Wells Fargo 2010 Annual Report Download - page 59

COMMERCIAL AND INDUSTRIAL LOANS AND LEASE
FINANCING For purposes of portfolio risk management, we
aggregate commercial and industrial loans and lease financing
according to market segmentation and standard industry
codes. Table 19 summarizes commercial and industrial loans and
lease financing by industry with the related nonaccrual totals.
While this portfolio has experienced deterioration in the current
credit cycle, we believe this portfolio has experienced less credit
deterioration than our CRE portfolios. For the year ended
December 31, 2010, the commercial and industrial loans and
lease financing portfolios had (1) a lower percentage of loans 90
days or more past due and still accruing (0.19% at year end;
0.24% for CRE), (2) a lower percentage of nonperforming loans
to total loans outstanding (2.02% at year end; 6.33% for CRE),
and (3) a lower loss rate to average total loans (1.50% for the
year; 1.67% for CRE). We believe this portfolio is well
underwritten and is diverse in its risk with relatively even
concentrations across several industries. A majority of our
commercial and industrial loans and lease financing portfolio is
secured by short-term liquid assets, such as accounts receivable,
inventory and securities, as well as long-lived assets, such as
equipment and other business assets. Our credit risk
management process for this portfolio primarily focuses on a
customer’s ability to repay the loan through their cash flow.
Generally, the collateral securing this portfolio represents a
secondary source of repayment.
Table 19: Commercial and Industrial Loans and Lease
Financing by Industry
December 31, 2010
% of
Nonaccrual
Outstanding total
(in millions) loans balance (1) loans
PCI loans:
Investors $ - 111 * %
Media - 107 *
Insurance - 91 *
Technology - 65 *
Healthcare - 47 *
Residential construction - 41 *
Other - 256 (2) *
Total PCI loans $ - 718 * %
All other loans:
Financial institutions $ 167 10,468 1 %
Cyclical retailers 67 8,804 1
Food and beverage 32 8,392 1
Oil and gas 156 8,140 1
Healthcare 87 7,885 1
Transportation 34 6,427 *
Industrial equipment 113 6,284 *
Real estate – other 90 5,713
*
Business services 66 5,632
*
Technology 28 5,609
*
Investors 114 5,326
*
Utilities 107 4,793
*
Other 2,260 80,187 (3) 11
Total all other loans $ 3,321 163,660 22 %
Total $ 3,321 164,378 22 %
* Less than 1%.
(1) For PCI loans, amounts represent carrying value.
(2) No other single category had loans in excess of $35 million.
(3) No other single category had loans in excess of $4.6 billion. The next largest
categories included public administration, hotel/restaurant, media, non-
residential construction and securities firms.
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