32,046
                                                                                                               =======     =======
----------------------------------------------------------------------------------------------------------------------------------
</Table>
(6)      The notes were called in May 2001 at par.
(7)      The maturities of the FHLB advances are determined quarterly, based on
         the outstanding balance, the then current LIBOR rate, and the maximum
         life of the advance. Advances maturing within the next year are
         expected to be refinanced, extending the maturity of such borrowings
         beyond one year.

    At December 31, 2001, the principal payments, including sinking fund
payments, on long-term debt are due as noted in the following table.

<Table>
<Caption>
-----------------------------------------------------
(in millions)           Parent                Company
<S>                  <C>                     <C>
2002                   $ 3,125                $10,115
2003                     3,398                  6,904
2004                     2,000                  3,915
2005                     2,993                  4,273
2006                     1,596                  3,359
Thereafter               1,344                  7,529
                     ---------              ---------
Total                  $14,456                $36,095
                     =========              =========
-----------------------------------------------------
</Table>

The interest rates on floating-rate notes are determined periodically by
formulas based on certain money market rates, subject, on certain notes, to
minimum or maximum interest rates.

As part of its long-term and short-term borrowing arrangements, the Company
was subject to various financial and operational covenants. Certain of the
agreements under which debt has been issued contain provisions that may limit
the merger or sale of certain subsidiary banks and the issuance of capital
stock or convertible securities by certain subsidiary banks. At December 31,
2001, the Company was in compliance with all the covenants.

                                      72
<Page>

10. GUARANTEED PREFERRED BENEFICIAL INTERESTS IN COMPANY'S SUBORDINATED
    DEBENTURES

The special purpose trusts, identified in the table on the next page, were
established by the Parent in 2001, and by WFC Holdings Corporation (the
former Wells Fargo & Company) in 1996 and 1997, and by First Security in 1996
(both of which are now direct subsidiaries of the Parent) (the holding
company subsidiaries) for the purpose of issuing trust preferred securities
and related trust common securities. The proceeds from such issuances were
used by the trusts to purchase junior subordinated debentures (debentures) of
the Parent or the debentures of the applicable holding company subsidiary,
which are the sole assets of each trust. Concurrently with the issuance of
the trust preferred securities, the Parent or the holding company subsidiary,
as applicable, issued guarantees for the benefit of the holders of the trust
preferred securities. These trust preferred securities are treated by the
Company as Tier 1 regulatory capital and provide the Company with a more
cost-effective means of obtaining Tier 1 capital for regulatory purposes than
if the Company itself were to issue additional preferred stock.

    The sole assets of these special purpose trusts are the debentures issued
by the Parent, (for the 2001 trusts) or the debentures issued by a holding
company subsidiary, as applicable. The Parent and the holding company
subsidiaries own all of the common securities of their related trusts. The
trust preferred securities issued by the trusts rank senior to the common
securities. The common securities and debentures, along with the related
income effects, are eliminated within the consolidated financial statements
of the Company. The respective obligations of the Parent and the holding
company subsidiaries under the debentures, indentures, the trust agreements,
and the guarantees relating to the trusts established by each of them and
identified in the table below in each case constitute the full and
unconditional guarantee by the Parent or the holding company subsidiary, as
applicable, of the obligations of the trusts with respect to the trust
preferred securities and rank subordinate and junior in right of payment to
all of their other liabilities. The Parent also guaranteed the obligations
previously issued by the former Wells Fargo & Company and assumed by WFC
Holdings with respect to the 1996 and 1997 trusts.

                                      73

<Page>

    The trust preferred securities are subject to mandatory redemption at the
stated maturity date of the debentures, upon repayment of the debentures, or
earlier, pursuant to the terms of the trust agreements. The table below
summarizes the outstanding preferred securities issued by each special
purpose trust and the debentures issued by the Parent or the holding company
subsidiary to each trust as of December 31, 2001:

<Table>
<Caption>
-------------------------------------------------------------------------------------------------------------------
(in millions)
                                                                           Trust preferred securities
                                                                                       and debentures       Interest
                           Trust preferred securities     Principal        --------------------------        payable/
                           --------------------------    balance of             Stated     Annualized   distribution
Trust name                     Issuance date   Amount    debentures           maturity    coupon rate          dates(4)
--------------------------------------------------------------------------------------------------------------------
<S>                           <C>             <C>           <C>      <C>                  <C>           <C>
Wells Fargo Capital A(1)       November 1996   $   85         $  94   December 1, 2026           8.13%  Semi-annual-
                                                                                                          June 1 and
                                                                                                          December 1

Wells Fargo Capital B(1)       November 1996      153           159   December 1, 2026           7.95%  Semi-annual-
                                                                                                          June 1 and
                                                                                                          December 1

Wells Fargo Capital C(1)       November 1996      186           194   December 1, 2026           7.73%  Semi-annual-
                                                                                                          June 1 and
                                                                                                          December 1

Wells Fargo Capital I(1)       December 1996      212           224  December 15, 2026           7.96%  Semi-annual-
                                                                                                         June 15 and
                                                                                                         December 15

Wells Fargo Capital II(1)       January 1997      149           155   January 30, 2027     LIBOR + .5%    Quarterly-
                                                                                                         January 30,
                                                                                                           April 30,
                                                                                                         July 30 and
                                                                                                          October 30

Wells Fargo Capital IV(2)(3)     August 2001    1,300         1,300  September 1, 2031           7.00%    Quarterly-
                                                                                                            March 1,
                                                                                                             June 1,
                                                                                                     September 1 and
                                                                                                          December 1

Wells Fargo Capital V(2)(3)    December 2001      200           200   December 1, 2031           7.00%    Quarterly-
                                                                                                            March 1,
                                                                                                             June 1,
                                                                                                     September 1 and
                                                                                                          December 1

First Security Capital I       December 1996      150           150  December 15, 2026           8.41%   Semi-annual
                                                                                                         June 15 and
                                                                                                         December 15
                                               ------

       Total                                   $2,435
                                               ======

-------------------------------------------------------------------------------------------------------------------
</Table>

(1)      Established by WFC Holdings (the former Wells Fargo).
(2)      Established by the Parent.
(3)      The Parent has the right to extend the stated maturity dates of the
         debentures held by the indicated trusts for a period of up to 19 years.
(4)      All distributions are cumulative.

    The debentures held by the trusts may be redeemed at the option of the
Parent or the holding company subsidiaries as applicable, and the
corresponding trust preferred securities will also be redeemed, subject to
any applicable regulatory approvals, at the redemption prices specified under
the terms of the debentures and trust preferred securities on or after
certain stated dates occurring in August 2006 for Wells Fargo Capital IV, in
December 2006 for Wells Fargo Capital A, Wells Fargo Capital B, Wells Fargo
Capital C, Wells Fargo Capital I, Wells Fargo Capital V, and First Security
Capital I, and in January 2007 for Wells Fargo Capital II. Prior to the
applicable stated redemption date, the trust preferred securities may be
redeemed at the option of the Parent or the applicable holding company
subsidiary, and the related trust preferred securities will be redeemed
after the occurrence of certain events that would have a negative tax effect
on the Parent, the holding company subsidiaries or their applicable trusts,
would cause the trust preferred securities to no longer qualify as Tier 1
capital, or would result in a trust being treated as an investment company.
The ability of each trust to pay timely distributions on its trust preferred
securities depends upon the Parent or the applicable holding company
subsidiary making the related payment on the debentures when due. The Parent
or the holding company subsidiaries have the right to defer payment of
interest on the debentures and, therefore, distributions on the trust
preferred securities for up to five years.

                                      74
<Page>

11. PREFERRED STOCK

The Company is authorized to issue 20 million shares of preferred stock and 4
million shares of preference stock, both without par value. All preferred shares
outstanding rank senior to common shares both as to dividends and liquidation
preference but have no general voting rights. No preference shares have been
issued under this authorization.

    The following table is a summary of preferred stock:
<Table>
<Caption>

--------------------------------------------------------------------------------------------------------------------------------
                                                Shares issued     Carrying amount                            Dividends declared
                                              and outstanding        (in millions)                                 (in millions)
                                          -------------------      --------------           Adjustable  -----------------------
                                                  December 31,        December 31,       dividend rate   Year ended December 31,
                                          -------------------      --------------   ------------------  -----------------------
                                             2001        2000       2001     2000    Minimum   Maximum    2001     2000    1999
--------------------------------------------------------------------------------------------------------------------------------
<S>                                     <C>         <C>             <C>      <C>        <C>      <C>       <C>      <C>     <C>
Adjustable-Rate Cumulative,
  Series B (1)                          1,460,000   1,460,000       $ 73     $ 73       5.50%    10.50%    $ 4      $ 4     $ 4

6.59%/Adjustable-Rate Noncumulative
  Preferred Stock, Series H  (1)(2)            --   4,000,000         --      200       7.00     13.00      10       13      13

Cumulative Tracking (3)                        --          --         --      --          --        --      --       --      18

2001 ESOP Cumulative Convertible (4)       61,800          --         62      --       10.50     11.50      --       --      --

2000 ESOP Cumulative Convertible (4)       39,962      55,273         40       55      11.50     12.50      --       --      --

1999 ESOP Cumulative Convertible (4)       15,552      18,206         15       18      10.30     11.30      --       --      --

1998 ESOP Cumulative Convertible (4)        6,145       7,631          6        8      10.75     11.75      --       --      --

1997 ESOP Cumulative Convertible (4)        7,576       9,542          8       10       9.50     10.50      --       --      --

1996 ESOP Cumulative Convertible (4)        7,707      10,211          8       10       8.50      9.50      --       --      --

1995 ESOP Cumulative Convertible (4)        5,543       8,285          5        8      10.00     10.00      --       --      --

ESOP Cumulative Convertible (4)             1,002       2,656          1        3       9.00      9.00      --       --      --

Unearned ESOP shares (5)                       --          --       (154)    (118)        --        --      --       --      --
                                         --------    --------       -----    -----                        -----    -----  -----

  Total                                 1,605,287   5,571,804       $ 64     $267                          $14      $17     $35
                                        =========   =========       ====     ====                          ===      ===     ====
</Table>

-------------------------------------------------------------------------------
(1)  Liquidation preference $50.
(2)  Annualized dividend rate was 6.59% until October 1, 2001. On October 1,
     2001 all shares were redeemed at the stated liquidation price plus accrued
     dividends.
(3)  In December 1999, the Company redeemed all shares of its Cumulative
     Tracking preferred stock.
(4)  Liquidation preference $1,000.
(5)  In accordance with the American Institute of Certified Public Accountants
     (AICPA) Statement of Position 93-6, EMPLOYERS' ACCOUNTING FOR EMPLOYEE
     STOCK OWNERSHIP PLANS, the Company recorded a corresponding charge to
     unearned ESOP shares in connection with the issuance of the ESOP Preferred
     Stock. The unearned ESOP shares are reduced as shares of the ESOP Preferred
     Stock are committed to be released. For information on dividends declared,
     see Note 12.

ADJUSTABLE-RATE CUMULATIVE PREFERRED STOCK, SERIES B
These shares are redeemable at the option of the Company at $50 per share
plus accrued and unpaid dividends. Dividends are cumulative and payable
quarterly on the 15th of February, May, August and November. For each
quarterly period, the dividend rate is 76% of the highest of the three-month
Treasury bill discount rate, 10-year constant maturity Treasury security
yield or 20-year constant maturity Treasury bond yield, but limited to a
minimum of 5.5% and a maximum of 10.5% per year. The average dividend rate
was 5.6% during 2001 and 2000 and 5.5% in 1999.

ESOP CUMULATIVE CONVERTIBLE PREFERRED STOCK
All shares of the Company's 2001, 2000, 1999, 1998, 1997, 1996 and 1995 ESOP
Cumulative Convertible Preferred Stock and ESOP Cumulative Convertible
Preferred Stock (collectively, ESOP Preferred Stock) were issued to a trustee
acting on behalf of the Wells Fargo & Company 401(k) Plan (formerly known as
the Norwest Corporation Savings Investment Plan). Dividends on the ESOP
Preferred Stock are cumulative from the date of initial issuance and are
payable quarterly at annual rates ranging from 8.50 percent to 12.50 percent,
depending upon the year of issuance. Each share of ESOP Preferred Stock
released from the unallocated reserve of the Plan is converted into shares of
common stock of the Company based on the stated value of the ESOP Preferred
Stock and the then current market price of the Company's common stock. The
ESOP Preferred Stock is also convertible at the option of the holder at any
time, unless previously redeemed. The ESOP Preferred Stock may be redeemed at
any time, in whole or in part, at the option of the Company at a redemption
price per share equal to the higher of (a) $1,000 per share plus accrued and
unpaid dividends or (b) the fair market value, as defined in the Certificates
of Designation of the ESOP Preferred Stock.


