NORWEST CORP, 10-Q, 1998-08-14

NORWEST CORP
10-Q, 1998-08-14
NATIONAL COMMERCIAL BANKS

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998

( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-2979

NORWEST CORPORATION

A Delaware Corporation-I.R.S. No. 41-0449260
Norwest Center
Sixth and Marquette
Minneapolis, Minnesota 55479
Telephone (612) 667-1234

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. X Yes ___ No.

Common Stock, par value $1 2/3 per share,
outstanding at July 31, 1998 765,783,139 shares

<PAGE>

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

The following consolidated financial statements of Norwest Corporation
and its subsidiaries are included herein:

Page
1. Consolidated Balance Sheets -
June 30, 1998 and December 31, 1997.......................... 3

2. Consolidated Statements of Income -
Quarters and Six Months Ended June 30, 1998 and 1997......... 4

3. Consolidated Statements of Comprehensive Income -
Quarters and Six Months Ended June 30, 1998 and 1997......... 5

4. Consolidated Statements of Cash Flows -
Six Months Ended June 30, 1998 and 1997...................... 6

5. Consolidated Statements of Stockholders' Equity -
Six Months Ended June 30, 1998 and 1997...................... 7

6. Notes to Unaudited Consolidated Financial Statements........... 9

The financial information for the interim periods is unaudited. In the opinion
of management, all adjustments necessary (which are of a normal recurring
nature) have been included for a fair presentation of the results of
operations. The results of operations for an interim period are not necessarily
indicative of the results that may be expected for a full year or any other
interim period.

2
<PAGE>

Norwest Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Unaudited)

In millions, except shares June 30, December 31,
1998 1997
ASSETS
Cash and due from banks ...................... $ 4,953.7 4,912.1
Interest-bearing deposits with banks ......... 63.4 46.6
Federal funds sold and resale agreements ..... 865.5 967.4
Total cash and cash equivalents .......... 5,882.6 5,926.1
Trading account securities ................... 247.4 486.9
Investment and mortgage-backed securities
available for sale ......................... 18,432.1 17,983.9
Investment securities held to maturity (fair
value $772.8 in 1998 and $762.8 in 1997) ... 752.4 747.2
Total investment securities .............. 19,184.5 18,731.1
Loans held for sale .......................... 3,470.1 3,407.0
Mortgages held for sale ...................... 12,190.7 8,848.0
Loans and leases, net of unearned discount ... 43,390.8 42,521.6
Allowance for credit losses .................. (1,262.1) (1,233.9)
Net loans and leases ..................... 42,128.7 41,287.7
Premises and equipment, net .................. 1,377.2 1,295.5
Mortgage servicing rights, net ............... 2,903.6 2,774.9
Interest receivable and other assets ......... 5,768.5 5,783.0
Total assets ............................. $93,153.3 88,540.2

LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Noninterest-bearing ........................ $17,796.7 16,253.3
Interest-bearing ........................... 38,998.5 39,203.8
Total deposits ........................... 56,795.2 55,457.1
Short-term borrowings ........................ 12,188.1 9,557.0
Accrued expenses and other liabilities ....... 4,508.3 3,737.2
Long-term debt ............................... 12,315.6 12,766.7
Total liabilities ........................ 85,807.2 81,518.0
Preferred stock .............................. 284.4 267.4
Unearned ESOP shares ......................... (97.9) (79.4)
Total preferred stock .................... 186.5 188.0
Common stock, $1 2/3 par value - authorized
2,000,000,000 shares:
Issued 771,113,149 and 769,113,149 shares
in 1998 and 1997, respectively ............ 1,285.2 1,281.9
Surplus ...................................... 482.8 419.6
Retained earnings ............................ 5,364.9 5,007.7
Accumulated other comprehensive income ....... 374.7 409.9
Notes receivable from ESOP ................... (5.4) (10.1)
Treasury stock - 10,850,171 and 10,493,685
common shares in 1998 and 1997, respectively (342.6) (274.8)
Total common stockholders' equity ........ 7,159.6 6,834.2
Total stockholders' equity ............... 7,346.1 7,022.2
Total liabilities and
stockholders' equity ................... $93,153.3 88,540.2

See notes to unaudited consolidated financial statements.

3
<PAGE>

Norwest Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

In millions, except per common share amounts Quarter Ended Six Months Ended
June 30, June 30,
<S> 1998 1997 1998 1997
INTEREST INCOME ON <C> <C> <C> <C>
Loans and leases ........................... $1,198.1 1,115.7 2,383.5 2,211.1
Investment and mortgage-backed securities
available for sale ........................ 317.6 364.8 631.3 690.3
Investment securities held to maturity ..... 6.5 7.1 13.1 14.1
Loans held for sale ........................ 68.4 55.9 138.9 112.1
Mortgages held for sale .................... 197.0 97.8 352.8 195.5
Money market investments ................... 10.1 9.4 21.8 30.5
Trading account securities ................. 16.9 10.8 27.7 15.3
Total interest income .................. 1,814.6 1,661.5 3,569.1 3,268.9

INTEREST EXPENSE ON
Deposits ................................... 372.1 358.6 739.2 714.7
Short-term borrowings ...................... 167.2 116.0 291.5 215.1
Long-term debt ............................. 194.2 187.1 390.7 381.0
Total interest expense ................. 733.5 661.7 1,421.4 1,310.8
Net interest income .................. 1,081.1 999.8 2,147.7 1,958.1
PROVISION FOR CREDIT LOSSES ................ 139.4 122.8 263.9 231.8
Net interest income after
provision for credit losses ........ 941.7 877.0 1,883.8 1,726.3
NON-INTEREST INCOME
Mortgage banking ........................... 287.4 177.3 540.1 399.1
Trust and investment fees and commissions .. 132.1 107.2 256.0 208.8
Service charges and credit related fees .... 162.5 141.6 310.5 275.7
Credit card fee revenue .................... 39.8 27.9 72.8 55.8
Insurance .................................. 110.5 99.9 205.2 190.1
Data processing ............................ 16.1 18.3 33.2 36.4
Net investment securities held to maturity
gains .................................... - 0.3 - 0.3
Net investment and mortgage-backed securities
available for sale gains .................. 34.6 8.6 42.1 4.2
Net venture capital gains .................. 53.2 93.3 111.9 112.5
Trading .................................... 42.1 27.3 66.4 52.2
Other ...................................... 71.9 54.7 122.3 105.9
Total non-interest income .............. 950.2 756.4 1,760.5 1,441.0

