Jim Rowe – Director, IR John Stumpf – Chairman, President and CEO Howard Atkins – SVP and CFO

John Mcdonald – Sanford Bernstein Matthew O'Connor – Deutsche Bank Chris Kotowski – Oppenheimer Betsy Graseck – Morgan Stanley Mike Mayo - COSA Nancy Bush – NAB Research Fred [Kellin] with KBW Paul Miller – FBR Joe Morford – RBC Capital Markets Ed Najarian – IFI Group Moshe Orenbuch – Credit Suisse

Good morning. My name is Celeste and I will be your conference operator today. At this time I would like to welcome everyone to the Wells Fargo Second Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator Instructions). I would now like to turn today’s call over to Director of Investor Relations, Mr. Jim Rowe. Please go ahead, sir.

Good morning. Thank you for joining our call today during which our Chairman and CEO, John Stumpf, and CFO Howard Atkins will review Second Quarter 2010 Results and answer your questions. Before we get started, I would like to remind you that our Second Quarter Earnings Release and our Quarterly Supplement are available on our website. I’d also like to caution you that we may make forward-looking statements in today’s call, and that those forward-looking statements are subject to risk and uncertainties. Factors that may cause actual results to different materially from expectations are detailed in our SEC filings, including the Form 8K and the Earnings Release and Quarterly Supplements are included as exhibits. In addition, some of the discussion today about the company’s performance will include references to non-GAAP financial measures. Information about those measures, including the reconciliation of those measures to GAAP measures can be found in our SEC filings and in the Earnings Release and Quarter Supplements available on our website at wellsfargo.com. I will know turn the call over to our Chairman and CEO, John Stumpf

Thank, Jim. And thanks everyone who has joined us on this call. We appreciate your interest in Well Fargo. I’ll turn this call over to our CFO, Howard Atkins shortly for a more in-depth look at our quarter results. But first, I’d like to comment briefly on the strength of our franchise, the status of our Wachovia merger integration and the current regulatory environment. As to our financial performance, our Second Quarter results again reflected the underlying strength of our company with all three business segments contributing to our profitability. Our next income was up about 20% from last quarter, and represents just the fourth time in our history that we’ve had quarterly net income over $3 billion. More importantly, we’re winning new business everyday, seeing growth in certain loan portfolios and more instances where conversations are turning into new relationships and new commitments. It is early yet to call these sustainable trends, but it is real progress and it is in the right direction. While the uneven economic recovery continues to create some headwinds to loan and revenue growth, we continue to see the core power of our diversified business model at work. For example, we think it is meaningful that Q2 revenue held up well versus last year despite a year-over-year decline in mortgage banking revenue of about $1 billion, along with the steady decline in earning assets over the year; a real testament to our overall business model’s resilience. Continuing to focus intensely on helping our customer succeed financially has allowed us to perform well through various economic cycles; a hallmark of our business. In addition, we’re now about half way through our three-year Wachovia Merger Integration Plan. We successfully integrated the California Wachovia stores in April, and this weekend we’ll integrate Texas, our largest overlapping market, and Kansas, which will complete the integration of all of our overlapping markets. During the quarter, we also completed one of the industry’s largest trust conversions; $150 billion in trust assets representing about 81,000 accounts. In addition, we completed a conversion in our unsecured loan portfolios, credit card rewards program, and mutual fund business. And we’ve now done a lot of the heavy lifting to prepare for the integration of our East Coast markets, which begins in September with Alabama, Mississippi and Tennessee, followed in the Fourth Quarter with Georgia. Our entire team is working exceptionally well together and culturally and financially, this merger is exceeding my expectations. I couldn’t be more excited about the opportunities ahead. Now, there’s no question that our industry is experiencing some uncertainty regarding the impact of regulatory reform. So let me spend a few minutes talking about the changing landscape based on what we know today. First of all, Wells Fargo has always been focused on doing the right thing for our customers, and adhering to a philosophy of transparency with all of our stakeholders. Those are core to what we do. While portions of the newly-signed legislation are consistent with that operating philosophy, which is positive, we remain concerned that some aspects may have unintended negative effect for America’s financial system, for consumers, and for businesses. Right now, we are proceeding with our efforts to gain a better understanding of all the components, and we will work internally with our regulators on implementation plans as the rule-making process evolves. At this stage, it is too soon to definitively estimate the financial impact given the varying implementation timelines for different components of the bill, the need for some additional clarifications since the actual rule writing is still on the horizon and the size of potential financial offset. Nevertheless, we believe the impact on Wells Fargo overall will be lower than the impact of our large-bank peers; particularly in areas such as proprietary trading, derivatives, and private equity. There will be areas where we will be affected, like debit interchange. There is simply insufficient information at this point for us to make a determination as to the net economic outcome. Any estimates will be premature in our view. It is just too soon. With that being said, Wells Fargo joins others in our industry in wholly dedicating our talents and resources to the biggest priority we share with the American public; the return to a vibrant US economy. To that end, Wells Fargo continues to supply significant credit to the US economy including consumers, small-and-medium sized business, and large corporate clients; about $990 billon over the last 18 months. We’ve also helped more than 1 ½ million people keep their homes since January 2009. We believe Wells Fargo has show that it’s business model remains successful throughout these tough economic times. And we position our franchise well for better economic times ahead. We’ve grown our customer base by providing a full spectrum of products and services to meet their needs throughout this period. We have an unmatched distribution platform nationwide. We’ve maintained our increased market share across many of our business, and our leadership team is encouraged by signs of continued improvement in the credit landscape. In my view, Wells Fargo has a banking franchise second to none in this country and we believe we are right where we need to be to continue to meet customer’s financial needs while growing our business profitably. Now, let me turn this over to Howard.

