Wells Fargo&Co.'s third-quarter 2008 results were quite good considering the challenging operating environment and the higher credit losses from consumer loans. Net income for the quarter was $1.64 billion, down 24% from a year ago but in line with our expectations that earnings for the year would be 20%-30% below those in 2007. While credit costs, net loan charge-offs, and credit provisions all increased, revenues were up 11% in the quarter, reflecting the strong core loan growth and deposit growth. Wells Fargo's sizable and low-cost core deposit base and a strong net interest margin of 4.79% underscore the firm's strong revenue showing. Wells Fargo is clearly benefiting from the weak performance of its regional competitors. Customer behavior is