NON-INTEREST EXPENSES
Salaries and benefits ...................... 721.8 569.9 1,389.1 1,116.5
Net occupancy .............................. 88.6 79.6 174.4 159.6
Equipment rentals, depreciation and
maintenance .............................. 95.1 83.5 183.1 165.7
Business development ....................... 66.4 63.7 132.0 122.1
Communication .............................. 82.3 71.3 159.0 142.8
Data processing ............................ 42.1 42.3 77.8 87.4
Intangible asset amortization .............. 43.7 43.0 86.0 83.4
Other ...................................... 184.5 166.4 333.1 283.7
Total non-interest expenses ............ 1,324.5 1,119.7 2,534.5 2,161.2
INCOME BEFORE INCOME TAXES ................. 567.4 513.7 1,109.8 1,006.1
Income tax expense ......................... 185.3 182.3 360.0 352.8
NET INCOME ................................. $ 382.1 331.4 749.8 653.3

PER COMMON SHARE
Net Income
Basic .................................... $ 0.50 0.43 0.98 0.86
Diluted .................................. 0.49 0.43 0.96 0.85
Dividends ................................. 0.165 0.150 0.330 0.300

See notes to unaudited consolidated financial statements.
</TABLE>
4
<PAGE>

Norwest Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)

In millions Quarter Ended Six Months Ended
June 30, June 30,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Net income ................................. $ 382.1 331.4 749.8 653.3

Other comprehensive income, before income taxes:
Change in net unrealized gains (losses) on
securities available for sale:
Unrealized losses arising during
the period .............................. 132.6 450.2 102.6 157.6
Less: reclassification adjustment for gains
included in net income .................. 87.8 101.9 154.0 116.7
44.8 348.3 (51.4) 40.9
Foreign currency translation adjustment ... (3.1) 0.3 (2.8) (1.5)
Other comprehensive income, before
income taxes .............................. 41.7 348.6 (54.2) 39.4
Income tax expense (benefit) related to
components of other comprehensive income at an
effective income tax rate of 35 percent ... (14.6) (122.0) 19.0 (13.8)
Other comprehensive income, net of
income taxes .............................. 27.1 226.6 (35.2) 25.6
Comprehensive income ....................... $ 409.2 558.0 714.6 678.9

See notes to unaudited consolidated financial statements.

</TABLE>
5
<PAGE>

Norwest Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

<TABLE>
<CAPTION>
In millions Six Months Ended
June 30,
1998 1997
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income ............................................................ $ 749.8 653.3
Adjustments to reconcile net income to net cash flows from
operating activities:
Provision for credit losses ....................................... 263.9 231.8
Depreciation and amortization ..................................... 592.0 410.2
Gains on sales of loans, securities and other assets, net ......... (370.8) (221.5)
Release of preferred shares to ESOP ............................... 18.0 19.3
Purchases of trading account securities ........................... (64,782.2) (39,517.4)
Proceeds from sales of trading account securities ................. 65,110.4 38,257.9
Originations of mortgages held for sale ........................... (46,938.6) (22,983.4)
Proceeds from sales of mortgages held for sale .................... 43,719.0 22,931.4
Originations of loans held for sale ............................... (459.2) (546.9)
Proceeds from sales of loans held for sale ........................ 389.2 585.4
Interest receivable ............................................... (29.9) (79.6)
Interest payable .................................................. (8.8) (16.8)
Other assets, net ................................................. (485.7) (425.3)
Other accrued expenses and liabilities, net ....................... 652.7 532.1
Net cash flows from operating activities ........................ (1,580.2) (169.5)

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities and paydowns of investment securities
held to maturity .................................................. 19.4 0.5
Proceeds from maturities and paydowns of investment and mortgage-
backed securities available for sale .............................. 2,214.5 1,152.6
Proceeds from sales and calls of investment securities held to
maturity .......................................................... 34.8 44.0
Proceeds from sales and calls of investment and mortgage-backed
securities available for sale ..................................... 5,891.2 5,350.9
Purchases of investment securities held to maturity ................. (86.8) (94.3)
Purchases of investment and mortgage-backed securities available
for sale .......................................................... (8,091.3) (9,009.4)
Net change in banking subsidiaries' loans and leases ................ (412.6) (313.2)
Non-bank subsidiaries' loans and leases originated .................. (4,295.9) (4,032.2)
Principal collected on non-bank subsidiaries' loans and leases ...... 4,044.6 3,852.2
Purchases of premises and equipment ................................. (222.8) (151.5)
Proceeds from sales of premises, equipment & other real estate owned 116.5 65.5
Cash paid for acquisitions, net of cash and cash equivalents acquired (194.1) 27.1
Net cash flows used for investing activities ...................... (982.5) (3,107.8)

CASH FLOWS FROM FINANCING ACTIVITIES
Deposits, net ....................................................... 922.7 95.3
Short-term borrowings, net .......................................... 2,601.9 1,783.8
Long-term debt borrowings ........................................... 462.4 1,342.0
Repayments of long-term debt ........................................ (1,020.5) (2,385.1)
Issuances of common stock ........................................... 77.4 34.7
Repurchases of common stock ......................................... (270.4) (215.5)
Net decrease in notes receivable from ESOP .......................... 4.7 1.0
Dividends paid ...................................................... (259.0) (233.5)
Net cash flows used for financing activities ...................... 2,519.2 422.7
Net decrease in cash and cash equivalents ......................... (43.5) (2,854.6)

CASH AND CASH EQUIVALENTS
Beginning of period ................................................. 5,926.1 7,371.3
End of period .......................................................$ 5,882.6 4,516.7

See notes to unaudited consolidated financial statements.

