UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   ----------

                                    FORM 10-Q

         |X|    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                For the quarterly period ended September 30, 2001

                                       OR

         ---    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                         Commission file number 001-2979

                                   ----------

                              WELLS FARGO & COMPANY
             (Exact name of registrant as specified in its charter)

                 Delaware                                 41-0449260
      (State or other jurisdiction of                 (I.R.S. Employer
      incorporation or organization)                 Identification No.)

             420 Montgomery Street, San Francisco, California 94163
               (Address of principal executive offices) (Zip Code)

       Registrant's telephone number, including area code: 1-800-411-4932

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.

                                   Yes |X|    No
                                       ---       ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

                                                         Shares Outstanding
                                                          October 31, 2001
                                                         ------------------

     Common stock, $1-2/3 par value                         1,695,208,263




                                    FORM 10-Q
                                TABLE OF CONTENTS


                                                                                   PAGE
                                                                                   ----
                                                                             
PART I      FINANCIAL INFORMATION
Item 1.     Financial Statements
            Consolidated Statement of Income......................................   2
            Consolidated Balance Sheet............................................   3
            Consolidated Statement of Changes in Stockholders' Equity
              and Comprehensive Income............................................   4
            Consolidated Statement of Cash Flows..................................   5
            Notes to Financial Statements.........................................   6

Item 2.     Management's Discussion and Analysis of Financial Condition and
              Results of Operations (MD&A)
            Summary Financial Data................................................  19
            Overview..............................................................  20
            Factors that May Affect Future Results................................  23
            Operating Segment Results.............................................  30
            Earnings Performance..................................................  31
              Net Interest Income.................................................  31
              Noninterest Income..................................................  34
              Noninterest Expense.................................................  36
              Income Taxes........................................................  36
              Cash Earnings/Ratios................................................  37
            Balance Sheet Analysis................................................  38
              Securities Available for Sale.......................................  38
              Loan Portfolio......................................................  40
              Nonaccrual and Restructured Loans and Other Assets..................  40
                 Loans 90 Days Past Due and Still Accruing........................  43
              Allowance for Loan Losses...........................................  44
              Interest Receivable and Other Assets................................  45
              Deposits............................................................  46
              Capital Adequacy/Ratios.............................................  46
              Liquidity and Capital Management....................................  47

Item 3.     Quantitative and Qualitative Disclosures About Market Risk............  48

PART II     OTHER INFORMATION
Item 6.     Exhibits and Reports on Form 8-K......................................  50

SIGNATURE.........................................................................  52

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


The information furnished in these interim statements reflects all adjustments
that are, in the opinion of management, necessary for a fair statement of the
results for such periods. Such adjustments are of a normal recurring nature,
unless otherwise disclosed in this Form 10-Q. The results of operations in the
interim statements are not necessarily indicative of the results that may be
expected for the full year. The interim financial information should be read in
conjunction with Wells Fargo & Company's 2000 Annual Report on Form 10-K.

                                       1



                         PART I - FINANCIAL INFORMATION
                         ------------------------------

                     WELLS FARGO & COMPANY AND SUBSIDIARIES
                        CONSOLIDATED STATEMENT OF INCOME




-------------------------------------------------------------------------------------------------------------------
                                                                               Quarter                  Nine months
                                                                        ended Sept. 30,              ended Sept. 30,
                                                                 ---------------------       ----------------------
(in millions, except per share amounts)                              2001         2000           2001          2000
-------------------------------------------------------------------------------------------------------------------
                                                                                               
INTEREST INCOME
Securities available for sale                                    $    669     $    660       $  1,885      $  2,046
Mortgages held for sale                                               425          245          1,055           618
Loans held for sale                                                    69           93            251           322
Loans                                                               3,583        3,777         11,094        10,544
Other interest income                                                  70           95            227           261
                                                                 --------     --------       --------      --------
     Total interest income                                          4,816        4,870         14,512        13,791
                                                                 --------     --------       --------      --------

INTEREST EXPENSE
Deposits                                                              845        1,093          2,949         2,955
Short-term borrowings                                                 316          466          1,037         1,311
Long-term debt                                                        431          518          1,439         1,399
Guaranteed preferred beneficial interests in Company's
   subordinated debentures                                             23           18             59            55
                                                                 --------     --------       --------      --------
     Total interest expense                                         1,615        2,095          5,484         5,720
                                                                 --------     --------       --------      --------

NET INTEREST INCOME                                                 3,201        2,775          9,028         8,071
Provision for loan losses                                             455          425          1,243           976
                                                                 --------     --------       --------      --------
Net interest income after provision for loan losses                 2,746        2,350          7,785         7,095
                                                                 --------     --------       --------      --------

NONINTEREST INCOME
Service charges on deposit accounts                                   470          435          1,370         1,267
Trust and investment fees                                             424          412          1,256         1,203
Credit card fees                                                      203          194            579           534
Other fees                                                            303          300            921           819
Mortgage banking                                                      369          341          1,277         1,010
Insurance                                                             196           80            524           293
Net venture capital (losses) gains                                   (124)         535         (1,593)        1,740
Net gains (losses) on securities available for sale                   165         (341)           309          (981)
Other                                                                 277           99            600           347
                                                                 --------     --------       --------      --------
     Total noninterest income                                       2,283        2,055          5,243         6,232
                                                                 --------     --------       --------      --------

NONINTEREST EXPENSE
Salaries                                                            1,020          945          3,015         2,732
Incentive compensation                                                315          271            784           624
Employee benefits                                                     223          241            737           741
Equipment                                                             217          211            672           640
Net occupancy                                                         240          236            716           707
Goodwill                                                              156          136            452           389
Core deposit intangible                                                41           46            125           142
Net gains on dispositions of premises and equipment                    (2)          (9)           (21)          (60)
Other                                                                 977          947          2,958         2,698
                                                                 --------     --------       --------      --------
     Total noninterest expense                                      3,187        3,024          9,438         8,613
                                                                 --------     --------       --------      --------

INCOME BEFORE INCOME TAX EXPENSE                                    1,842        1,381          3,590         4,714
Income tax expense                                                    678          560          1,348         1,816
                                                                 --------     --------       --------      --------

NET INCOME                                                       $  1,164     $    821       $  2,242      $  2,898
                                                                 ========     ========       ========      ========

NET INCOME APPLICABLE TO COMMON STOCK                            $  1,160     $    816       $  2,229      $  2,885
                                                                 ========     ========       ========      ========

EARNINGS PER COMMON SHARE                                        $    .68     $    .48       $   1.30      $   1.70
                                                                 ========     ========       ========      ========

DILUTED EARNINGS PER COMMON SHARE                                $    .67     $    .47       $   1.29      $   1.68
                                                                 ========     ========       ========      ========

DIVIDENDS DECLARED PER COMMON SHARE                              $    .26     $    .22       $    .74      $    .66
                                                                 ========     ========       ========      ========

Average common shares outstanding                                 1,710.6      1,707.7        1,713.8       1,695.8
                                                                 ========     ========       ========      ========

Diluted average common shares outstanding                         1,726.9      1,728.0        1,732.9       1,713.9
                                                                 ========     ========       ========      ========
-------------------------------------------------------------------------------------------------------------------


                                       2



                     WELLS FARGO & COMPANY AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET




-------------------------------------------------------------------------------------------------------------------
                                                                  SEPT. 30,             Dec. 31,           Sept. 30,
(in millions, except shares)                                          2001                 2000                2000
-------------------------------------------------------------------------------------------------------------------
                                                                                                  
ASSETS
Cash and due from banks                                           $ 15,791             $ 16,978            $ 14,986
Federal funds sold and securities purchased
   under resale agreements                                           3,241                1,598               3,113
Securities available for sale                                       40,749               38,655              37,307
Mortgages held for sale                                             23,154               11,812              11,507
Loans held for sale                                                  4,982                4,539               4,349

Loans                                                              168,866              161,124             154,305
Allowance for loan losses                                            3,761                3,719               3,665
                                                                  --------             --------            --------
     Net loans                                                     165,105              157,405             150,640
                                                                  --------             --------            --------

Mortgage servicing rights                                            5,404                5,609               5,742
Premises and equipment, net                                          3,534                3,415               3,365
Core deposit intangible                                              1,053                1,183               1,209
Goodwill                                                             9,604                9,303               9,221
Interest receivable and other assets                                25,483               21,929              19,883
                                                                  --------             --------            --------

     Total assets                                                 $298,100             $272,426            $261,322
                                                                  ========             ========            ========

LIABILITIES
Noninterest-bearing deposits                                      $ 56,271             $ 55,096            $ 51,404
Interest-bearing deposits                                          120,491              114,463             112,869
                                                                  --------             --------            --------
     Total deposits                                                176,762              169,559             164,273
Short-term borrowings                                               40,196               28,989              24,669
Accrued expenses and other liabilities                              17,454               14,409              13,161
Long-term debt                                                      34,131               32,046              31,470
Guaranteed preferred beneficial interests in
   Company's subordinated debentures                                 2,235                  935                 935

STOCKHOLDERS' EQUITY
Preferred stock                                                        447                  385                 408
Unearned ESOP shares                                                  (185)                (118)               (143)
                                                                  --------             --------            --------
     Total preferred stock                                             262                  267                 265
Common stock - $1-2/3 par value, authorized
   6,000,000,000 shares; issued 1,736,381,025 shares,
   1,736,381,025 shares and 1,736,891,279 shares                     2,894                2,894               2,895
Additional paid-in capital                                           9,438                9,337               9,344
Retained earnings                                                   15,281               14,541              13,895
Cumulative other comprehensive income                                  969                  524               1,701
Notes receivable from ESOP                                              --                   --                  (1)
Treasury stock - 30,498,100 shares, 21,735,182 shares
   and 27,302,953 shares                                            (1,522)              (1,075)             (1,285)
                                                                  --------             --------            --------
     Total stockholders' equity                                     27,322               26,488              26,814
                                                                  --------             --------            --------

     Total liabilities and stockholders' equity                   $298,100             $272,426            $261,322
                                                                  ========             ========            ========
-------------------------------------------------------------------------------------------------------------------


                                       3



                     WELLS FARGO & COMPANY AND SUBSIDIARIES
            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                            AND COMPREHENSIVE INCOME




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

                                                                                  Unearned              Additional
                                                        Number of    Preferred        ESOP    Common       paid-in    Retained
(in millions, except shares)                               shares        stock      shares     stock       capital    earnings
------------------------------------------------------------------------------------------------------------------------------
                                                                                                   
BALANCE DECEMBER 31, 1999                                                $ 344       $ (73)   $2,894        $9,213     $12,565
                                                                         -----       -----    ------        ------     -------
Comprehensive income
   Net income                                                                                                            2,898
   Other comprehensive income, net of tax:
     Translation adjustments
     Unrealized gains (losses) on securities
       available for sale arising during the period
     Reclassification adjustment for (gains) losses
       on securities available for sale included
       in net income

Total comprehensive income
Common stock issued                                    11,960,155                                  1           277        (391)
Common stock issued for acquisitions                   69,347,582                                             (199)         (7)
Common stock repurchased                               70,672,243
Stock options repriced                                                                                          48
Preferred stock (170,000) issued to ESOP                                   170         (181)                    11
Preferred stock released to ESOP                                                        111                     (7)
Preferred stock (104,991) converted to common shares    2,533,470         (105)                                  1
Preferred stock repurchased                                31,600           (1)
Preferred stock dividends                                                                                                  (13)
Common stock dividends                                                                                                  (1,157)
Change in Rabbi trust assets
   (classified as treasury stock)

Net change                                                                  64          (70)       1           131       1,330
                                                                         -----        -----   ------        ------     -------

BALANCE SEPTEMBER 30, 2000                                               $ 408        $(143)  $2,895        $9,344     $13,895
                                                                         =====        =====   ======        ======     =======

BALANCE DECEMBER 31, 2000                                                $ 385        $(118)  $2,894        $9,337     $14,541
                                                                         -----        -----   ------        ------     -------

COMPREHENSIVE INCOME
   NET INCOME                                                                                                            2,242
   OTHER COMPREHENSIVE INCOME, NET OF TAX:
     TRANSLATION ADJUSTMENTS
     UNREALIZED GAINS (LOSSES) ON SECURITIES
       AVAILABLE FOR SALE ARISING DURING THE PERIOD
     RECLASSIFICATION ADJUSTMENT FOR (GAINS) LOSSES
       ON SECURITIES AVAILABLE FOR SALE INCLUDED
       IN NET INCOME
     UNREALIZED GAINS (LOSSES) ON DERIVATIVES AND
       HEDGING ACTIVITIES ARISING DURING THE PERIOD
     RECLASSIFICATION ADJUSTMENT FOR (GAINS) LOSSES
       ON CASH FLOW HEDGES INCLUDED IN NET INCOME
     CUMULATIVE EFFECT OF THE CHANGE IN
       ACCOUNTING PRINCIPLE FOR DERIVATIVES
       AND HEDGING ACTIVITIES

TOTAL COMPREHENSIVE INCOME
COMMON STOCK ISSUED                                    14,349,572                                               92        (221)
COMMON STOCK ISSUED FOR ACQUISITIONS                      428,343                                                1           1
COMMON STOCK REPURCHASED                               26,312,895
PREFERRED STOCK (192,000) ISSUED TO ESOP                                   192         (207)                    15
PREFERRED STOCK RELEASED TO ESOP                                                        140                    (10)
PREFERRED STOCK (130,225) CONVERTED TO COMMON SHARES    2,772,062         (130)                                  3
PREFERRED STOCK DIVIDENDS                                                                                                  (13)
COMMON STOCK DIVIDENDS                                                                                                  (1,269)
CHANGE IN RABBI TRUST ASSETS
   (CLASSIFIED AS TREASURY STOCK)
                                                                         -----        -----   ------        ------     -------
NET CHANGE                                                                  62          (67)      --           101         740
                                                                         -----        -----   ------        ------     -------

BALANCE SEPTEMBER 30, 2001                                                $447        $(185)  $2,894        $9,438     $15,281
                                                                         =====        =====   ======        ======     =======
------------------------------------------------------------------------------------------------------------------------------






-----------------------------------------------------------------------------------------------------------------
                                                               Notes                   Cumulative
                                                          receivable                        other           Total
                                                                from    Treasury    comprehensive    stockholders'
(in millions, except shares)                                    ESOP       stock           income          equity
-----------------------------------------------------------------------------------------------------------------
                                                                                              
