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,…

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…

(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.

Good morning. Can you hear me?

Hi Mike.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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!

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.