Thank, John. My remarks this morning will follow the slide presentation included in the Quarterly Supplement available on the Wells Fargo Investor Relations Website. Page 3 of the presentation gives you a very broad overview of the quarter and the topics I’d like to cover today. I’ll start with my remarks with some detail about earnings of $3.1 billion, very strong of course. I’ll conclude my remarks with some detail about our balance sheet and how that positions us for even more growth going forward. In between, I’d like to leave you with three important takeaways about our quarter. First, what you saw in the quarter was the Wells Fargo business model at work. With $21.4 billion in revenue, the Wells Fargo growth machine continued to fuel revenue and market share gains across many of our business in the quarter. Second, the combination with Wachovia is producing better-than-expected results and in particular, incremental revenue. And third, credit quality clearly improved significantly in the second quarter, even earlier and more significantly than we originally projected. Slide 4 goes through our earnings for you. Wells Fargo earned $3.1 billion in the quarter, producing record net income applicable to common of $2.9 billion, up 21% from the first quarter. Since our merger with Wachovia, we have earned $18 billion, reflecting the strength of our franchise and the benefits of the merger. Earnings last year, of course, were affected by higher credit costs, as well as strong mortgage hedging results. Earnings so far in 2010 reflect lower mortgage hedging results as the yield curve is moderated, but businesses as diverse as commercial banking, investment banking, asset-based lending, auto dealer services, debit card global remittance, mortgage servicing, and many, many others have had strong top-line and/or bottom-line results so far this year. In organization with as many business activities as ours, there are always pluses and minuses in every quarter. And while in my view the results are the results, I’ll quickly mention a few of the more significant items in the second quarter. First, a $500 million release of loan-loss reserves reflecting improved loan portfolio performance. Second, a commercial loan resolution in the PCI portfolio increased $324 million from the first quarter. This is a reflection of our success in selling or resolving commercial PCI loans at real-life values above the marks we took when we closed the Wachovia merger. And we believe there may be additional recover potential in this portfolio going forward. Operating losses in the quarter were $627 million, up $419 million from the first quarter, primarily due to additional litigation accruals. Merger expenses in the quarter were $498 million, up from $380 in the first quarter. And we had $137 million of severance costs for the previously-announced Wells Fargo Financial Restructuring. Now, the pluses and minuses of these particular items for the quarter had a negligible impact on the bottom line results. Slide 5 indicates our various operating margins and financial returns, which continued to be among the best in the industry with 4.38% net interest margin, 1% ROA, and a 14.6% return on tangible common. At our investor conference in May, my business colleagues and I explained the importance of return on assets, the operating metric. As shown on Slide 6, we continued to generate the highest ROA among our large peers in the second quarter, as we have for many, many years. Our higher ROA was driven by a couple of factors. First, the high proportion of checking and savings accounts and our deposit mix; in the second quarter, low-cost checking and savings accounts combined rose to 88% of total deposits. Second, we have a lower credit cost rate in our loan portfolio, a reflection of our discipline underwriting culture, proactive loan surveillance and concentration, and lower loss-rate real estate secured loans. Our consolidated loss rate of 2.3% compares with an average of 3.9% for the other three large peers, although keep in mind this comparison is impacted by the respective PCI portfolios at each bank. And third, we have a high proportion of total revenue coming from fee income, which tends to be less asset incentive. Our revenue per dollar of assets was 7% in the second quarter compared with an average of less than 5% for the other three peers. This is largely a function of our success in cross selling non-credit products in addition to the credit products we’ve brought our customers. Slide 7 shows that all business segments contributed to earnings in the second quarter with particularly strong results coming from community banking, which was up 21% and wholesale banking, which was up 18% from the first quarter. Wealth Brokerage and Retirement Services earned $270 million, down about 4%. Within our three reporting segments, we operate more than 80 businesses. Across all of these business in total, consolidated revenue was flat late quarter and down about 4% year over year with declines in MSR hedging revenue, offset by revenue growth in our other 80-plus businesses, particularly those business where revenue is driven by sales including double-digit linked quarter revenue growth on greater customer volume in commercial and corporate banking, commercial real estate brokerage, asset-based lending, international, auto dealer services, merchant services and debit cards. Starting on Slide 8, I’ll quickly go over the results by each of these business segments. Wholesale Banking accounted for about 45% of the consolidated earnings in the quarter, and has had consistent revenue growth for many years, including the last six quarters since the merger. Revenues reached $5.7 billion in this segment in the second quarter, up 8% from a year ago, and up 25% late-quarter annualized. The Wholesale Business is very diverse with revenue growth in the second quarter coming from commercial, corporate, Eastdil Secured, our commercial real estate brokerage business, Well Fargo Capital Finance, our asset-based lending business, international and loan resolutions more than offsetting lower trading revenue in the quarter. This business has been reducing non-strategic high-risk loans and securities positions since the merger, cumulatively earning in excess of our initial write downs during this period. The Business Segment has been consistently growing deposits, which are up 18% year over year, and has recently seen signs of loan growth with loans to commercial customers, global financial institution customers and asset-based lending up in the second quarter. Net Income in this segment was up 32% from a year ago on higher revenue and lower charge offs. Credit losses remain relatively low and declined 10% in the second quarter. Slide 9, our Community Banking Business proves credit, mortgage, deposits and payment services to more than 20 million retail bank households and over 2 ½ million small businesses and business banking households with more banking stores to serve communities across the United States than any other bank. Earlier this month we announced that we will be integrating the separate store distribution channel for consumer finance into the regional banking channel to better provide product coverage for consumer finance customers and branch consolidation savings in the process. This resulted in a $137 million restructuring charge in the second quarter for severance. Our Community Banking business earned $1.8 billion in the second quarter, up 21% from the first quarter. This business segment has been profitable throughout the credit crisis and earned nearly a 1% ROA in the second quarter despite elevated credit costs and the impact of merger integration expenses for Wachovia. The result in this segment essentially reflect the sales machine that is inherent in our regional banking distribution. Legacy Wells Fargo Core Product Solutions of $7.3 million were up 15% from a year ago, and Store-Based Small Business Solutions were up 31%. Cross sale for Legacy Wells Fargo reached a record 6.06 products per household of Wells Fargo products, up from 5.84 percent a year ago, and reached 4.88 Wachovia products per household, up from 4.55 a year ago. Total Consumer Loans were down, but certain portfolios increased late quarter, including Core Auto Loans, which are up 4% and Private Student Lending, which was up 1%. Mortgage applications rose 14% in the quarter and the unclosed mortgage application pipeline was $68 billion at the end of the quarter, up 15% from the first quarter. New Small Business Loan commitments rose 30% from the first quarter. While there are too many imponderables on the Reg Reform Bill, here’s how we are thinking about Reg E and the Card Act. First, Reg E and other overdraft changes, we estimate at $225 million after-tax impact in the third quarter and about $275 million in the fourth quarter, not including any offsets. Since Reg E changes did not begin until early July for new customers, and will not begin for current customers until mid-August, the third quarter will have limited revenue benefit, potential to offset and customer opt in, we expect revenue benefits and potential offsets to increase going forward. Q4 will potentially benefit form an increasing opt-in rate. Because of the potential offsets and changes in customer opt-in rate, it is like that run-rate costs will diminish over time from the numbers that I just quoted you for the third and the fourth quarter. The impact from the card act will be relatively small, approximately $30 million after tax in the third quarter, much smaller than up here given our significantly smaller credit card portfolio. Slide 10, one of the keys to the consistent sales growth in the Regional Banking Group has been our ability to attract and retain consumer checking accounts across the country. Combined Legacy Wells Fargo and Wachovia consumer checking accounts were up a net 7.4% from a year ago. California continued to be our fastest growing state in the West of 9%, and we continued to see checking account growth accelerate in the East with New Jersey up 10% in the second quarter, double the growth rate from late last year. The Wealth Broker Retirement Business has had solid revenue results over the past six quarters, even though the markets have been very volital. Second quarter revenue included strong asset-based fee growth and steady brokerage transaction revenue. Retail Brokerage Clients assets were up 6% year over year, while core deposits grew 7%. Institutional Retirement Plan Assets rose 10% on the market improvement and new customer growth. Net Income and Wealth Brokerage Retirement was up 5% percent from the Second Quarter 2009 with growth and managed account fees driven by a 22% increase in Managed Account Assets, and 8% growth in Investment Management and trust revenue year over year. Slide 12 covers lending at Wells Fargo, and I’d like to spend some time on this slide. On this slide, we’ve split quarterly loans outstanding into the so-called Liquidating or Non-Strategic Portfolios. And the All Other Portfolios, which are portfolios where we plan to continue to originate loans. The Non-Strategic Portfolio is comprised of about $125 billion in loan portfolios where we exited or no longer write new business, including Pick-A-Pay, Indirect Home Equity, Legacy Wells Fargo Financial, Indirect Auto, Wells Fargo Financial Debt Consolidation and Commercial and CRE PCI loans. Please see the appendix for more details on the composition and the managed runoff of these loans. Apart from these Non-Strategic loans, we had $620 billion in loans in the continuing portfolios. In the year prior to the second quarter, all other loans declined $10-to-$20 billion roughly per quarter. But in the second quarter, all of the loans were down only $5 billion, or less than 1%. About $3 billion of the $5 billion decline was due to mods and normal pay-off activity in the Non-Pick-A-Pay Mortgage Loan Portfolio. Importantly, for the first time in the second quarter, we began to see some life in certain lending businesses, including linked-quarter growth in Wholesale Commercial, Wholesale Asset-Based Lending, Global Financial Institutions, Wealth Brokerage and Retirement, Auto Dealer Services, and Private Student Lending. We believe we are gaining share in those lending markets we continue to serve. As we have throughout the credit crisis, we continue to supply credit to the US economy in the second quarter. In