</TABLE>
6
<PAGE>

Norwest Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)

In Accumulated
millions, Unearned Other Notes
except for Preferred ESOP Common Sur- Retained Comprehensive Receivable Treasury
shares Stock Shares Stock plus Earnings Income from ESOP Stock Total

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance,
December 31, 1996...... $ 249.8 (61.0) 625.9 948.6 4,248.2 297.1 (11.1) (233.3) 6,064.2
Comprehensive income:
Net income............ - - - - 653.3 - - - 653.3
Other................. - - - - - 25.6 - - 25.6
Dividends on
Common stock.......... - - - - (224.6) - - - (224.6)
Preferred stock....... - - - - (8.9) - - - (8.9)
Conversion of 19,245
preferred shares to
771,672 common shares. (19.3) - - 2.6 - - - 16.7 -
Cash payments received
on notes receivable
from ESOP............. - - - - - - 1.0 - 1.0
Issuance of 51,700
preferred shares to
ESOP.................. 51.7 (53.8) - 2.1 - - - - -
Release of preferred
shares to ESOP........ - 20.1 - (0.8) - - - - 19.3
Issuance of 4,154,330
common shares......... - - - 29.6 (49.3) - - 79.0 59.3
Issuance of 14,667,100
common shares for
acquisitions.......... - - 9.3 7.8 42.6 0.9 - 72.8 133.4
Repurchase of 8,460,946
common shares......... - - - - - - - (215.5) (215.5)
Balance,
June 30, 1997......... $ 282.2 (94.7) 635.2 989.9 4,661.3 323.6 (10.1) (280.3) 6,507.1

</TABLE>

(Continued on page 8)
7
<PAGE>

Norwest Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)

(Continued from page 7)
<TABLE>
<CAPTION>

In Accumulated
millions, Unearned Other Notes
except for Preferred ESOP Common Sur- Retained Comprehensive Receivable Treasury
shares Stock Shares Stock plus Earnings Income from ESOP Stock Total

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance,
December 31, 1997...... $ 267.4 (79.4) 1,281.9 419.6 5,007.7 409.9 (10.1) (274.8) 7,022.2
Comprehensive income:
Net income............ - - - - 749.8 - - - 749.8
Other................. - - - - - (35.2) - - (35.2)
Dividends on
Common stock.......... - - - - (250.1) - - - (250.1)
Preferred stock....... - - - - (8.9) - - - (8.9)
Conversion of 18,043
preferred shares to
452,668 common shares. (18.0) - - 2.5 - - - 15.5 -
Cash payments received
on notes receivable
from ESOP............. - - - - - - 4.7 - 4.7
Issuance of 35,000
preferred shares to
ESOP.................. 35.0 (37.7) - 2.7 - - - - -
Release of preferred
shares to ESOP........ - 19.2 - (1.2) - - - - 18.0
Issuance of 5,273,982
common shares......... - - - 34.3 (97.8) - - 164.5 101.0
Issuance of 2,646,909
common shares for
acquisitions.......... - - 3.3 25.2 (35.8) - - 22.3 15.0
Repurchase of 6,730,045
common shares......... - - - (0.3) - - - (270.1) (270.4)
Balance,
June 30, 1998......... $ 284.4 (97.9) 1,285.2 482.8 5,364.9 374.7 (5.4) (342.6) 7,346.1

</TABLE>

See notes to unaudited consolidated financial statements.
8
<PAGE>

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. Changes in Accounting Policies

Effective January 1, 1998, the corporation adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income" (FAS 130).
FAS 130 requires disclosures of the components of comprehensive income and
the accumulated balance of other comprehensive income within total
stockholders' equity. The adoption of FAS 130 has not had a material
effect on the corporation's financial statements.

2. Consolidated Statements of Cash Flows

Supplemental disclosures of cash flow information for the six months ended
June 30 include:

In millions 1998 1997

Interest...................................... $1,430.2 1,327.5
Income taxes.................................. 18.5 84.0
Transfer of loans to other real estate owned.. 70.8 26.8

See Notes 8 and 13 for certain non-cash common and preferred stock
transactions.

3. Earnings Per Share

Basic earnings per share, pursuant to Statement of Financial Accounting
Standards No. 128, "Earnings Per Share," (FAS 128) is determined using net
income, adjusted for preferred stock dividends, divided by weighted
average common shares outstanding. Diluted earnings per share, as defined
by FAS 128, is computed based on the amount of income that would be
available for each common share assuming all dilutive potential common
shares were issued. Such dilutive potential common shares include stock
options and the 6 3/4 percent convertible subordinated debentures. Amounts
used in the determination of basic and diluted earnings per share for the
quarters and six months ended June 30, 1998 and 1997 are shown in the
table below.

In millions, except shares
Quarter Ended Six Months Ended
June 30, June 30,
1998 1997 1998 1997

Net income ................ $ 382.1 331.4 749.8 653.3
Less dividends accrued on
preferred stock ......... 4.5 4.5 8.9 8.9
Income available to common
stockholders ............ $ 377.6 326.9 740.9 644.4

Weighted average shares
outstanding ............. 757,867,635 749,137,792 757,787,480 747,366,474
Adjustments for dilutive
securities:
Assumed exercise of stock
options ............... 13,092,213 10,255,394 13,655,151 10,288,454
Assumed conversion of
convertible subordinated
debentures ............ 34,400 34,800 34,469 34,800
Diluted common shares ..... 770,994,248 759,427,986 771,477,100 757,689,728

9
<PAGE>

4. Investment Securities

The amortized cost and fair value of investment securities at June 30, 1998
were:
<TABLE>

In millions Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
<S> <C> <C> <C> <C>
Available for sale:
U.S. Treasury and federal agencies .. $ 3,631.8 32.2 (3.9) 3,660.1
State, municipal and housing -
tax exempt ......................... 1,426.8 84.1 (0.5) 1,510.4
Other ............................... 1,057.8 232.4 (8.9) 1,281.3
Total investment securities
available for sale .............. 6,116.4 348.7 (13.3) 6,451.8
Mortgage-backed securities:
Federal agencies ................... 11,452.4 303.8 (5.5) 11,750.7
Collateralized mortgage
obligations ....................... 225.0 4.7 (0.1) 229.6
Total mortgage-backed securities
available for sale .............. 11,677.4 308.5 (5.6) 11,980.3
Total investment and
mortgage-backed securities
available for sale .................. $17,793.8 657.2 (18.9) 18,432.1

Investment securities held to
maturity ........................... $ 752.4 25.7 (5.3) 772.8

Total investment securities .......... $18,546.2 682.9 (24.2) 19,204.9

</TABLE>
Interest income on investment securities for the quarters and six months ended
June 30 was:
Quarter Six Months
In millions 1998 1997 1998 1997