BALANCE DECEMBER 31, 1999                                        $(1)    $(1,831)          $  760         $23,871
                                                                 ---     -------           ------         -------
Comprehensive income
   Net income                                                                                               2,898
   Other comprehensive income, net of tax:
     Translation adjustments                                                                   (2)             (2)
     Unrealized gains (losses) on securities
       available for sale arising during the period                                           783             783
     Reclassification adjustment for (gains) losses
       on securities available for sale included
       in net income                                                                          160             160
                                                                                                          -------
Total comprehensive income                                                                                  3,839
Common stock issued                                                          476                              363
Common stock issued for acquisitions                                       2,864                            2,658
Common stock repurchased                                                  (2,891)                          (2,891)
Stock options repriced                                                                                         48
Preferred stock (170,000) issued to ESOP                                                                       --
Preferred stock released to ESOP                                                                              104
Preferred stock (104,991) converted to common shares                         104                               --
Preferred stock repurchased                                                                                    (1)
Preferred stock dividends                                                                                     (13)
Common stock dividends                                                                                     (1,157)
Change in Rabbi trust assets
   (classified as treasury stock)                                             (7)                              (7)

Net change                                                        --         546              941           2,943
                                                                 ---     -------           ------         -------

BALANCE SEPTEMBER 30, 2000                                       $(1)    $(1,285)          $1,701         $26,814
                                                                 ===     =======           ======         =======

BALANCE DECEMBER 31, 2000                                        $--     $(1,075)          $  524         $26,488
                                                                 ---     -------           ------         -------

COMPREHENSIVE INCOME
   NET INCOME                                                                                               2,242
   OTHER COMPREHENSIVE INCOME, NET OF TAX:
     TRANSLATION ADJUSTMENTS                                                                   (3)             (3)
     UNREALIZED GAINS (LOSSES) ON SECURITIES
       AVAILABLE FOR SALE ARISING DURING THE PERIOD                                          (145)           (145)
     RECLASSIFICATION ADJUSTMENT FOR (GAINS) LOSSES
       ON SECURITIES AVAILABLE FOR SALE INCLUDED
       IN NET INCOME                                                                          469             469
     UNREALIZED GAINS (LOSSES) ON DERIVATIVES AND
       HEDGING ACTIVITIES ARISING DURING THE PERIOD                                            26              26
     RECLASSIFICATION ADJUSTMENT FOR (GAINS) LOSSES
       ON CASH FLOW HEDGES INCLUDED IN NET INCOME                                              27              27
     CUMULATIVE EFFECT OF THE CHANGE IN
       ACCOUNTING PRINCIPLE FOR DERIVATIVES
       AND HEDGING ACTIVITIES                                                                  71              71
                                                                                                          -------
TOTAL COMPREHENSIVE INCOME                                                                                  2,687
COMMON STOCK ISSUED                                                          643                              514
COMMON STOCK ISSUED FOR ACQUISITIONS                                          20                               22
COMMON STOCK REPURCHASED                                                  (1,225)                          (1,225)
PREFERRED STOCK (192,000) ISSUED TO ESOP                                                                       --
PREFERRED STOCK RELEASED TO ESOP                                                                              130
PREFERRED STOCK (130,225) CONVERTED TO COMMON SHARES                         127                               --
PREFERRED STOCK DIVIDENDS                                                                                     (13)
COMMON STOCK DIVIDENDS                                                                                     (1,269)
CHANGE IN RABBI TRUST ASSETS
   (CLASSIFIED AS TREASURY STOCK)                                            (12)                             (12)
                                                                 ---     -------           ------         -------
NET CHANGE                                                        --        (447)             445             834
                                                                 ---     -------           ------         -------

BALANCE SEPTEMBER 30, 2001                                       $--     $(1,522)          $  969         $27,322
                                                                 ===     =======           ======         =======
-----------------------------------------------------------------------------------------------------------------


                                       4



                     WELLS FARGO & COMPANY AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF CASH FLOWS




------------------------------------------------------------------------------------------------------------------------
                                                                                          Nine months ended September 30,
                                                                                        --------------------------------
(in millions)                                                                                2001                   2000
------------------------------------------------------------------------------------------------------------------------
                                                                                                          
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                                                           $   2,242               $  2,898
   Adjustments to reconcile net income to net cash provided by operating activities:
      Provision for loan losses                                                             1,243                    976
      Depreciation and amortization                                                         2,011                  1,206
      Net (gains) losses on securities available for sale                                    (443)                   981
      Net venture capital losses (gains)                                                    1,593                 (1,740)
      Net (gains) losses on sales of mortgages held for sale                                 (276)                    16
      Net (gains) losses on sales of loans                                                    (10)                   149
      Net gains on dispositions of premises and equipment                                     (21)                   (60)
      Net gains on dispositions of operations                                                (104)                    (8)
      Release of preferred shares to ESOP                                                     130                    104
      Net (increase) decrease in trading assets                                            (2,447)                   299
      Deferred income tax (benefit) expense                                                  (192)                   775
      Net decrease (increase) in accrued interest receivable                                   86                   (205)
      Net (decrease) increase in accrued interest payable                                    (128)                   198
      Originations of mortgages held for sale                                            (114,214)               (55,066)
      Proceeds from sales of mortgages held for sale                                       97,824                 52,344
      Net increase in loans held for sale                                                    (443)                  (707)
      Other assets, net                                                                     1,482                 (2,898)
      Other accrued expenses and liabilities, net                                           4,922                  2,099
                                                                                        ---------               --------

Net cash (used) provided by operating activities                                           (6,745)                 1,361
                                                                                        ---------               --------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Securities available for sale:
      Proceeds from sales                                                                  16,262                 22,013
      Proceeds from prepayments and maturities                                              4,564                  3,486
      Purchases                                                                           (23,392)               (12,376)
   Net cash (paid for) acquired from acquisitions                                            (383)                   994
   Net increase in banking subsidiaries' loans resulting from originations
      and collections                                                                      (1,104)               (15,078)
   Proceeds from sales (including participations) of banking subsidiaries' loans            1,731                  3,862
   Purchases (including participations) of banking subsidiaries' loans                       (300)                  (251)
   Principal collected on nonbank subsidiaries' loans                                       7,409                  4,081
   Nonbank subsidiaries' loans originated                                                 (14,698)                (7,180)
   Proceeds from dispositions of operations                                                 1,190                     11
   Proceeds from sales of foreclosed assets                                                   183                    202
   Net increase in federal funds sold and securities purchased
      under resale agreements                                                              (1,643)                (1,391)
   Net increase in mortgage servicing rights                                               (1,615)                (1,384)
   Other, net                                                                              (2,357)                (5,006)
                                                                                        ---------               --------

Net cash used by investing activities                                                     (14,153)                (8,017)
                                                                                        ---------               --------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Net increase in deposits                                                                 7,203                 15,457
   Net increase (decrease) in short-term borrowings                                        11,207                 (7,831)
   Proceeds from issuance of long-term debt                                                11,074                 14,143
   Repayment of long-term debt                                                             (9,048)                (9,656)
   Proceeds from issuance of guaranteed preferred beneficial interest
      in Company's subordinated debentures                                                  1,300                     --
   Proceeds from issuance of common stock                                                     423                    286
   Repurchase of common stock                                                              (1,225)                (2,891)
   Payment of cash dividends on preferred and common stock                                 (1,282)                (1,170)
   Other, net                                                                                  59                   (814)
                                                                                        ---------               --------

Net cash provided by financing activities                                                  19,711                  7,524
                                                                                        ---------               --------

   NET CHANGE IN CASH AND DUE FROM BANKS                                                   (1,187)                   868

Cash and due from banks at beginning of period                                             16,978                 14,118
                                                                                        ---------               --------

CASH AND DUE FROM BANKS AT END OF PERIOD                                                $  15,971               $ 14,986
                                                                                        =========               ========

Supplemental disclosures of cash flow information:
   Cash paid during the period for:
      Interest                                                                          $   5,356               $  5,522
      Income taxes                                                                      $   1,654               $    597
   Noncash investing and financing activities:
      Transfers from mortgages held for sale to loans                                   $   2,152               $  3,687
      Transfers from loans held for sale to loans                                       $      --               $  1,388
      Transfers from loans to foreclosed assets                                         $     231               $    147
------------------------------------------------------------------------------------------------------------------------


                                       5



                     WELLS FARGO & COMPANY AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS

1.  BUSINESS COMBINATIONS

Wells Fargo & Company and Subsidiaries (the Company) regularly explores
opportunities for acquisitions of financial institutions and related businesses.
Generally, management of the Company does not make a public announcement about
an acquisition opportunity until a definitive agreement has been signed.

Transactions completed in the nine months ended September 30, 2001 include:




--------------------------------------------------------------------------------------------------------------
                                                                                                     Method of
(in millions)                                                  Date             Assets              Accounting
--------------------------------------------------------------------------------------------------------------
                                                                                   
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
                                                                                ------
                                                                                $1,946
                                                                                ======
--------------------------------------------------------------------------------------------------------------


In connection with the foregoing transactions, the Company paid cash in the
aggregate amount of $800 million and issued aggregate common shares of .4
million.

On October 5, 2001, the Company announced an agreement to acquire Texas
Financial Bancorporation, Inc. and certain bank and nonbank subsidiaries of
Marquette Bancshares, Inc. The banks have approximately $6 billion in assets and
$4 billion in deposits and have locations in Minnesota, South Dakota, Illinois,
Iowa, Wisconsin, Texas and New Mexico. Pending regulatory approvals, the
acquisition is expected to be completed in the first quarter of 2002.

On August 30, 2001, the Company announced an agreement to acquire SIFE. Based in
Walnut Creek, California, SIFE is the advisor, administrator and distributor of
the SIFE Trust Fund, which has approximately $700 million in assets under
management. Pending approval by SIFE Trust Fund shareholders, the acquisition is
expected to be completed during the first quarter of 2002.

On October 25, 2000, the merger involving the Company and First Security
Corporation was completed. As a condition to that 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 unamortized goodwill.

                                       6



2. GUARANTEED PREFERRED BENEFICIAL INTEREST IN COMPANY'S SUBORDINATED DEBENTURES

In August 2001, the Company established Wells Fargo Capital IV (the Trust) as a
business trust for the purpose of issuing up to $1.5 billion in trust preferred
securities. On August 29, 2001, the Trust issued to the public $1.3 billion in
trust preferred securities in the form of its 7% Capital Securities and issued
to the Company approximately $40 million of trust common securities. The Trust
used the proceeds to purchase $1.34 billion of the Company's 7% junior
subordinated debentures due September 1, 2031 (the Debentures). The Debentures
are the sole assets of the Trust and are subordinate to all of the Company's
existing and future obligations for borrowed or purchased money, whether or not
evidenced by a written instrument, its obligations under letters of credit and
certain derivative contracts, and any guarantees by the Company of any of such
obligations. The trust preferred securities generally rank equal to the trust
common securities in priority of payment, but will rank prior to the trust
common securities if and so long as the Company fails to make principal or
interest payments on the Debentures. Concurrently with the issuance of the
Debentures and the trust preferred and common securities, the Company issued a
guarantee related to the trust securities for the benefit of the holders.

The Company will treat the trust preferred securities as Tier 1 capital. The
Debentures, the common securities issued by the Trust, and the related income
effects are eliminated within the Company's consolidated financial statements.
The Company's obligations under the Debentures, the related indenture, the trust
agreement relating to the trust securities, and the guarantee constitute a full
and unconditional guarantee by the Company of the obligations of the Trust under
the trust preferred securities.

The stated maturity date of the Debentures is September 1, 2031, which may be
accelerated under limited circumstances or extended to no later than September
1, 2050. In addition, the Debentures are subject to redemption at the option of
the Company, subject to prior regulatory approval, in whole or in part on or
after August 29, 2006 or in whole, but not in part, within 90 days after the
occurrence of certain events that either would have a negative tax effect on the
Trust or the Company, would cause the trust preferred securities to no longer
qualify as Tier 1 capital, or would result in the Trust being treated as an
investment company. Upon repayment of the Debentures at their stated maturity or
following their earlier redemption, the Trust will use the proceeds of such
repayment to redeem an equivalent amount of outstanding trust preferred
securities and trust common securities.

                                       7



3.  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 table below is a summary of the Company's preferred stock at September 30,
2001, December 31, 2000 and September 30, 2000. A detailed description of the
Company's preferred stock is provided in Note 11 to the audited consolidated
financial statements included in the Company's 2000 Annual Report on Form 10-K.




-----------------------------------------------------------------------------------------------------------------------------------
                                           Shares issued and outstanding          Carrying amount (in millions)          Adjustable
                                      ----------------------------------      --------------------------------       dividends rate
                                       SEPT. 30,    Dec. 31,    Sept. 30,    SEPT. 30,     Dec. 31,   Sept. 30,   -----------------
                                           2001        2000         2000         2001         2000        2000    Minimum   Maximum
                                      ---------   ---------    ---------     --------      -------    --------    -------   -------
                                                                                                       
Adjustable-Rate Cumulative, Series B
   (Liquidation preference $50)       1,468,400   1,468,400    1,468,400        $  73        $  73       $  74        5.5%     10.5%

6.59%/Adjustable-Rate Noncumulative
   Preferred Stock, Series H
   (Liquidation preference $50) (1)   4,000,000   4,000,000    4,000,000          200          200         200        7.0      13.0

2001 ESOP Cumulative Convertible
   (Liquidation preference $1,000)       74,792          --           --           75           --          --      10.50     11.50

2000 ESOP Cumulative Convertible
   (Liquidation preference $1,000)       43,762      55,273       67,101           44           55          67      11.50     12.50

1999 ESOP Cumulative Convertible
   (Liquidation preference $1,000)       17,652      18,206       21,506           18           18          21      10.30     11.30

1998 ESOP Cumulative Convertible
   (Liquidation preference $1,000)        7,395       7,631        8,131            7            8           8      10.75     11.75

1997 ESOP Cumulative Convertible
   (Liquidation preference $1,000)        9,276       9,542       10,542            9           10          10       9.50     10.50

1996 ESOP Cumulative Convertible
   (Liquidation preference $1,000)        9,957      10,211       11,711           10           10          12       8.50      9.50

1995 ESOP Cumulative Convertible
   (Liquidation preference $1,000)        8,143       8,285       11,785            8            8          12       10.0      10.0

ESOP Cumulative Convertible
   (Liquidation preference $1,000)        2,602       2,656        3,656            3            3           4        9.0       9.0

Unearned ESOP shares (2)                     --          --           --         (185)        (118)       (143)        --        --

$3.15 Cumulative Convertible
   Preferred Stock, Series A                 --          --        8,028           --           --          --         --        --
                                      ---------   ---------    ---------        -----        -----       -----

     Total                            5,641,979   5,580,204    5,610,860        $ 262        $ 267       $ 265
                                      =========   =========    =========        =====        =====       =====
-----------------------------------------------------------------------------------------------------------------------------------


(1)  Annualized dividend rate was 6.59% until October 1, 2001. On October 1,
     2001, all the shares were redeemed at the stated liquidation price plus
     accrued dividends.
(2)  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.

                                       8



4.  EARNINGS PER COMMON SHARE

The table below presents 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.