the second quarter alone, we originated or committed to $150 billion of credit, up 17% from the first quarter. You can see the breakdown of that on Slide 13. The growth in Commercial and Commercial Real Estate originations and commitments was the largest quarterly increase since the merger. Shifting to the other side of the balance sheet on Slide 14, we continue to grow checking and saving deposits which were up $59 billion or 10% from the year. Checking and savings deposits account for 88% of core deposits and at quarter end, our core deposits funded almost 100% of consolidated loans. Besides, growth and high concentration of checking accounts in our deposit base represent important differentiators for Wells Fargo and important sources of cross sell and revenue growth. We have significantly reduced high-cost CDs with $114 billion of Wachovia’s higher-rate CDs maturing since the merger. Approximately 57% of maturing Wachovia CDs were retained in lower-rate CDs or checking and savings deposits. Now, most of Wachovia’s higher-rate CDs have matured with only $4 billion scheduled to mature in the second half of 2010. Slide 15, an important part of our revenue growth is the incremental revenue Wells Fargo was earning from the merger with Wachovia. There are many, many examples of this merger-enabled growth, if you will, a few of which are listed on Slide 15. Let me just mention a couple of these. First, Wachovia cost, as I mentioned before, has now increased 7% from 4.55 just after the merger to 4.88 in the second quarter of 2010. So we’re clearly getting good costs from the East. Within Wholesale Banking, the product and expertise that we gain from Wachovia is driving increases within investment baking. The amount of investment banking revenue coming from our own commercial banking customers is up 45% since the merger. In part, this is more and more of Legacy Wells Fargo commercial and corporate customers are using Wells Fargo Securities to underwrite their bond and equity financings. Within Government and Institutional Banking, crossover revenue is up 43% in the first half of 2010. In the Wealth and Retirement and Brokerage Business, client assets, deposits, managed accounts are all up significantly since the merger. And in our Retail Brokerage Group, we are significantly cross selling loans, which is one of the reasons our loan growth occurred in the second quarter. We now shift to Slide 16. In terms of Non-Interest Expenses, we continue to invest in our businesses in the second quarter in ways that better serve our customers; opening 13 new banking stores in the quarter, converting over 1,400 ATMs to envelope-free, web-enabled ATMs, and increasing Regional Banking Platform banker, FTEs in the East, up 500 from year end to 1,009. Most of the increase in Non-Interest Expense from the first quarter was due to three items. $419 million in additional operating losses; as I mentioned earlier, primarily due to additional litigation accruals. $137 million in severance costs related to the Wells Fargo Financial Restructuring, and $118 million in higher merger integration costs compared with the first quarter. As John mentioned earlier, we continue to make great progress on integrating Wachovia and we will start to convert our stores in the East later this quarter after completing the overlapping markets this coming weekend. In the first half of this year, we spent about $900 million on the Wachovia merger integration and we expect to spend approximately $1.2 billion in the second half of the year. We now except to spend approximately $1.4 billion for the integration in 2011, bringing the total Wachovia merger integration costs to approximately $5.7 billion. Now, this is an increase from our most recent estimate of approximately $5 billion and was driven by several factors. Including first, increased scope and complexity associated with certain merger projects such as the development of our international products and systems. Second, additional enhancements and upgrades, especially in our Treasury Management Products, and additional testing than was originally contemplated including building substantial test environments for our complex systems. Now, on the savings side, we’ve already achieved about 80% of the expected $5 billion in annual run-rate savings. As I mentioned on our investment, as part of our One Wells Fargo effort to bring the entire organization officially to each of our customers, we intend to simplify and streamline our company to make it easier for our customers to do business with us, and therefore, earn more of their business going forward. Our objective is to improve customer service, reduce turnaround times, and improve time to market. But the expense savings associated with simplifying a streamlined company could be very significant. The announcement we made earlier this month to close 638 Wells Fargo Financial Stores is but one example of the type of savings that would fall into this simplification and streamlining category. Let me now shift to credit on Slide 17. As I indicated earlier, credit quality improved significantly in the second quarter. Net charge offs declined earlier and more significantly than projected and was down 16% late quarter and down $924 million from the peak in the fourth quarter of 2009. Our early credit quality indicators continue to improve with non-accrual inflows down 18%, commercial criticized loans down 14% year to date, and early-stage delinquencies improving almost across the board. Our PCI Portfolio continued to perform better than expected, resulting in the release of $1.9 billion from the non-accretable difference for the Pick-A-Pay portfolio, which will add to future income over the life of the loans. At quarter end, we had $25 billion of allowance for credit losses, about 3.27 percent of total loans. And additionally, we had $16.2 billion in remaining non-accretable difference, about 26% of the PCI loan unpaid principle balance. Because of improved portfolio performance, we released $500 million dollars in reserves in the second quarter with the potential for additional releases absence significant degeneration in the economy. A couple of highlights about the credit quality in the quarter, starting on Slide 18, the 16% decline in charge offs from the first quarter was pretty much across the board. Commercial Real Estate loss was down about 10%. Consumer Loss was in total down 21%, including 23% decline in First Mortgage charge offs, 18% decline in Junior Lien Mortgage charge offs. Credit Card charge offs were down 10%, and Revolving Credit Card Loan charge offs were down 34%. Slide 19 shows trends in consumer delinquencies. Early indicators continue to improve with 30 days past due improving in many consumer portfolios including Credit Card, Student Lending, Home Equity and Wells Fargo Home Mortgage. On Slide 20, it shows you the Pick-A-Pay portfolio where credit trends continue to improve in both the non-impaired and impaired Pick-A-Pay portfolios, with performance better than originally expected at the time of the merger. The roll rate of loans from current status to 30-plus days past due stabilized or improved in both the PCI and non-impaired Pick-A-Pay portfolios. And the percentage of first-time delinquent loans in the non-impaired portfolio is down for the fifth consecutive quarter. And in the PCI portfolio, first time delinquencies were levels not seen since prior to the merger. We also had improvements in net charge offs in the non-impaired Pick-A-Pay portfolio, which were down $148 million, or 35% from the first quarter. As shown on Slide 21, non-accrual inflow in the second quarter were down 18% with consumer inflows down 23% and commercial down 7%. In addition, outflows increased 12% from the first quarter. Now, this combination of this dramatic slowdown on inflows and higher outflows resulted in a significant acceleration of non-accrual loan growth, which was up only 2% in the second quarter. One of the reasons the level of outflow is not yet higher is that it is taking somewhat longer to resolve residential real estate loans, in part because the Federal and State regulations that have the affect of elongating the modification and foreclosure process. Again, loans are written down when necessary and we get realizable value when we sell – but they seem to run on accrual for slightly longer periods of time. On Slide 22, we consider the combination of $25 billion in the allowance and $16 billion remaining non-accretable difference to be low bust, especially now that charge offs are declining. As I mentioned earlier, during the second quarter we released $500 million of loan loss reserves reflecting improved performance in the loan portfolios both consumer and commercial. The Purchas Credit Impaired portfolios have performed better than originally expected. And Slide 23 provides a lot of details on this. We already saw an improved performance in the Pick-A-Pay portfolio in the first quarter when we released $549 million of non accretable difference. In the second quarter with sustained positive performance in this portfolio, we released an additional $1.8 billion, reclassified to accretable yield. Now, the improvement in life-of-loan loss estimates is primarily attributable to our significant modification efforts as well as stabilization in the portfolio’s delinquencies over the last several months. I should mention that this $1.8 billion reclass of the non-accretable to accretable did not affect income in the second quarter, but will be realized over the remaining life of the portfolio, approximately eight years. Now, with the remaining non-accretable difference of $16 billion, there may be additional potential for further releases from non-accretable to accretable if this portfolio continues to perform better than original expectations. In the Commercial PCI portfolio we did, as I mentioned earlier, have a release of non-accretable difference from resolutions of loans, either through payment from customers or sales to third parties. Since the merger, we have written off $6.1 billion against the original PCI unpaid principle balance of $29.2 billion and the remaining commercial non-accretable difference represents about 15% of the remaining commercial PCI portfolio. I’ll conclude with a couple of remarks about our balance sheet on Slide 24. The strength of our business model continued to product high rates of internal capital generation as reflected in our significantly improved capital ratios. During the quarter we added $4 billion to tangible common equity through retained earnings and other internally generated sources of capital, producing the annualized increase in tangible common of 20%. Q1 common ratio increased 44 basis points to 7.53%. In the second quarter we purchased 64% of the TARP warrants auctioned by the US Treasury, which reduced that Tier1 common by about 5 basis points. But which we expect to be accretive to earnings. We expect to opportunistically repurchase more warrants in the open market from time to time at economic prices. We have about $19 billion of outstanding Trust Preferred Securities and $7 billion of those will convert automatically to qualifying Tier 1 capital under their original terms. So under the new Financial Reform Act, only about $12 billion is expected to be disqualified over a three-year period beginning in 2013. The elimination has no impact on T1 common and given internally generated growth that’s likely in capital over this time periods, we would expect the elimination of these Trust Prefers to have only a small impact on the T1 common. Slide 25, in terms of our balance sheet, we believe our balance sheet is stronger than ever. Capital ratios are now substantially higher than they were before we doubled the size of the company with the Wachovia acquisition and our capital ratios have been growing rapidly through internal capital generation. T1 common, for example, is up a full 100 basis points year to date. Our loan loss reserves, the remaining non-accretable difference with the PCI portfolio are strong at a time where loses are coming down. The loan portfolio is now funded with core deposits and we have significant capacity to add mortgage-backed securities to build revenues and earnings even more at higher long-term yields. In affect, our current income is running less than it could be as we keep our investment powder dry. And with that, I’d like to now open up the call for questions.