Available for sale:
U.S. Treasury and federal agencies .. $ 62.8 64.4 97.1 96.5
State, municipal and housing -
tax exempt ........................ 20.6 20.0 40.9 34.6
Other ............................... 11.6 9.7 23.7 24.2
Total investment securities
available for sale .............. 95.0 94.1 161.7 155.3
Mortgage-backed securities:
Federal agencies ................... 218.6 266.7 461.0 526.6
Collateralized mortgage
obligations ....................... 4.0 4.0 8.6 8.4
Total mortgage-backed securities
available for sale .............. 222.6 270.7 469.6 535.0
Total investment and mortgage-backed
securities available for sale ...... $ 317.6 364.8 631.3 690.3

Investment securities held to
maturity ........................... $ 6.5 7.1 13.1 14.1

Total investment securities .......... $ 324.1 371.9 644.4 704.4

Certain investment securities held to maturity with a total amortized cost
of $11.9 million and $34.8 million for the quarter and six months ended
June 30, 1998, respectively, and $38.5 million and $43.7 million for the
quarter and six months ended June 30, 1997, respectively, were sold by the
corporation due to significant deterioration in the creditworthiness of the
related issuers or because such securities were called by the issuers prior
to maturity. Sales and calls of investment securities resulted in no gain
or loss for the quarter and six months ended June 30, 1998 and a gain of
$0.3 million for the quarter and six months ended June 30, 1997.

10
<PAGE>

5. Loans and Leases

The carrying values of loans and leases at June 30, 1998 and
December 31, 1997 were:

In millions June 30, December 31,
1998 1997
Commercial, financial and industrial ..... $11,338.4 10,680.2
Agricultural ............................. 1,270.0 1,276.2
Real estate
Secured by 1-4 family residential
properties ........................... 10,915.3 10,746.6
Secured by development properties ...... 1,969.9 2,131.4
Secured by construction and land
development .......................... 1,049.4 1,005.8
Secured by owner-occupied properties ... 3,001.4 2,866.1
Consumer ................................. 11,877.0 12,298.0
Credit card .............................. 1,569.3 1,632.2
Lease financing .......................... 1,029.8 921.2
Foreign
Consumer ............................... 1,217.2 864.0
Commercial ............................. 223.7 212.4
Total loans and leases ............... 45,461.4 44,634.1
Unearned discount ........................ (2,070.6) (2,112.5)
Total loans and leases, net of
unearned discount .................... $43,390.8 42,521.6

Changes in the allowance for credit losses for the quarters and six months
ended June 30 were:
Quarter Six Months
In millions 1998 1997 1998 1997

Balance at beginning of period ....... $1,236.3 1,062.6 1,233.9 1,040.8
Allowance related to assets
acquired, net ..................... 26.0 0.5 35.3 25.3
Provision for credit losses ........ 139.4 122.8 263.9 231.8

Credit losses ...................... (177.3) (157.0) (350.8) (303.7)
Recoveries ......................... 37.7 42.2 79.8 76.9
Net credit losses ................ (139.6) (114.8) (271.0) (226.8)
Balance at end of period ............. $1,262.1 1,071.1 1,262.1 1,071.1

11
<PAGE>

6. Non-performing Assets and 90-day Past Due Loans and Leases

Total non-performing assets and 90-day past due loans and leases at June 30,
1998 and 1997 and December 31, 1997 were:

In millions June 30, December 31,
1998 1997 1997
Impaired loans
Non-accrual ........................... $ 128.4 113.5 89.4
Restructured .......................... 0.7 0.2 0.1
Total impaired loans ................ 129.1 113.7 89.5
Other non-accrual loans and leases ...... 86.4 74.2 88.7
Total non-accrual and
restructured loans and leases ........ 215.5 187.9 178.2
Other real estate owned ................. 49.3 44.8 50.3
Total non-performing assets ........... 264.8 232.7 228.5
Loans and leases past due 90 days or more* 165.0 115.4 153.8
Total non-performing assets and
90-day past due loans and leases ..... $ 429.8 348.1 382.3

* Excludes non-accrual and restructured loans and leases.

The average balances of impaired loans for the six months ended June 30,
1998 and 1997 were $115.9 million and $108.4 million, respectively. The
allowance for credit losses related to impaired loans at June 30, 1998 and
December 31, 1997 was $38.3 million and $33.5 million, respectively.
Impaired loans of $3.3 million and $1.8 million were not subject to a
related allowance for credit losses at June 30, 1998 and December 31, 1997,
respectively, because of the net realizable value of loan collateral,
guarantees and other factors.

The effect of non-accrual and restructured loans on interest income for the
quarters and six months ended June 30 was:

Quarter Six Months
In millions 1998 1997 1998 1997

Interest
As originally contracted ........... $ 6.4 6.1 9.9 11.3
As recognized ...................... (1.4) (0.9) (2.0) (1.4)
Reduction of interest income ..... $ 5.0 5.2 7.9 9.9

7. Long-term Debt

During the first six months of 1998, certain subsidiaries of the
corporation received $339.8 million of advances from the Federal Home Loan
Bank. Advances of $39.8 million were issued bearing interest at fixed
rates ranging from 5.47 percent to 6.19 percent, which mature between
March 2001 and December 2027. Advances of $300.0 million were issued
bearing interest at rates of one-month LIBOR less 15 basis points, which
mature between July 1998 and March 1999. Advances maturing within the next
year are expected to be refinanced, extending the maturity of such
borrowings beyond one year. Norwest Financial, Inc. and its subsidiaries
issued $111.6 million in senior notes bearing interest at fixed rates
ranging from 5.50 percent to 6.08 percent, which mature between April 2003
and March 2008. Norwest Financial, Inc. and its subsidiaries assumed
$104.8 million in senior notes in connection with its acquisition of The T.
Eaton Acceptance Company Limited, bearing interest at fixed rates ranging from
7.55 percent to 9.00 percent, which mature between December 1999 to
December 2000.

12
<PAGE>

8. Stockholders' Equity

The table below is a summary of the corporation's preferred and preference
stock at June 30, 1998 and December 31, 1997. A detailed description of the
corporation's preferred and preference stock is provided in Note 10 to the
audited consolidated financial statements included in the corporation's 1997
annual report on Form 10-K.