-------------------------------------------------------------------------------------------------------------------
                                                                                Quarter                 Nine months
                                                                         ended Sept. 30,             ended Sept. 30,
                                                                  ---------------------      ----------------------
(in millions, except per share amounts)                               2001         2000          2001          2000
-------------------------------------------------------------------------------------------------------------------
                                                                                               
Net income                                                        $  1,164     $    821      $  2,242      $  2,898
Less: Preferred stock dividends                                          4            5            13            13
                                                                  --------     --------      --------      --------
Net income applicable to common stock                             $  1,160     $    816      $  2,229      $  2,885
                                                                  ========     ========      ========      ========

EARNINGS PER COMMON SHARE
Net income applicable to common stock (numerator)                 $  1,160     $    816      $  2,229      $  2,885
                                                                  ========     ========      ========      ========

Average common shares outstanding (denominator)                    1,710.6      1,707.7       1,713.8       1,695.8
                                                                  ========     ========      ========      ========

Per share                                                         $    .68     $    .48      $   1.30      $   1.70
                                                                  ========     ========      ========      ========

DILUTED EARNINGS PER COMMON SHARE
Net income applicable to common stock (numerator)                 $  1,160     $    816      $  2,229      $  2,885
                                                                  ========     ========      ========      ========

Average common shares outstanding                                  1,710.6      1,707.7       1,713.8       1,695.8
Add:   Stock options                                                  15.7         19.1          18.4          16.9
       Restricted share rights                                          .6          1.1            .7           1.1
       Convertible preferred                                            --           .1            --            .1
                                                                  --------     --------      --------      --------
Diluted average common shares outstanding (denominator)            1,726.9      1,728.0       1,732.9       1,713.9
                                                                  ========     ========      ========      ========

Per share                                                         $    .67     $    .47      $   1.29      $   1.68
                                                                  ========     ========      ========      ========
-------------------------------------------------------------------------------------------------------------------


                                       9



5.  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, 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.


                                       10



THE WHOLESALE BANKING GROUP serves businesses with annual sales in excess of $10
million and maintains relationships with major corporations throughout the
United States. Wholesale Banking provides a complete line of commercial and
corporate banking services. These include traditional commercial loans and
lines of credit, letters of credit, asset-based lending, equipment leasing,
international trade facilities, foreign exchange services, treasury
management, investment management, electronic products, insurance and
investment banking. 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.
Secondary market services are provided through the Capital Markets Group. Its
business includes senior loan financing, mezzanine financing, financing for
leveraged transactions, purchasing distressed real estate loans and high
yield debt, origination of permanent loans for securitization, loan
syndications, real estate brokerage services and commercial real estate loan
servicing.

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 issued 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.

                                       11



The following table provides the results for the Company's three major operating
segments.




------------------------------------------------------------------------------------------------------------------------------------
(income/expense in millions,                                                                               Recon-           Consoli-
average balances in billions)                 Community           Wholesale          Wells Fargo        ciliation              dated
                                                Banking             Banking            Financial        column (4)           Company
------------------------------------------------------------------------------------------------------------------------------------
QUARTER ENDED SEPTEMBER 30,             2001       2000      2001      2000       2001      2000    2001     2000      2001     2000
                                                                                                
Net interest income (1)              $ 2,306     $1,969    $  489    $  467     $  429    $  362   $ (23)   $ (23)   $3,201   $2,775
Provision for loan losses                266        282        62        51        127        92      --       --       455      425
Noninterest income                     1,624      1,538       548       439        100        82      11       (4)    2,283    2,055
Noninterest expense                    2,230      2,218       590       469        283       246      84       91     3,187    3,024
                                     -------    -------    ------   -------    -------    ------   -----    -----    ------   ------
Income (loss) before income
   tax expense (benefit)               1,434      1,007       385       386        119       106     (96)    (118)    1,842    1,381
Income tax expense (benefit) (2)         503        390       140       146         46        39     (11)     (15)      678      560
                                     -------    -------    ------   -------    -------    ------   -----    -----    ------   ------
Net income (loss)                    $   931     $  617    $  245    $  240     $   73    $   67   $ (85)   $(103)   $1,164   $  821
                                     =======    =======    ======   =======    =======    ======   =====    =====    ======   ======

Average loans                        $   101     $   92    $   50    $   47     $   13    $   11   $  --    $  --    $  164   $  150
Average assets                           202        177        66        61         15        12       6        7       289      257
Average core deposits                    155        133        16        15         --        --      --       --       171      148

NINE MONTHS ENDED SEPTEMBER 30,

Net interest income (1)              $ 6,407     $5,641    $1,466    $1,450     $1,229    $1,054   $ (74)   $ (74)   $9,028   $8,071
Provision for loan losses                728        637       172       113        343       227      --       (1)    1,243      976
Noninterest income                     3,405      4,649     1,528     1,307        273       223      37       53     5,243    6,232
Noninterest expense                    6,619      6,191     1,754     1,404        814       743     251      275     9,438    8,613
                                     -------    -------    ------   -------    -------    ------   -----    -----    ------   ------
Income (loss) before income
   tax expense (benefit)               2,465      3,462     1,068     1,240        345       307    (288)    (295)    3,590    4,714
Income tax expense (benefit) (2)         858      1,254       388       470        131       115     (29)     (23)    1,348    1,816
                                     -------    -------    ------   -------    -------    ------   -----    -----    ------   ------
Net income (loss)                      1,607     $2,208       680    $  770        214    $  192    (259)   $(272)    2,242   $2,898
                                                =======             =======               ======            =====             ======
Less:  Impairment and other special
   charges (after tax) (3)            (1,089)                 (62)                  --                (6)            (1,157)
                                     -------               ------              -------             -----             ------
Net income (loss) excluding
   impairment and other special
   charges                           $ 2,696               $  742               $  214             $(253)            $3,399
                                     =======               ======              =======             =====             ======

Average loans                        $    99     $   87    $   50    $   45     $   13    $   10   $  --    $  --    $  162   $  142
Average assets                           193        171        65        57         15        12       6        7       279      247
Average core deposits                    149        130        16        14         --        --      --       --       165      144

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


(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 $7 million and $(10) million; and unallocated items of $(19)
     million and $(17) million for the third quarter of 2001 and 2000,
     respectively. Revenue includes Treasury activities of $40 million and $36
     million; and unallocated items of $(77) million and $(57) million for the
     first nine months of 2001 and 2000, respectively. Net income includes
     Treasury activities of $3 million and $(6) million; and unallocated items
     of $(88) million and $(97) million for the third quarter of 2001 and 2000,
     respectively. Net income includes Treasury activities of $23 million and
     $21 million; and unallocated items of $(282) million and $(293) million for
     the first nine months of 2001 and 2000, respectively. The material item in
     the reconciliation column related to noninterest expense is amortization of
     unallocated goodwill of $82 million for the third quarter of 2001 and 2000
     and $247 million and $245 million for the first nine months of 2001 and
     2000, respectively. The material item in the reconciliation column related
     to average assets is unallocated goodwill of $6 billion and $7 billion for
     the third quarter of 2001 and 2000, respectively, and $6 billion and $7
     billion for the first nine months of 2001 and 2000, respectively.

                                       12




6.  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 components of mortgage banking noninterest income are presented below:



----------------------------------------------------------------------------------------------
                                                             Quarter               Nine months
                                                      ended Sept. 30,           ended Sept. 30,
                                                   -----------------         -----------------
(in millions)                                        2001       2000         2001         2000
----------------------------------------------------------------------------------------------
                                                                            

Origination and other closing fees                    179        100          490          258
Servicing fees, net of amortization
    and impairment                                   (127)       176          (21)         500
Net gains on securities available for sale              2         --          134           --
Net gains on sales of mortgage servicing rights        --         39           --           98
Net gains (losses) on sales of mortgage loans          79        (22)         276          (16)
All other                                             236         48          398          170
                                                    -----       ----       ------       ------
    Total mortgage banking                          $ 369       $341       $1,277       $1,010
                                                    =====       ====       ======       ======
----------------------------------------------------------------------------------------------


The managed servicing portfolio totaled $499 billion at September 30, 2001, $468
billion at December 31, 2000 and $463 billion at September 30, 2000, which
included loans subserviced for others of $71 billion, $85 billion and $93
billion, respectively.

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



----------------------------------------------------------------------------------------------
                                                             Quarter               Nine months
                                                      ended Sept. 30,           ended Sept. 30,
                                                   -----------------         -----------------
(in millions)                                        2001       2000         2001         2000
----------------------------------------------------------------------------------------------
                                                                          
Balance, beginning of period                      $6,351      $5,030       $5,609       $4,652
    Originations                                     440         238        1,269          497
    Purchases                                        218         783          630        1,116
    Sales                                             --         (18)          --          (55)
    Amortization                                    (223)       (142)        (595)        (390)
    Other (includes changes in mortgage
       servicing rights due to hedging)             (567)       (149)        (694)         (78)
                                                  ------      ------       ------       ------
                                                   6,219       5,742        6,219        5,742
    Less: Valuation allowance                        815          --          815           --
                                                  ------      ------       ------       ------

Balance, end of period                            $5,404      $5,742       $5,404       $5,742
                                                  ======      ======       ======       ======
----------------------------------------------------------------------------------------------



                                       13




The following table summarizes the changes in the valuation allowance for
capitalized mortgage servicing rights:



-----------------------------------------------------------------------------------------
                                                            Quarter           Nine months
                                                     ended Sept. 30,       ended Sept. 30,
                                                    ---------------      ----------------
(in millions)                                       2001       2000       2001       2000
-----------------------------------------------------------------------------------------
                                                                          
Balance, beginning of period                        $275        $--       $ --        $--
    Provision for capitalized mortgage
       servicing rights in excess of fair value      540         --        815         --
                                                    ----        ---       ----        ---

Balance, end of period                              $815        $--       $815        $--
                                                    ====        ===       ====        ===
-----------------------------------------------------------------------------------------


                                       14






7.  DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

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 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, interest rate futures and
forward contracts, and options. Interest rate swap contracts are exchanges of
interest payments, such as fixed-rate payments for floating-rate payments, based
on a common notional amount and maturity date. Payments related to the Company's
swap contracts are made either monthly, quarterly or semi-annually by one of the
parties based on contractual terms. Interest rate futures and forward contracts
are contracts in which the buyer agrees to purchase and the seller agrees to
make delivery of a specific financial instrument at a predetermined price or
yield. These contracts may be settled either in cash or by delivery of the
underlying financial instrument. Futures contracts are standardized and are
traded on exchanges. Options are contracts that grant the purchaser, for a
premium payment, the right, but not the obligation, to either purchase or sell
the underlying financial instrument at a set price during a period or at a
specified date in the future. The writer of the option is obligated to purchase
or sell the underlying financial instrument, if the purchaser chooses to
exercise the option.

The Company also enters into various free-standing derivative instruments, which
include interest rate, commodity, credit and foreign exchange contracts for
customer accommodation purposes. Trading activities primarily involve providing
various derivative products to customers, managing foreign currency exchange
risk and managing overall Company risk. 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,

                                       15



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. When the fair value of a derivative contract is positive, this
generally indicates the Company bears the risk of loss. When the fair value of
the derivative contract is negative, the counterparty bears the risk of loss
and, therefore, the Company has no risk of loss (or credit risk). The Company
minimizes credit risk through credit approvals, limits and monitoring
procedures. 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
Interpretation No. 41, OFFSETTING OF AMOUNTS RELATED TO CERTAIN REPURCHASE AND
REVERSE REPURCHASE AGREEMENTS. The Company generally enters into transactions
only with counterparties that carry quality credit ratings. Credit risk related
to derivative contracts is considered and provided for separately. Losses
associated with counterparty nonperformance on derivative contracts have been
immaterial.

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 strategies.

The accounting treatment applied to certain hedging activities was based on
matters not yet resolved by the FASB. Final resolution of these matters could
have an impact to earnings.

FAIR VALUE HEDGES

The Company enters into interest rate swaps to convert its nonprepayable,
fixed-rate long-term debt to floating-rate debt and a portion of its fixed-rate
trust preferred securities to floating rate securities. 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. The Company's practice is
to convert a majority of fixed-rate debt to floating-rate debt. Decisions to
convert fixed-rate debt to floating are made primarily by consideration of the
asset/liability mix of the Company, the desired asset/liability sensitivity and
by interest rate levels. In determining the portion of mortgage servicing rights
to hedge, the Company takes into account offsetting economic hedge positions as
well as natural offsets from the mortgage loan production franchise.

The Company recognized a gain of $5 million and $13 million for the third
quarter and first nine months of 2001, respectively, as an offset to interest
expense, representing the ineffective portion of fair value hedges of long-term
debt. There was no ineffectiveness recorded pertaining to its trust preferred
securities fair value hedge. Additionally, for the third quarter

                                     16



and first nine months of 2001, the Company recognized a gain of $320 million
and $311 million, respectively, in noninterest income, which represents the
ineffective portion of fair value hedges of mortgage servicing rights. The
ineffectiveness primarily relates to yield curve and basis spread changes,
caused by a volatile interest rate environment, that have impacted the market
value of the derivative instruments. For long-term debt all components of
each derivative instrument's gain or loss are included in the assessment of
hedge effectiveness. 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 September 30,
2001, all designated hedges continued to qualify as fair value hedges.

CASH FLOW HEDGES

The Company enters into interest rate swaps to convert floating-rate loans to
fixed rates. The loans are typically grouped and share 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 the third quarter and first nine months of 2001, the Company recognized a
net loss of $54 million and $44 million, respectively, 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. For the third quarter and first nine months of 2001, there
were no cash flow hedges discontinued related to forecasted transactions that
are probable of not occurring.

As of September 30, 2001, $78 million of deferred net losses on derivative
instruments included in other comprehensive income are expected to be
reclassified as 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 five 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.

                                       17




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 forwards, futures and options. 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.