(Operator Instructions) Your first question comes from the line of Chris Kotowski with Oppenheimer and Company Chris Kotowski – Oppenheimer: Yeah, good morning. I was wondering if you could talk a little bit about the geographic differences in the loan portfolios. And are you noticing any growth in any of the markets that are less stressed in housing than the other markets? And, in your judgement, how much of an impact is that, or has consumer behavior sort of been broadly changed in all geographies, in call different kinds of markets?

I want to take a shot at that, Chris. On the mortgage side, most of what we did in the second quarter on the first mortgage was refinances. And there is not a geographic bias to that, per se. But what we’re seeing is, as we mentioned, and Howard talked about, it’s more portfolio unique than geographic specific. So the growth we’re seeing is, for example, in autos, we’re seeing it there. We’re seeing some of our small business; we’re seeing some more activity there. Student lending and so forth, but I wouldn’t – there’s not a geographic bias that would stand out. Chris Kotowski – Oppenheimer: Okay. And switching to asset quality, any view on when you’d expect total non-performers to peak?

I think we’ve said in the past that we’re getting close and it would not surprise me that – I mean, if you look at the acceleration of our growth, you can make your own assumptions about that. But you know, the issue there is, the inflows have been significantly reduced. The key is for us to get the outflows going faster and that is somewhat impeded by regulatory and other issues related to – especially in the residential side, State issues. Chris Kotowski – Oppenheimer: Okay. And then finally, how much do you expect the integration costs to carry on into 2011?