                                     75
<Page>


12. COMMON STOCK AND STOCK PLANS

COMMON STOCK

The following table summarizes common stock reserved, issued and authorized as
of December 31, 2001:
<Table>
<Caption>
--------------------------------------------------------------------------------------------
                                                                            Number of shares
--------------------------------------------------------------------------------------------
<S>                                                                            <C>
Convertible subordinated debentures                                                   24,400
Acquisition contingencies                                                            139,337
Dividend reinvestment and common stock purchase plans                              2,126,970
Director plans                                                                     1,323,541
Stock plans (1)                                                                  219,541,353
                                                                               -------------

  Total shares reserved                                                          223,155,601
Shares issued                                                                  1,736,381,025
Shares not reserved                                                            4,040,463,374
                                                                               -------------

  Total shares authorized                                                      6,000,000,000
                                                                               =============
--------------------------------------------------------------------------------------------
</Table>

(1)  Includes employee option, 401(k), profit sharing and compensation deferral
     plans.

     Each share of the Company's common stock includes one preferred share
purchase right. These rights will become exercisable only if a person or
group acquires or announces an offer to acquire 15 percent or more of the
Company's common stock. When exercisable, each right will entitle the holder
to buy one one-thousandth of a share of a new series of junior participating
preferred stock at a price of $160 for each one one-thousandth of a preferred
share. In addition, upon the occurrence of certain events, holders of the
rights will be entitled to purchase either the Company's common stock or
shares in an "acquiring entity" at one-half of the then current market value.
The Company will generally be entitled to redeem the rights at one cent per
right at any time before they become exercisable. The rights will expire on
November 23, 2008, unless extended, previously redeemed or exercised. The
Company has reserved 1.7 million shares of preferred stock for issuance upon
exercise of the rights.

DIVIDEND REINVESTMENT AND COMMON STOCK PURCHASE PLANS

The Company's dividend reinvestment and common stock direct purchase plans
permit participants to purchase at fair market value shares of the Company's
common stock by reinvestment of dividends and/or optional cash payments, subject
to the terms of the plan.

DIRECTOR PLANS

Under the Company's director plans, non-employee directors receive stock as part
of their annual retainer. These plans provide for annual grants of options to
purchase common stock to each non-employee director elected or re-elected at the
annual meeting of stockholders. Options granted become exercisable after six
months and may be exercised until the tenth anniversary of the date of grant.
Compensation expense for the options is measured as the quoted market price of
the stock at the date of exercise less the grant price and is accrued over the
vesting period.

EMPLOYEE STOCK PLANS

LONG-TERM INCENTIVE PLANS The Company's stock incentive plans provide for awards
of incentive and nonqualified stock options, stock appreciation rights,
restricted shares, restricted share rights, performance awards and stock awards
without restrictions. Employee stock options can be granted with exercise prices
at or above the fair market value (as defined in the plan) of the stock at the
date of grant and with terms of up to ten years. The options generally become
fully exercisable over three years from the date of grant. Except as otherwise
permitted under the plan, upon termination of employment for reasons other than
retirement, permanent disability or death, the option period is reduced or the
options are canceled. Options also may include the right to acquire a "reload"
stock option. If an option contains the reload feature and if a participant pays
all or part of the exercise price of the option with shares of stock purchased
in the market or held by the participant for at least six months, upon exercise
of the option, the participant is granted a new option to purchase, at the fair
market value of the stock as of the date of the reload, the number of shares of
stock equal to the sum of the number of shares used in payment of the exercise
price and a number of shares with respect to related taxes. No compensation
expense was recorded for the options granted under the plans, as the exercise
price was equal to the quoted market price of the stock at the date of grant.
The total number of shares of common stock available for grant under the plans
as of December 31, 2001 was 50,271,203.


                                     76
<Page>


     Holders of restricted shares and restricted share rights are entitled at
no cost to the related shares of common stock generally over three to five
years after the restricted shares or restricted share rights were granted.
Upon grant of the restricted shares or restricted share rights, holders
generally are entitled to receive quarterly cash payments equal to the cash
dividends that would be paid on common stock equal to the number of
restricted shares or restricted share rights. Except in limited
circumstances, restricted shares and restricted share rights are canceled
upon termination of employment. In 2001, 2000 and 1999, 107,000, 56,636 and
204,868 restricted shares and restricted share rights were granted,
respectively, with a weighted-average grant-date per share fair value of
$46.73, $40.61 and $43.24, respectively. As of December 31, 2001, 2000 and
1999, there were 888,234, 1,450,074 and 2,423,999 restricted shares and
restricted share rights outstanding, respectively. The compensation expense
for the restricted shares and restricted share rights equals the quoted
market price of the related stock at the date of grant and is accrued over
the vesting period. The total compensation expense recognized for the
restricted shares and restricted share rights was $6 million in 2001 and 2000
and $21 million in 1999.

     In connection with various acquisitions and mergers since 1992, the
Company converted employee and director stock options of acquired or merged
companies into stock options to purchase the Company's common stock based on
the terms of the original stock option plan and the agreed-upon exchange
ratio.

BROAD-BASED PLANS In 1996, the Company adopted the Best Practices
PARTNERSHARES(R) Plan, a broad-based employee stock option plan covering full-
and part-time employees who were not participants in the long-term incentive
plans described above. The total number of shares of common stock authorized for
issuance under the plan since inception through December 31, 2001 was
67,000,000, including 14,936,350 shares available for grant. Options granted
under the PARTNERSHARES Plan have an exercise date that generally is the earlier
of five years after the date of grant or when the quoted market price of the
stock reaches a predetermined price. Those options generally expire ten years
after the date of grant. Because the exercise price of each PARTNERSHARES grant
has been equal to or higher than the quoted market price of the Company's common
stock at the date of grant, no compensation expense is recognized.

     The following table summarizes the Company's stock option activity and
related information for the three years ended December 31, 2001: <Table>
<Caption>

-------------------------------------------------------------------------------------------------------------------
                                       Director Plans      Long-Term Incentive Plans          Broad-Based Plans (5)
                             ------------------------  -----------------------------     --------------------------
                                             Weighted-                      Weighted-                      Weighted-
                                              average                        average                        average
                                             exercise                       exercise                       exercise
                               Number           price          Number          price          Number          price
-------------------------------------------------------------------------------------------------------------------
<S>                           <C>              <C>         <C>                <C>         <C>               <C>
OPTIONS OUTSTANDING AS OF
DECEMBER 31, 1998             562,590          $21.02      64,131,146         $24.78      41,805,980        $33.60
                             --------                    ------------                    -----------
1999:
   Granted                     38,253 (1)       42.60      17,492,150 (2)(3)   39.59              --            --
   Canceled                        --              --      (2,198,973)         28.30      (7,836,842)        34.76
   Exercised                  (75,745)          16.57     (12,817,198)         19.63      (1,454,838)        24.40
                             --------                    ------------                    -----------
OPTIONS OUTSTANDING AS OF
DECEMBER 31, 1999             525,098           23.24      66,607,125          29.53      32,514,300         33.72
                             --------                    ------------                    -----------

2000:
   Granted                     28,080 (1)       42.75      23,183,070 (2)(3)   35.63      23,160,800 (4)     46.50
   Canceled                    (5,005)          25.04      (1,896,001)         35.74      (4,827,800)        36.81
   Exercised                 (115,495)          12.94     (13,906,642)         22.93        (390,695)        18.19
   Acquisitions                    --              --         797,076          20.43              --            --
                             --------                    ------------                    -----------
OPTIONS OUTSTANDING AS OF
DECEMBER 31, 2000             432,678           27.23      74,784,628          32.39      50,456,605         39.41

2001:
   GRANTED                     49,635 (1)       47.55      19,930,772 (2) (3)  49.52         353,600 (4)     41.84
   CANCELED                        --              --      (1,797,865)         43.21      (5,212,550)        41.81
   EXERCISED                 (169,397)          19.42     (10,988,267)         25.61        (191,440)        21.43
                             --------                    ------------                    -----------
OPTIONS OUTSTANDING AS OF
DECEMBER 31, 2001             312,916          $34.69      81,929,268         $37.23      45,406,215        $39.23
                             ========          ======    ============         ======     ===========        ======

Outstanding options
exercisable as of:
   December 31, 1999          511,225          $22.06      39,582,781         $24.86       1,646,500        $17.64
   December 31, 2000          432,678           27.23      44,893,948          30.36       1,309,005         18.33
   DECEMBER 31, 2001          312,916           34.69      46,937,295          33.44       1,264,015         20.29

-------------------------------------------------------------------------------------------------------------------
</Table>

(1)  The weighted-average per share fair value of options granted was $13.87,
     $12.60 and $12.09 for 2001, 2000 and 1999, respectively.
(2)  The weighted-average per share fair value of options granted was $14.16,
     $10.13 and $10.16 for 2001, 2000 and 1999, respectively.
(3)  Includes 1,791,852, 2,029,063 and 2,285,910 reload grants at December 31,
     2001, 2000 and 1999, respectively.
(4)  The weighted-average per share fair value of options granted was $5.90 and
     $4.60 for 2001 and 2000, respectively.
(5)  Activity for broad-based plans in 1999 includes the options related to the
     Employee Stock Purchase Plan, which was discontinued in 2000. The Employee
     Stock Purchase Plan allowed eligible employees of the former Wells Fargo to
     purchase common stock at a price of the lower of (1) the quoted market
     price of the stock at the date of grant or (2) 85% of the quoted market
     price at the end of the one-year option term.


                                     77
<Page>

     The following table is a summary of selected information for the
Company's stock option plans described on the preceding page:

<Table>
<Caption>
-------------------------------------------------------------------------------------------------------------------
                                                                                                  December 31, 2001
                                                             ------------------------------------------------------
                                                                 Weighted-
                                                                  average                                  Weighted-
                                                                remaining                                   average
                                                              contractual                                  exercise
                                                            life (in yrs.)              Number                price
-------------------------------------------------------------------------------------------------------------------
<S>                                                                  <C>            <C>                      <C>

RANGE OF EXERCISE PRICES
DIRECTOR PLANS
     $.10
         Options outstanding/exercisable                             3.01                2,390               $  .10
     $7.84-$13.48
         Options outstanding/exercisable                             2.36                8,210                11.49
     $13.49-$16.00
         Options outstanding/exercisable                             3.27               30,940                15.10
     $16.01-$25.04
         Options outstanding/exercisable                             3.94               64,788                21.98
     $25.05-$38.29
         Options outstanding/exercisable                             5.90               74,620                33.47
     $38.30-$51.00
         Options outstanding/exercisable                             8.12              131,968                48.27

LONG-TERM INCENTIVE PLANS

     $3.37-$5.06
         Options outstanding/exercisable                             5.95               92,900                 4.32
     $5.07-$7.60
         Options outstanding/exercisable                             1.65              150,461                 7.49
     $7.61-$11.41
         Options outstanding/ exercisable                            1.84              300,936                10.60
     $11.42-$17.13
         Options outstanding                                         2.95            3,369,121                14.11
         Options exercisable                                         2.92            3,233,969                14.03
     $17.14-$25.71
         Options outstanding                                         2.62            3,021,351                19.98
         Options exercisable                                         2.68            2,909,873                19.96
     $25.72-$38.58
         Options outstanding                                         6.80           47,336,583                33.81
         Options exercisable                                         6.26           31,679,923                33.39
     $38.59-$71.30
         Options outstanding                                         8.19           27,657,916                48.35
         Options exercisable                                         6.05            8,569,233                47.08
BROAD-BASED PLANS
     $16.56
         Options outstanding/exercisable                             4.56            1,022,815                16.56
     $24.85-$37.81
         Options outstanding                                         6.25           24,686,600                34.40
         Options exercisable                                         6.18              200,800                34.01
     $37.82-$46.50
         Options outstanding                                         8.85           19,696,800                46.47
         Options exercisable                                         8.84               40,400                46.50
-------------------------------------------------------------------------------------------------------------------
</Table>


     In accordance with FAS 123, ACCOUNTING FOR STOCK-BASED COMPENSATION, the
Company has elected to continue applying the provisions of Accounting
Principles Board Opinion 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES, in
accounting for the stock plans described above. Had compensation cost for
those stock plans been determined based on the (optional) fair value method
established by FAS 123, the Company's net income and earnings per common
share would have been reduced to the pro forma amounts indicated in the table
below.

<Table>
<Caption>
-------------------------------------------------------------------------------------------------------------------
                                                                                             Year ended December 31,
                                                                              -------------------------------------
(in millions, except per common share amounts)                                    2001          2000           1999
-------------------------------------------------------------------------------------------------------------------

<S>                                                                           <C>         <C>         <C>
Net income
      As reported                                                             $3,423      $4,026      $4,012
      Pro forma                                                                3,277       3,914       3,909
Earnings per common share
      As reported                                                             $ 1.99      $ 2.36      $ 2.32
      Pro forma                                                                 1.91        2.29        2.26
Diluted earnings per common share
      As reported                                                             $ 1.97      $ 2.33      $ 2.29
      Pro forma                                                                 1.89        2.27        2.23
-------------------------------------------------------------------------------------------------------------------
</Table>

    The fair value of each option grant is estimated based on the date of
grant using an option-pricing model. The following weighted-average
assumptions were used in 2001, 2000 and 1999: expected dividend yield ranging
from 1.4% to 3.4%; expected volatility ranging from 20.0% to 42.0%; risk-free
interest rates ranging from 2.2% to 7.8% and expected life ranging from .1 to
6.6 years.