                                       18




                                 FINANCIAL REVIEW

SUMMARY FINANCIAL DATA



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

                                                                                          % Change
                                                                 Quarter ended Sept. 30, 2001 from      Nine months ended
                                                 ----------------------------- -------------------   --------------------
                                                 SEPT. 30,  June 30,  Sept. 30, June 30,  Sept. 30,  SEPT. 30,   Sept. 30,       %
(in millions, except per share amounts)              2001      2001       2000     2001       2000       2001        2000   Change
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                                    
FOR THE PERIOD
Net income (loss)                                $  1,164  $    (87)  $    821       --%        42%  $  2,242    $  2,898      (23)%
Net income (loss) applicable to common stock        1,160       (91)       816       --         42      2,229       2,885      (23)

Earnings (loss) per common share                 $    .68  $   (.05)  $    .48       --         42   $   1.30    $   1.70      (24)
Diluted earnings (loss) per common share              .67      (.05)       .47       --         43       1.29        1.68      (23)

Dividends declared per common share                   .26       .24        .22        8         18        .74         .66       12

Average common shares outstanding                 1,710.6   1,714.9    1,707.7       --         --    1,713.8     1,695.8        1
Diluted average common shares outstanding         1,726.9   1,714.9    1,728.0        1         --    1,732.9     1,713.9        1

Profitability ratios (annualized)
   Net income to average total assets (ROA)          1.59%       --%      1.27%      --         25       1.07%       1.57%     (32)
   Net income applicable to common stock to
     average common stockholders' equity (ROE)      17.11        --      13.08       --         31      11.24       16.00      (30)

Total revenue                                    $  5,484  $  3,553   $  4,830       54         14   $ 14,271    $ 14,303       --

Efficiency ratio (1)                                 58.1%     91.6%      62.6%     (37)        (7)      66.1%       60.2%      10

Average loans                                    $164,046  $161,269   $149,889        2          9   $161,750    $142,125       14
Average assets                                    289,461   279,325    256,831        4         13    279,184     246,904       13
Average core deposits                             170,710   168,183    147,987        2         15    165,315     143,762       15

Net interest margin                                  5.40%     5.31%      5.34%       2          1       5.31%       5.36%      (1)

CASH NET INCOME AND RATIOS (2)
Net income applicable to common stock            $  1,339  $     85   $    979       --         37   $  2,807    $  3,355      (16)
Earnings per common share                             .78       .05        .57       --         37       1.64        1.98      (17)
Diluted earnings per common share                     .78       .05        .57       --         37       1.62        1.96      (17)
ROA                                                  1.91%      .13%      1.59%      --         20       1.40%       1.90%     (26)
ROE                                                 32.08      2.09      25.94       --         24      22.96       30.53      (25)
Efficiency ratio                                     54.6      86.2       58.9      (37)        (7)      61.9        56.6        9

AT PERIOD END
Securities available for sale                    $ 40,749  $ 41,290   $ 37,307       (1)         9   $ 40,749    $ 37,307        9
Loans                                             168,866   164,754    154,305        2          9    168,866     154,305        9
Allowance for loan losses                           3,761     3,760      3,665       --          3      3,761       3,665        3
Goodwill                                            9,604     9,607      9,221       --          4      9,604       9,221        4
Assets                                            298,100   289,758    261,322        3         14    298,100     261,322       14
Core deposits                                     171,303   171,218    150,077       --         14    171,303     150,077       14
Common stockholders' equity                        27,060    26,802     26,549        1          2     27,060      26,549        2
Stockholders' equity                               27,322    27,061     26,814        1          2     27,322      26,814        2
Tier 1 capital (3)                                 17,752    16,002     15,628       11         14     17,752      15,628       14
Total capital (3)                                  26,430    24,129     23,896       10         11     26,430      23,896       11

Capital ratios
   Common stockholders' equity to assets             9.08%     9.25%     10.16%      (2)       (11)      9.08%      10.16%     (11)
   Stockholders' equity to assets                    9.17      9.34      10.26       (2)       (11)      9.17       10.26      (11)
   Risk-based capital (3)
     Tier 1 capital                                 7.40      6.95       7.29       6          2       7.40         7.29       2
     Total capital                                 11.02     10.48      11.15       5         (1)     11.02        11.15      (1)
   Leverage (3)                                     6.40      5.97       6.40       7         --       6.40         6.40       --

Book value per common share                      $  15.86  $  15.64   $  15.53        1          2   $  15.86    $  15.53        2

Staff (active, full-time equivalent)              116,268   116,278    105,474       --         10    116,268     105,474       10

COMMON STOCK PRICE
High                                             $  48.30  $  50.16   $  47.13       (4)         2   $  54.81    $  47.75       15
Low                                                 40.50     42.65      38.73       (5)         5      40.50       31.00       31
Period end                                          44.45     46.43      45.94       (4)        (3)     44.45       45.94       (3)
------------------------------------------------------------------------------------------------------------------------------------


(1)  The efficiency ratio is defined as noninterest expense divided by the total
     revenue (net interest income and noninterest income).
(2)  Cash net income and ratios exclude goodwill and nonqualifying core deposit
     intangible (CDI) amortization and the reduction of unamortized goodwill due
     to sales of assets. The ratios also exclude the balance of goodwill and
     nonqualifying CDI. Nonqualifying core deposit intangible amortization and
     average balance excluded from these calculations are, with the exception of
     the efficiency and ROA ratios, net of applicable taxes. The pretax amount
     for the average balance of nonqualifying CDI was $1,042 million and $1,082
     million for the quarter and nine months ended September 30, 2001,
     respectively. The after-tax amounts for the amortization and average
     balance of nonqualifying CDI were $23 million and $646 million,
     respectively, for the quarter ended September 30, 2001 and $72 million and
     $671 million, respectively, for the nine months ended September 30, 2001.
     Goodwill amortization and the reduction of unamortized goodwill due to the
     sales of assets and average balance (which are not tax effected) were $156
     million, nil and $9,682 million, respectively, for the quarter ended
     September 30, 2001 and $506 million, $54 million and $9,491 million,
     respectively, for the nine months ended September 30, 2001.
(3)  See the Capital Adequacy/Ratios section for additional information.

                                       19




OVERVIEW

Wells Fargo & Company is a $298 billion diversified financial services company
providing banking, mortgage and consumer finance through the Internet and other
distribution channels throughout North America, including all 50 states, and
elsewhere internationally. It ranks fifth in assets at September 30, 2001 among
U.S. bank holding companies. In this Form 10-Q, Wells Fargo & Company and
Subsidiaries are referred to as the Company and Wells Fargo & Company alone is
referred to as the Parent.

On October 25, 2000, the merger involving the Company and First Security
Corporation (the FSCO Merger) was completed, with First Security Corporation
(First Security or FSCO) surviving 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 this 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 quarters have been
reclassified to conform with the current financial statement presentation.

Net income for the third quarter of 2001 was $1,164 million, compared with $821
million for the third quarter of 2000. Diluted earnings per common share for the
third quarter of 2001 were $.67, compared with $.47 for the third quarter of
2000. Net income for the first nine months of 2001 was $2,242 million, or $1.29
per share, compared with $2,898 million, or $1.68 per share, for the first nine
months of 2000.

Return on average assets (ROA) was 1.59% and 1.07% in the third quarter and
first nine months of 2001, respectively, compared with 1.27% and 1.57% in the
same periods of 2000. Return on average common equity (ROE) was 17.11% and
11.24% in the third quarter and first nine months of 2001, respectively,
compared with 13.08% and 16.00% in the same periods of 2000.

Diluted earnings excluding goodwill and nonqualifying core deposit intangible
amortization and the reduction of unamortized goodwill due to the sales of
assets ("cash" earnings) in the third quarter and first nine months of 2001 were
$.78 and $1.62 per share, respectively, compared with $.57 and $1.96 per share
in the same periods of 2000. On the same basis, ROA was 1.91% and 1.40% in the
third quarter and first nine months of 2001, respectively, compared with 1.59%
and 1.90% in the same periods of 2000; ROE was 32.08% and 22.96% in the third
quarter and first nine months of 2001, respectively, compared with 25.94% and
30.53% in the same periods of 2000.

Net interest income on a taxable-equivalent basis was $3,222 million and $9,085
million for the third quarter and first nine months of 2001, respectively,
compared with $2,796 million and $8,126 million for the same periods of 2000.
The Company's net interest margin was 5.40% and 5.31% for the third quarter and
first nine months of 2001, respectively, compared with 5.34% and 5.36% for the
same periods of 2000.

                                       20




Noninterest income was $2,283 million and $5,243 million for the third quarter
and first nine months of 2001, respectively, compared with $2,055 million and
$6,232 million for the same periods of 2000.

Noninterest expense totaled $3,187 million and $9,438 million for the third
quarter and first nine months of 2001, respectively, compared with $3,024
million and $8,613 million for the same periods of 2000.

The Company continued to experience some deterioration in credit quality in the
third quarter of 2001. The provision for loan losses was $455 million and $1,243
million in the third quarter and first nine months of 2001, respectively,
compared with $425 million and $976 million in the same periods of 2000. During
the third quarter of 2001, net charge-offs were $454 million, or 1.10% of
average total loans (annualized), compared with $330 million, or .88%, during
the third quarter of 2000. The allowance for loan losses was $3,761 million, or
2.23% of total loans, at September 30, 2001, compared with $3,719 million, or
2.31%, at December 31, 2000 and $3,665 million, or 2.38%, at September 30, 2000.
The Company expects continued deterioration in asset quality consistent with
economic conditions.

At September 30, 2001, total nonaccrual and restructured loans were $1,618
million or 1.0% of total loans, compared with $1,195 million, or .7%, at
December 31, 2000 and $965 million, or .6%, at September 30, 2000. Foreclosed
assets amounted to $166 million at September 30, 2001, $128 million at December
31, 2000 and $134 million at September 30, 2000.

At September 30, 2001, the ratio of common stockholders' equity to total assets
was 9.08%, compared with 10.16% at September 30, 2000. The Company's total
risk-based capital (RBC) ratio at September 30, 2001 was 11.02% and its Tier 1
RBC ratio was 7.40%, exceeding the minimum regulatory guidelines of 8% and 4%,
respectively, for bank holding companies. The Company's ratios at September 30,
2000 were 11.15% and 7.29% respectively. The Company's leverage ratio was
6.40% at September 30, 2001 and September 30, 2000, exceeding the minimum
regulatory guideline of 3% for bank holding companies.

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.


                                       21




FAS 142 eliminates amortization of goodwill associated with business
combinations completed after June 30, 2001. During a transition period from
July 1, 2001 through December 31, 2001, goodwill associated with business
combinations completed prior to July 1, 2001 will continue to be amortized
through the income statement. Effective January 1, 2002, all goodwill
amortization expense will cease and goodwill will be assessed (at least
annually) for impairment 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, under FAS 142 the elimination of goodwill amortization 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 will also complete an
initial goodwill impairment assessment to determine if a transition impairment
charge will be recognized under FAS 142. The Company is reassessing goodwill
in preparation for implementation of FAS 142.

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 144 (FAS 144), ACCOUNTING FOR THE
IMPAIRMENT OR DISPOSAL OF LONG-LIVED ASSETS, which supersedes Statement 121 (FAS
121), ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS AND FOR LONG-LIVED
ASSETS TO BE DISPOSED OF. FAS 144, which is effective January 1, 2002, 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 is effective January 1, 2002 and is to be
applied prospectively. The Company does not expect the adoption of FAS 144 to
have a material effect on the financial statements.


                                       22



FACTORS THAT MAY AFFECT FUTURE RESULTS

We might make forward-looking statements in this report and in other reports,
prospectuses 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    future value of equity securities;

     o    the impact of new accounting standards for goodwill amortization on
          future noninterest expense and net income; and

     o    the impact of changes in interest rates on future liquidity.

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 of which are 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, "Balance Sheet Analysis"). Additional factors, including the
regulation and supervision of the holding company and its subsidiaries, are


                                       23




described in our report on Form 10-K for the year ended December 31, 2000. When
we refer to our Form 10-K for the year ended December 31, 2000, we are referring
not only to the information included directly in that report but also to
information that is incorporated by reference into that report from our 2000
Annual Report to Stockholders and from our definitive Proxy Statement for our
2001 Annual Meeting of Stockholders. Information incorporated from our 2000
Annual Report to Stockholders is filed as Exhibit 13 to our Form 10-K.

Any factor described in this report or in our 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.

RECENT 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 likely immediate impact will be
decreased demand for air travel, which could adversely affect not only the
airline industry but also other travel-related and leisure industries, such as
lodging, gaming and tourism. The impact could spread beyond certain industries
to the overall U.S. and global economies, further decreasing capital and
consumer spending and increasing the risk of a U.S. and/or global recession.
Decreased capital and consumer spending and other recessionary trends could
adversely affect the Company in a number of ways including decreased demand for
our products and services and increased credit losses.

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 or higher
interest rates could decrease the demand for our loans and other products and
services and/or increase the number of customers who fail to repay their loans.
Higher interest rates also could increase our cost to borrow funds and increase
the rate we pay on deposits. This could more than offset, in the net interest
margin, any increase we earn on new or floating rate loans or short-term
investments. Lower interest rates could also adversely impact our net interest
margin--at least in the short term--insofar as the rates we earn on our loans
and investments may fall more rapidly than the rates we pay on deposits.

California is an example of a local economy in which we operate. During 2001,
California and other western states have experienced an energy crisis, including
increased energy costs, repeated episodes of diminished or interrupted
electrical power supply and the filing by a

                                      24



California utility for protection under bankruptcy laws. We cannot predict
the duration or severity of this situation. Continuation 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. The energy crisis could 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 and in our Form 10-K for the year ended December 31, 2000.

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 paid on interest-bearing deposits and can also affect the value
of financial instruments we hold. 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. Many of our
competitors have fewer regulatory constraints and 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.


                                       25



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.

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 report on Form 10-K for the year ended December 31, 2000 and
to Notes 3 and 22 to the Financial Statements included in our 2000 Annual
Report to Stockholders and incorporated by reference into the Form 10-K.

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 at one or both ends of the
transaction. 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


                                       26




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 report on Form 10-K for the year ended December 31,
2000.

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. For example, our venture
capital gains are volatile and unpredictable. They depend not only on the
business success of the underlying investments but also on when the holdings
become publicly-traded and subsequent market conditions. In recent quarters,
we have experienced sustained declines in the market values of our publicly
traded and private equity securities, in particular securities of companies
in the technology and telecommunications industries. As a result, 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 and, if we determine that the declines are
other-than-temporary, additional impairment charges. In addition, we will
realize losses to the extent we sell securities at less than book value. For
more information, see "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Overview," "--Earnings
Performance--Noninterest Income," "--Balance Sheet Analysis--Securities
Available for Sale" and "--Balance Sheet Analysis--Interest Receivable and
Other Assets."

The home mortgage industry is subject to special interest rate risks. 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 existing loans at lower
interest rates. And, when portions of our servicing portfolio pay off, we would
expect to experience lower revenues from our servicing investments. Conversely,
in a constant or


                                       27




increasing rate environment, we would expect fewer loans to be
refinanced and fewer early payoffs of our servicing portfolio. We manage the
impact of interest rate changes on the dynamic between loan origination revenues
and loan servicing revenues with derivative financial instruments and other
asset/liability management tools. How well we manage this risk impacts our
mortgage-related revenues. For more information, refer to the "Balance Sheet
Analysis" section later in this report and to the same section included in our
2000 Annual Report to Stockholders and incorporated by reference into our Form
10-K for the year ended December 31, 2000.

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 some
type of regulatory approval, and we cannot be certain when or if, or on what
terms and conditions, any required regulatory approvals will be granted. We
typically can decide not to complete a proposed acquisition or business
combination if we believe any condition under which a regulatory approval has
been granted is unreasonably burdensome to us.

