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11 Wells Fargo Corporation —

2009

Donald L. Crooks
Wagner College

Robert S. Goodman
Wagner College

John Burbridge
Elon University 1

WFC

www.wellsfargo.com
The year of 2009 witnessed continued deterioration in the housing and credit markets, high
unemployment rates, and tight credit. Many banks are stuggling and many have recently
failed, including Colonial National and Guaranty Financial Group. Like many banks today,
Guaranty had more than $3 billion of securities backed by adjustable-rate mortgages.
Delinquency rates on their holdings soared as high as 40 percent before federal officials
seized the bank in August 2009. Many homeowners today cannot make mortgage payments.
The value of houses has dropped below the amount borrowed, causing great problems
for all.
This is the environment that Wells Fargo Bank and its competitors in the financial
services industries face as they look to the future.

History
Wells Fargo is a storied name in American Old West folklore going back to the days of
the stagecoach. Wells Fargo is the result of over 200 mergers including, most recently,
Wachovia. The vast majority of these acquisitions, except for Wachovia, involved
financial institutions in the far western part of the United States. An important acquisi-
tion came in 1998 when San Francisco–based Wells Fargo acquired Norwest
Corporation in a stock swap that valued Wells Fargo at $34 billion. The result was a San
Francisco–based bank with branches in 21 states in the West and Midwest, $191 billion
in combined assets, and almost 6,000 service outlets worldwide. Because Norwest was
the country’s largest mortgage underwriter, the new bank became a major force in that
market. It also had a presence in Canada, the Caribbean, Latin America, and other
countries.
By the end of 2008, Wells Fargo had built a very creditable reputation and was
widely recognized as an industry leader. The following statistics based on industry sources
and government statistics clearly show its size and strength:
• 41st in revenue among all U.S. companies as ranked by Fortune
• 17th most profitable company in the United States
• 33rd largest employer in the United States
• 18th most respected company in the world as ranked by Barron’s
• “Aaa” credit-rated by Moody’s