                                     78
<Page>

EMPLOYEE STOCK OWNERSHIP PLAN The Wells Fargo & Company 401(k) Plan (the 401(k)
Plan) is a defined contribution employee stock ownership plan (ESOP) under which
the 401(k) Plan may borrow money to purchase the Company's common or preferred
stock. Beginning in 1994, the Company has loaned money to the 401(k) Plan which
has been used to purchase shares of the Company's ESOP Preferred Stock. As ESOP
Preferred Stock is released and converted into common shares, compensation
expense is recorded equal to the current market price of the common shares.
Dividends on the common shares allocated as a result of the release and
conversion of the ESOP Preferred Stock are recorded as a reduction of retained
earnings and the shares are considered outstanding for purposes of earnings per
share computations. Dividends on the unallocated ESOP Preferred Stock are not
recorded as a reduction of retained earnings, and the shares are not considered
to be common stock equivalents for purposes of earnings per share computations.
Loan principal and interest payments are made from the Company's contributions
to the 401(k) Plan, along with dividends paid on the ESOP Preferred Stock. With
each principal and interest payment, a portion of the ESOP Preferred Stock is
released and, after conversion of the ESOP Preferred Stock into common shares,
allocated to the 401(k) Plan participants.

     Total dividends paid to the 401(k) Plan on ESOP shares were as follows:
<Table>
<Caption>

-------------------------------------------------------------------------------------------------------------------
                                                                                             Year ended December 31,
                                                                               ------------------------------------
(in millions)                                                                     2001          2000           1999
-------------------------------------------------------------------------------------------------------------------

<S>                                                                                <C>          <C>             <C>
ESOP Preferred Stock:
      Common dividends                                                             $15           $11            $ 7
      Preferred dividends                                                           19            14             11
1989 ESOP shares:
      Common dividends                                                              11            11             11
                                                                                 -----          ----          -----
Total                                                                              $45           $36            $29
                                                                                 =====          ====          =====
-------------------------------------------------------------------------------------------------------------------
</Table>

The ESOP shares as of December 31, 2001, 2000 and 1999 were as follows:

<Table>
<Caption>

-------------------------------------------------------------------------------------------------------------------
                                                                                                        December 31,
                                                                ---------------------------------------------------
                                                                            2001             2000              1999
-------------------------------------------------------------------------------------------------------------------
ESOP Preferred Stock:
<S>                                                                 <C>                <C>               <C>
    Allocated shares (common)                                       17,233,798         13,716,692        10,784,773
    Unreleased shares (preferred)                                      145,287            111,804            69,221
1989 ESOP shares:
    Allocated shares                                                 9,809,875         10,988,083        13,016,033
    Unreleased shares                                                    3,042             39,558            76,070
Fair value of unearned
    ESOP shares (in millions)                                       $      145         $      112        $       69
-------------------------------------------------------------------------------------------------------------------
</Table>
DEFERRED COMPENSATION PLAN FOR INDEPENDENT SALES AGENTS

WF Deferred Compensation Holdings, Inc. is a non-operating, wholly-owned
subsidiary of the Parent formed solely to sponsor a deferred compensation plan
for independent sales agents who provide investment, financial and other
qualifying services for or with respect to participating affiliates. The plan,
which became effective January 1, 2002, allows participants to defer all or part
of their eligible compensation payable to them by a participating affiliate. The
Parent has fully and unconditionally guaranteed WF Deferred Compensation
Holdings, Inc.'s deferred compensation obligations under the plan. Effective
January 1, 2002, the H.D. Vest, Inc. Representatives' Deferred Compensation Plan
was merged into the plan.

                                     79
<Page>

13. EMPLOYEE BENEFITS AND OTHER EXPENSES

EMPLOYEE BENEFITS

The Company sponsors noncontributory qualified defined benefit retirement
plans including the Cash Balance Plan and the First Security Corporation
Retirement Plan. The Cash Balance Plan is an active plan and it covers
eligible employees of the Company except certain subsidiaries. The FSCO
Retirement Plan is an inactive plan, which provides benefits to eligible
employees of First Security. All benefits under the FSCO Retirement Plan
were frozen effective December 31, 2000.

    Under the Cash Balance Plan, eligible employees' Cash Balance Plan
accounts are allocated a compensation credit based on a certain percentage of
their certified compensation. The compensation credit percentage is based on
age and years of credited service. In addition, participants are allocated at
the end of each quarter investment credits on their accumulated balances.
Employees become vested in their Cash Balance Plan accounts after completion
of five years of vesting service or attainment of age 65, if earlier. Pension
benefits accrued prior to the conversion to the Cash Balance Plan are
guaranteed. In addition, certain employees are eligible for a special
transition benefit comparison.

    The Company's policy is to fund the actuarially computed retirement cost
accrued for the Cash Balance Plan. Contributions are intended to provide not
only for benefits attributed to service to date but also for those expected
to be earned in the future.

    The Company sponsors defined contribution retirement plans including the
401(k) Plan and the First Security Incentive Savings Plan and Trust (the FSCO
401(k) Plan). Under the 401(k) Plan, eligible employees who have completed
one month of service are eligible to contribute up to 18% of their pretax
certified compensation, although a lower limit may be applied to certain
highly compensated employees in order to maintain the qualified status of the
401(k) Plan. Eligible employees who complete one year of service are eligible
for matching company contributions, which are generally a dollar for dollar
match up to 6% of an employee's certified compensation. The Company's
matching contributions are generally subject to a four-year vesting schedule.

    Under the FSCO 401(k) Plan, eligible employees who were 21 or older with
one year of service were eligible to contribute up to 17% of their pretax
certified compensation, although a lower limit may be applied to certain
employees in order to maintain the qualified status of the FSCO 401(k) Plan.
Eligible employees were eligible for matching company contributions, which
are generally equal to 50% of the first 6% of an employee's certified
compensation. The Company's matching contributions were fully vested upon
enrollment. The FSCO 401(k) Plan was merged into the Wells Fargo 401(k) Plan
effective January 1, 2001.

    The Company provides health care and life insurance benefits for certain
retired employees and reserves the right to terminate or amend any of the
benefits described above at any time.

    The following table shows the changes in the benefit obligation and the
fair value of plan assets during 2001 and 2000 and the amounts included in
the Company's Consolidated Balance Sheet as of December 31, 2001 and 2000 for
the Company's defined benefit pension and other postretirement benefit plans:

<Table>
<Caption>
-------------------------------------------------------------------------------------------------------------------
                                                                                                        December 31,
                                                            -------------------------------------------------------
                                                                                2001                           2000
                                                            ------------------------      -------------------------
                                                              PENSION          OTHER        Pension           Other
(in millions)                                                BENEFITS       BENEFITS       benefits        benefits
-------------------------------------------------------------------------------------------------------------------
<S>                                                          <C>            <C>            <C>             <C>
CHANGE IN BENEFIT OBLIGATION
Benefit obligation at beginning of year                        $2,656          $ 578         $2,503           $ 567
Service cost                                                      161             16            154              16
Interest cost                                                     191             42            186              43
Plan participants' contributions                                   --             12             --               6
Amendments                                                        (47)            --             --              --
Plan mergers                                                       --            (10)            25              --
Actuarial gain (loss)                                             165            (28)           (24)            (22)
Benefits paid                                                    (192)           (64)          (176)            (32)
Settlement                                                         --             --            (12)             --
                                                               ------          -----         ------           -----
Benefit obligation at end of year                              $2,934          $ 546         $2,656           $ 578
                                                               ======          =====         ======           =====

CHANGE IN PLAN ASSETS
Fair value of plan assets at beginning of year                 $3,270          $ 236         $2,867           $ 209
Actual return on plan assets                                     (331)           (12)           550              26
Plan mergers                                                       --             --             28              --
Employer contribution                                              14             54             13              27
Plan participants' contributions                                   --             12             --               6
Benefits paid                                                    (192)           (64)          (176)            (32)
Settlement                                                         --             --            (12)             --
                                                               ------          -----         ------           -----
Fair value of plan assets at end of year                       $2,761          $ 226         $3,270           $ 236
                                                               ======          =====         ======           =====

Funded status                                                  $ (175)         $(319)        $  612           $(336)
Unrecognized net actuarial loss (gain)                            228            (23)          (667)            (29)
Unrecognized net transition asset                                   1              4             (4)              4
Unrecognized prior service cost                                   (27)           (12)            21              (2)
                                                               ------          -----         ------           -----
Accrued benefit income (cost)                                  $   27          $(350)        $  (38)          $(363)
                                                               ======          =====         ======           =====

Amounts recognized in the balance sheet
   consist of: (1)
    Prepaid benefit cost                                       $  156          $(287)
    Accrued benefit liability                                    (197)           (63)
    Intangible asset                                               --             --
    Accumulated other comprehensive income                         68             --
                                                               ------          -----
Accrued benefit income (cost)                                  $   27          $(350)
                                                               ======          =====
--------------------------------------------------------------------------------------------------------------------
</Table>
(1) Reconciliation is not provided for 2000 as no minimum liability was
recognized in that year.


                                       80

<Page>

   The following table sets forth the components of net periodic benefit
(income) cost for 2001, 2000 and 1999:

<Table>
<Caption>
--------------------------------------------------------------------------------------------------------------------
                                                                                             Year Ended December 31,
                                                   -----------------------------------------------------------------
                                                                  2001                   2000                  1999
                                                   -------------------   --------------------   --------------------
                                                    PENSION      OTHER    Pension       Other    Pension      Other
(in millions)                                      BENEFITS   BENEFITS   benefits    benefits   benefits   benefits
--------------------------------------------------------------------------------------------------------------------
<S>                                                <C>        <C>        <C>         <C>        <C>        <C>
Service cost                                          $ 161       $ 16      $ 154         $16      $ 120       $ 25
Interest cost                                           191         42        186          43        144         35
Expected return on plan assets                         (287)       (20)      (249)        (18)      (200)        (6)
Recognized net actuarial gain (1)                      (112)        (2)       (46)         (1)        (3)        (8)
Amortization of prior service cost                       --         (1)         2          --          3         --
Amortization of unrecognized transition asset            (1)        --         (2)         --         (2)        --
Settlement                                               (1)        --          4          --         --         --
                                                      -----       ----      -----         ---      -----       ----
Net periodic benefit (income) cost                    $ (49)      $ 35      $  49         $40      $  62       $ 46
                                                      =====       ====      =====         ===      =====       ====
--------------------------------------------------------------------------------------------------------------------
</Table>

(1)      Net actuarial gain is generally amortized over five years.

  The weighted-average assumptions used in calculating the amounts above were:

<Table>
<Caption>
--------------------------------------------------------------------------------------------------------------------
                                                                                             Year Ended December 31,
                             --------------------------------------------------------------------------------------
                                                 2001                           2000                           1999
                             ------------------------       ------------------------      -------------------------
                              PENSION           OTHER         Pension          Other        Pension           Other
                             BENEFITS        BENEFITS        benefits       benefits       benefits        benefits
-------------------------------------------------------------------------------------------------------------------
<S>                          <C>             <C>             <C>            <C>            <C>             <C>
Discount rate                     7.5%            7.5%            7.5%           7.5%       7.5-8.0%        7.5-8.0%
Expected return
   on plan assets                 9.0%            9.0%            9.0%           9.0%           9.0%            9.0%
Rate of compensation
   increase                       5.0%             --%        4.5-5.0%            --%       4.5-5.0%             --%
-------------------------------------------------------------------------------------------------------------------
</Table>

  Accounting for postretirement health care plans uses a health care cost trend
rate to recognize the effect of expected changes in future health care costs due
to medical inflation, utilization changes, technological changes, regulatory
requirements and Medicare cost shifting. Average annual increases of 8.0% for
HMOs and for all other types of coverage in the per capita cost of covered
health care benefits were assumed for 2001. By 2006 and thereafter, rates were
assumed at 5.5% for HMOs and for all other types of coverage. Increasing the
assumed health care trend by one percentage point in each year would increase
the benefit obligation as of December 31, 2001 by $43 million and the aggregate
of the interest cost and service cost components of the net periodic benefit
cost for 2001 by $5 million. Decreasing the assumed health care trend by one
percentage point in each year would decrease the benefit obligation as of
December 31, 2001 by $39 million and the aggregate of the interest cost and
service cost components of the net periodic benefit cost for 2001 by $5 million.

  Expenses for defined contribution retirement plans were $206 million,
$169 million and $155 million in 2001, 2000 and 1999, respectively.


OTHER EXPENSES

The following table shows expenses which exceeded 1% of total interest income
and noninterest income and which are not otherwise shown separately in the
financial statements or notes thereto.