In millions, except share amounts

<TABLE>
<CAPTION>
Annual
Dividend
Shares Outstanding Rate at Amount Outstanding
June 30, December 31, June 30, June 30, December 31,
1998 1997 1998 1998 1997
<S> <C> <C> <C> <C> <C>
Cumulative
Tracking, $200
stated value .............. 980,000 980,000 9.30% $ 196.0 196.0
1998 ESOP Cumulative
Convertible, $1,000 stated
value ..................... 20,636 - 10.75% 20.6 -
1997 ESOP Cumulative
Convertible, $1,000 stated
value ..................... 19,982 22,927 9.50% 20.0 23.0
1996 ESOP Cumulative
Convertible, $1,000 stated
value ..................... 22,458 22,831 9.50% 22.5 22.8
1995 ESOP Cumulative
Convertible, $1,000 stated
value ..................... 20,396 20,625 10.00% 20.4 20.6
ESOP Cumulative Convertible,
$1,000 stated value ....... 9,890 10,022 9.00% 9.9 10.0
Less: Cumulative
Tracking shares held by
a subsidiary .............. (25,000) (25,000) (5.0) (5.0)
1,048,362 1,031,405 284.4 267.4
Unearned ESOP shares ........ (97.9) (79.4)
Total preferred stock ... $ 186.5 188.0

On February 24, 1998, the corporation issued 35,000 shares of 1998 ESOP
Cumulative Convertible Preferred Stock, $1,000 stated value per share
("1998 ESOP Preferred Stock"), in the stated amount of $35.0 million at a
premium of $2.7 million; a corresponding charge of $37.7 million was
recorded to unearned ESOP shares.

On February 24, 1997, the corporation issued 51,700 shares of 1997 ESOP
Cumulative Convertible Preferred Stock, $1,000 stated value per share
("1997 ESOP Preferred Stock"), in the stated amount of $51.7 million at a
premium of $2.1 million; a corresponding charge of $53.8 million was
recorded to unearned ESOP shares.

During the quarter and six months ended June 30, 1998, 9,466 and 18,043
shares of ESOP Preferred Stock were converted into 246,201 and 452,668
shares of common stock of the corporation, respectively. During the
quarter and six months ended June 30, 1997, 7,678 and 19,245 shares of ESOP
Preferred Stock were converted into 275,040 shares and 771,672 shares of
common stock of the corporation, respectively.

Accumulated other comprehensive income at June 30, 1998 and December 31,
1997 is comprised of the following:
June 30, December 31,
1998 1997

Unrealized gains on securities available
for sale ............................. $ 386.0 419.4
Foreign currency translation ........... (11.3) (9.5)
Accumulated other comprehensive income $ 374.7 409.9

13
<PAGE>

9. Business Segments

The corporation's operations include three primary business segments:
banking, mortgage banking and consumer finance. See Note 16 to the audited
consolidated financial statements included in the corporation's annual
report on Form 10-K for the year ended December 31, 1997 for a detailed
description of each business segment. Selected financial information by
business segment for the quarters and six months ended June 30 is included
in the following summary:

In millions
Quarter Six Months
1998 1997 1998 1997
Revenues:*
Banking ................ $ 1,697.1 1,608.0 3,285.6 3,099.8
Mortgage Banking ....... 531.1 347.1 980.5 691.5
Norwest Financial ...... 536.6 462.8 1,063.5 918.6
Total ................ $ 2,764.8 2,417.9 5,329.6 4,709.9
Organizational earnings:*
Banking ................ $ 274.4 229.7 538.3 456.2
Mortgage Banking ....... 54.0 35.3 105.9 69.1
Norwest Financial ...... 53.7 66.4 105.6 128.0
Total ................ $ 382.1 331.4 749.8 653.3
Total assets:
Banking ................ $60,404.4 62,759.1
Mortgage Banking ....... 21,929.9 12,111.3
Norwest Financial ...... 10,819.0 8,985.9
Total ................ $93,153.3 83,856.3

* Revenues (interest income plus non-interest income), where applicable,
and organizational earnings by business segment are impacted by
intercompany revenues and expenses, such as interest on borrowings
from the parent company, corporate service fees and allocation of
federal income taxes.

10. Mortgage Banking Activities

Additional information about mortgage banking non-interest income for
the quarters and six months ended June 30 is presented below:

Quarter Six Months
In millions 1998 1997 1998 1997

Origination and other
closing fees ............ $129.1 77.8 238.2 136.4
Servicing fees ............ (19.0) 45.7 31.2 140.8
Net gains (losses) on sales
of servicing rights ..... 16.6 (2.6) 16.3 (2.4)
Net gains on sales of
mortgages ............... 98.5 14.5 135.3 46.0
Other ..................... 62.2 41.9 119.1 78.3
Total mortgage banking
non-interest income ... $287.4 177.3 540.1 399.1

14
<PAGE>
Mortgage loans serviced for others are not included in the accompanying
consolidated balance sheets. The outstanding balances of serviced loans
were $220.3 billion and $191.1 billion at June 30, 1998 and 1997,
respectively, and $205.8 billion at December 31, 1997.

Changes in capitalized mortgage servicing rights for the quarters and six
months ended June 30 were:

Quarter Six Months
In millions 1998 1997 1998 1997

Mortgage servicing rights:

Balance at beginning
of period ............ $2,874.9 2,785.1 2,839.1 2,712.7
Originations ........... 180.9 82.0 310.8 159.8
Purchases and other
additions ............ 190.2 76.9 307.7 108.6
Sales .................. (56.1) - (56.1) (17.4)
Amortization ........... (175.2) (132.8) (328.3) (218.0)
Other .................. (46.9) (27.4) (105.4) 38.1
2,967.8 2,783.8 2,967.8 2,783.8
Less valuation allowance (64.2) (64.2) (64.2) (64.2)
Balance at end of period . $2,903.6 2,719.6 2,903.6 2,719.6

The fair value of capitalized mortgage servicing rights at June 30, 1998
was approximately $3.3 billion, calculated using discount rates ranging
from 500 to 700 basis points over the ten-year U.S. Treasury rate.

There were no changes in the valuation allowance for capitalized mortgage
servicing rights during the quarters and six months ended June 30, 1998 and
1997.