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 part, on our ability to attract and retain key people.
Competition for the best people--in particular, individuals with technology
experience--is intense. We may not be able to hire people or pay them enough 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;


                                       28




     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.

                                   29


OPERATING SEGMENT RESULTS

COMMUNITY BANKING'S net income increased to $931 million in the third quarter of
2001 from $617 million in the third quarter of 2000, an increase of 51 percent.
Excluding second quarter 2001 impairment and other special charges of $1,089
million (after tax), net income increased to $2,696 million for the first nine
months of 2001 from $2,208 million for the first nine months of 2000, an
increase of 22 percent. Net interest income increased to $2,306 million in the
third quarter of 2001 from $1,969 million in the third quarter of 2000. Net
interest income increased to $6,407 million for the first nine months of 2001
from $5,641 million in the first nine months of 2000. The increase in net
interest income was due to increases in loans and core deposits, combined with
an increase in the net interest margin. Average loans in Community Banking grew
10 percent and average core deposits grew 17 percent from a year ago. The
provision for loan losses decreased by $16 million and increased by $91 million
for the third quarter and first nine months of 2001, respectively. Noninterest
income for the third quarter of 2001 increased by $86 million over the same
period in 2000. Primary contributors to the increase in noninterest income were
growth in services charges on deposits, mortgage banking, and trust and
investment fees from H.D.Vest.

WHOLESALE BANKING'S net income was $245 million in the third quarter of 2001,
compared with $240 million in the third quarter of 2000. Excluding second
quarter 2001 impairment and other special charges of $62 million (after tax),
net income was $742 million for the first nine months of 2001, compared with
$770 million for the first nine months of 2000. Net interest income was $489
million in the third quarter of 2001 and $467 million in the third quarter of
2000. Net interest income was $1,466 million for the first nine months of 2001
and $1,450 million in the first nine months of 2000. The slight increase in net
interest income was due to higher loan volume offset by a slight decline in
asset yields. Average outstanding loan balances grew to $50 billion in the third
quarter of 2001 from $47 billion in the third quarter of 2000. The provision for
loan losses increased by $11 million to $62 million in the third quarter of 2001
and increased by $59 million to $172 million for the first nine months of 2001.
Noninterest income increased to $548 million and $1,528 million in the third
quarter and first nine months of 2001, respectively, from $439 million and
$1,307 million in the same periods of 2000. The increase for both periods was
primarily due to higher insurance revenue from Acordia. Noninterest expense
increased to $590 million in the third quarter of 2001 and $1,754 million for
the first nine months of 2001 from $469 million and $1,404 million for the same
periods in the prior year. The increase for the first nine months of 2001 was
due to higher personnel costs as a result of the Acordia acquisition and
increased sales and service staff.

WELLS FARGO FINANCIAL'S net income was $73 million in the third quarter of 2001
and $67 million for the same period in 2000. Net income increased to $214
million for the first nine months of 2001 from $192 million for the same period
in 2000, an increase of 11 percent. Net interest income increased 19 percent in
the third quarter and 17 percent in the first nine months of 2001, compared with
the same periods in 2000. The increase in net interest income was due to growth
in average loans. The provision for loan losses increased by $35 million and
$116 million in the third quarter and first nine months of 2001, respectively,
predominantly

                                       30




due to higher net write-offs in the loan portfolios. The increase in
noninterest income of $18 million in the third quarter of 2001 was primarily
due to additional fee income originating from businesses acquired in the past
year. Noninterest expense increased to $283 million in the third quarter of
2001 and $814 million for the first nine months of 2001 from $246 million and
$743 million for the same periods in the prior year. Noninterest expense
increased 10 percent in the first nine months of 2001, compared with the same
period in 2000, primarily due to higher operating costs resulting from
acquisitions in the last year.

EARNINGS PERFORMANCE

NET INTEREST INCOME

Net interest income on a taxable-equivalent basis was $3,222 million in the
third quarter of 2001, compared with $2,796 million in the third quarter of
2000. Net interest income was $9,085 million in the first nine months of 2001,
compared with $8,126 million in the first nine months of 2000. The increase for
both periods was mostly due to the increase in earning assets and lower
short-term and long-term borrowing costs. The Company's net interest margin
increased to 5.40% in the third quarter of 2001, compared with 5.34% in the
third quarter of 2000 and decreased to 5.31% in the first nine months of 2001,
compared with 5.36% in the first nine months of 2000. The decrease in the margin
for the first nine months of 2001, compared with the same period of 2000, was
largely due to falling loan yields which reset with declining market rates
faster than interest-bearing deposits. This decrease was mostly offset by lower
short-term and long-term borrowing costs. The increase in the margin for the
third quarter of 2001, compared with the third quarter of 2000, was
predominantly due to falling short-term and long-term borrowing and deposit
costs, which declined to keep pace with declines in earning asset yields earlier
in the year. This increase was predominantly offset by decreased loan yields,
which continued to fall with market rates.

Individual components of net interest income and the net interest margin are
presented in the rate/yield table on the following page.

Loans averaged $164.0 billion in the third quarter of 2001, compared with $149.9
billion in the third quarter of 2000. For the first nine months of 2001, loans
averaged $161.8 billion, compared with $142.1 billion for the same period of
2000. The increase in average loans for the third quarter and first nine months
of 2001 was primarily due to loan growth in the real estate 1-4 family first
mortgage and real estate 1-4 family junior lien mortgage portfolios.

For the first nine months of 2001, debt securities averaged $36.0 billion,
compared with $40.2 billion in the same period of 2000.

Average core deposits were $170.7 billion and $148.0 billion and funded 59% and
58% of the Company's average total assets in the third quarter of 2001 and 2000,
respectively. For the first nine months of 2001 and 2000, average core deposits
were $165.3 billion and $143.8 billion, respectively, and funded 59% and 58%,
respectively, of the Company's average total assets.

                                       31




AVERAGE BALANCES, YIELDS AND RATES PAID (TAXABLE-EQUIVALENT BASIS) (1) (2)
--------------------------------------------------------------------------



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

                                                                                                     Quarter ended Sept. 30,
                                                               ------------------------------------------------------------
                                                                                      2001                             2000
                                                               ---------------------------        -------------------------
                                                                                  INTEREST                         Interest
                                                                AVERAGE   YIELDS/   INCOME/      Average    Yields/  income/
(in millions)                                                   BALANCE    RATES   EXPENSE       balance     rates  expense
---------------------------------------------------------------------------------------------------------------------------
                                                                                                   

EARNING ASSETS

Federal funds sold and securities purchased
  under resale agreements                                      $  2,683     3.44%   $   23      $  2,762      6.33%  $   44
Debt securities available for sale (3):
  Securities of U.S. Treasury and federal agencies                2,113     6.28        32         2,955      6.44       48
  Securities of U.S. states and political subdivisions            2,018     8.02        39         2,060      7.89       41
  Mortgage-backed securities:
    Federal agencies                                             29,292     7.19       512        25,404      7.28      466
    Private collateralized mortgage obligations                   1,801     9.00        40         2,484      7.27       47
                                                               --------             ------      --------              -----
      Total mortgage-backed securities                           31,093     7.29       552        27,888      7.28      513
  Other debt securities (4)                                       3,797     8.06        65         5,633      8.31       73
                                                               --------             ------      --------              -----
        Total debt securities available for sale (4)             39,021     7.34       688        38,536      7.34      675
Mortgages held for sale (3)                                      24,958     6.79       425        12,123      8.01      245
Loans held for sale (3)                                           4,771     5.74        69         4,177      8.88       93
Loans:
  Commercial                                                     48,501     7.77       950        46,090      9.58    1,110
  Real estate 1-4 family first mortgage                          20,227     7.05       356        17,892      7.99      358
  Other real estate mortgage                                     24,300     7.86       481        22,927      9.02      519
  Real estate construction                                        8,113     7.80       160         7,258     10.23      187
  Consumer:
    Real estate 1-4 family junior lien mortgage                  21,729     9.18       500        15,771     10.44      413
    Credit card                                                   6,208    13.44       208         6,156     14.82      228
    Other revolving credit and monthly payment                   23,558    11.19       660        22,368     12.27      687
                                                               --------             ------      --------              -----
      Total consumer                                             51,495    10.61     1,368        44,295     11.97    1,328
  Lease financing                                                 9,770     7.60       186         9,784      8.00      196
  Foreign                                                         1,640    20.56        84         1,643     20.89       86
                                                               --------             ------      --------              -----
        Total loans (5)                                         164,046     8.71     3,585       149,889     10.07    3,784
Other                                                             3,981     4.67        47         3,168      6.48       50
                                                               --------             ------      --------              -----
          Total earning assets                                 $239,460     8.10     4,837      $210,655      9.34    4,891
                                                               ========             ------      ========              -----

FUNDING SOURCES
Deposits:
  Interest-bearing checking                                    $  1,946     1.95         9      $  3,252      2.09       17
  Market rate and other savings                                  84,633     1.95       417        64,200      2.92      471
  Savings certificates                                           28,810     4.89       355        30,689      5.54      428
  Other time deposits                                             1,108     4.58        13         4,728      5.86       70
  Deposits in foreign offices                                     5,827     3.49        51         6,560      6.53      107
                                                               --------             ------      --------              -----
      Total interest-bearing deposits                           122,324     2.74       845       109,429      3.97    1,093
Short-term borrowings                                            35,582     3.52       316        28,616      6.47      466
Long-term debt                                                   34,730     4.96       431        30,128      6.88      518
Guaranteed preferred beneficial interests in Company's
  subordinated debentures                                         1,401     6.40        23           935      7.95       18
                                                               --------             ------      --------              -----
        Total interest-bearing liabilities                      194,037     3.31     1,615       169,108      4.93    2,095
Portion of noninterest-bearing funding sources                   45,423       --        --        41,547        --       --
                                                               --------             ------      --------              -----
          Total funding sources                                $239,460     2.70     1,615      $210,655      4.00    2,095
                                                               ========             ------      ========              -----
NET INTEREST MARGIN AND NET INTEREST INCOME ON
  A TAXABLE-EQUIVALENT BASIS (6)                                            5.40%   $3,222                    5.34%  $2,796
                                                                           =====    ======                   =====   ======


NONINTEREST-EARNING ASSETS
Cash and due from banks                                        $ 14,237                         $ 13,270
Goodwill                                                          9,682                            9,094
Other                                                            26,082                           23,812
                                                               --------                         --------
          Total noninterest-earning assets                     $ 50,001                         $ 46,176
                                                               ========                         ========
NONINTEREST-BEARING FUNDING SOURCES
Deposits                                                       $ 55,321                         $ 49,846
Other liabilities                                                12,962                           12,796
Preferred stockholders' equity                                      259                              265
Common stockholders' equity                                      26,882                           24,816
Noninterest-bearing funding sources used to
  fund earning assets                                           (45,423)                         (41,547)
                                                               --------                         --------
          Net noninterest-bearing funding sources              $ 50,001                         $ 46,176
                                                               ========                         ========

TOTAL ASSETS                                                   $289,461                         $256,831
                                                               ========                         ========
-----------------------------------------------------------------------------------------------------------------


(1)  The average prime rate of the Company was 6.57% and 9.50% for the quarters
     ended September 30, 2001 and 2000, respectively, and 7.50% and 9.15% for
     the nine months ended September 30, 2001 and 2000, respectively. The
     average three-month London Interbank Offered Rate (LIBOR) was 3.45% and
     6.62% for the quarters ended September 30, 2001 and 2000, respectively, and
     4.33% and 6.46% for the nine months ended September 30, 2001 and 2000,
     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.
(4)  Includes certain preferred securities.
(5)  Nonaccrual loans and related income are included in their respective loan
     categories.
(6)  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 periods
     presented.


                                       32






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

                                                                                            Nine months ended Sept. 30,
                                                        --------------------------------------------------------------
                                                                                2001                              2000
                                                        ----------------------------        --------------------------
                                                                            INTEREST                          Interest
                                                         AVERAGE   YIELDS/    INCOME/       Average  Yields/    income/
                                                         BALANCE    RATES    EXPENSE        balance   rates    expense
                                                        --------------------------------------------------------------

                                                                                           

EARNING ASSETS

Federal funds sold and securities purchased
  under resale agreements                               $  2,672     4.13%  $    83        $  2,452    6.17%  $   113
Debt securities available for sale (3):
  Securities of U.S. Treasury and federal agencies         2,192     6.74       107           3,475    6.08       164
  Securities of U.S. states and political subdivisions     2,016     7.94       115           2,113    7.85       126
  Mortgage-backed securities:
    Federal agencies                                      26,763     7.18     1,405         26,433     7.17     1,448
    Private collateralized mortgage obligations            1,641     9.12       110          2,730     7.22       153
                                                        --------            -------       --------            -------
      Total mortgage-backed securities                    28,404     7.29     1,515         29,163     7.18     1,601
  Other debt securities (4)                                3,388     7.86       195          5,433     7.67       197
                                                        --------            -------       --------            -------
        Total debt securities available for sale (4)      36,000     7.34     1,932         40,184     7.16     2,088
Mortgages held for sale (3)                               20,234     6.93     1,055         10,333     7.90       618
Loans held for sale (3)                                    4,802     6.98       251          5,085     8.48       322
Loans:
  Commercial                                              49,120     8.38     3,078         44,270     9.37     3,106
  Real estate 1-4 family first mortgage                   18,870     7.33     1,038         15,705     7.94       935
  Other real estate mortgage                              24,093     8.30     1,496         22,143     9.04     1,498
  Real estate construction                                 8,080     8.59       519          6,718    10.02       504
  Consumer:
    Real estate 1-4 family junior lien mortgage           20,047     9.64     1,448         14,547    10.34     1,127
    Credit card                                            6,229    13.65       638          5,769    14.40       623
    Other revolving credit and monthly payment            23,646    11.56     2,048         21,573    11.99     1,938
                                                        --------            -------       --------            -------
      Total consumer                                      49,922    11.05     4,134         41,889    11.75     3,688
  Lease financing                                         10,062     7.76       586          9,767     7.73       566
  Foreign                                                  1,603    20.89       251          1,633    21.14       259
                                                        --------            -------       --------            -------
        Total loans (5)                                  161,750     9.17    11,102        142,125     9.91    10,556
Other                                                      3,760     5.18       146          3,257     6.07       149
                                                        --------            -------       --------            -------
          Total earning assets                          $229,218     8.52    14,569       $203,436     9.14    13,846
                                                        ========            -------       ========            -------