<Table>
<Caption>
-------------------------------------------------------------------------------------------------------------------
                                                                                             Year ended December 31,
                                                                          -----------------------------------------
(in millions)                                                               2001              2000             1999
-------------------------------------------------------------------------------------------------------------------
<S>                                                                         <C>               <C>              <C>
Outside professional services                                               $486              $447             $381
Contract services                                                            472               536              473
Telecommunications                                                           355               303              286
Outside data processing                                                      319               343              312
Travel and entertainment                                                     286               287              262
Advertising and promotion                                                    276               316              251
Postage                                                                      242               252              239
-------------------------------------------------------------------------------------------------------------------
</Table>

                                       81
<Page>


14. INCOME TAXES


The following is a summary of the components of income tax expense applicable to
income before income taxes:
<Table>
<Caption>
-------------------------------------------------------------------------------------------------------------------
                                                                                             Year ended December 31,
                                                                        -------------------------------------------
(in millions)                                                               2001              2000             1999
-------------------------------------------------------------------------------------------------------------------
<S>                                                                       <C>
Current:
  Federal                                                                 $2,329            $1,446           $  628
  State and local                                                            282               158               46
  Foreign                                                                     34                46               53
                                                                          ------            ------           ------
                                                                           2,645             1,650              727
                                                                          ------            ------           ------
Deferred:
  Federal                                                                   (518)              783            1,416
  State and local                                                            (71)               90              195
                                                                          ------            ------           ------
                                                                            (589)              873            1,611
                                                                          ------            ------           ------
     Total                                                                $2,056            $2,523           $2,338
                                                                          ======            ======           ======
-------------------------------------------------------------------------------------------------------------------
</Table>

<Table>
<Caption>
------------------------------------------------------------------------------------------------------------------
                                                                                            Year ended December 31,
                                                                                            ----------------------
(in millions)                                                                                  2001           2000
------------------------------------------------------------------------------------------------------------------
<S>                                                                                         <C>            <C>
DEFERRED TAX ASSETS
   Allowance for loan losses                                                                $ 1,429        $ 1,414
   Net tax-deferred expenses                                                                    907            747
   Other                                                                                        168             63
                                                                                            -------        -------
      Total deferred tax assets                                                               2,504          2,224
                                                                                            -------        -------

DEFERRED TAX LIABILITIES
   Core deposit intangible                                                                      338            376
   Leasing                                                                                    2,061          1,853
   Mark to market                                                                               307            712
   Mortgage servicing                                                                         1,838          1,799
   FAS 115 adjustment                                                                           312            295
   FAS 133 adjustment                                                                           162             --
   Other                                                                                        100            486
                                                                                            -------        -------
      Total deferred tax liabilities                                                          5,118          5,521
                                                                                            -------        -------

NET DEFERRED TAX LIABILITY                                                                  $(2,614)       $(3,297)
                                                                                            =======        =======
------------------------------------------------------------------------------------------------------------------
</Table>

  The Company's tax benefit related to the exercise of employee stock options
that was recorded in stockholders' equity was $88 million, $112 million and
$88 million for 2001, 2000 and 1999, respectively.

  The Company had a net deferred tax liability of $2,614 million and $3,297
million at December 31, 2001 and 2000, respectively. The tax effects of
temporary differences that gave rise to significant portions of deferred tax
assets and liabilities at December 31, 2001 and 2000 are presented in the
table to the right.

  The Company has determined that a valuation reserve is not required for any
of the deferred tax assets since it is more likely than not that these assets
will be realized principally through carryback to taxable income in prior
years, and future reversals of existing taxable temporary differences, and,
to a lesser extent, future taxable income and tax planning strategies. The
Company's conclusion that it is "more likely than not" that the deferred tax
assets will be realized is based on federal taxable income in excess of $10
billion in the carryback period, substantial state taxable income in the
carryback period, as well as a history of growth in earnings and the
prospects for continued earnings growth.

  The deferred tax liability related to 2001, 2000 or 1999 unrealized gains
and losses on securities available for sale along with the deferred tax
liability related to derivatives and hedging activities for 2001, had no
impact on income tax expense as these gains and losses, net of taxes, were
recorded in cumulative other comprehensive income.

  The table below is a reconciliation of the statutory federal income tax
expense and rate to the effective income tax expense and rate:

<Table>
<Caption>
---------------------------------------------------------------------------------------------------------------------
                                                                                               Year ended December 31,
                                                ---------------------------------------------------------------------
                                                                2001                     2000                    1999
                                                --------------------     --------------------     -------------------
(in millions)                                   AMOUNT             %     Amount             %     Amount            %
---------------------------------------------------------------------------------------------------------------------
<S>                                             <C>             <C>      <C>             <C>      <C>            <C>
Statutory federal income tax expense and rate   $1,918         35.0%     $2,292         35.0%      $2,222        35.0%
Change in tax rate resulting from:
   State and local taxes on income, net of
     federal income tax benefit                    137          2.5         161          2.5          158         2.5
   Amortization of goodwill not
     deductible for tax return purposes            196          3.6         165          2.5          133         2.1
   Tax-exempt income                               (87)        (1.6)        (76)        (1.2)         (71)       (1.1)
   Other                                          (108)        (2.0)        (19)        (.3)         (104)       (1.7)
                                                ------         ----      ------         ---       -------        ----
     Effective income tax expense and rate      $2,056         37.5%      2,523         38.5%      $2,338        36.8%
                                                ======         ====      ======         ====      =======        ====
---------------------------------------------------------------------------------------------------------------------
</Table>


                                       82
<Page>

15. EARNINGS PER COMMON SHARE

The table below shows dual presentation of earnings per common share and diluted
earnings per common share and a reconciliation of the numerator and denominator
of both earnings per common share calculations.

<Table>
<Caption>
------------------------------------------------------------------------------------------------------------------
                                                                                            Year ended December 31,
                                                                       -------------------------------------------
(in millions, except per share amounts)                                    2001             2000              1999
------------------------------------------------------------------------------------------------------------------
<S>                                                                    <C>              <C>               <C>
Net income                                                             $  3,423         $  4,026          $  4,012
Less: Preferred stock dividends                                              14               17                35
                                                                       --------         --------          --------
Net income applicable to common stock                                  $  3,409         $  4,009          $  3,977
                                                                       ========         ========          ========

EARNINGS PER COMMON SHARE
Net income applicable to common stock (numerator)                      $  3,409         $  4,009          $  3,977
                                                                       ========         ========          ========

Average common shares outstanding (denominator)                         1,709.5          1,699.5           1,714.0
                                                                       ========         ========          ========

Per share                                                              $   1.99         $   2.36          $   2.32
                                                                       ========         ========          ========

DILUTED EARNINGS PER COMMON SHARE
Net income applicable to common stock (numerator)                      $  3,409         $  4,009          $  3,977
                                                                       ========         ========          ========

Average common shares outstanding                                       1,709.5          1,699.5           1,714.0
Add:   Stock options                                                       16.8             17.7              19.7
       Restricted share rights                                               .6              1.2               1.6
       Convertible preferred                                                 --               --                .1
                                                                       --------         --------          --------
Diluted average common shares outstanding
    (denominator)                                                       1,726.9          1,718.4           1,735.4
                                                                       ========         ========          ========

Per share                                                              $   1.97         $   2.33          $   2.29
                                                                       ========         ========          ========
------------------------------------------------------------------------------------------------------------------
</Table>

                                     83
<Page>

16.  OTHER COMPREHENSIVE INCOME

The following table presents the components of other comprehensive income and
the related tax effect allocated to each component:

<Table>
<Caption>
----------------------------------------------------------------------------------------------------------------
(in millions)                                                               Before
                                                                               tax                        Net of
                                                                            amount      Tax effect           tax
----------------------------------------------------------------------------------------------------------------
<S>                                                                          <C>             <C>           <C>
1999:
Translation adjustments                                                      $   6           $   2         $   4
                                                                             -----           -----         -----
Net unrealized gains on securities available for sale
    arising during the year                                                    205              78           127
Reclassification of net losses on
    securities available for sale included in net income                       219              83           136
                                                                             -----           -----         -----
Net unrealized gains on securities available for sale
    arising during the year                                                    424             161           263
                                                                             -----           -----         -----
Other comprehensive income                                                   $ 430           $ 163         $ 267
                                                                             =====           =====         =====

2000:
Translation adjustments                                                      $  (3)          $  (1)        $  (2)
                                                                             -----           -----         -----
Net unrealized losses on securities available for sale
    arising during the year                                                   (232)            (88)         (144)
Reclassification of net gains on
    securities available for sale included in net income                      (145)            (55)          (90)
                                                                             ------          ------        -----
Net unrealized losses on securities available for sale
    arising during the year                                                   (377)           (143)         (234)
                                                                             -----           -----         -----
Other comprehensive income                                                   $(380)          $(144)        $(236)
                                                                             =====           =====         =====

2001:
TRANSLATION ADJUSTMENTS                                                      $  (5)          $  (2)        $  (3)
                                                                             -----           -----         -----
MINIMUM PENSION LIABILITY ADJUSTMENT                                           (68)            (26)          (42)
                                                                             -----           -----         -----
NET UNREALIZED LOSSES ON SECURITIES AVAILABLE FOR SALE
    ARISING DURING THE YEAR                                                   (574)           (211)         (363)
RECLASSIFICATION OF NET LOSSES ON
    SECURITIES AVAILABLE FOR SALE INCLUDED IN NET INCOME                       601             228           373
                                                                             -----           -----         -----
NET UNREALIZED GAINS ON SECURITIES AVAILABLE FOR
    SALE ARISING DURING THE YEAR                                                27              17            10
                                                                             -----           -----         -----
CUMULATIVE EFFECT OF THE CHANGE IN ACCOUNTING
    PRINCIPLE FOR DERIVATIVES AND HEDGING ACTIVITIES                           109              38            71
                                                                             -----           -----         -----
NET UNREALIZED GAINS ON DERIVATIVES AND
    HEDGING ACTIVITIES ARISING DURING THE YEAR                                 196              80           116
RECLASSIFICATION OF NET LOSSES ON
    CASH FLOW HEDGES INCLUDED IN NET INCOME                                    120              44            76
                                                                             -----           -----         -----
NET UNREALIZED GAINS ON DERIVATIVES AND HEDGING
    ACTIVITIES ARISING DURING THE YEAR                                         316             124           192
                                                                             -----           -----         -----
OTHER COMPREHENSIVE INCOME                                                   $ 379           $ 151         $ 228
                                                                             =====           =====         =====
----------------------------------------------------------------------------------------------------------------
</Table>


The following table presents cumulative other comprehensive income balances:

<Table>
<Caption>
---------------------------------------------------------------------------------------------------------------------------
(in millions)                                           Minimum                                                  Cumulative
                                                        pension      Net unrealized      Net unrealized               other
                                    Translation       liability       gains (losses)           gains on       comprehensive
                                    adjustments      adjustment       on securities         derivatives              income
---------------------------------------------------------------------------------------------------------------------------
<S>                                       <C>             <C>                <C>                 <C>               <C>
Balance, December 31, 1998                $ (14)          $  --              $  507              $   --            $    493
                                          -----           -----              ------              ------             -------

    Net change                                4              --                 263                  --                 267
                                          -----           -----              ------              ------              ------
Balance, December 31, 1999                  (10)             --                 770                  --                 760
                                          -----           -----              ------              ------              ------

    Net change                               (2)             --                (234)                 --                (236)
                                          -----           -----              ------              ------              ------
Balance, December 31, 2000                  (12)             --                 536                  --                 524
                                          -----           -----              ------              ------              ------

    NET CHANGE                               (3)            (42)                 10                 263                 228
                                          -----           -----              ------              ------              ------
BALANCE, DECEMBER 31, 2001                $ (15)          $ (42)             $  546              $  263            $    752
                                          =====           =====              ======              ======            ========
---------------------------------------------------------------------------------------------------------------------------
</Table>


                                      84
<Page>

17.  OPERATING SEGMENTS

The Company has identified three lines of business for the purposes of
management reporting: Community Banking, Wholesale Banking and Wells Fargo
Financial. The results are determined based on the Company's management
accounting process, which assigns balance sheet and income statement items to
each responsible operating segment. This process is dynamic and somewhat
subjective. Wells Fargo Home Mortgage activities are included in the Community
Banking Group due to the integration of Home Mortgage into Community Banking and
the reorganization of Wells Fargo Home Mortgage as a subsidiary of Wells Fargo
Bank, N.A. In 2001, there were various reorganizations resulting in the
integration into Wholesale Banking from Community Banking of certain units of
First Security, certain Community Banking Offices that were reorganized as
Regional Commercial Banking Offices, the Insurance Group and Correspondent
Banking. Unlike financial accounting, there is no comprehensive, authoritative
guidance for management accounting equivalent to generally accepted accounting
principles. The management accounting process measures the performance of the
operating segments based on the management structure of the Company and is not
necessarily comparable with similar information for any other financial services
company. The Company's operating segments are defined by product type and
customer segments. Changes in management structure and/or the allocation process
may result in changes in allocations, transfers and assignments. In that case,
results for prior periods would be (and have been) restated to allow
comparability.

  THE COMMUNITY BANKING GROUP offers a complete line of diversified financial
products and services to individual consumers and small businesses with
annual sales up to $10 million in which the owner is also the principal
financial decision maker. Community Banking also offers investment management
and other services to retail customers and high net worth individuals,
insurance and securities brokerage through affiliates and venture capital
financing. These products and services include WELLS FARGO FUNDS(SM), a
family of mutual funds, as well as personal trust, employee benefit trust and
agency assets. Loan products include lines of credit, equity lines and loans,
equipment and transportation (auto, recreational vehicle and marine) loans,
origination and purchase of residential mortgage loans for sale to investors
and servicing of mortgage loans. Other credit products and financial services
available to small businesses and their owners include receivables and
inventory financing, equipment leases, real estate financing, Small Business
Administration financing, cash management, payroll services, retirement
plans, medical savings accounts and credit and debit card processing.
Consumer and business deposit products include checking accounts, savings
deposits, market rate accounts, Individual Retirement Accounts (IRAs) and
time deposits.