11. Trading Revenues

For the quarters and six months ended June 30, trading revenues were
derived from the following activities:

Quarter Six Months
In millions 1998 1997 1998 1997

Interest income:
Securities .............................. $ 16.9 10.8 27.7 15.3

Non-interest income:
Gains(losses) on securities sold ........ 36.2 16.3 48.7 31.6
Swaps and other interest rate contracts . 0.5 0.3 0.5 0.6
Foreign exchange trading ................ 2.9 3.9 6.5 7.6
Options ................................. 1.7 1.7 2.0 3.8
Futures ................................. 0.8 5.1 8.7 8.6
Total non-interest income ............. 42.1 27.3 66.4 52.2
Total trading revenues .................... $ 59.0 38.1 94.1 67.5
<PAGE>

12. Derivative Activities

The corporation and its subsidiaries, as end-users, utilize various types of
derivative products (principally interest rate swaps,interest rate caps
and floors, futures and options on futures contracts) as part of an
overall interest rate risk management strategy. See Note 15 to the
audited consolidated financial statements included in the corporation's
annual report on Form 10-K for the year ended December 31, 1997 for a
detailed description of derivative products utilized in end-user activities.

For the six months ended June 30, 1998, end-user derivative activities
increased interest income by $3.8 million and decreased interest expense by
$45.6 million, for a total benefit to net interest income of $49.4 million.
For the same period in 1997, the total benefit to net interest income was
$35.3 million.

Activity in the notional amounts of end-user derivatives for the six months
ended June 30, 1998 is summarized as follows:

</TABLE>
<TABLE>
<CAPTION>

In millions December 31, Amortization June 30,
1997 Additions & Maturities Terminations 1998
<S> <C> <C> <C> <C> <C>
Swaps:

Generic receive fixed ..... $ 4,316 - (300) - 4,016

Amortizing receive fixed .. 3,185 - (188) - 2,997

Generic pay fixed ......... 221 123 (3) - 341

Basis ..................... 29 29 (29) - 29

Total swaps ............. 7,751 152 (520) - 7,383

Interest rate caps
and floors ................ 14,377 - (327) - 14,050

Futures contracts ........... 4,690 15,105 (4,903) (9,836) 5,056

Options on futures contracts 9,886 41,605 (23,963) (15,065) 12,463

Security options ............ 1,240 24,526 (12,801) (7,040) 5,925

Forward foreign exchange
contracts ................. 491 188 (556) - 123

Total ....................... $ 38,435 81,576 (43,070) (31,941) 45,000

</TABLE>

Deferred gains and losses on closed end-user derivatives were not material
at June 30, 1998 and December 31, 1997.

A key assumption in the information which follows is that rates remain
constant at June 30, 1998 levels. To the extent that rates change, both
the average notional and variable interest rate information may change.

16
<PAGE>

The following table presents the maturities and weighted average rates for
end-user derivatives by type:

Dollars in millions
Maturity
There-
June 30, 1998 1998 1999 2000 2001 2002 after Total

Swaps:
Generic receive fixed-
Notional value ........$ 450 766 400 500 400 1,500 4,016
Weighted avg.
receive rate ........ 6.02% 7.28 6.17 6.35 6.59 6.53 6.56
Weighted avg. pay rate 5.68% 5.67 5.67 5.71 5.69 5.69 5.69
Amortizing receive fixed-
Notional value ........$ - 1,786 1,211 - - - 2,997
Weighted avg.
receive rate ........ -% 7.46 6.53 - - - 7.08
Weighted avg. pay rate -% 5.52 5.65 - - - 5.57
Generic pay fixed-
Notional value ........$ 3 4 4 110 101 119 341
Weighted avg.
receive rate ........ 5.69% 8.50 5.51 5.67 5.69 5.69 5.71
Weighted avg. pay rate 6.18% 9.24 5.97 5.76 5.99 5.78 5.88
Basis-
Notional value ........$ - - - - - 29 29
Weighted avg.
receive rate ........ -% - - - - 5.11 5.11
Weighted avg. pay rate -% - - - - 2.69 2.69

Interest rate caps and
floors (1):
Notional value ........$ 200 400 3,200 4,750 5,500 - 14,050

Futures contracts (1):
Notional value ........$ 5,056 - - - - - 5,056

Options on futures
contracts (1):
Notional value ........$12,463 - - - - - 12,463

Security options (1):
Notional value ........$ 5,900 - - 25 - - 5,925

Forward foreign exchange
contracts (1):
Notional value ........$ 123 - - - - - 123

Total notional value ....$24,195 2,956 4,815 5,385 6,001 1,648 45,000

Total weighted avg.
rates on swaps:
Receive rate ........ 6.02% 7.41 6.44 6.22 6.41 6.44 6.73

Pay rate ............ 5.68% 5.57 5.66 5.72 5.75 5.64 5.64

(1) Average rates are not meaningful for interest rate caps and floors, futures
contracts, options or forward foreign exchange contracts.

Note: Weighted average variable rates are based on the actual rates as of
June 30, 1998.

17
<PAGE>

The following table provides the gross gains and gross losses not yet
recognized in the consolidated financial statements for open end-user
derivatives applicable to certain hedged assets and liabilities:

In millions Balance Sheet Category
Loans Mortgage Interest- Short- Long-
Investment and Servicing bearing term term
Securities Leases Rights Deposits Borrowings Debt Total
<S> <C> <C> <C> <C> <C> <C> <C>
Swaps:

Pay variable
Unrealized gains ..... $ - - 41.8 69.2 - 94.2 205.2
Unrealized (losses) .. - - - - - (1.0) (1.0)

Pay variable net ..... - - 41.8 69.2 - 93.2 204.2

Pay fixed
Unrealized gains ..... - 0.2 - 0.5 - - 0.7
Unrealized losses .... - (1.5) - - - - (1.5)

Pay fixed net ........ - (1.3) - 0.5 - - (0.8)

Basis
Unrealized (losses) .. (0.1) - - - - - (0.1)

Total unrealized gains . - 0.2 41.8 69.7 - 94.2 205.9
Total unrealized (losses) (0.1) (1.5) - - - (1.0) (2.6)

Total net ............ $ (0.1) (1.3) 41.8 69.7 - 93.2 203.3

Interest rate caps and floors:

Unrealized gains ..... $ - - 188.4 - - - 188.4
Unrealized (losses) .. - - - - - - -

Total net .......... $ - - 188.4 - - - 188.4

Futures contracts:

Unrealized gains ..... $ - 0.2 44.2 - - - 44.4
Unrealized (losses) .. - (4.9) - - - - (4.9)