FUNDING SOURCES
Deposits:
  Interest-bearing checking                             $  2,237     2.86        48       $  3,344     1.74        44
  Market rate and other savings                           78,256     2.36     1,383         62,964     2.73     1,289
  Savings certificates                                    30,926     5.37     1,243         29,826     5.26     1,175
  Other time deposits                                      1,470     5.21        57          4,271     5.58       178
  Deposits in foreign offices                              6,422     4.53       218          5,823     6.17       269
                                                        --------            -------       --------            -------
      Total interest-bearing deposits                    119,311     3.30     2,949        106,228     3.72     2,955
Short-term borrowings                                     31,273     4.44     1,037         28,547     6.13     1,311
Long-term debt                                            34,460     5.57     1,439         28,216     6.61     1,399
Guaranteed preferred beneficial interests in Company's
  subordinated debentures                                  1,091     7.12        59            935     7.90        55
                                                        --------            -------       --------            -------
        Total interest-bearing liabilities               186,135     3.94     5,484        163,926     4.66     5,720
Portion of noninterest-bearing funding sources            43,083       --        --         39,510       --        --
                                                        --------            -------       --------            -------
          Total funding sources                         $229,218     3.21     5,484       $203,436     3.78     5,720
                                                        ========            -------       ========            -------
NET INTEREST MARGIN AND NET INTEREST INCOME ON
  A TAXABLE-EQUIVALENT BASIS (6)                                     5.31%  $ 9,085                    5.36%  $ 8,126
                                                                    =====   =======                   =====   =======



NONINTEREST-EARNING ASSETS
Cash and due from banks                                 $ 14,506                          $ 12,883
Goodwill                                                   9,491                             8,675
Other                                                     25,969                            21,910
                                                        --------                          --------
          Total noninterest-earning assets              $ 49,966                          $ 43,468
                                                        ========                          ========

NONINTEREST-BEARING FUNDING SOURCES
Deposits                                                $ 53,896                          $ 47,628
Other liabilities                                         12,387                            10,990
Preferred stockholders' equity                               260                               267
Common stockholders' equity                               26,506                            24,093
Noninterest-bearing funding sources used to
  fund earning assets                                    (43,083)                          (39,510)
                                                        --------                          --------
          Net noninterest-bearing funding sources       $ 49,966                          $ 43,468
                                                        ========                          ========

TOTAL ASSETS                                            $279,184                          $246,904
                                                        ========                          ========
--------------------------------------------------------------------------------------------------------------

                                       33





NONINTEREST INCOME




-------------------------------------------------------------------------------------------------------------------
                                                                    Quarter                    Nine months
                                                             ended Sept. 30,                ended Sept. 30,
                                                          -----------------        %      ----------------        %
(in millions)                                               2001       2000   Change        2001      2000   Change
-------------------------------------------------------------------------------------------------------------------
                                                                                           
Service charges on deposit accounts                       $  470     $  435        8%     $1,370    $1,267        8%
Trust and investment fees:
   Asset management and custody fees                         181        186       (3)        551       539        2
   Mutual fund and annuity sales fees                        181        195       (7)        596       563        6
   All other                                                  62         31      100         109       101        8
                                                          ------     ------               ------    ------
     Total trust and investment fees                         424        412        3       1,256     1,203        4

Credit card fees                                             203        194        5         579       534        8
Other fees:
   Cash network fees                                          54         49       10         153       141        9
   Charges and fees on loans                                 103         92       12         316       252       25
   All other                                                 146        159       (8)        452       426        6
                                                          ------     ------               ------    ------
     Total other fees                                        303        300        1         921       819       12

Mortgage banking:
   Origination and other closing fees                        179        100       79         490       258       90
   Servicing fees, net of amortization and impairment       (127)       176       --         (21)      500       --
   Net gains on securities available for sale                  2         --       --         134        --       --
   Net gains on sales of mortgage servicing rights            --         39     (100)         --        98     (100)
   Net gains (losses) on mortgage loans                       79        (22)      --         276       (16)      --
   All other                                                 236         48      392         398       170      134
                                                          ------     ------               ------    ------
     Total mortgage banking                                  369        341        8       1,277     1,010       26

Insurance                                                    196         80      145         524       293       79
Net venture capital (losses) gains                          (124)       535       --      (1,593)    1,740       --
Net gains (losses) on securities available for sale          165       (341)      --         309      (981)      --
Net income (loss) from equity investments accounted
  for by the:
   Cost method                                                (3)        18       --         (27)      145       --
   Equity method                                               3         12      (75)        (82)       88       --
Net gains (losses) on sales of loans                          11        (78)      --          10      (149)      --
Net gains on dispositions of operations                        1          2      (50)        104         8       --
All other                                                    265        145       83         595       255      133
                                                          ------     ------               ------    ------

     Total                                                $2,283     $2,055       11%     $5,243    $6,232      (16)%
                                                          ======     ======     ====      ======    ======    =====
-------------------------------------------------------------------------------------------------------------------


The increase in trust and investment fees for the third quarter of 2001 was due
to an increase in "all other" fees primarily due to the acquisition of H.D.
Vest, largely offset by a change in the mutual fund mix from equity funds to
money market funds. The Company managed mutual funds with $70 billion of assets
at September 30, 2001, compared with $67 billion at September 30, 2000. The
Company also managed or maintained personal trust, employee benefit trust and
agency assets of $485 billion and $486 billion at September 30, 2001 and 2000,
respectively.

The increase in mortgage origination and other closing fees was primarily due to
increased refinancing activity resulting from the lowering of interest rates by
the Federal Reserve in the second and third quarters of 2001. Mortgage servicing
fees decreased for the third quarter and nine months ended September 30, 2001,
predominantly due to increased amortization and provisions recorded against the
book value of the mortgage servicing rights asset. Both are

                                       34



driven by higher prepayment assumptions 3ue to the decline in interest rates.
The decrease was predominantly offset by gains representing the ineffective
portion of all fair value hedges of mortgage servicing rights due to the
adoption of FAS 133 and increased servicing fees due to growth of the
servicing portfolio. The increase in gains on sales of mortgage loans for the
third quarter was due to increased production volume.

The increase in insurance revenue for the third quarter and first nine months
of 2001 was predominantly due to the acquisition of Acordia.

For the first nine months of 2001, net venture capital losses included
approximately $1,500 million of impairment write-downs recognized in the second
quarter of 2001 reflecting other-than-temporary impairment in the valuation
of publicly traded and private equity securities. Venture capital gains in
the third quarter and first nine months of 2000 included net gains on various
venture capital securities, including a $560 million gain recognized during
the first quarter on the Company's investment in Siara Systems.

The net losses on securities available for sale during the third quarter and
first nine months of 2000 were predominantly due to the restructuring of the
portfolio.

For the first nine months of 2001, net losses from equity investments
accounted for by the equity method included approximately $215 million of
impairment write-downs recognized in the second quarter of 2001.

The increase in net gains on dispositions of operations in the first nine
months of 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.

                                       35




NONINTEREST EXPENSE



-------------------------------------------------------------------------------------------------------------------
                                                              Quarter                         Nine months
                                                       ended Sept. 30,                     ended Sept. 30,
                                                     ----------------        %           ----------------         %
(in millions)                                         2001       2000   Change            2001       2000    Change
-------------------------------------------------------------------------------------------------------------------
                                                                                           
Salaries                                            $1,020     $  945        8%         $3,015     $2,732        10%
Incentive compensation                                 315        271       16             784        624        26
Employee benefits                                      223        241       (7)            737        741        (1)
Equipment                                              217        211        3             672        640         5
Net occupancy                                          240        236        2             716        707         1
Goodwill                                               156        136       15             452        389        16
Core deposit intangible:
   Nonqualifying (1)                                    38         43      (12)            117        131       (11)
   Qualifying                                            3          3       --               8         11       (27)
Net gains on dispositions of premises
   and equipment                                        (2)        (9)     (78)            (21)       (60)      (65)
Contract services                                      108        134      (19)            366        364         1
Outside professional services                          104        118      (12)            335        297        13
Outside data processing                                 84         87       (3)            238        245        (3)
Advertising and promotion                               66         84      (21)            190        223       (15)
Telecommunications                                      91         77       18             260        223        17
Travel and entertainment                                67         71       (6)            209        199         5
Postage                                                 56         62      (10)            179        185        (3)
Stationery and supplies                                 58         54        7             181        159        14
Insurance                                               30         30       --             145        126        15
Operating losses                                        50         53       (6)            149        122        22
Security                                                39         24       63             115         72        60
All other                                              224        153       46             591        483        22
                                                    ------     ------                   ------     ------

   Total                                            $3,187     $3,024        5%         $9,438     $8,613        10%
                                                    ======     ======      ===          ======     ======      ====
-------------------------------------------------------------------------------------------------------------------


(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 noninterest expense was due to higher salaries, resulting from
an increase in full-time equivalent staff, and higher incentive compensation,
due to additional sales and service team members partially due to high mortgage
origination volume, and commission expense resulting from the acquisition of
H.D. Vest.

INCOME TAXES

The Company's effective income tax rate was 37% for the third quarter of 2001,
compared with 41% for the same period of 2000. The decrease was predominantly
due to the impact of a donation of appreciated securities in the third quarter
of 2001 coupled with the effect of a third quarter 2000 charge resulting from a
change of intent to repatriate the undistributed earnings of a foreign
subsidiary. To date, this charge remains a deferred liability.


                                       36




CASH EARNINGS/RATIOS

The following table reconciles reported earnings to net income excluding
goodwill and nonqualifying core deposit intangible amortization ("cash"
earnings) for the quarter ended September 30, 2001.



-------------------------------------------------------------------------------------------------------------------
                                                                                                      Quarter ended
(in millions, except per share amounts)                                                              Sept. 30, 2001
-------------------------------------------------------------------------------------------------------------------
                                                                                    Nonqualifying
                                                      Reported                       core deposit             "Cash"
                                                      earnings          Goodwill       intangible          earnings
-------------------------------------------------------------------------------------------------------------------
                                                                                               
Income before income tax expense                        $1,842              $156              $38            $2,036
   Income tax expense                                      678                --               15               693
                                                        ------              ----              ---            ------
Net income                                               1,164               156               23             1,343
   Preferred stock dividends                                 4                --               --                 4
                                                        ------              ----              ---            ------
Net income applicable to common stock                   $1,160              $156              $23            $1,339
                                                       =======              ====              ===            ======
Earnings per common share                               $  .68                                               $  .78
                                                        ======                                               ======
Diluted earnings per common share                       $  .67                                               $  .78
                                                        ======                                               ======
-------------------------------------------------------------------------------------------------------------------


The ROA, ROE and efficiency ratios excluding goodwill and nonqualifying core
deposit intangible amortization and related balances for the quarter ended
September 30, 2001 were calculated as follows:



-------------------------------------------------------------------------------------------------------------------
                                                                                                      Quarter ended
(in millions)                                                                                        Sept. 30, 2001
-------------------------------------------------------------------------------------------------------------------
                                                                                            
                                    ROA:             A / (C-E-F)      =   1.91%
                                    ROE:             B / (D-E-G)      =  32.08%
                                    Efficiency:      (H-I) / J        =   54.6%

Net income                                                                                            $  1,343  (A)
Net income applicable to common stock                                                                    1,339  (B)
Average total assets                                                                                   289,461  (C)
Average common stockholders' equity                                                                     26,882  (D)
Average goodwill                                                                                         9,682  (E)
Average pretax nonqualifying core deposit intangible                                                     1,042  (F)
Average after-tax nonqualifying core deposit intangible                                                    646  (G)
Noninterest expense                                                                                      3,187  (H)
Amortization expense for goodwill and nonqualifying core deposit intangible                                194  (I)
Net interest income plus noninterest income                                                              5,484  (J)
-------------------------------------------------------------------------------------------------------------------


These calculations were specifically formulated by the Company and may not be
comparable to similarly titled measures reported by other companies. Also,
"cash" earnings are not entirely available for use by management. See the
Consolidated Statement of Cash Flows for other information regarding funds
available for use by management.

                                       37



BALANCE SHEET ANALYSIS

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 the periods presented.



-------------------------------------------------------------------------------------------------------------------
                                                         SEPTEMBER 30,           December 31,          September 30,
                                                                 2001                   2000                   2000
                                                 --------------------   --------------------    -------------------
                                                            ESTIMATED              Estimated              Estimated
                                                                 FAIR                   fair                   fair
(in millions)                                        COST       VALUE       Cost       value        Cost      value
-------------------------------------------------------------------------------------------------------------------
                                                                                        
Securities of U.S. Treasury and
    federal agencies                              $ 2,014     $ 2,105    $ 2,739     $ 2,783     $ 3,109    $ 3,141
Securities of U.S. states and
    political subdivisions                          2,198       2,306      2,322       2,400       2,174      2,192
Mortgage-backed securities:
    Federal agencies                               29,818      30,963     26,304      26,995      22,703     22,834
    Private collateralized mortgage
       obligations (1)                              1,900       1,959      1,455       1,446       1,326      1,302
                                                  -------     -------    -------     -------     -------    -------
      Total mortgage-backed securities             31,718      32,922     27,759      28,441      24,029     24,136
Other                                               2,620       2,642      2,588       2,502       2,706      2,632
                                                  -------     -------    -------     -------     -------    -------
    Total debt securities                          38,550      39,975     35,408      36,126      32,018     32,101
Marketable equity securities                          856         774      2,457       2,529       2,690      5,206
                                                  -------     -------    -------     -------     -------    -------
         Total                                    $39,406     $40,749    $37,865     $38,655     $34,708    $37,307
                                                  =======     =======    =======     =======     =======    =======

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

(1)  Substantially all private collateralized mortgage obligations are AAA-rated
     bonds collateralized by 1-4 family residential first mortgages.

The decrease in the cost of marketable equity securities was predominantly due
to impairment write-downs reflecting other-than-temporary impairment in
valuation.

The following table provides the components of the estimated unrealized net gain
on securities available for sale. The estimated unrealized net gain or loss on
securities available for sale is reported on an after-tax basis as a component
of cumulative other comprehensive income.



-------------------------------------------------------------------------------------------------------------------
                                                             SEPT. 30,               Dec. 31,              Sept. 30,
(in millions)                                                    2001                   2000                   2000
-------------------------------------------------------------------------------------------------------------------
                                                                                                  
Estimated unrealized gross gains                               $1,711                 $1,620                 $2,903
Estimated unrealized gross losses                                (368)                  (830)                  (304)
                                                               ------                 ------                 ------
Estimated unrealized net gain                                  $1,343                 $  790                 $2,599
                                                               ======                 ======                 ======
-------------------------------------------------------------------------------------------------------------------



                                       38




The following table provides the components of the realized net gains (losses)
on the sales of securities from the securities available for sale portfolio.
(Realized gains (losses) on marketable equity securities from venture capital
investments are reported as net venture capital gains (losses).)