  Community Banking provides access to customers through a wide range of
channels, which encompass a network of traditional banking stores, banking
centers, in-store banking centers, business centers and ATMs. Additionally,
24-hour telephone service is provided by PHONEBANK(SM) centers and the National
Business Banking Center. Online banking services include the Wells Fargo
Internet Services Group and BUSINESS GATEWAY(R), a personal computer banking
service exclusively for the small business customer.

  THE WHOLESALE BANKING GROUP serves businesses with annual sales in excess
of $10 million across the United States. Wholesale Banking provides a
complete line of commercial, corporate and real estate banking products and
services. These include traditional commercial loans and lines of credit,
letters of credit, asset-based lending, equipment leasing, mezzanine
financing, high yield debt, international trade facilities, foreign exchange
services, treasury management, investment management, institutional fixed
income and equity sales, electronic products, insurance and insurance
brokerage services, and investment banking services. Wholesale Banking
includes the majority ownership interest in the Wells Fargo HSBC Trade Bank,
which provides trade financing, letters of credit and collection services and
is sometimes supported by the Export-Import Bank of the United States (a
public agency of the United States offering export finance support for
American-made products). Wholesale Banking also supports the commercial real
estate market with products and services such as construction loans for
commercial and residential development, land acquisition and development
loans, secured and unsecured lines of credit, interim financing arrangements
for completed structures, rehabilitation loans, affordable housing loans and
letters of credit, permanent loans for securitization, commercial real estate
loan servicing and real estate and mortgage brokerage services.


                                       85
<Page>

  WELLS FARGO FINANCIAL includes consumer finance and auto finance operations.
Consumer finance operations make direct loans to consumers and purchase sales
finance contracts from retail merchants from offices throughout the United
States and Canada and in the Caribbean and Latin America. Automobile finance
operations specialize in purchasing sales finance contracts directly from
automobile dealers and making loans secured by automobiles in the United States
and Puerto Rico. Credit cards are offered to consumer finance customers through
two credit card banks. Wells Fargo Financial also provides lease and other
commercial financing and provides information services to the consumer finance
industry.

  THE RECONCILIATION COLUMN includes unallocated goodwill, the net impact of
transfer pricing loan and deposit balances, the cost of external debt, and any
residual effects of unallocated systems and other support groups. It also
includes the impact of asset/liability strategies the Company has put in place
to manage interest rate sensitivity at the consolidated level.

<Table>
<Caption>

-------------------------------------------------------------------------------------------------------
(income/expense in millions,
average balances in billions)
                                                                                  Recon-      Consoli-
                                      Community    Wholesale   Wells Fargo     ciliation         dated
                                        Banking      Banking     Financial     Column (4)      Company
------------------------------------------------------------------------------------------------------
<S>                                     <C>           <C>           <C>            <C>         <C>
2001
NET INTEREST INCOME (1)                 $ 8,910       $1,969        $1,679         $ (98)      $12,460
PROVISION FOR LOAN LOSSES                 1,015          278           487            --         1,780
NONINTEREST INCOME                        5,189        2,113           371            17         7,690
NONINTEREST EXPENSE                       9,118        2,345         1,096           332        12,891
                                        -------       ------        ------         -----       -------
INCOME (LOSS) BEFORE INCOME
   TAX EXPENSE (BENEFIT)                  3,966        1,459           467          (413)        5,479
INCOME TAX EXPENSE (BENEFIT) (2)          1,398          531           179           (52)        2,056
                                        -------       ------        ------         -----       -------
NET INCOME (LOSS)                         2,568          928           288          (361)        3,423
LESS:  IMPAIRMENT AND OTHER SPECIAL
   CHARGES (AFTER TAX) (3)               (1,089)         (62)           --            (6)       (1,157)
                                        -------       ------        ------         -----       -------
NET INCOME (LOSS) EXCLUDING
   IMPAIRMENT AND OTHER SPECIAL CHARGES $ 3,657       $  990        $  288         $(355)      $ 4,580
                                        =======       ======        ======         =====       =======

2000
Net interest income (1)                 $ 7,586       $1,949        $1,424         $ (94)      $10,865
Provision for loan losses                   849          151           329            --         1,329
Noninterest income                        6,685        1,768           304            86         8,843
Noninterest expense                       8,542        1,946           986           356        11,830
                                        -------       ------        ------         -----       -------
Income (loss) before income
   tax expense (benefit)                  4,880        1,620           413          (364)        6,549
Income tax expense (benefit) (2)          1,774          613           155           (19)        2,523
                                        -------       ------        ------         ------      -------
Net income (loss)                       $ 3,106       $1,007        $  258         $(345)      $ 4,026
                                        =======       ======        ======         =====       =======

1999
Net interest income (1)                 $ 7,479       $1,403        $1,314         $ (80)      $10,116
Provision for loan losses                   712          102           288             2         1,104
Noninterest income                        6,371        1,194           311            99         7,975
Noninterest expense                       8,194        1,154           952           337        10,637
                                        -------       ------        ------         -----       -------
Income (loss) before income
   tax expense (benefit)                  4,944        1,341           385          (320)        6,350
Income tax expense (benefit) (2)          1,700          500           142            (4)        2,338
                                        -------       ------        ------         -----       -------
Net income (loss)                       $ 3,244       $  841        $  243         $(316)      $ 4,012
                                        =======       ======        ======         =====       =======

2001
AVERAGE LOANS                           $   100       $   50        $   13         $  --       $   163
AVERAGE ASSETS                              198           66            15             6           285
AVERAGE CORE DEPOSITS                       152           16            --            --           168

2000
Average loans                           $    89       $   46        $   11         $  --       $   146
Average assets                              173           58            12             7           250
Average core deposits                       131           15            --            --           146

------------------------------------------------------------------------------------------------------
</Table>

(1)  Net interest income is the difference between actual interest earned on
     assets (and interest paid on liabilities) owned by a group and a funding
     charge (and credit) based on the Company's cost of funds. Community Banking
     and Wholesale Banking are charged a cost to fund any assets (e.g., loans)
     and are paid a funding credit for any funds provided (e.g., deposits). The
     interest spread is the difference between the interest rate earned on an
     asset or paid on a liability and the Company's cost of funds rate.
(2)  Taxes vary by geographic concentration of revenue generation. Taxes as
     presented may differ from the consolidated Company's effective tax rate as
     a result of taxable-equivalent adjustments that primarily relate to income
     on certain loans and securities that is exempt from federal and applicable
     state income taxes. The offsets for these adjustments are found in the
     reconciliation column.
(3)  Non-cash impairment and other special charges recognized in the second
     quarter of 2001, which are included in noninterest income, mainly related
     to impairment of publicly traded and private equity securities, primarily
     in the venture capital portfolio.
(4)  The material items in the reconciliation column related to revenue (i.e.,
     net interest income plus noninterest income) and net income consist of
     Treasury activities and unallocated items. Revenue includes Treasury
     activities of $14 million, $63 million and $83 million; and unallocated
     items of $(95) million, $(71) million, and $(64) million for 2001, 2000 and
     1999, respectively. Net income includes Treasury activities of $6 million,
     $38 million and $51 million; and unallocated items of $(367) million,
     $(383) million and $(367) million for 2001, 2000 and 1999, respectively.
     The material item in the reconciliation column related to noninterest
     expense is amortization of unallocated goodwill of $329 million, $327
     million and $318 million for 2001, 2000 and 1999, respectively. The
     material item in the reconciliation column related to average assets is
     unallocated goodwill of $6 billion and $7 billion for 2001 and 2000,
     respectively .


                                      86
<Page>


18.  SECURITIZATIONS

The Company routinely originates, securitizes and sells mortgage loans and, from
time to time, other financial assets, including student loans, auto receivables
and securities, into the secondary market. As a result of this process, the
Company typically retains the servicing rights and may retain other beneficial
interests from the sales. These securitizations are usually structured without
recourse to the Company and without restrictions on the retained interest. The
retained interests do not contain significant credit risks. The Company
recognized gains from sales of financial assets in securitizations of $623
million in 2001, compared with $298 million in 2000. Additionally, the Company
had the following cash flows with securitization trusts:

<Table>
-------------------------------------------------------------------------------------------------------------------
                                                                                             Year ended December 31,
                                                  -----------------------------------------------------------------
                                                                            2001                               2000
                                                  ------------------------------     ------------------------------
                                                   Residential             Other      Residential             Other
                                                      mortgage         financial         mortgage         financial
(in millions)                                            loans            assets            loans            assets
-------------------------------------------------------------------------------------------------------------------
<S>                                                 <C>                <C>              <C>               <C>
Proceeds from new securitizations                      $16,410            $3,024           $4,397            $4,540
Servicing fees                                              65                42               58                34
Cash flows on interest-only strips                         144               112              115               112
-------------------------------------------------------------------------------------------------------------------
</Table>


    In the normal course of creating securities for investors, the Company
may sponsor the special purpose entities which hold, for the benefit of the
investors, the loans or leases that are the source of payment to the
investors. Those special purpose entities are consolidated unless they meet
the criteria for a qualifying special purpose entity in accordance with FASB
Statement No. 140 (FAS 140), ACCOUNTING FOR THE TRANSFERS AND SERVICING OF
FINANCIAL ASSETS AND EXTINGUISHMENTS OF LIABILITIES, or they have a
substantial residual equity investment by an unaffiliated entity and the
Company does not retain a controlling interest as a result of the Company's
ownership of residual equity.

<Page>


19.  MORTGAGE BANKING ACTIVITIES

Mortgage banking activities, included in the Community Banking and Wholesale
Banking operating segments, comprise residential and commercial mortgage
originations and servicing. The following table presents the components of
mortgage banking noninterest income:

<Table>
<Caption>
-------------------------------------------------------------------------------------------------------------------
                                                                                             Year ended December 31,
                                                                       --------------------------------------------
(in millions)                                                               2001             2000              1999
-------------------------------------------------------------------------------------------------------------------

<S>                                                                    <C>               <C>              <C>
Origination and other closing fees                                        $  737           $  350            $  406
Servicing fees, net of amortization
    and impairment                                                          (260)             665               404
Net gains on securities available for sale                                   134               --                --
Net gains on sales of mortgage servicing rights                               --              159               193
Net gains on mortgage loan origination/sales activities                      705               38               117
All other                                                                    355              232               287
                                                                          ------           ------            ------
    Total mortgage banking noninterest
       income                                                             $1,671           $1,444            $1,407
                                                                          ======           ======            ======
-------------------------------------------------------------------------------------------------------------------
</Table>


    The managed servicing portfolio totaled $514 billion at December 31,
2001, $468 billion at December 31, 2000 and $308 billion at December 31,
1999, which included loans subserviced for others of $63 billion, $85 billion
and $9 billion, respectively.

    The following table summarizes the changes in capitalized mortgage loan
servicing rights:

<Table>
<Caption>
-------------------------------------------------------------------------------------------------------------------
                                                                                             Year ended December 31,
                                                                      ---------------------------------------------
(in millions)                                                               2001             2000              1999
-------------------------------------------------------------------------------------------------------------------
<S>                                                                    <C>               <C>              <C>
Balance, beginning of year                                                $5,609           $4,652            $3,294
    Originations                                                           1,883              702             1,110
    Purchases                                                                962            1,212               695
    Sales                                                                     --              (58)             (172)
    Amortization                                                            (914)            (554)             (721)
    Other (includes changes in mortgage
       servicing rights due to hedging)                                     (175)            (345)              446
                                                                          ------           ------            ------
                                                                           7,365            5,609             4,652
    Less: Valuation allowance                                              1,124               --                --
                                                                          ------           ------            ------

Balance, end of year                                                      $6,241           $5,609            $4,652
                                                                          ======           ======            ======

-------------------------------------------------------------------------------------------------------------------
</Table>


                                      87
<Page>


    The key economic assumptions used in determining the fair value of
mortgage servicing rights and other retained interests related to residential
mortgage loan securitizations at the date of securitization resulting from
securitizations completed in 2001 and 2000 were as follows:

<Table>
<Caption>
-------------------------------------------------------------------------------------------------------------------
                                                       Mortgage servicing rights           Other retained interests
                                                       -------------------------           ------------------------
                                                          2001              2000             2001              2000
-------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>                <C>             <C>                <C>
Prepayment speed (annual CPR) (1)                        13.41%             12.8%           16.41%             10.2%
Weighted average life (in years)                           7.1               7.9              6.1               8.2
Discount rates (1)                                         8.9%             10.6%            11.2%             12.0%

CPR - Constant prepayment rate
-------------------------------------------------------------------------------------------------------------------
</Table>

(1)  Discount rates and prepayment speeds represent weighted averages for all
     retained interests resulting from residential mortgage securitizations
     completed in 2001 and 2000.

    At December 31, 2001, key economic assumptions and the sensitivity of the
current fair value of mortgage servicing rights, both purchased and retained,
and other retained interests related to residential mortgage loan
securitizations to immediate 10% and 25% adverse changes in those assumptions
are presented in the table to the right.