Total net .......... $ - (4.7) 44.2 - - - 39.5

Options on futures contracts:

Unrealized gains ..... $ - 0.5 26.2 - - - 26.7
Unrealized (losses) .. - (1.9) (4.5) - - - (6.4)

Total net .......... $ - (1.4) 21.7 - - - 20.3
Security options:

Unrealized gains ..... $ - 11.7 - - - - 11.7
Unrealized (losses) .. - (4.2) - - - - (4.2)

Total net .......... $ - 7.5 - - - - 7.5
Forward foreign exchange contracts:

Unrealized (losses) .. $ - - - - (2.1) - (2.1)

Grand total
unrealized gains ... $ - 12.6 300.6 69.7 - 94.2 477.1
Grand total
unrealized (losses) (0.1) (12.5) (4.5) - (2.1) (1.0) (20.2)

Grand total net ...... $ (0.1) 0.1 296.1 69.7 (2.1) 93.2 456.9

18
<PAGE>

As a result of interest rate fluctuations, off-balance sheet derivatives
have unrealized appreciation or depreciation in market values as compared
with their cost. As these derivatives hedge certain assets and liabilities
of the corporation, as noted in the table above, there has been offsetting
unrealized appreciation and depreciation in the assets and liabilities
hedged.

The corporation has entered into mandatory and standby forward contracts,
including options on forward contracts, to reduce interest rate risk on
certain mortgage loans held for sale and other commitments. The contracts
provide for the delivery of securities at a specified future date, at a
specified price or yield. At June 30, 1998, the corporation had forward
contracts and options on forward contracts totaling $31.2 billion, all of
which mature within 180 days. Gains and losses on forward contracts and
options on forward contracts are included in the determination of market
value of mortgages held for sale.

At June 30, 1998, the corporation's trading account portfolio included
futures of $325 million notional value, which are valued at market with any
gains or losses recognized currently.

13. Business Combinations

The corporation regularly explores opportunities for acquisitions of
financial institutions and related businesses. Generally, management of
the corporation does not make a public announcement about an acquisition
opportunity until a definitive agreement has been signed. At June 30,
1998, the corporation had six pending acquisitions with total assets of
approximately $95.5 billion, and it is anticipated that approximately 889.9
million common shares will be issued upon completion of these acquisitions.

The pending acquisitions include the proposed merger of the corporation and
Wells Fargo & Company pursuant to an agreement signed on June 7, 1998. In
accordance with the agreement, common stockholders of Wells Fargo will
receive ten shares of Norwest common stock in exchange for each share of
Wells Fargo & Company common stock. Each of the corporation's pending
acquisitions, subject to any required approvals by stockholders and regulatory
agencies, is expected to be completed by the end of 1998.

19
<PAGE>

Transactions completed in the six months ended June 30, 1998 include:

</TABLE>
<TABLE>
<CAPTION>

In millions, except share amounts Common
Cash Shares Method of
Date Assets Paid Issued Accounting
<S> <C> <C> <C> <C> <C>
Finvercon S.A. Compania
Financiera
Argentina (F) ................. January 8 $ 57.4 $ 19.7 - Purchase

Fidelity Bancshares, Inc.
Fort Worth, Texas (B) ......... January 13 111.0 16.1 - Purchase

Heritage Trust Company,
Grand Junction, Colorado (B)... February 20 1.6 - 136,950 Purchase

Founders Trust Company
Dallas, Texas (B) ............. March 2 1.6 6.9 - Purchase

The T. Eaton Acceptance Company
Limited and National Retail Credit
Services Limited, Don Mills,
Ontario, Canada (F) ........... April 21 370.0 247.6 - Purchase

WMC Mortgage Corporation
Woodland Hills, California (M). April 30 4.9 21.9 - Purchase

First Bank Pooling of
Katy, Texas (B) ............... May 22 309.7 - 1,999,980 Interests*

First Bank of Grants
Grants, New Mexico (B) ........ May 28 44.9 - 212,000 Purchase

Spring Mountain Escrow Company
Irvine, California (M) ........ May 29 1.3 1.7 - Purchase

Emjay Corporation
Milwaukee, Wisconsin (B) ...... June 15 5.8 - 297,979 Purchase
$ 908.2 $ 313.9 2,646,909
</TABLE>

* Pooling of interests transaction was not material to the corporation's
consolidated financial statements; accordingly, previously reported results
have not been restated.

(B) - Banking Group; (M) - Mortgage Banking; (F) - Norwest Financial

20
<PAGE>

Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.

Management's discussion and analysis should be read together with the
financial statements submitted under Item 1 of Part I and with Norwest
Corporation's 1997 Annual Report on Form 10-K.

EARNINGS PERFORMANCE

The corporation reported net income of $382.1 million for the quarter ended
June 30, 1998, a 15.3 percent increase over the $331.4 million earned in
the second quarter of 1997. Diluted earnings per share were 49 cents,
compared with 43 cents in the second quarter of 1997, an increase of 14.0
percent. Basic earnings per share increased 16.3 percent to 50 cents per
common share in the second quarter of 1998 from 43 cents a year earlier.
Return on realized common equity was 23.1 percent and return on assets was
1.65 percent for the second quarter of 1998, compared with 22.1 percent and
1.61 percent, respectively, in the second quarter of 1997.

For the six months ended June 30, 1998, net income was $749.8 million, or
96 cents per diluted common share, an increase of 14.8 percent and 12.9
percent, respectively, over the $653.3 million, or 85 cents per diluted
common share, earned in the first six months of 1997. Return on realized
common equity was 23.0 percent and return on assets was 1.67 percent for
the first six months of 1998 compared with 22.4 percent and 1.62 percent,
respectively, in the same period a year ago.

ORGANIZATIONAL EARNINGS

The organizational earnings of the corporation's primary business segments
are included in Note 9 to the unaudited consolidated financial statements
for the three and six months ended June 30, 1998 and 1997 and are discussed
in the following paragraphs.