-------------------------------------------------------------------------------------------------------------------
                                                                            Quarter                     Nine months
                                                                     ended Sept. 30,                 ended Sept. 30,
                                                              ---------------------           ---------------------
(in millions)                                                  2001            2000            2001            2000
-------------------------------------------------------------------------------------------------------------------
                                                                                                
Realized gross gains                                           $180 (1)      $  17             $542 (1)     $    54
Realized gross losses                                           (13)(2)       (357)             (99)(2)      (1,035)
                                                               ----          -----             ----         -------
Realized net gains (losses)                                    $167          $(340)            $443         $  (981)
                                                               ====          =====             ====         =======

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

(1)  Includes $5 million and $148 million of gross gains reported in mortgage
     banking noninterest income for the third quarter and first nine months of
     2001, respectively.
(2)  Includes $3 million and $14 million of gross losses reported in mortgage
     banking noninterest income for the third quarter and first nine months of
     2001, respectively.

The weighted average expected remaining maturity of the debt securities portion
of the securities available for sale portfolio was 9 years and 4 months at
September 30, 2001. Expected remaining maturities will differ from contractual
maturities because borrowers may have the right to prepay obligations with or
without penalties.

At September 30, 2001, mortgage-backed securities, including collateralized
mortgage obligations, were $32.9 billion, or 81% of the Company's securities
available for sale portfolio. As an indication of interest rate risk, the
Company has estimated the effect of a 200 basis point increase in interest rates
on the value of the mortgage-backed securities and the corresponding expected
remaining maturities. Based on that rate scenario, mortgage-backed securities
would decrease in fair value from $32.9 billion to $31.9 billion and the
expected remaining maturity of these securities would increase from 5 years to 7
years and 9 months.

                                       39








LOAN PORTFOLIO


-----------------------------------------------------------------------------------------------------------------------
                                                                                                               % Change
                                                                                                    Sept. 30, 2001 from
                                                                                                 ----------------------
                                                      SEPT. 30,       Dec. 31,      Sept. 30,    Dec. 31,      Sept. 30,
(in millions)                                             2001           2000           2000        2000           2000
-----------------------------------------------------------------------------------------------------------------------
                                                                                                
Commercial (1)                                        $ 48,444       $ 50,518       $ 47,300          (4)%            2%
Real estate 1-4 family first mortgage                   23,308         18,464         19,627          26             19
Other real estate mortgage (2)                          24,311         23,972         23,249           1              5
Real estate construction                                 8,028          7,715          7,457           4              8
Consumer:
   Real estate 1-4 family junior lien mortgage          23,901         18,218         16,322          31             46
   Credit card                                           6,333          6,616          6,226          (4)             2
   Other revolving credit and monthly payment           23,232         23,974         22,343          (3)             4
                                                      --------       --------       --------
      Total consumer                                    53,466         48,808         44,891          10             19
Lease financing                                          9,696         10,023         10,170          (3)            (5)
Foreign                                                  1,613          1,624          1,611          (1)            --
                                                      --------       --------       --------

      Total loans (net of unearned income,
         including net deferred loan fees, of
         $4,188, $4,231 and $4,070)                   $168,866       $161,124       $154,305           5%             9%
                                                      ========       ========       ========         ===             ==
-----------------------------------------------------------------------------------------------------------------------


(1)  Includes agricultural loans (loans to finance agricultural production and
     other loans to farmers) of $3,969 million, $4,206 million and $3,661
     million at September 30, 2001, December 31, 2000 and September 30, 2000,
     respectively.
(2)  Includes agricultural loans that are secured by real estate of $1,244
     million, $1,280 million and $1,098 million at September 30, 2001, December
     31, 2000 and September 30, 2000, respectively.


NONACCRUAL AND RESTRUCTURED LOANS AND OTHER ASSETS (1)



-------------------------------------------------------------------------------------------------------------------
                                                                          SEPT. 30,         Dec. 31,       Sept. 30,
(in millions)                                                                 2001             2000            2000
-------------------------------------------------------------------------------------------------------------------
                                                                                                  
Nonaccrual loans:
   Commercial (2)                                                           $  863           $  739          $  578
   Real estate 1-4 family first mortgage                                       197              127             141
   Other real estate mortgage (3)                                              231              113             117
   Real estate construction                                                    113               57              19
   Consumer:
      Real estate 1-4 family junior lien mortgage                               18               23              12
      Other revolving credit and monthly payment                                42               36              35
                                                                            ------           ------          ------
        Total consumer                                                          60               59              47
   Lease financing                                                             146               92              53
   Foreign                                                                       8                7               8
                                                                            ------           ------          ------
      Total nonaccrual loans (4)                                             1,618            1,194             963
Restructured loans                                                              --                1               2
                                                                            ------           ------          ------
Nonaccrual and restructured loans                                            1,618            1,195             965
As a percentage of total loans                                                 1.0%              .7%             .6%

Foreclosed assets                                                              166              128             134
Real estate investments (5)                                                      2               27              28
                                                                            ------           ------          ------
Total nonaccrual and restructured loans
   and other assets                                                         $1,786           $1,350          $1,127
                                                                            ======           ======          ======
-------------------------------------------------------------------------------------------------------------------


(1)  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.
(2)  Includes commercial agricultural loans of $67 million, $44 million and $40
     million at September 30, 2001, December 31, 2000 and September 30, 2000,
     respectively.
(3)  Includes agricultural loans secured by real estate of $48 million, $13
     million and $11 million at September 30, 2001, December 31, 2000 and
     September 30, 2000, respectively.
(4)  Of the total nonaccrual loans, $1,031 million, $761 million and $531
     million at September 30, 2001, December 31, 2000 and September 30, 2000,
     respectively, were considered impaired under FAS 114, ACCOUNTING BY
     CREDITORS FOR IMPAIRMENT OF A LOAN.
(5)  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 $25
     million, $56 million and $72 million at September 30, 2001, December 31,
     2000 and September 30, 2000, respectively.

                                       40





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. 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.

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.

                                       41




In accordance with FAS 114, the table below shows the recorded investment in
impaired loans and the related methodology used to measure impairment for the
periods presented:



-------------------------------------------------------------------------------------------------------------------
                                                              SEPT. 30,                Dec. 31,            Sept. 30,
(in millions)                                                     2001                    2000                 2000
-------------------------------------------------------------------------------------------------------------------
                                                                                                  
Impairment measurement based on:
    Collateral value method                                     $  416                    $174                 $190
    Discounted cash flow method                                    369                     331                  162
    Historical loss factors                                        246                     257                  181
                                                                ------                    ----                 ----
      Total (1)                                                 $1,031                    $762                 $533
                                                                ======                    ====                 ====

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

(1)  Includes $624 million, $345 million and $277 million of impaired loans with
     a related FAS 114 allowance of $122 million, $74 million and $62 million at
     September 30, 2001, December 31, 2000 and September 30, 2000, respectively.

The average recorded investment in impaired loans was $955 million and $488
million during the third quarter of 2001 and 2000, respectively, and $893
million and $428 million during the first nine months of 2001 and 2000,
respectively. Total interest income recognized on impaired loans was $4
million and $1 million during the third quarter of 2001 and 2000,
respectively, and $12 million and $4 million during the first nine months of
2001 and 2000, respectively, most of which was 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.

The Company anticipates changes in the amount of nonaccrual loans that result
from increases in lending activity and reductions due to resolutions of loans
in the nonaccrual portfolio. The Company expects that nonaccrual loans will
increase during the year consistent with current economic conditions. 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 may acquire loans from other financial institutions that may be
classified as nonaccrual based on the Company's policies.

                                       42




LOANS 90 DAYS OR MORE PAST DUE AND STILL ACCRUING

The following table shows loans contractually past due 90 days or more as to
interest or principal, but not included in the nonaccrual or restructured
categories. All loans in this category 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. Notwithstanding, real estate 1-4 family loans (first liens and
junior liens) are placed on nonaccrual within 120 days of becoming past due
and such nonaccrual loans are excluded from the following table.



-------------------------------------------------------------------------------------------------------------------
                                                                        SEPT. 30,         Dec. 31,         Sept. 30,
(in millions)                                                               2001             2000              2000
-------------------------------------------------------------------------------------------------------------------
                                                                                                  
Commercial                                                                  $ 97             $ 90              $ 60
Real estate 1-4 family first mortgage                                        115               66                39
Other real estate mortgage                                                    52               24                20
Real estate construction                                                      65               12                12
Consumer:
     Real estate 1-4 family junior lien mortgage                              59               27                40
     Credit card                                                             117               96               137
     Other revolving credit and monthly payment                              295              263               239
                                                                            ----             ----              ----
        Total consumer                                                       471              386               416
                                                                            ----             ----              ----
     Total                                                                  $800             $578              $547
                                                                            ====             ====              ====
-------------------------------------------------------------------------------------------------------------------


                                       43




ALLOWANCE FOR LOAN LOSSES



-------------------------------------------------------------------------------------------------------------------
                                                                             Quarter                    Nine months
                                                                      ended Sept. 30,                ended Sept. 30,
                                                                --------------------          ---------------------
(in millions)                                                      2001         2000            2001           2000
-------------------------------------------------------------------------------------------------------------------
                                                                                                
BALANCE, BEGINNING OF PERIOD                                     $3,760       $3,519         $ 3,719        $ 3,344

Allowances related to business combinations                          --           51              41            212

Provision for loan losses                                           455          425           1,243            976

Loan charge-offs:
    Commercial                                                     (178)        (117)           (460)          (314)
    Real estate 1-4 family first mortgage                           (14)          (4)            (20)           (12)
    Other real estate mortgage                                       (3)         (10)            (12)           (26)
    Real estate construction                                         (7)          (3)            (10)            (7)
    Consumer:
       Real estate 1-4 family junior lien mortgage                  (11)          (6)            (33)           (23)
       Credit card                                                 (100)         (90)           (320)          (264)
       Other revolving credit and monthly payment                  (195)        (168)           (563)          (456)
                                                                 ------       ------         -------        -------
          Total consumer                                           (306)        (264)           (916)          (743)
    Lease financing                                                 (23)          (9)            (67)           (31)
    Foreign                                                         (20)         (20)            (56)           (65)
                                                                 ------       ------         -------        -------
              Total loan charge-offs                               (551)        (427)         (1,541)        (1,198)
                                                                 ------       ------         -------        -------

Loan recoveries:
    Commercial                                                       19           18              57             71
    Real estate 1-4 family first mortgage                             1            1               3              3
    Other real estate mortgage                                        4            3              12             10
    Real estate construction                                         --            1               2              3
    Consumer:
       Real estate 1-4 family junior lien mortgage                    2            2               8             10
       Credit card                                                   10            9              32             29
       Other revolving credit and monthly payment                    50           54             151            170
                                                                 ------       ------         -------        -------
          Total consumer                                             62           65             191            209
    Lease financing                                                   7            3              20              9
    Foreign                                                           4            6              14             26
                                                                 ------       ------         -------        -------
              Total loan recoveries                                  97           97             299            331
                                                                 ------       ------         -------        -------
                Total net loan charge-offs                         (454)        (330)         (1,242)          (867)
                                                                 ------       ------         -------        -------

BALANCE, END OF PERIOD                                           $3,761       $3,665         $ 3,761        $ 3,665
                                                                 ======       ======         =======        =======

Total net loan charge-offs as a percentage
    of average total loans (annualized)                            1.10%         .88%           1.03%           .81%
                                                                 ======       ======         =======        =======

Allowance as a percentage of total loans                           2.23%        2.38%           2.23%          2.38%
                                                                 ======       ======         =======        =======
-------------------------------------------------------------------------------------------------------------------


The Company considers the allowance for loan losses of $3,761 million
adequate to cover losses inherent in loans, loan commitments and standby and
other letters of credit at September 30, 2001. The Company's determination of
the level of the allowance for loan

                                       44




losses rests upon various judgements 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.

INTEREST RECEIVABLE AND OTHER ASSETS



-------------------------------------------------------------------------------------------------------------------
                                                            SEPT. 30,                Dec. 31,              Sept. 30,
(in millions)                                                   2001                    2000                   2000
-------------------------------------------------------------------------------------------------------------------
                                                                                                  
Nonmarketable equity investments:
    Venture capital cost method investments                  $ 1,711                 $ 2,033                $ 1,882
    Federal Reserve Bank stock                                 1,254                   1,237                  1,300
    All other                                                    879                     872                    856
                                                              ------                  ------                  -----
        Total nonmarketable equity investments                 3,844                   4,142                  4,038

Trading assets                                                 6,224                   3,777                  2,390
Interest receivable                                            1,430                   1,516                  1,491
Government National Mortgage Association
    (GNMA) pool buy outs                                       2,601                   1,510                  1,400
Certain identifiable intangible assets                           192                     227                    229
Foreclosed assets                                                166                     128                    134
Interest-earning deposits                                        330                      95                    103
Due from customers on acceptances                                110                      85                    110
All other                                                     10,586                  10,449                  9,988
                                                              ------                  ------                  -----

        Total interest receivable and other assets           $25,483                 $21,929                $19,883
                                                             =======                 =======                =======
-------------------------------------------------------------------------------------------------------------------


The decrease in venture capital cost method investments was due to impairment
write-downs reflecting other-than-temporary impairment in the valuation of
private equity securities.

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 $27 million
in the third quarter of 2001 and 2000, and $87 million and $72 million in the
first nine months of 2001 and 2000, respectively. Noninterest income from
trading assets was $94 million and $40 million in the third quarter of 2001
and 2000, respectively, and $298 million and $161 million in the first nine
months of 2001 and 2000, respectively.

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 $10 million and $11 million in the third quarter of 2001 and
2000, respectively.

                                       45



DEPOSITS



-------------------------------------------------------------------------------------------------------------------
                                                            SEPT. 30,                Dec. 31,              Sept. 30,
(in millions)                                                   2001                    2000                   2000
-------------------------------------------------------------------------------------------------------------------
                                                                                                  
Noninterest-bearing                                         $ 56,271                $ 55,096               $ 51,404
Interest-bearing checking                                      1,700                   3,699                  2,718
Market rate and other savings                                 85,331                  66,859                 65,137
Savings certificates                                          28,001                  31,056                 30,818
                                                            --------                --------               --------
    Core deposits                                            171,303                 156,710                150,077
Other time deposits                                            1,082                   5,137                  4,739
Deposits in foreign offices                                    4,377                   7,712                  9,457
                                                            --------                --------               --------

        Total deposits                                      $176,762                $169,559               $164,273
                                                            ========                ========               =======
-------------------------------------------------------------------------------------------------------------------


CAPITAL ADEQUACY/RATIOS

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.