    These sensitivities are hypothetical and should be used with caution. As
the figures indicate, changes in fair value based on a 10% variation in
assumptions generally cannot be extrapolated because the relationship of the
change in the assumption to the change in fair value may not be linear. Also,
in the above table, the effect of a variation in a particular assumption on
the fair value of the retained interest is calculated independently without
changing any other assumption. In reality, changes in one factor may result
in changes in another (for example, changes in prepayment speed estimates
could result in changes in the discount rates), which might magnify or
counteract the sensitivities.

<Table>
<Caption>
-------------------------------------------------------------------------------------------------------------------
(in millions)                                          Mortgage servicing rights           Other retained interests
-------------------------------------------------------------------------------------------------------------------
<S>                                                                    <C>                                <C>
Fair value of retained interests                                          $6,397                             $1,470
Expected weighted average life (in years)                                    5.6                                5.3

Prepayment speed assumption (annual CPR)                                    16.5%                              15.9%
     Decrease in fair value from 10% adverse change                       $  333                             $   86
     Decrease in fair value from 25% adverse change                          772                                199

Discount rate assumption                                                    7.41%                              7.41%
     Decrease in fair value from 100 basis point
         adverse change                                                   $  270                             $   59
     Decrease in fair value from 200 basis point
         adverse change                                                      504                                108

-------------------------------------------------------------------------------------------------------------------
</Table>

    Not included in the table above are mortgage servicing rights, both
purchased and retained, with a fair value of $14 million and other retained
interests with a fair value of $150 million related to commercial mortgage
loan securitizations and other retained interests of $325 million related to
securitizations of student loans, auto receivables and securities.


<Page>


20.  PARENT COMPANY

Condensed financial information of the Parent follows. For information regarding
the Parent's long-term debt, see Note 9.

CONDENSED STATEMENT OF INCOME

<Table>
<Caption>
------------------------------------------------------------------------------------------------------------------
                                                                                            Year ended December 31,
                                                                          ----------------------------------------
(in millions)                                                                  2001            2000           1999
------------------------------------------------------------------------------------------------------------------
<S>                                                                       <C>           <C>             <C>
INCOME
Dividends from subsidiaries:
      Bank                                                                   $2,360          $2,318         $2,378
      Nonbank                                                                   218           1,139            153
Interest income from subsidiaries                                               566             701            616
Service fees from subsidiaries                                                   49              45            104
Other income                                                                    180             369             95
                                                                             ------          ------         ------
           Total income                                                       3,373           4,572          3,346
                                                                             ------          ------         ------

EXPENSE
Interest on:
      Short-term borrowings                                                     305             464            350
      Long-term debt                                                            691             739            514
Noninterest expense                                                             148             116            380
                                                                             ------          ------         ------
           Total expense                                                      1,144           1,319          1,244
                                                                             ------          ------         ------

Income before income tax benefit and
      undistributed income of subsidiaries                                    2,229           3,253          2,102
Income tax benefit (expense)                                                    230             114           (161)
Equity in undistributed income of subsidiaries                                  964             659          2,071
                                                                             ------          ------         ------

NET INCOME                                                                   $3,423          $4,026         $4,012
                                                                             ======          ======         ======
-------------------------------------------------------------------------------------------------------------------
</Table>

                                       88
<Page>

CONDENSED BALANCE SHEET

<Table>
<Caption>
-------------------------------------------------------------------------------------------------------------------
                                                                                                        December 31,
                                                                                 ----------------------------------
(in millions)                                                                          2001                    2000
-------------------------------------------------------------------------------------------------------------------
<S>                                                                              <C>                     <C>
ASSETS
Cash and noninterest-bearing balances due from:
      Subsidiary banks                                                              $     2                 $    --
      Non-affiliates                                                                     74                      50
Interest-bearing balances due from
      subsidiary banks                                                                2,834                   1,759
Securities available for sale                                                         1,531                   1,982
Loans and advances to subsidiaries:
      Bank                                                                              200                     200
      Nonbank                                                                        10,439                  10,862
Investment in subsidiaries (1):
      Bank                                                                           28,741                  26,386
      Nonbank                                                                         4,781                   4,845
Other assets                                                                          2,326                   1,257
                                                                                    -------                 -------
         Total assets                                                               $50,928                 $47,341
                                                                                    =======                 =======

LIABILITIES AND STOCKHOLDERS' EQUITY
Short-term borrowings                                                               $ 4,969                 $ 5,848
Other liabilities                                                                     1,086                     900
Long-term debt                                                                       14,456                  12,994
Indebtedness to subsidiaries                                                          1,657                   1,111
Guaranteed preferred beneficial interests
      in Company's subordinated debentures                                            1,546                      --
Stockholders' equity                                                                 27,214                  26,488
                                                                                    -------                 -------
Total liabilities and stockholders' equity                                          $50,928                 $47,341
                                                                                    =======                 =======
-------------------------------------------------------------------------------------------------------------------
</Table>

(1)   The double leverage ratio, which represents the ratio of the Parent's
      total equity investment in subsidiaries to its total stockholders' equity,
      was 123% and 118% at December 31, 2001 and 2000, respectively.


<Page>


CONDENSED STATEMENT OF CASH FLOWS

<Table>
<Caption>
------------------------------------------------------------------------------------------------------------------
                                                                                            Year ended December 31,
                                                                       -------------------------------------------
(in millions)                                                              2001              2000             1999
------------------------------------------------------------------------------------------------------------------
<S>                                                                    <C>               <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income                                                          $ 3,423           $ 4,026          $ 4,012
    Adjustments to reconcile net income to net cash
      provided by operating activities:
         Equity in undistributed income of subsidiaries                    (964)             (659)          (2,071)
         Depreciation and amortization                                       19                18               26
         Release of preferred shares to ESOP                                159               127               86
         Other assets, net                                                 (848)              295              114
         Accrued expenses and other liabilities                             143              (127)             536
                                                                        -------           -------          -------

Net cash provided by operating activities                                 1,932             3,680            2,703
                                                                        -------           -------          -------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Securities available for sale:
      Proceeds from sales                                                   626               739              348
      Proceeds from prepayments and maturities                               85               112              120
      Purchases                                                            (462)           (1,067)            (872)
    Net advances to nonbank subsidiaries                                   (722)           (2,499)             724
    Principal collected on notes/loans of subsidiaries                    1,304             1,487            1,108
    Capital notes and term loans made to subsidiaries                      (159)           (2,007)            (505)
    Net increase in investment in subsidiaries                             (979)           (1,804)          (1,003)
                                                                        -------           -------          -------

Net cash used by investing activities                                      (307)           (5,039)             (80)
                                                                        -------           -------          -------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Net (decrease) increase in short-term borrowings
      and indebtedness to subsidiaries                                     (331)             (743)           1,059
    Proceeds from issuance of long-term debt                              4,527             6,590            6,574
    Repayment of long-term debt                                          (3,066)           (4,400)          (1,780)
    Proceeds from issuance of guaranteed preferred
      beneficial interests in Company's subordinated
      debentures                                                          1,546                --               --
    Proceeds from issuance of common stock                                  484               422              517
    Repurchases of common stock                                          (1,760)           (3,235)          (2,122)
    Preferred stock redeemed                                               (200)               --               --
    Net decrease in ESOP loans                                               --                --                2
    Payment of cash dividends                                            (1,724)           (1,586)          (1,436)
                                                                        -------           -------          -------

Net cash (used) provided by financing activities                           (524)           (2,952)           2,814
                                                                        -------           -------          -------
    NET CHANGE IN CASH AND CASH EQUIVALENTS                               1,101            (4,311)           5,437
Cash and cash equivalents at beginning of year                            1,809             6,120              683
                                                                        -------           -------          -------
CASH AND CASH EQUIVALENTS AT END OF YEAR                                $ 2,910           $ 1,809          $ 6,120
                                                                        =======           =======          =======
------------------------------------------------------------------------------------------------------------------
</Table>

                                       89
<Page>

21. LEGAL ACTIONS

In the normal course of business, the Company is at all times subject to
numerous pending and threatened legal actions, some for which the relief or
damages sought are substantial. After reviewing pending and threatened actions
with counsel, management believes that the outcome of such actions will not have
a material adverse effect on the results of operations or stockholders' equity
of the Company. The Company is not able to predict whether the outcome of such
actions may or may not have a material adverse effect on results of operations
in a particular future period as the timing and amount of any resolution of such
actions and its relationship to the future results of operations are not known.

22. RISK-BASED CAPITAL

The Company and each of the subsidiary banks are subject to various regulatory
capital adequacy requirements administered by the FRB and the OCC, respectively.
The Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA)
required that the federal regulatory agencies adopt regulations defining five
capital tiers for banks: well capitalized, adequately capitalized,
undercapitalized, significantly undercapitalized and critically
undercapitalized. Failure to meet minimum capital requirements can initiate
certain mandatory and possibly additional discretionary actions by regulators
that, if undertaken, could have a direct material effect on the Company's
financial statements.

  Quantitative measures, established by the regulators to ensure capital
adequacy, require that the Company and each of the subsidiary banks maintain
minimum ratios (set forth in the table on the following page) of capital to
risk-weighted assets. There are three categories of capital under the
guidelines. Tier 1 capital includes common stockholders' equity, qualifying
preferred stock and trust preferred securities, less goodwill and certain
other deductions (including the unrealized net gains and losses, after
applicable taxes, on securities available for sale carried at fair value).
Tier 2 capital includes preferred stock not qualifying as Tier 1 capital,
subordinated debt, the allowance for loan losses and net unrealized gains on
marketable equity securities, subject to limitations by the guidelines. Tier
2 capital is limited to the amount of Tier 1 capital (i.e., at least half of
the total capital must be in the form of Tier 1 capital). Tier 3 capital
includes certain qualifying unsecured subordinated debt.

  Under the guidelines, capital is compared to the relative risk related to
the balance sheet. To derive the risk included in the balance sheet, one of
four risk weights (0%, 20%, 50% and 100%) is applied to the different balance
sheet and off-balance sheet assets, primarily based on the relative credit
risk of the counterparty. For example, claims guaranteed by the U.S.
government or one of its agencies are risk-weighted at 0%. Off-balance sheet
items, such as loan commitments and derivative financial instruments, are
also applied a risk weight after calculating balance sheet equivalent
amounts. One of four credit conversion factors (0%, 20%, 50% and 100%) is
assigned to loan commitments based on the likelihood of the off-balance sheet
item becoming an asset. For example, certain loan commitments are converted
at 50% and then risk-weighted at 100%. Derivative financial instruments are
converted to balance sheet equivalents based on notional values, replacement
costs and remaining contractual terms. (See Notes 5 and 23 for further
discussion of off-balance sheet items.) The capital amounts and
classification are also subject to qualitative judgments by the regulators
about components, risk weightings and other factors.

  Management believes that, as of December 31, 2001, the Company and each of the
covered subsidiary banks met all capital adequacy requirements to which they are
subject.

  Under the FDICIA prompt corrective action provisions applicable to banks, the
most recent notification from the OCC categorized each of the covered subsidiary
banks as well capitalized. To be categorized as well capitalized, the
institution must maintain a total risk-based capital ratio as set forth in the
following table and not be subject to a capital directive order. There are no
conditions or events since that notification that management believes have
changed the risk-based capital category of any of the covered subsidiary banks.


                                       90
<Page>

<Table>
<Caption>
------------------------------------------------------------------------------------------------------------------------------
                                                                                                                    To be well
                                                                                                             capitalized under
                                                                                                                    the FDICIA
                                                                                 For capital                 prompt corrective
                                                        Actual             adequacy purposes                 action provisions
                                             -----------------   ---------------------------       ---------------------------
(in billions)                                 Amount     Ratio         Amount          Ratio             Amount          Ratio
---------------------------------------       ------    ------   ------------    -----------       ------------   ------------
<S>                                            <C>      <C>      <C>             <C>               <C>            <C>
As of December 31, 2001:
    Total capital (to risk-weighted assets)
        Wells Fargo & Company                  $27.3    10.45%   > or = $20.9    > or = 8.00%
        Wells Fargo Bank, N.A.                  15.7    11.79    > or =  10.7    > or = 8.00       > or = $13.3   > or = 10.00%
        Wells Fargo Bank Minnesota, N.A.         3.3    11.14    > or =   2.4    > or = 8.00       > or =   3.0   > or = 10.00

    Tier 1 capital (to risk-weighted assets)
        Wells Fargo & Company                  $18.2     6.99%   > or = $10.4    > or = 4.00%
        Wells Fargo Bank, N.A.                   9.5     7.16    > or =   5.3    > or = 4.00       > or = $ 8.0   > or =  6.00%
        Wells Fargo Bank Minnesota, N.A.         3.0    10.19    > or =   1.2    > or = 4.00       > or =   1.8   > or =  6.00

    Tier 1 capital (to average assets)
      (Leverage ratio)
        Wells Fargo & Company                  $18.2     6.25%   > or = $11.7    > or = 4.00%(1)
        Wells Fargo Bank, N.A.                   9.5     7.31    > or =   5.2    > or = 4.00 (1)   > or = $ 6.5   > or =  5.00%
        Wells Fargo Bank Minnesota, N.A.         3.0     5.99    > or =   2.0    > or = 4.00 (1)   > or =   2.5   > or =  5.00
------------------------------------------------------------------------------------------------------------------------------
</Table>
(1)  The leverage ratio consists of Tier 1 capital divided by quarterly average
     total assets, excluding goodwill and certain other items. The minimum
     leverage ratio guideline is 3% for banking organizations that do not
     anticipate significant growth and that have well-diversified risk,
     excellent asset quality, high liquidity, good earnings, effective
     management and monitoring of market risk and, in general, are considered
     top-rated, strong banking organizations.