Well, we have said that, you know, we first stared out saying that we thought the cost was somewhere in the $8 billion range. We took that down to $5 billion. We think it’s going to be something more than that; Howard shared those numbers. And we expect those costs to be used up or completed at the time of the merger completion, which is the end of 2011. Chris Kotowski – Oppenheimer: Okay. Thank you.

Your next question comes from the line of Betsy Graseck with Morgan Stanley Betsy Graseck – Morgan Stanley: Good morning.

Hey, Betsy. Betsy Graseck – Morgan Stanley: Hi. A couple of questions; one on the NIM, and Howard, you mentioned some of the ins and outs up there, and I was intrigued by your comment that you indicated the significant capacity to add our MSB. Could you just talk through how you’re thinking about shifts in the composition of earning assets, and the potential impact on NIM, if rates where to stay flat with where they are today?

Well, the key thing on NIM, as we’ve said for a long time, is deposit. So the more we keep growing the deposits, that’s going to be beneficial to the NIM. You know, the earning asset composition, in part is going to be a reflection of whether loan demand comes back more vigorously, which we would all like to see. We began to see signs of that in the second quarter in both commercial and to a lesser extent in consumer. So we hope that continues. And you know, the mortgage, the MSB portfolio is going to be a function of whether yields are appropriate to add to the portfolio. But this way, we don’t run the company around the NIM. The NIM is what it is. If we like MSB yields, and at some point in time we will, and we have huge capacity to add those, it might be negative to the NIM, but be positive to income. That would be the right thing to do. So the NIM is not the goal here. Betsy Graseck – Morgan Stanley: Right. And so are you at the stage where you would be interested in shifting some of your liquidity into RMBS at this stage?

It depends on the deposit growth, Betsy. The purpose of the MSB portfolio is really to match off against our long-duration liabilities, and the more deposit grow, we get a little longer on the right-hand side of the balance sheet. We could get to a point where just to manage the risk of that we want to add to the MSB portfolio, but absent that, we’re very focused on long-term yields and that’s what we’ll stay focused on. Betsy Graseck – Morgan Stanley: Okay. And then on the accretable yield and the release of the accretable yield, could you just talk through what you would need to see to have more of that occur? I mean, obviously, a little bit of it was released this quarter.

Well, you know, I think, Betsy, in that case it’s all about performance. So we look at the cash flows and we look at how those portfolios are performing. And I think we shared a lot of detail at the investor conference and I think there was a lot of confidence in how we’re managing that. And we will continue to make that analysis, and you know how that works. If we take the benefits over the remaining life, and if we miss on the other side, we have to put reserves up right away. So we want to be absolutely sure as we go through this process that we’re sure on the performance of those portfolios. But the biggest amount left relates to the Pick-A-Pay and we probably have most confidence there about how that portfolio is performing. And the driver there, of course, Betsy, is the success we’ve had in modifying these loans, which is really the fact of this that’s driving the cash flow. So with the passage of time, and the success in modifying loans in that portfolio, that tends to increase our confidence around releasing more non-accretable. Betsy Graseck – Morgan Stanley: Okay. And then could you just speak to your outlook for house prices? There’s been some question in the marketplace as to whether or not they’ll stay where they are right now given the reduction in stimulus to the housing market. So I would think that would have an impact on how much you release there.

Yeah. So if you think about the Pick-A-Pay, about 2/3s of the impaired portfolio happens to be in California. And most of those loans were your first-time homebuyer, or second-time homebuyer homes. And this state, California, and that price has seen more recovery than most places. So we’ve been – it’s been a benefit to us. And we’re seeing other states where housing also is – on the low end has improved, bounced off the bottom. As I mentioned, a number of times, when we do take back properties and sell them, we’re getting multiple bids, and most of them are cash bids. And while the first-time homebuyer credit was important, it’s not the only thing that’s driving it. You’ve got record-low interest rates these days, employment is pretty steady, and home price affordability has never been better. Betsy Graseck – Morgan Stanley: Okay. Thank you.

You next question comes from the line of John Mcdonald – with Bernstein. John Mcdonald – Stanford Bernstein: Hi. Good morning.

Hey John. John Mcdonald – Stanford Bernstein: Just a clarification on the NIM. Howard, if we look at the increase in the NIM quarter to quarter, understanding you’re not managing that, was the purchase accounting accretion a driver, a big driver?

Yes. That’s correct. John Mcdonald – Stanford Bernstein: That’s the $506 million?

Well, that was the level. The change from first quarter to second quarter was about $300 million. So you can do the math in terms of how much basis points that occurred. John Mcdonald – Stanford Bernstein: Okay, great. And then on the MSR Hedge, could just kind of update us where you stand, not in numbers, but just conceptually are you fully hedged still or are you biased towards becoming less hedged?

You know, as you would expect, when interest rates are declining and/or low, we tend to be more fully hedged in that against the MSR asset, and when rates go the other way, we tend to be a little less fully hedged, which is one of the reasons why we feel that we are keeping our powder dry in the investment portfolio because we’re relatively fully hedged on the MSR. John Mcdonald – Stanford Bernstein: Okay. And are you still getting what you’ve called the past, has carrying come on the hedge this quarter as well as kind of the change in the value of the hedge?

Yeah, the mark on the hedge is a reflection of both the change in price as well as the carry. There is still carry income coming through. The total hedge result was down about $300 million from first to second quarter, largely as a result of a flattening of the curve. You know, the load rates came down to almost a full point in the quarter, and that was the main driver there. John Mcdonald – Stanford Bernstein: Okay. Wells Fargo has historically not released reserves even when other have. Could you give us a little color on in your models, what drove the release this quarter and what’s driving your commentary that you could have continued reserve release in coming quarters? You know, what’s different than in the past?

That’s very simple, charge offs dropped substantially, and the loss content, as we see it in these portfolios has dropped. And as a result, you have to release reserves to a certain extend when the loss content in the portfolio declines as it did. John Mcdonald – Stanford Bernstein: So it’s just a revision of our 12- month, or 24-month outlook on losses?

We look at losses over what we call a loss emergence period, and that’s what defines the loss content in these portfolios. And the loss content, as defined, as dropped pretty significantly, which you see in the first quarter of that loss-emergence period manifested in the second quarter results. John Mcdonald – Stanford Bernstein: Okay. And I guess declining balances also is a factor there as well?

Yeah, but not as much, John. It’s more of what Howard just said. We take a look at this emergence period and – but this should be expected. I mean, when we were going through this last year on the other side of the curve, we knew this would be the case. And that’s – John Mcdonald – Stanford Bernstein: Okay. The last question, and maybe it’s for John. Just regarding the exit of the Wells Fargo Financial Business, John, you’re in this business for over 100 years, you’re long founded to be a profitable-valuable business, and you know, in the press release it cited your increase in Brink Branches in density as a driver of the decision to exit. Is there other things that cause your change in the view of the profitability and attractiveness of that business besides just sheer number of branches?

