This compares with $4.50 billion 1.16% at March 31, 2008 consisting of $3.26 billion of nonperforming loans $578 million of GNMA loan repurchases and $658 million of foreclosed and repossessed assets.

Loans that are 90 days or more past due and still accruing totaled $7.26 billion, $6.92 billion and $4.99 billion at June 30, 2008, March 31, 2008, and June 30, 2007, respectively. For the same periods, the totals included $5.48 billion, $5.29 billion and $3.91 billion, respectively, in advances pursuant to our servicing agreement to GNMA mortgage pools and similar loans whose repayments are insured by FHA and Department of Veterans Affairs.

The allowance for credit losses, including unfunded commitments, totaled $7.52 billion at June 30, 2008, compared with $6.01 billion at March 31, 2008, and $4.01 billion at June 30, 2007. Second quarter 2008 results included a credit reserve build of $1.5 billion primarily for expected higher credit losses in the loan portfolio.

Approximately 38% of $73 billion home equity portfolio and 71% of $11 billion liquidating home equity portfolio had combined loan-to-value ratios above 90% as of June 30, 2008. The property values are primarily based on a combination of March 2008 automated value models and May 2008 home price indices. If home prices decline in the coming months, these ratios will deteriorate significantly.

Community Banking Income Rises

Community Banking reported net income of $1.2 billion in second quarter 2008 down $268 million from a year ago affected by the $1.1 billion credit reserve build. Revenue increased 22% to $1.4 billion. Average loans of $215.9 billion in second quarter 2008 grew 16% and average core deposits grew 4 to $252.6 billion.

Wholesale Banking Revenue Up 8%

Wholesale banking reported net income declined $64 million in the quarter to $557 million partly due to the $143 million credit reserve build. Revenue increased $191 million. Average loans grew 32% to $107.6 billion from a year ago and core deposits were up 14% to $65.8 billion.

Wells Fargo Financial

Wells Fargo financial lost $38 million this quarter reflecting higher credit costs including a $265 million credit reserve build primarily driven by continued softening in the real estate market. The division provides loan on credit cards and secured loans against real estate to consumers. The revenues in the division were flat at $1.4 billion and reported quarterly loss of $38 million compared to $156 million income in the quarter a year ago.

Wells Fargo & Company (WFC: chart) in the last one year traded as high as $37.99 in October 2007 and as low as $20.46 in July 2008. Based on the yesterday''s closing price the company has a market cap of $ 67.74 billion.