23. DERIVATIVE FINANCIAL INSTRUMENTS

The Company adopted FAS 133 on January 1, 2001. The effect on net income from
the adoption was an increase of $13 million (after tax). The pretax amount of
$22 million was recorded as a component of other noninterest income. In
accordance with the transition provisions of FAS 133, the Company recorded a
transition adjustment of $71 million, net of tax, (increase in equity) in other
comprehensive income in a manner similar to a cumulative effect of a change in
accounting principle. The transition adjustment was the initial amount necessary
to adjust the carrying values of certain derivative instruments (that qualified
as cash flow hedges) to fair value to the extent that the related hedge
transactions had not yet been recognized.

  The Company maintains an overall interest rate risk management strategy that
incorporates the use of derivative instruments to minimize significant unplanned
fluctuations in earnings, fair values of assets and liabilities, and cash flows
caused by interest rate volatility. The Company's interest rate risk management
strategy involves modifying the repricing characteristics of certain assets and
liabilities so that changes in interest rates do not have a significant adverse
effect on the net interest margin and cash flows. As a result of interest rate
fluctuations, hedged assets and liabilities will appreciate or depreciate in
market value. In a fair value hedging strategy, the effect of this unrealized
appreciation or depreciation will generally be offset by income or loss on the
derivative instruments that are linked to the hedged assets and liabilities. In
a cash flow hedging strategy, the variability of cash payments due to interest
rate fluctuations is managed by the effective use of derivative instruments that
are linked to hedged assets and liabilities.

  Derivative instruments that the Company uses as part of its interest rate risk
management strategy include interest rate swaps and floors, interest rate
futures and forward contracts, and options. The Company also offers various
derivative contracts, which include interest rate, commodity and foreign
exchange contracts to its customers but usually offsets such contracts by
purchasing other financial contracts. The customer accommodations are treated as
free-standing derivatives held for trading. The free-standing derivative
instruments also include derivative transactions entered into for risk
management purposes that do not otherwise qualify for hedge accounting. To a
lesser extent, the Company takes positions based on market expectations or to
benefit from price differentials between financial instruments and markets.

  By using derivative instruments, the Company is exposed to credit risk in
the event of nonperformance by counterparties to financial instruments. If a
counterparty fails to perform, credit risk is equal to the fair value gain in
a derivative. The Company minimizes the credit risk through credit approvals,
limits and monitoring procedures. Credit risk related to derivative contracts
is considered and, if material, provided for separately. As the Company
generally enters into transactions only with counterparties that carry
quality credit ratings, losses associated with counterparty nonperformance on
derivative contracts have been immaterial. Further, the Company obtains
collateral where appropriate and uses master netting arrangements in
accordance with FASB Interpretation No. 39, OFFSETTING OF AMOUNTS RELATED TO
CERTAIN CONTRACTS, as amended by FASB

                                      91
<Page>


Interpretation No. 41, OFFSETTING OF AMOUNTS RELATED TO CERTAIN REPURCHASE
AND REVERSE REPURCHASE AGREEMENTS.

  The Company's derivative activities are monitored by the Asset/Liability
Committee. The Company's Treasury function, which includes asset/liability
management, is responsible for implementing various hedging strategies that are
developed through its analysis of data from financial models and other internal
and industry sources. The resulting hedging strategies are then incorporated
into the Company's overall interest rate risk management and trading strategies.

FAIR VALUE HEDGES
The Company enters into interest rate swaps to convert a majority of its
fixed-rate long-term debt to floating-rate debt. The decisions to convert
fixed-rate debt to floating takes into consideration the asset/liability
repricing characteristics, the desired asset/liability sensitivity and current
level of interest rates. Additionally, the Company enters into a combination of
derivative instruments (futures, floors, forwards, swaps and options) to hedge
changes in fair value of its mortgage servicing rights as it relates to changes
in London Interbank Offered Rate (LIBOR) interest rates and changes in the
credit risk. In determining the portion of mortgage servicing rights to hedge,
the Company takes into account natural offsets from the mortgage loan production
franchise.

  The Company recognized a net gain of $11 million for 2001, as an offset to
interest expense, representing the ineffective portion of fair value hedges of
long-term debt. For long-term debt, in some instances all components of each
derivative instrument's gain or loss are included in the assessment of hedge
effectiveness, whereas, in other instances, only the benchmark interest rate is
included in the assessment of hedge effectiveness. Additionally, for 2001, the
Company recognized a net gain of $521 million in noninterest income, which
represents the ineffective portion of all fair value hedges of mortgage
servicing rights. For mortgage servicing rights, all components of each
derivative instrument's gain or loss are included in the measurement of hedge
ineffectiveness, as reflected in the statement of income, while the time decay
and the volatility components of an option's change in value are excluded from
the assessment of hedge effectiveness. As of December 31, 2001, all designated
hedges continued to qualify as fair value hedges.

CASH FLOW HEDGES
The Company enters into interest rate swaps and floors to convert floating-rate
loans to fixed rates. The loans are typically grouped by the same risk exposure
for which they are being hedged. Specific types of loans and amounts that are
hedged are determined based on prevailing market conditions, the asset/liability
mix of the Company and the current shape of the yield curve. Additionally, to
hedge the forecasted sale of its mortgage loans, the Company enters into futures
contracts and mandatory forward contracts, including options on futures and
forward contracts.

  For 2001, the Company recognized a net loss of $120 million, which represents
the total ineffectiveness of all cash flow hedges. Gains and losses on
derivative contracts that are reclassified from cumulative other comprehensive
income to current period earnings are included in the line item in which the
hedged item's effect in earnings is recorded. All components of each derivative
instrument's gain or loss are included in the assessment of hedge effectiveness,
except for derivative instruments hedging commercial loans indexed to LIBOR,
where only the benchmark interest rate is included in the assessment of hedge
effectiveness. For the period ended December 31, 2001, all designated hedges
continued to qualify as cash flow hedges. Further, all designated forecasted
transactions remain probable of occurring.

  As of December 31, 2001, $110 million of deferred net gains on derivative
instruments included in other comprehensive income are expected to be
reclassified to net income during the next twelve months. The maximum term over
which the Company is hedging its exposure to the variability of future cash
flows for all forecasted transactions, excluding those related to payments of
variable interest in existing financial instruments, is ten years for hedges
converting floating-rate loans to fixed and one year for hedges of forecasted
sales of mortgage loans.

FREE-STANDING DERIVATIVE INSTRUMENTS
The Company enters into various derivative contracts which primarily focus on
providing derivative products to customers. To a lesser extent, the Company
takes positions based on market expectations or to benefit from price
differentials between financial instruments and markets. These derivative
contracts are not linked to specific assets and liabilities on the balance sheet
or to forecasted transactions and, therefore, do not qualify for hedge
accounting.

  Interest rate lock commitments issued on residential mortgage loans
intended to be held for resale are considered free-standing derivative
instruments. The interest rate exposure on these commitments is economically
hedged primarily with options and forwards. The commitments and free-standing
derivative instruments are marked to market and recorded as a component of
mortgage banking noninterest income in the statement of income.

  Derivative instruments utilized by the Company and classified as free-standing
instruments include interest rate swaps, futures, forwards, floors and caps
purchased and written, options purchased and written, and warrants.


                                      92
<Page>

The following table summarizes the aggregate notional or contractual amounts,
credit risk amount and estimated net fair value for the Company's derivative
financial instruments at December 31, 2001 and 2000.

<Table>
<Caption>
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                                      December 31,
                                          ---------------------------------------------------------------------------------------
                                                                               2001                                          2000
                                          -----------------------------------------     -----------------------------------------
                                          NOTIONAL OR          CREDIT     ESTIMATED     Notional or          Credit     Estimated
                                          CONTRACTUAL            RISK      NET FAIR     contractual            risk      net fair
(in millions)                                  AMOUNT       AMOUNT (3)        VALUE          amount       amount (3)        value
---------------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>               <C>           <C>            <C>                <C>           <C>
ASSET/LIABILITY MANAGEMENT
    HEDGES
Interest rate contracts:
     Swaps (1)                               $ 27,868          $1,594        $1,559         $25,817            $391          $368
     Futures                                      264              --            --          71,484              --           141
     Floors and caps (1)                          500              27            27          20,139             191           191
     Options (1) (2) (4)                      499,430             286           184          20,620             275           267
     Forwards (1)                             113,620             290          (263)         21,392              69           (93)

Foreign exchange contracts:
     Forwards (1)                                  --              --            --              72              --            (2)

CUSTOMER ACCOMMODATIONS AND TRADING
Interest rate contracts:
     Swaps (1)                                 68,332           1,657           148          40,934             635            58
     Futures                                   22,762              --            --          17,890              --            --
     Floors and caps purchased (1)             24,255             440           440          14,196             107           107
     Floors and caps written                   24,309              --          (385)         15,310              --           (76)
     Options purchased (1)                      2,435              18            18           1,205              12            12
     Options written                           23,117              --          (162)             71              --            (3)
     Forwards (1)                              41,837             248           173             150               2            (1)

Commodity contracts:
     Swaps (1)                                     66              10             1             167              57             1
     Floors and caps purchased (1)                104               8             8              58               8             8
     Floors and caps written                      105              --            (8)             57              --            (8)

Equity contracts:
     Swaps                                      3,464              13            (1)             --              --            --
     Options purchased                            704              33            33              --              --            --
     Options written                              529              --           (29)             --              --            --

Foreign exchange contracts:
     Forwards (1)                               8,968             227            65           7,283             150            31
     Options purchased (1)                        275              18            18              42               1             1
     Options written                              260              --           (17)             42              --            (1)
---------------------------------------------------------------------------------------------------------------------------------
</Table>
(1)  The Company anticipates performance by substantially all of the
     counterparties for these contracts or the underlying financial instruments.
(2)  At December 31, 2001, the purchased option contracts were predominantly
     options on futures contracts, which are exchange traded for which the
     exchange assumes counterparty risk.
(3)  Credit risk amounts reflect the replacement cost for those contracts in a
     gain position in the event of nonperformance by counterparties.
(4)  Includes purchased options with notional or contractual amounts, credit
     risk amounts and estimated net fair value of $263,617 million, $286
     million, and $286 million, respectively, at December 31, 2001. Includes
     written options with notional or contractual amounts, credit risk amounts
     and estimated net fair values of $235,813 million, nil and $(102) million,
     respectively, at December 31, 2001.


                                      93
<Page>

24. FAIR VALUE OF FINANCIAL INSTRUMENTS

FAS 107, DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS, requires that
the Company disclose estimated fair values for its financial instruments. Fair
value estimates, methods and assumptions set forth below for the Company's
financial instruments are made solely to comply with the requirements of this
Statement and should be read in conjunction with the financial statements and
notes in this Annual Report. The carrying amounts in the table on page 96 are
recorded in the Consolidated Balance Sheet under the indicated captions, except
for the derivative financial instruments which are recorded in other assets.

  Fair values are based on estimates or calculations using present value
techniques in instances where quoted market prices are not available. Because
broadly traded markets do not exist for most of the Company's financial
instruments, the fair value calculations attempt to incorporate the effect of
current market conditions at a specific time. Fair valuations are management's
estimates of the values, and they are often calculated based on current pricing
policy, the economic and competitive environment, the characteristics of the
financial instruments and other such factors. These calculations are subjective
in nature, involve uncertainties and matters of significant judgment and do not
include tax ramifications; therefore, the results cannot be determined with
precision, substantiated by comparison to independent markets and may not be
realized in an actual sale or immediate settlement of the instruments. There may
be inherent weaknesses in any calculation technique, and changes in the
underlying assumptions used, including discount rates and estimates of future
cash flows, that could significantly affect the results. The Company has not
included certain material items in its disclosure, such as the value of the
long-term relationships with the Company's deposit, credit card and trust
customers, since these intangibles are not financial instruments. For all of
these reasons, the aggregation of the fair value calculations presented herein
do not represent, and should not be construed to represent, the underlying value
of the Company.

FINANCIAL ASSETS

SHORT-TERM FINANCIAL ASSETS
Short-term financial assets include cash and due from banks, federal funds sold
and securities purchased under resale agreements and due from customers on
acceptances. The carrying amount is a reasonable estimate of fair value because
of the relatively short period of time between the origination of the instrument
and its expected realization.

SECURITIES AVAILABLE FOR SALE
Securities available for sale at December 31, 2001 and 2000 are set forth in
Note 4.

MORTGAGES HELD FOR SALE
The fair value of mortgages held for sale is based on quoted market prices.

LOANS HELD FOR SALE
The fair value of loans held for sale is based on what secondary markets are
currently offering for portfolios with similar characteristics.

