Wells Fargo 2010 Annual Report Download - page 133

The following table presents total loans outstanding by portfolio
segment and class of financing receivable. Outstanding balances
are presented net of unearned income, net deferred loan fees,
and unamortized discounts and premiums totaling a net
reduction of $11.3 billion and $14.6 billion at December 31, 2010
and 2009, respectively. Outstanding balances also include PCI
loans net of any remaining purchase accounting adjustments.
Information about PCI loans is presented separately in the
“Purchased Credit-Impaired Loans” section of this Note.
Effective June 30, 2010, real estate construction outstanding
balances and all other related data include certain commercial
real estate secured loans acquired from Wachovia previously
classified as real estate mortgage. Balances for 2009 and 2008
have been revised to conform with the current presentation.
Note 6: Loans and Allowance for Credit Losses
December 31,
(in millions) 2010 2009 2008 2007 2006
Commercial:
Commercial and industrial $ 151,284 158,352 202,469 90,468 70,404
Real estate mortgage 99,435 97,527 94,923 36,747 30,112
Real estate construction
25,333
36,978
42,861
18,854
15,935
Lease financing 13,094 14,210 15,829 6,772 5,614
Foreign (1)
32,912
29,398
33,882
7,441
6,666
Total commercial 322,058 336,465 389,964 160,282 128,731
Consumer:
Real estate 1-4 family first mortgage 230,235 229,536 247,894 71,415 53,228
Real estate 1-4 family junior lien mortgage 96,149 103,708 110,164 75,565 68,926
Credit card
22,260
24,003
23,555
18,762
14,697
Other revolving credit and installment 86,565 89,058 93,253 56,171 53,534
Total consumer 435,209 446,305 474,866 221,913 190,385
Total loans
$
757,267
782,770
864,830
382,195
319,116
(1) Substantially all of our foreign loan portfolio is commercial loans. Loans are classified as foreign if the borrower’s primary address is outside of the United States.
We pledge loans to secure borrowings from the FHLB and
the Federal Reserve Bank as part of our liquidity management
strategy. Loans pledged where the secured party does not have
the right to sell or repledge totaled $312.6 billion for both
December 31, 2010 and 2009. We did not have any pledged
loans where the secured party has the right to sell or repledge for
the same respective periods.
Loan concentrations may exist when there are amounts
loaned to borrowers engaged in similar activities or similar types
of loans extended to a diverse group of borrowers that would
cause them to be similarly impacted by economic or other
conditions. At December 31, 2010 and 2009, we did not have
concentrations representing 10% or more of our total loan
portfolio in domestic commercial and industrial loans and lease
financing by industry or CRE loans (real estate mortgage and
real estate construction) by state or property type. Our real
estate 1-4 family mortgage loans to borrowers in the state of
California represented approximately 14% of total loans at both
December 31, 2010 and 2009. Of this amount, 3% of total loans
were PCI loans at December 31, 2010. These loans are generally
diversified among the larger metropolitan areas in California,
with no single area consisting of more than 3% of total loans.
Changes in real estate values and underlying economic or market
conditions for these areas are monitored continuously within our
credit risk management process.
Some of our real estate 1-4 family mortgage loans, including
first mortgage and home equity products, include an interest-
only feature as part of the loan terms. At December 31, 2010,
these loans were approximately 25% of total loans, compared
with 26% at December 31, 2009. Substantially all of these loans
are considered to be prime or near prime. We do not offer option
adjustable-rate mortgage (ARM) products, nor do we offer
variable-rate mortgage products with fixed payment amounts,
commonly referred to within the financial services industry as
negative amortizing mortgage loans.
The following table summarizes the proceeds paid or received
for purchases and sales of loans, respectively. It also includes
transfers from (to) mortgages/loans held for sale at lower of cost
or market. The table excludes PCI loans and loans recorded at
fair value, including loans originated for sale. This activity
primarily includes purchases or sales of commercial loan
participation interests, whereby we receive or transfer a portion
of a loan after origination.
December 31, 2010
(in millions) Commercial Consumer Total
Purchases $ 2,135 162 2,297
Sales (5,930) (553) (6,483)
Transfers from/(to) MHFS/LHFS (1,461) (82) (1,543)
131