Well, a couple of things. I think we announce all at the same time, we want to be relevant and be able to provide products and services where our customers live and work. And when you add another 3,500 or 3,300 stores in the East, you know, we had the distribution. Secondly, some of the product, or one product, the debt consolidation product that we were doing, we really weren’t doing much of it. So if you look at the rest of the things we were doing, we were doing those in other channels, we can do it more efficiently, provide a more consistent experience for the customer. So it all – it was a very obvious thing to do. We think about 100 years of experience, we’ll still have that experience in a lot of our other distribution channels. It just – we can do it, again, more efficiently and more effectively for customers. John Mcdonald – Stanford Bernstein: Okay. Thanks, John.

Your next question comes from the line of Mike Mayo with COSA. Mike Mayo - COSA: Good morning. Can you hear me?

Hi Mike. Mike Mayo - COSA: One simple question and one hard question. The simple question is, what is your commercial loan utilization in the second quarter and how does that compare to the first quarter or last year?

What’s your simple question? I don’t have the number here in front of me, Mike, but it’s relatively unchanged with perhaps maybe a tad better given both the increase in commitments as well as some early signs of demand on the commercial side in the second quarter.

Still at historic lows. Mike Mayo - COSA: All right. And then the hard question is, how much of the $506 million of the accretable yield would you consider sustainable? And I have a couple other questions relating to that, but that’s the gist of my question. So I guess, the accretable yield this quarter was $506 million, and what was –

The release from non-accretable to accretable on the commercial side was 506. Mike Mayo - COSA: Right. The accretable yield, which is an income statement item was $506 million positive.

Correct. Well, $506 mill for the quarter, up $300-some-odd from the prior quarter. We’ve been getting releases through accretable in this portfolio for a couple of quarters now. Mike Mayo - COSA: And so the first quarter it was, you know, $200 and change, and before that it was around the same level?

It was a little bit lower in the prior quarters, but yes. Mike Mayo - COSA: And so, should we expect a $500 million run rate going forward, or how do you think about that?

No, I mean again, the total amount of non-accretable against this portfolio is $2.9 billion, as I mentioned, which is about 15% of the remaining unpaid principle balance. So you know, we are hopeful that we will get additional recoveries from that $2.9 billion, particularly given our success and given where the markets are now, you know, markets are liquid, these borrowers are able to refinance and finance out of these positions. We mark these positions as you know down very heavily at the close, but while we expect additional recoveries in this portfolio, it’s an exhaustable resource. It does end at some point.

But Mike, think of it this way, there’s also offsets to that. We’re taking higher loses in that portfolio right now, and there’s more costs of managed net portfolio. So it’s not like – it is an exhaustable resource, but I wouldn’t think of it in terms of well, there’s – this is good news, and that good news ends some times. There’s also some bad news that also will end as we work through this portfolio. Mike Mayo - COSA: I understand, it’s a testament to your conservatism at the time you close the merger because you wrote down these loans.

Well, it’s also more that that, as John says, there’s cost and risk still – we’d like to see this go away, yes because there’s cost and risk associated with this portfolio.

But I’d also say we were conservative at the time, but I’ve got to tell you, and you know some of our people, Mike, we have just terrific people working on these portfolios. If you know the time that Dave Hoyt and his team spends on these sort of things, the same way we’re spending time on the Pick-A-Pay, it’s all hands on deck. Mike Mayo - COSA: And if you’re recognizing this difference over eight years, why was so much of the difference recognized in the second quarter? In other words, the uptake of $300 million?

The release on the commercial portfolio is immediately recognized on the consumer side because we’re talking about portfolio, that’s where you get the release over time. So commercial is loan by loan.

Loan specific on the commercial side. Mike Mayo - COSA: The $1.8 billion transfer was specifically for Pick-A-Pay?

Yes. $1.8 is Pick-A-Pay, that had no impact on second quarter income, but will accrete into income over roughly an eight-year period. Whereas on the commercial side, the recovery, if you will, was immediately an income. Mike Mayo - COSA: Oh, so that was really the big driver for the quarter then. And what part made you more optimistic about the commercial impaired loans?

That’s actual recovery. You do a deal.

Actual cash in hand. The customer refinanced or we sold a loan, or it was resolved.

There’s no guess work there, Mike. It’s done. Mike Mayo - COSA: Got it. All right. And just a last follow up. If someone asked me how much the $506 million of the accretable yield is permanent, what would you answer be?

I’d have to question why you say permanent. It happened. It’s done. It’s income that was booked in the second quarter, Mike. Mike Mayo - COSA: Okay. And so next quarter and the quarter after, you’ll just see –

Next quarter hopefully we’ll have more recoveries over time and hopefully on the other side the cost of working off this portfolio will decline and the risk will go away. Mike Mayo - COSA: All right. Thanks a lot.

Your next questions comes from the line of Nancy Bush with NAB Research Nancy Bush – NAB Research: Good morning guys.

Hi Nancy. Nancy Bush – NAB Research: I promise I will not ask a question about accretable yield. I’m still trying to get my head kind of wrapped around this Wells Fargo Financial move. And I understand the economics of having a larger branch system, etcetera. But is your Wells Fargo Financial client going to come into a branch to do business?

Yes. Nancy Bush – NAB Research: And when he’s in the branch, he or she, do you think that you can get them to do “more banking-type transactions”? I mean, I don’t – I’m just having trouble sort of migrating one business to another.

You know, Nancy, that’s already happening. In fact, if you would look at the Wells Fargo traditional store network, you call franchise, store network, not all those customers are prime customers to begin with. In fact, we’ve been serving them for a number of years. This way we can serve them even better, more consistently, and we’re taking a lot of the front-room folks, the sales folks from our Wells Fargo Financial system, that’s now being eliminated and putting them in our stores. And yes, we are trying to sell them other things, help them succeed financially. And we actually get, in the last year or so, some tests on this, and it works very, very well. So that gave us the confidence that we could do that in our banking stores. Nancy Bush – NAB Research: I guess this is more a question for Howard, related to the same topic. How do we look at the migration of revenues and expenses? Will this take margins down, particularly as the subprime mortgage business runs off, or goes away? How do we think about the P&L changes that this move is going to have?