LOANS
The fair valuation calculation process differentiates loans based on their
financial characteristics, such as product classification, loan category,
pricing features and remaining maturity. Prepayment estimates are evaluated by
product and loan rate.

  The fair value of commercial loans, other real estate mortgage loans and real
estate construction loans is calculated by discounting contractual cash flows
using discount rates that reflect the Company's current pricing for loans with
similar characteristics and remaining maturity.

  For real estate 1-4 family first and junior lien mortgages, fair value is
calculated by discounting contractual cash flows, adjusted for prepayment
estimates, using discount rates based on current industry pricing for loans of
similar size, type, remaining maturity and repricing characteristics.

  For consumer finance and credit card loans, the portfolio's yield is equal to
the Company's current pricing and, therefore, the fair value is equal to book
value.

  For other consumer loans, the fair value is calculated by discounting the
contractual cash flows, adjusted for prepayment estimates, based on the current
rates offered by the Company for loans with similar characteristics.

  For auto lease financing, the fair value is calculated by discounting the
contractual cash flows at the Company's current pricing for items with similar
remaining terms, not including tax benefits.

  Commitments, standby letters of credit and commercial and similar letters of
credit not included in the table on page 96 have contractual values of $99.7
billion, $5.5 billion and $577 million, respectively, at December 31, 2001, and
$92.7 billion, $5.6 billion and $729 million, respectively, at December 31,
2000. These instruments generate ongoing fees at the Company's current pricing
levels. Of the commitments at December 31, 2001, 38% mature within one year.

TRADING ASSETS
Trading assets, which are carried at fair value, are set forth in Note 6.


                                       94
<Page>

NONMARKETABLE EQUITY INVESTMENTS

There are restrictions on the sale and/or liquidation of the Company's
nonmarketable equity investments, including Federal Reserve Bank Stock. For the
Federal Reserve Bank Stock carrying value equals fair value. The Company uses
all facts and circumstances available to estimate the fair value of its cost
method investments. Typical considerations include: access to and need for
capital (including recent or projected financing activity), qualitative
assessments of the viability of the investee, and prospects for its future.

FINANCIAL LIABILITIES

DEPOSIT LIABILITIES
FAS 107 states that the fair value of deposits with no stated maturity, such as
noninterest-bearing demand deposits, interest-bearing checking and market rate
and other savings, is equal to the amount payable on demand at the measurement
date. Although the FASB's requirement for these categories is not consistent
with the market practice of using prevailing interest rates to value these
amounts, the amount included for these deposits in the following table is their
carrying value at December 31, 2001 and 2000. The fair value of other time
deposits is calculated based on the discounted value of contractual cash flows.
The discount rate is estimated using the rates currently offered for like
deposits with similar remaining maturities.

SHORT-TERM FINANCIAL LIABILITIES
Short-term financial liabilities include federal funds purchased and securities
sold under repurchase agreements, commercial paper and other short-term
borrowings. The carrying amount is a reasonable estimate of fair value because
of the relatively short period of time between the origination of the instrument
and its expected realization.

LONG-TERM DEBT
The fair value of the Company's underwritten long-term debt is estimated based
on the quoted market prices of the instruments. The fair value of the
medium-term note programs, which are part of long-term debt, is calculated based
on the discounted value of contractual cash flows. The discount rate is
estimated using the rates currently offered for new notes with similar remaining
maturities.

GUARANTEED PREFERRED BENEFICIAL INTERESTS IN COMPANY'S
SUBORDINATED DEBENTURES

The fair value of the Company's trust preferred securities is estimated based on
the quoted market prices of the instruments.

DERIVATIVE FINANCIAL INSTRUMENTS
The fair value of derivative financial instruments is based on the estimated
amounts that the Company would receive or pay to terminate the contracts at the
reporting date (i.e., mark-to-market value). Dealer quotes are available for
substantially all of the Company's derivative financial instruments.

LIMITATIONS
These fair value disclosures are made solely to comply with the requirements of
FAS 107. The calculations represent management's best estimates; however, due to
the lack of broad markets and the significant items excluded from this
disclosure, the calculations do not represent the underlying value of the
Company. The information presented is based on fair value calculations and
market quotes as of December 31, 2001 and 2000. These amounts have not been
updated since year end; therefore, the valuations may have changed significantly
since that point in time.

  As discussed above, certain of the Company's asset and liability financial
instruments are short-term, and therefore, the carrying amounts in the
Consolidated Balance Sheet approximate fair value. Other significant assets and
liabilities, which are not considered financial assets or liabilities and for
which fair values have not been estimated, include premises and equipment,
goodwill and other intangibles, deferred taxes and other liabilities.


                                       95
<Page>

  The following table presents a summary of the Company's remaining financial
instruments, as defined by FAS 107:

<Table>
<Caption>
-------------------------------------------------------------------------------------------------------------------
                                                                                                        December 31,
                                                           --------------------------------------------------------
                                                                                 2001                          2000
                                                           --------------------------     -------------------------
                                                              CARRYING      ESTIMATED       Carrying      Estimated
(in millions)                                                   AMOUNT     FAIR VALUE         amount     fair value
-------------------------------------------------------------------------------------------------------------------
<S>                                                          <C>           <C>             <C>           <C>
FINANCIAL ASSETS
Mortgages held for sale                                       $ 30,405       $ 30,405       $ 11,812       $ 11,812
Loans held for sale                                              4,745          4,828          4,539          4,637
Loans, net (1)                                                 168,725        167,400        157,396        154,379
Nonmarketable equity investments                                 4,062          4,239          4,142          4,435

FINANCIAL LIABILITIES
Deposits                                                      $187,266       $187,520       $169,559       $169,535
Long-term debt (2)                                              36,068         37,610         32,019         31,869
Guaranteed preferred beneficial interests in Company's
   subordinated debentures                                       2,435          2,830            935            967

DERIVATIVE FINANCIAL INSTRUMENTS (3)
   Interest rate contracts:
   Floors and caps purchased                                  $    467       $    467       $    184       $    298
   Floors and caps written                                        (385)          (385)           (76)           (76)
   Options purchased                                               298            298            106            287
   Options written                                                (258)          (258)           (13)           (11)
   Swaps                                                         1,707          1,707            177            427
   Futures                                                          --             --            141            141
   Forwards                                                        (90)           (90)          (245)           (94)
Foreign exchange contracts                                          66             66             31             29
Equity derivatives                                                   3              3             --             --
Commodity contracts                                                  1              1              1              1
-------------------------------------------------------------------------------------------------------------------
</Table>
(1)  Loans are net of deferred fees on loan commitments and standby letters of
     credit of $13 million and $9 million at December 31, 2001 and 2000,
     respectively.
(2)  The carrying amount and fair value exclude obligations under capital leases
     of $27 million at December 31, 2001 and 2000.
(3)  The 2001 carrying amounts are at estimated fair value in accordance with
     FAS 133. The 2000 carrying amounts include unamortized fees paid or
     received and gains or losses on derivative financial instruments receiving
     mark-to-market treatment.


                                       96
<Page>

INDEPENDENT AUDITORS' REPORT
-------------------------------------------------------------------------------

The Board of Directors and Stockholders of Wells Fargo & Company:

         We have audited the accompanying consolidated balance sheet of Wells
Fargo & Company and Subsidiaries as of December 31, 2001 and 2000, and the
related consolidated statements of income, changes in stockholders' equity and
comprehensive income, and cash flows for each of the years in the three-year
period ended December 31, 2001. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

         We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

         In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Wells Fargo
& Company and Subsidiaries as of December 31, 2001 and 2000, and the results of
their operations and their cash flows for each of the years in the three-year
period ended December 31, 2001, in conformity with accounting principles
generally accepted in the United States of America.


KPMG LLP

San Francisco, California
January 15, 2002


                                       97
<Page>

                            QUARTERLY FINANCIAL DATA

             CONDENSED CONSOLIDATED STATEMENT OF INCOME - QUARTERLY
                                   (UNAUDITED)

<Table>
<Caption>

-----------------------------------------------------------------------------------------------------------------------------------
                                                                                 2001                                          2000
                                                                        Quarter ended                                 Quarter ended
                                           ------------------------------------------    ------------------------------------------
(in millions, except per share amounts)    DEC. 31    SEPT. 30   JUNE 30     MAR. 31     Dec. 31  Sept. 30(1) June 30(1) Mar. 31(1)
-------------------------------------------------------------------------------------    ------------------------------------------
<S>                                        <C>         <C>        <C>         <C>         <C>        <C>        <C>        <C>
INTEREST INCOME                            $ 4,690     $ 4,816    $ 4,816     $ 4,881     $ 4,934    $ 4,870    $ 4,543    $  4,378
INTEREST EXPENSE                             1,258       1,615      1,808       2,061       2,140      2,095      1,879       1,746
                                           -------     -------    -------     -------     -------    -------    -------     -------

NET INTEREST INCOME                          3,432       3,201      3,008       2,820       2,794      2,775      2,664       2,632

Provision for loan losses                      536         455        427         361         352        425        275         276
                                           -------     -------    -------     -------     -------    -------    -------     -------
Net interest income after
   provision for loan losses                 2,896       2,746      2,581       2,459       2,442      2,350      2,389       2,356
                                           -------     -------    -------     -------     -------    -------    -------     -------

NONINTEREST INCOME
Service charges on deposit accounts            506         470        471         428         437        435        428         404
Trust and investment fees                      454         424        417         415         421        412        394         397
Credit card fees                               216         203        196         181         187        194        175         167
Other fees                                     323         303        311         307         295        300        266         251
Mortgage banking                               394         369        517         391         434        341        336         334
Insurance                                      221         196        210         118         119         80        117          95
Net venture capital (losses) gains             (37)       (124)    (1,487)         17         203        535        320         885
Net gains (losses) on securities
   available for sale                          154         165         27         117         259       (341)       (39)       (601)
Other                                          216         277       (117)        440         256         99        138         111
                                           -------     -------    -------     -------     -------    -------    -------     -------
   Total noninterest income                  2,447       2,283        545       2,414       2,611      2,055      2,135       2,043
                                           -------     -------    -------     -------     -------    -------    -------     -------

NONINTEREST EXPENSE
Salaries                                     1,012       1,020      1,018         977         920        945        906         881
Incentive compensation                         411         315        265         204         222        271        185         168
Employee benefits                              223         223        236         278         247        241        245         255
Equipment                                      237         217        217         237         307        211        208         221
Net occupancy                                  259         240        239         237         247        236        233         238
Goodwill                                       158         156        152         144         141        136        136         117
Core deposit intangible                         40          41         41          43          45         46         47          48
Net (gains) losses on dispositions
   of premises and equipment                    --          (2)        --         (19)          3         (9)       (17)        (34)
Other                                        1,114         977      1,087         895       1,086        947        909         842
                                           -------     -------    -------     -------     -------    -------    -------     -------
   Total noninterest expense                 3,454       3,187      3,255       2,996       3,218      3,024      2,852       2,736
                                           -------     -------    -------     -------     -------    -------    -------     -------

INCOME (LOSS) BEFORE INCOME TAX
   EXPENSE                                   1,889       1,842       (129)      1,877       1,835      1,381      1,672       1,663
Income tax expense (benefit)                   708         678        (42)        712         707        560        635         623
                                           -------     -------    -------     -------     -------    -------    -------     -------

NET INCOME (LOSS)                          $ 1,181     $ 1,164    $   (87)    $ 1,165     $ 1,128    $   821    $ 1,037     $ 1,040
                                           =======     =======    =======     =======     =======    =======    =======     =======

NET INCOME (LOSS) APPLICABLE TO
   COMMON STOCK                            $ 1,180     $ 1,160    $   (91)    $ 1,161     $ 1,124    $   816    $ 1,033     $ 1,036
                                           =======     =======    =======     =======     =======    =======    =======     =======

EARNINGS (LOSS) PER COMMON SHARE           $   .70     $   .68    $  (.05)    $   .68     $   .66    $   .48    $   .61     $   .61
                                           =======     =======    =======     =======     =======    =======    =======     =======
DILUTED EARNINGS (LOSS)
   PER COMMON SHARE                        $   .69     $   .67    $  (.05)    $   .67     $   .65    $   .47    $   .61     $   .61
                                           =======     =======    =======     =======     =======    =======    =======     =======

DIVIDENDS DECLARED PER
   COMMON SHARE                            $   .26     $   .26    $   .24     $   .24     $   .24    $   .22    $   .22     $   .22
                                           =======     =======    =======     =======     =======    =======    =======     =======

Average common shares outstanding          1,696.7     1,710.6    1,714.9     1,715.9     1,710.5    1,707.7    1,682.8     1,696.7
                                           =======     =======    =======     =======     =======    =======    =======     =======
Diluted average common
   shares outstanding                      1,709.2     1,726.9    1,714.9     1,738.7     1,732.4    1,728.0    1,702.6     1,711.3
                                           =======     =======    =======     =======     =======    =======    =======     =======

-----------------------------------------------------------------------------------------------------------------------------------
</Table>

(1) Amounts have been restated to reflect the pooling-of-interests accounting
    treatment of the FSCO Merger. The restated amounts include adjustments to
    conform the accounting policies of First Security and Wells Fargo.


                                       98

</TEXT>
</DOCUMENT>
