Sharon Haas, CFA, +1-212-908-0362

John Mackerey, +1-212-908-0366

David Spring, +1-312-368-3194 (Chicago)

Media Relations:

Sandro Scenga, +1-212-908-0278

sandro.scenga@fitchratings.com

Wells Fargo & Company (WFC) has effectively doubled its franchise through the acquisition of Wachovia Corporation (Wachovia) completed late on Dec. 31, 2008, according to Fitch Ratings, which has affirmed WFC's Issuer Default Rating (IDR) at 'AA'. The transaction transforms WFC from a prominent western U.S. banking company to a dominant, national banking company with strong deposit market share and meaningful household penetration throughout its 39-state footprint. Fitch has also upgraded ratings for Wachovia and removed them from Rating Watch Positive to align them with WFC.

As part of this transaction, WFC merged Wachovia Corporation with and into Wells Fargo & Company and assumed all Wachovia debt. Various Wachovia preferred shares were exchanged for newly issued preferred shares of WFC with the same terms. Wachovia's bank subsidiaries will retain their current names and operate as wholly owned subsidiaries of WFC until system integration is completed, at which point Fitch expects the banks to be merged into WFC's lead bank, Wells Fargo Bank, NA. As a result, ratings for Wachovia, it subsidiaries and its outstanding debt have been aligned to reflect WFC's acquisition and debt assumption. A complete ratings list follows the end of the release.

While WFC is certainly not immune from the macroeconomic pressures facing U.S. consumers and businesses, it has fared comparatively better than many banks. It approached problems in one particular segment of its home equity portfolio swiftly and directly beginning in 2007. Throughout 2008, WFC's strong core profitability afforded it the ability to steadily increase its provision for loan losses while remaining solidly profitable. Relative to its large bank peer group, WFC benefited from its avoidance of certain businesses and underwriting practices. By way of example, WFC did not originate option (Pick-A-Pay) ARMs or negatively amortizing mortgage loans. WFC never attempted to compete with the investment banks in trading or structured finance; as a result, WFC did not suffer the losses that have plagued the industry. That said, WFC has experienced asset quality deterioration, with further declines likely over the near term. Nevertheless, WFC is well-positioned to absorb the associated credit costs.

Wachovia has faced significant asset quality challenges, particularly in its option ARM mortgage portfolio, acquired from Golden West. In addition, Wachovia has absorbed material charges associated with exposures to ABS CDOs, structured leases, CMBS and leveraged loans. As part of its acquisition evaluation, WFC has assumed considerable future lifetime losses on Wachovia's mortgage portfolio which Fitch believes are reasonable in light of the current housing market and expected economic environment. The carrying value of those loans was adjusted at closing accordingly.

While every merger carries integration risks, WFC, under its current management team, has an excellent track record with acquisitions. WFC tends to take a deliberate approach to ensure smoother transitions and lower customer disruption when operations are consolidated. As a result, bank charters are not likely to be combined much before the end of 2009, at the earliest. WFC is expected to recognize significant merger expenses both at closing and during 2009, as the integration proceeds.