Well, we’re not talking about a big component to the balance sheet, but in concept, Nancy, these are slightly higher-margin assets. That will go away, but by the same token, they’re also higher-loss content portfolios, so losses will be on the margin a little lower and –

Nancy, I’d answer it this way. Everything that has been done in the financial stores except for the debt consolidation portfolio loans will be done someplace else, and they’re being done right now. And frankly, in the last year or two, we were doing almost zero debt-consolidation loans in the portfolio anyhow. So we’re just not losing that much and the game is, we think, significant in that you bring financial bankers who are really good at loans into our stores to help our store people become better at loans, and their people help them become better at opening up checking accounts and stuff like that. So I see this as win. Better for customers, better for team members, and better for shareholders. And I don’t see the downside here. Nancy Bush – NAB Research: Well, when will this migration be completed, John? When is this completely done and you know, we start seeing the end?

The stores have been shut down as we speak. I mean, Gary Tolset [ph] has worked with Dave Cromie [ph] and Kevin Ryne [ph] on that team about people’s migrations and so forth. So think of it as third quarter. Nancy Bush – NAB Research: And Howard, one quick question on operating losses. I know this is a lumpy number. I mean, how do we think about that number going forward? Is there some baseline that we should be thinking about? I’m assuming that $400 million or so increase in the quarter is abnormal. Is there anything particularly driving it in the second quarter, and you know, when do you see these numbers start to tail off?

Well again, it is higher than not only the first quarter but higher than the average for the prior five quarters so you can sort of make your own judgement about what an average quarter would look like. And this particular quarter we just had a confluence of litigation matters that we accrued for all the same quarter. Nancy Bush – NAB Research: Okay, great. Thanks.

Your next question is come from the line of Fred Kellin with KBW. Fred Kellin – KBW: Well, thanks. John, at the investor day, you had stated that a preemption was your biggest concern about Reg Reform. In your introductory comments today, it appears that there’s a number of other issues that have you concerned about how Reg Reform plays itself out as the rules get written. I was wondering if you could add a little color on that.

Sure. You know, there are parts of Reg Reform that they really got right. And I want to compliment those who are involved in that, things like the systemic risk regulator. You know, a way to unwind large systematically important firms, in regards have that on the banking side, commercial banks, but they didn’t have it on Financial Services and Consumer Protection. Well have to see how the bureau works. But the conflict around consumers should be able to buy products from providers who have proper regulation. We think that – and a level playing field, that’s all good. On the part that there’s a big omission here in the Reform Bill, and there’s nothing in there, not one word about the GSEs, Fannie and Freddie. And you can ask any America and they would say housing was, if it wasn’t at the epicenter of what happened it was very close to it. And who are the two biggest players there, Fannie and Freddie. So now with respect to preemption, they got it mostly right. I think it could have been even better for Americans but they got it pretty close there and that’s why I’m hopeful that as we see it work in reality, that it will continue to provide products and services across the country, consumers can live, and work, and borrow, and use ATM machines, and understand that there’s consistent laws across the land. And of course, I don’t see how debit card fees between banks and merchants had anything to do with what happened in the last couple of years as a downturn. So you know, we’re still working through the impacts of that. So think of it this way. There are things that we agree with and we think will make the industry and the country stronger. There are things that weren’t tackled that need to be tackled in some way, shape, or form, and there’s things that I don’t understand how it impacted the downturn, and frankly, I don’t agree with parts of it. Fred Kellin with KBW.: I couldn’t agree with you more. Just as a follow up, John, the Consumer Financial Product Bureau that’s being set up, how concerned are you about that and about who gets nominated to run that new agency?

You know, again, it’s so early, you know, we’ve always been here at this company strongly aligned with the interest of our consumers. I’ve been asked this question a thousand times, what did you see in real estate that other did not that caused you not to make negative M option arms. And we said, we didn’t see a downturn coming. We just knew it wasn’t good for consumers. And we’ve always been guided by that. So how the Bureau works, who’s named, that’s all stuff for another day and we’ll just continue to do what’s right here, and I’m sure that we’ll be able to adopt our, and work with whatever the outcome is.

All right. Thanks. One final one. Your loan mods, I believe in the press release, up to date, you have about 76,000 HEM and about 430,000 of your own. Do you see more loan mods as those number continue to climb, or do you see the HEM ones beginning to accelerate? Kind of, where are we on that? Thanks! John, Stumpf: Yeah, we’re doing about three mods for every one foreclosure, and I’ve got to tell you, while we continue to get better and we need to get better, I’m very proud of the work that over 16 or 17,000 of my people do everyday to help Americans stay in their homes. We do about 2,000 mods per day. And there continues to be changes, and some that the industry has suggested to help make HEM more friendly, more useable But I’ve got to tell you, we’re also doing a lot of things that we think are best-practice kinds of things. We are now doing our 10th or 11th weekend event in large cities across America where we have home preservation workshops. We bring our people in. They’re all hooked up to online so people can sit down and have a modification done right at the event. We’re doing many other outreach kinds of activities, so you know, I don’t know that one will grow more than the other, but we have all of our people that are involved in this very committed help Americans stay in homes.

Thanks so much.

Your next question comes from the line of Paul Miller with FBR. Paul Miller – FBR: Thank you very much. Talk a little bit about your MSR portfolio. You have it definitely lower than anybody else in the industry at 76 basis points. I know a lot of that was driven by than ten-year gone from 4 to 3%, but you’re not really seeing a big uptake in refi’s or whatnot. A lot of people talk about a refi burnout. I mean, can you add some color about how you might be able to capture some of that value there? You definitely don’t need to hedge it down at this level given where rates are.

Well, you always have to worry about where the rates go up, down and sideways, so we can’t ignore or hedging portfolio, but yes, at 73 basis points, you know, if rates go back up or we decide to hedge differently, there could be very significant value in that activity.

But Paul, you do raise, I think, and I don’t know if this is part of your question, but there might be a point in time that we have a view that rates can’t go much lower and they’re going to go up. We might have a bias, we might take a company view that rates will go up and in those times, we might decide to not as fully hedge based on that view. But I mean, we sat here just a quarter ago and rates were 100 point higher. People said at that time it couldn’t go any lower. And it went 100 basis points lower. And so you know, the goal there on the MSR is not to – it’s really a risk management activity and it’s not, you know, so that’s the reason for the hedge. We might have a bias one way or another, but it’s predominately about risk management. Paul Miller – FBR: Well, I guess I’m more, you know, it’s definitely about risk management, but it’s also just a confusion of the accounting. I mean, a lot of people have to use that ten-year as a basis, but that’s not seeing the refi, so it’s really the accounting value matching the economic value. In my mind, there’s a huge difference between the two at this point. I don’t know if you want to address that at all on the call, but it just seems to me that there’s a lot more economic value –

Yeah, but you know, actually refinance volumes have jumped quite a bit recently. I mean, there’s some activity there. On the other hand, you’re right, that not everyone can refinance because of the loan-to-value requirements. But if you’re interested in a longer conversation on this we will surely arrange for that. But I think it’s pretty obvious. We have a set of $9 million or so customers who we make 25 basis points on the servicing, which is – we discount that back, we put an asset on our balance sheet. We think that asset is conservatively valued, like you said, 70-some basis points, the lowest in the industry. In fact, I think it’s the lowest we’ve ever had it because rates are so low. So we still have a few more questions from the line. We’ll try to take one from a few more people.