-------------------------------------------------------------------------------------------------------------------
                                                                                                         To be well
                                                                                                  capitalized under
                                                                                                         the FDICIA
                                                                             For capital          prompt corrective
                                                       Actual          adequacy purposes          action provisions
                                            -----------------       --------------------        -------------------
(in billions)                                 Amount    Ratio         Amount       Ratio          Amount      Ratio
---------------------------------------     --------    -----       --------       -----         -------      -----
                                                                                         
As of September 30, 2001:
    Total capital (to risk-weighted assets)
        Wells Fargo & Company                  $26.4    11.02%      >  $19.2      > 8.00%
                                                                    -             -
        Wells Fargo Bank Minnesota, N.A.         3.2    11.41       >    2.2      > 8.00        >  $ 2.8   >  10.00%
                                                                    -             -             -          -
        Wells Fargo Bank, N.A.                  15.1    13.17       >    9.1      > 8.00        >   11.4   >  10.00
                                                                    -             -             -          -
    Tier 1 capital (to risk-weighted assets)
        Wells Fargo & Company                  $17.8     7.40%      > $  9.6      > 4.00%
                                                                    -             -
        Wells Fargo Bank Minnesota, N.A.         2.9    10.40       >    1.1      > 4.00        >  $ 1.7   >   6.00%
                                                                    -             -             -          -
        Wells Fargo Bank, N.A.                   9.1     7.97       >    4.6      > 4.00        >    6.9   >   6.00
                                                                    -             -             -          -
    Tier 1 capital (to average assets)
      (Leverage ratio)
        Wells Fargo & Company                  $17.8     6.40%      >  $11.1      > 4.00%  (1)
                                                                    -             -
        Wells Fargo Bank Minnesota, N.A.         2.9     6.45       >    1.8      > 4.00   (1)  >  $ 2.2   >   5.00%
                                                                    -             -             -          -
        Wells Fargo Bank, N.A.                   9.1     7.62       >    4.8      > 4.00   (1)  >    6.0   >   5.00
                                                                    -             -             -          -
-------------------------------------------------------------------------------------------------------------------

(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.

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LIQUIDITY AND CAPITAL MANAGEMENT

The Company manages its liquidity and capital at both the parent and
subsidiary levels.

Liquidity for the Company is also provided by interest income,
deposit-raising activities, and potential disposition of readily marketable
assets and through its 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.

In October 2000, the Parent filed a shelf registration statement with the SEC
under which the Parent may issue up to $10 billion in debt and equity
securities, excluding common stock, other than common stock issuable upon the
exercise or conversion of debt and equity securities. The Parent issued $750
million in subordinated notes in July 2001 and issued $1 billion in
medium-term notes in August 2001. The remaining issuance authority at
September 30, 2001 under the October 2000 registration statement, together
with the $50 million issuance authority remaining on the Parent's
registration statement filed in 1999, was $6.10 billion. Proceeds from the
issuance of the debt securities listed above were, and with respect to any
such securities issued in the future, are expected to be used for general
corporate purposes.

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 July 2001, WFFI issued
a total of $600 million in senior notes. As of September 30, 2001, the
remaining issuance authority under that registration statement and the WFFI
shelf registration statements filed in 2000 and 1999 was $4.35 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 $100 million under the long-term portion in August 2001. As of
September 2001, the remaining issuance authority under the long-term portion
was $9.9 billion. In October 2001, Wells Fargo Bank, N.A. issued $425 million
under the long-term portion of the bank note program.

In August 2001, the Company filed a registration statement 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. Following effectiveness of the
registration statement with the SEC, on August 29, 2001, Wells Fargo Capital
IV (the Trust), 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 pursuant to
the August 2001 registration statement in the
                                       47



form of its 7% Capital Securities and approximately $40 million of trust
common securities to the Company. At September 30, 2001, there is currently
$200 million in issuance authority remaining on the August 2001 registration
statement.

In February 2001, the Board of Directors authorized the repurchase of up to
25 million additional shares of the Company's outstanding common stock and in
September 2001, authorized the repurchase of up to 30 million additional
shares. As of September 30, 2001, the total remaining common stock repurchase
authority was approximately 34 million shares. 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.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the exposure to loss resulting from changes in interest rates,
foreign currency exchange rates, commodity prices and equity prices. The
primary market risk to which the Company is exposed is interest rate risk.
The majority of the Company's interest rate risk arises from the instruments,
positions and transactions entered into for purposes other than trading. They
include loans, securities available for sale, deposit liabilities, short-term
borrowings, long-term debt and derivative financial instruments used for
asset/liability management. Interest rate risk occurs when assets and
liabilities reprice at different times as market interest rates change. For
example, if fixed-rate assets are funded with floating-rate debt, the spread
between asset and liability rates will decline or turn negative if rates
increase. The Company refers to this type of risk as "term structure risk."
There is, however, another source of interest rate risk which results from
changing spreads between asset and liability rates. The Company calls this
type of risk "basis risk"; it is a significant source of interest rate risk
for the Company and is more difficult to quantify and manage than term
structure risk. Two primary components of basis risk for the Company are (1)
the spread between prime-based loans and market rate account (MRA) savings
deposits and (2) the rate paid on savings and interest-bearing checking
accounts as compared to LIBOR-based loans.

Interest rate risk is managed within an overall asset/liability framework for
the Company. The principal objectives of asset/liability management are to
manage the exposure interest rate fluctuations have on net income and cash
flows and to enhance profitability in ways that promise sufficient reward for
understood and controlled risk. Funding positions are kept within
predetermined limits designed to ensure that risk taking is not excessive and
that liquidity is properly managed. The Company employs a sensitivity
analysis in the form of a net interest income simulation to help characterize
the market risk arising from changes in interest rates in the
other-than-trading portfolio.

The Company's net interest income simulation includes all other-than-trading
financial assets, financial liabilities, derivative financial instruments and
leases where the Company is the lessor. It captures the dynamic nature of the
balance sheet by anticipating probable balance sheet and off-balance sheet
strategies and volumes under different interest rate scenarios over the
course of a one-year period. This simulation measures both the term structure
risk and the basis risk in the Company's positions. The simulation also
captures the option characteristics of products, such as caps and floors on
floating-rate loans, the right to prepay mortgage loans without penalty and
the
                                       48



ability of customers to withdraw deposits on demand. These options are
modeled directly in the simulation either through the use of caps and floors
on loans, or through statistical analysis of historical customer behavior, in
the case of mortgage loan prepayments or non-maturity deposits.

The simulation model is used to measure the impact on net income, relative to
a base case scenario, of interest rates increasing or decreasing 100 basis
points over the next 12 months. The simulation for September 30, 2001 showing
the largest drop in net income relative to the base case scenario is a 100
basis point decrease in rates that will result in a decrease in net income of
$120 million over the next twelve months, largely based on the assumption
that at some level of open market interest rates the banking industry's
ability to further reduce deposits costs could be limited. In the simulation
that was run at December 31, 2000, the largest drop in net income relative to
the base case scenario over the next twelve months was a 100 basis point
increase in rates that was projected to result in a decrease in net income of
$60 million.

The Company uses interest rate derivative financial instruments as an
asset/liability management tool to hedge mismatches in interest rate
exposures indicated by the net income simulation described above. They are
used to reduce the Company's exposure to interest rate fluctuations and
provide more stable cash flow. Additionally, receive-fixed rate swaps are
used to convert floating-rate loans into fixed rates to better match the
liabilities that fund the loans. The Company also uses derivatives including
floors, forwards and swaps, futures contracts and options on futures
contracts and swaps to hedge the Company's mortgage servicing rights as well
as forwards, futures and options on futures and forwards to hedge the
Company's 1-4 family real estate first mortgage loan commitments and mortgage
loans held for sale.

The Company is also exposed to equity price risk principally arising through
its venture capital investments. The Company does not actively trade these
investments but conducts an orderly sale considering restriction periods and
market conditions. Where economic, the Company may use hedging strategies to
mitigate the equity price risk.

The Company considers the fair values and the potential near term losses to
future earnings related to its customer accommodation derivative financial
instruments to be immaterial.

                                       49



                           PART II - OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

     (a)   Exhibits

          3(a)   Restated Certificate of Incorporation, incorporated by
                 reference to Exhibit 3(b) to the Company's Current Report on
                 Form 8-K dated June 28, 1993.  Certificates of Amendment of
                 Certificate of Incorporation, incorporated by reference to
                 Exhibit 3 to the Company's Current Report on Form 8-K dated
                 July 3, 1995 (authorizing preference stock), Exhibits 3(b)
                 and 3(c) to the Company's Quarterly Report on Form 10-Q for
                 the quarter ended September 30, 1998 (changing the Company's
                 name and increasing authorized common and preferred stock,
                 respectively), and Exhibit 3(b) to the Company's Quarterly
                 Report on Form 10-Q for the quarter ended March 31, 2001
                 (increasing authorized common stock)

           (b)   Certificate of Change of Location of Registered Office and
                 Change of Registered Agent, incorporated by reference to
                 Exhibit 3(b) to the Company's Quarterly Report on Form 10-Q
                 for the quarter ended June 30, 1999

           (c)   Certificate of Designations for the Company's ESOP
                 Cumulative Convertible Preferred Stock, incorporated by
                 reference to Exhibit 4 to the Company's Quarterly Report on
                 Form 10-Q for the quarter ended March 31, 1994

           (d)   Certificate of Designations for the Company's 1995 ESOP
                 Cumulative Convertible Preferred Stock, incorporated by
                 reference to Exhibit 4 to the Company's Quarterly Report on
                 Form 10-Q for the quarter ended March 31, 1995

           (e)   Certificate Eliminating the Certificate of Designations for
                 the Company's Cumulative Convertible Preferred Stock, Series
                 B, incorporated by reference to Exhibit 3(a) to the
                 Company's Current Report on Form 8-K dated November 1, 1995

           (f)   Certificate Eliminating the Certificate of Designations for
                 the Company's 10.24% Cumulative Preferred Stock,
                 incorporated by reference to Exhibit 3 to the Company's
                 Current Report on Form 8-K dated February 20, 1996

           (g)   Certificate of Designations for the Company's 1996 ESOP
                 Cumulative Convertible Preferred Stock, incorporated by
                 reference to Exhibit 3 to the Company's Current Report on
                 Form 8-K dated February 26, 1996

           (h)   Certificate of Designations for the Company's 1997 ESOP
                 Cumulative Convertible Preferred Stock, incorporated by
                 reference to Exhibit 3 to the Company's Current Report on
                 Form 8-K dated April 14, 1997


                                       50



          3(i)   Certificate of Designations for the Company's 1998 ESOP
                 Cumulative Convertible Preferred Stock, incorporated by
                 reference to Exhibit 3 to the Company's Current Report on
                 Form 8-K dated April 20, 1998

           (j)   Certificate of Designations for the Company's Adjustable
                 Cumulative Preferred Stock, Series B, incorporated by
                 reference to Exhibit 3(j) to the Company's Quarterly Report
                 on Form 10-Q for the quarter ended September 30, 1998

           (k)   Certificate of Designations for the Company's
                 Fixed/Adjustable Rate Noncumulative Preferred Stock, Series
                 H, incorporated by reference to Exhibit 3(k) to the
                 Company's Quarterly Report on Form 10-Q for the quarter
                 ended September 30, 1998

           (l)   Certificate of Designations for the Company's Series C
                 Junior Participating Preferred Stock, incorporated by
                 reference to Exhibit 3(l) to the Company's Annual Report on
                 Form 10-K for the year ended December 31, 1998

           (m)   Certificate Eliminating the Certificate of Designations for
                 the Company's Series A Junior Participating Preferred Stock,
                 incorporated by reference to Exhibit 3(a) to the Company's
                 Current Report on Form 8-K dated April 21, 1999

           (n)   Certificate of Designations for the Company's 1999 ESOP
                 Cumulative Convertible Preferred Stock, incorporated by
                 reference to Exhibit 3(b) to the Company's Current Report on
                 Form 8-K dated April 21, 1999

           (o)   Certificate of Designations for the Company's 2000 ESOP
                 Cumulative Convertible Preferred Stock, incorporated by
                 reference to Exhibit 3(o) to the Company's Quarterly Report
                 on Form 10-Q for the quarter ended March 31, 2000

           (p)   Certificate of Designations for the Company's 2001 ESOP
                 Cumulative Convertible Preferred Stock, incorporated by
                 reference to Exhibit 3 to the Company's Current Report on
                 Form 8-K dated April 17, 2001

           (q)   By-Laws, incorporated by reference to Exhibit 3(m) to the
                 Company's Annual Report on Form 10-K for the year ended
                 December 31, 1998

          4(a)   See Exhibits 3(a) through 3(q)

           (b)   Rights Agreement, dated as of October 21, 1998, between the
                 Company and ChaseMellon Shareholder Services, L.L.C., as
                 Rights Agent, incorporated by reference to Exhibit 4.1 to
                 the Company's Registration Statement on Form 8-A dated
                 October 21, 1998

           (c)   The Company agrees to furnish upon request to the Commission
                 a copy of each instrument defining the rights of holders of
                 senior and subordinated debt of the Company.

                                       51



          10     Agreement dated July 11, 2001 between the Company and Howard
                 I. Atkins, filed herewith

          99(a)  Computation of Ratios of Earnings to Fixed Charges -- the
                 ratios of earnings to fixed charges, including interest on
                 deposits, were 2.12 and 1.65 for the quarters ended
                 September 30, 2001 and 2000, respectively, and 1.64 and 1.81
                 for the nine months ended September 30, 2001 and 2000,
                 respectively. The ratios of earnings to fixed charges,
                 excluding interest on deposits, were 3.29 and 2.33 for the
                 quarters ended September 30, 2001 and 2000, respectively,
                 and 2.36 and 2.65 for the nine months ended September 30,
                 2001 and 2000, respectively.

            (b)  Computation of Ratios of Earnings to Fixed Charges and
                 Preferred Dividends -- the ratios of earnings to fixed
                 charges and preferred dividends, including interest on
                 deposits, were 2.11 and 1.64 for the quarters ended
                 September 30, 2001 and 2000, respectively, and 1.64 and 1.80
                 for the nine months ended September 30, 2001 and 2000,
                 respectively. The ratios of earnings to fixed charges and
                 preferred dividends, excluding interest on deposits, were
                 3.26 and 2.31 for the quarters ended September 30, 2001 and
                 2000, respectively, and 2.34 and 2.63 for the nine months
                 ended September 30, 2001 and 2000, respectively.

     (b)   The Company filed the following reports on Form 8-K during the
           third quarter of 2001:

           (1)   July 17, 2001, under Item 5, containing the Company's
                 financial results for the quarter ended June 30, 2001

           (2)   August 30, 2001, under Item 7, filing as exhibits documents
                 relating to the issuance by Wells Fargo Capital IV of its 7%
                 Capital Securities and the issuance by the Company of its 7%
                 Junior Subordinated Debentures


                                   SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

Dated:  November 9, 2001               WELLS FARGO & COMPANY


                                       By:  LES L. QUOCK
                                          -------------------------------------
                                          Les L. Quock
                                          Senior Vice President and Controller
                                          (Principal Accounting Officer)


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