Your next questions comes from the line of Joe Morford, with RBC Capital Markets. Joe Morford – RBC Capital Markets: Regarding capital, can you update us as to what your current expectations are for what new requirements you may be held to as well as when you think we may hear something specific on that. And then, given the strong internal generation rates, when might we see Wells start to pull some of its capital through dividend increases or share buybacks, and where would your preference be between those two?

Well, Joe, all I can tell you is what I read because I don’t know a lot more than that. You know, the Bosal [ph] 3, of course, you know, there’s lots of discussion going on about that. I would expect that it’s in the interest of the banks in the US, our economy, and the world that there be a resolution on that sooner than later. I don’t know where those numbers are going to go, but there has to be some call about how much capital is enough. Hopefully whoever makes the call relates it to the risk inherent in the companies, you know, one sizes does not fit all here. I can tell you in our company’s case, our Tier 1 is now higher than it’s ever been in my 30 years with the company, or 29 years with the company. Our Tier 1 common now is as high as it’s ever been. We’re generating it at very rapid pace. And frankly, it’s time we start rewarding our owners, our stockholders with a more representatives dividend given the performance of this company. And that’s Job 1 around here. We want to get that done. Joe Morford – RBC Capital Markets: Okay. Thanks.

Your next question comes from the line of Matt O’Connor with Deutsche Bank. Matt O’Connor – Deutsche Bank: Hi guys.

Hey, Matt. Matt O’Connor – Deutsche Bank: If I could just circle back to the expense reduction conversation that you were having earlier. You know, obviously there’s the opportunity of cutting costs in financial. It seems like if you’re already at 80% of the Wachovia targeted cost saves and there’s still a ton of integration to be done, it seems like there might be some upside there. I guess I was just hoping that you could try and size up how big all the cost savings might be, and the timing of when you might start realizing some of them.

Well, you know, as we mentioned, Matt, we’ve got a lot of things in various stages of thought and development on expenses. We’re still committed to realizing the $5 billion of annual savings from the consolidation. We talked about the Wells Fargo Financial; we’ve put some estimates into the public on the potential positive impact of that, and timing of that going forward. And as I said, we’ve got a variety of other things that are going on that are just in very early stages of development, I would say. As we know more, I can put some specificity around that. We’ll disclose more of that. Matt O’Connor – Deutsche Bank: Okay. When do you think you’ll be doing that?

Throughout the next four or five quarters probably. Matt O’Connor – Deutsche Bank: Okay. All right, thank you.

Your next question comes from the line of Ed Najarian with IFI Group. Ed Najarian – IFI Group: Hi, Howard. Just a quick question to clarify this accretable difference thing. Could you just give us the actual total accretable difference in the first quarter and then what it was in the second quarter so we can not only see that $300 million step up but what the actual numbers were? I know that 506 is just related to the commercial PCI portfolio and I was interested in the totals.

Well, we’ve got about $1.8 billion on the Pick-A-Pay side and the $500 on the commercial side. Ed Najarian – IFI Group: I’m talking about the amount that flowed through net interest income. Excuse me.

The only thing that went through that interest income was the $506 compared with roughly $180 in the first quarter. Ed Najarian – IFI Group: So there was no consumer-related that flowed through in the second quarter?

No because again, the consumer is just a yield, and the bulk of the increase was the billion-eight in the second quarter and that had no impact on second quarter. Ed Najarian – IFI Group: Okay. And then secondarily, on the US Bank Corp call, they indicated that the change in FDIC Insurance costs for 2011 would be about $200 million annually. You guys have a little over four times their deposits. Is that something – around $800 million a number that you would think would be about right for you guys?

I don’t know where they get that number, so I can’t comment. Ed Najarian – IFI Group: And you don’t have any estimates for that number?

No. Ed Najarian – IFI Group: Okay. Thanks.

We’ll take one more question.

Your final question comes from the line of Moshe Orenbuch with Credit Suisse Moshe Orenbuch – Credit Suisse: Just a clarification, I think that the previous question was asking also about the accretion, which was like abruptly $40 million from like 640-some odd last quarter to like 680-some odd this quarter. I think that’s what the reference was.

Well, $40 million, the big difference is the difference between 180 and 506. Moshe Orenbuch – Credit Suisse: Just to get back on the expense side, it just seems like there’s – maybe I’m understanding this wrong, but if you said that you’ve already got 80% of the reductions in there out of $5 billion, it means that there’s a billion dollars of incremental savings, yet you’ve still got 2.6 billion of spending to go. Could you kind of reconcile what that spending is going to get you if you’ve got 80% of the savings?

What it’s going to get you is signage and systems conversions, in principally the non-overlapping stores on the East Coast. The sort of staff consolidation expenses are now behind us, the savings, and the bulk of the remaining expenditures gets consolidation, as I said, in the non-overlapping states. Moshe Orenbuch – Credit Suisse: Is there kind of an incremental revenue benefit because I guess otherwise it seems like –

You’ve got the benefit from having everybody on the same system, and all of the revenue benefits and cost savings comes with that going forward.

But the two are really not as connected as you might thing. So you have your integration and it costs money to change systems, to change signs and all the things, and you have your savings. So it wouldn’t be the right analysis to say you’re through 80% of your conversion, you should have 80% of your savings. Those two are really not as connected as you might think they are. Moshe Orenbuch – Credit Suisse: All right, I don’t want to harp on it, but it seemed to me that it usually went the other way, that a lot of the spending comes up front and the savings are realized afterwards. So this for some reason seems to be reversed.

Well, you know, when you have, in our case, we have two companies and you only need one CEO, you need one head of retail, one head of operations, you know, those kinds of things you make some of those changes very quickly. If you have a systems conversion that’s necessary to consolidate two branches, then yeah, you can have – you spend the money first. You consolidate the systems, and then the savings come when you actually mush the branches together. But as I say, in this case, we’re converting the Nation’s system of systems and the bulk of the work effort there is connected with the non-overlapping states. So you have to do the work and the benefit, as I said, will be all the revenue synergies and all the other goodies that come along with having everybody on the same system. Moshe Orenbuch – Credit Suisse: Great, thanks.

Thank you. I want to thank off of you for joining us. We very much appreciate your time, and we’ll see you next quarter.

Ladies and Gentlemen, this concludes today’s conference call.