Banking Group

The Banking Group reported second quarter 1998 earnings of $274.4 million,
a 19.5 percent increase over the second quarter 1997 earnings of $229.7
million. For the six months ended June 30, 1998, earnings increased 18.0
percent to $538.3 million compared with $456.2 million for the same period
in 1997. The increased earnings in the first six months of 1998 reflect a 3.0
percent increase in tax-equivalent net interest income to $1,436.2
million, primarily due to a 15 basis point increase in net interest margin.
The Banking Group's provision for credit losses for the six months ended June
30, 1998 decreased $26.6 million to $68.7 million from $95.3 million a year
earlier, as average loans and leases rose $869.7 million, or 2.7 percent, and
net charge-offs as a percent of average loans and leases decreased 13 basis
points to 0.51 percent. Non-interest income rose $221.0 million to $1,060.6
million for the first six months of 1998, due primarily to growth in trust and
investment fees and commissions, service charges and fees, credit card fee
revenue, and insurance revenue, partially offset by lower net venture capital
gains. Non-interest expenses of $1,623.1 million for the first six months of
1998 were $190.1 million higher when compared with the first six months of
1997, reflecting additional operating expenses from acquired companies.

21
<PAGE>

Mortgage Banking

Mortgage Banking earned $54.0 million in the current quarter compared with
$35.3 million in the second quarter of 1997. For the first six months of
1998, Mortgage Banking earned $105.9 million compared with $69.1 million in
the same period of 1997. See Note 10 to the unaudited consolidated
financial statements for additional information about Mortgage Banking
revenues for the three and six months ended June 30, 1998 and 1997.

The growth in Mortgage Banking earnings over the first half of 1997
primarily reflects a 74.6 percent increase in origination and other
closing fees associated with the low mortgage interest rate environment.
Mortgage loan originations amounted to $46.9 billion during the first six
months of 1998, compared with $23.0 billion in the first six months of
1997. Combined gains on sales of mortgages and servicing rights amounted to
$151.6 million in the first six months of 1998, compared with $43.6 million
in the same period of 1997. The growth in Mortgage Banking earnings is
also due to higher tax-equivalent net interest income related to increases
in the average balance of mortgage loans held for sale. The growth in
origination and closing fees, gains on sales of mortgages and servicing
rights, and net interest income was partially offset by lower servicing
revenue, reflecting increased amortization of capitalized mortgage
servicing rights due to the low mortgage interest rate environment.
Amortization of capitalized mortgage servicing rights was $328.3 million in
the first six months of 1998, compared with $218.0 million in the first
half of 1997.

The percentage of fundings attributed to mortgage loan refinancings was
approximately 51 percent in the first half of 1998, compared with 21
percent for the same period of 1997. The unclosed pipeline of mortgage
loans was $19.4 billion at June 30, 1998, compared with $10.6 billion at
December 31, 1997. The servicing portfolio had a weighted average coupon of
7.61 percent and 7.75 percent at June 30, 1998 and December 31, 1997,
respectively.

Norwest Financial

Norwest Financial (including Norwest Financial Services, Inc. and Island
Finance) reported earnings of $53.7 million in the second quarter of 1998,
compared with $66.4 million in the second quarter of 1997, a decrease of
19.0 percent. For the first six months of 1998, Norwest Financial's net
income was $105.6 million, down 17.5 percent from the first six months of
1997. The decrease in net income for the quarter and six months ended
June 30, 1998 was primarily due to higher levels of charge-offs and non-
interest expenses, partially offset by an increase in tax-equivalent net
interest income.

Norwest Financial's net charge-offs in the first six months of 1998 were
$185.2 million, or 4.16 percent of average loans, compared with $125.6
million, or 3.39 percent of average loans, in the same period in 1997. The
increase in net charge-offs was primarily attributable to increased
bankruptcies in Puerto Rico and the acquisition of Fidelity Acceptance
Corporation in August 1997. Non-interest expenses for the first six months
of 1998 increased 21.1 percent over the same period of 1997 primarily due
to the acquisition of Fidelity Acceptance Corporation. Tax-equivalent net
interest income for the first half of 1998 increased 16.2 percent over the
same period of last year due to a 19.8 percent increase in average earning
assets partially offset by a decrease of 23 basis points in net interest
margin.

22
<PAGE>

CONSOLIDATED INCOME STATEMENT ANALYSIS

Net Interest Income

Consolidated tax-equivalent net interest income was $1,093.0 million in the
second quarter of 1998, compared with $1,011.6 million in the second quarter of
1997, an increase of 8.0 percent. For the first six months of 1998,
tax-equivalent net interest income increased 9.8 percent from the same period in
1997 to $2,171.7 million. Growth in tax-equivalent net interest income over the
second quarter ended June 30, 1997 was primarily due to an 11.6 percent growth
in average earning assets, partially offset by a 15 basis point decrease in net
interest margin. Net interest margin, the ratio of annualized tax-equivalent
net interest income to average earning assets, was 5.54 percent in the second
quarter of 1998, compared with 5.69 percent in the second quarter of 1997. The
decrease in net interest margin from second quarter of 1997 is principally due
to a higher mix of mortgages held for sale and investment securities that have
lower yields than other interest-earning assets.

The following table summarizes changes in tax-equivalent net interest income
between the quarters ended June 30 and March 31 and the six months ended June
30.

Changes in Tax-Equivalent Net Interest Income*
In millions 2Q 98 2Q 98 6 Mos. 98
from from from
2Q 97 1Q 98 6 Mos. 97
Increase (decrease) due to:
Change in earning asset volume ............ $112.2 57.5 195.7
Change in volume of interest-free funds ... 8.7 (1.2) 27.4
Change in net return from
Interest-free funds ...................... 1.6 1.8 1.8
Interest-bearing funds ................... (36.0) (18.9) (38.8)
Change in earning asset mix ............... (8.3) (22.0) (4.3)
Change in funding mix ..................... 3.2 (2.9) 11.1
Change in tax-equivalent net interest income. $ 81.4 14.3 192.9

* Net interest income is presented on a tax-equivalent basis using a
federal incremental tax rate of 35 percent in each period presented.

Provision for Credit Losses

The corporation provided $139.4 million for credit losses in the second
quarter of 1998, compared with $122.8 million in the same period a year
ago. Net credit losses totaled $139.6 million and $114.8 million for the
three months ended June 30, 1998 and 1997, respectively. As a percentage
of average loans and leases, net credit losses were 131 basis points in the
second quarter of 1998, compared with 114 basis points in the same period a
year ago.

For the first six months of 1998, the provision for credit losses totaled
$263.9 million, compared with $231.8 million in the first six months of
1997. Net credit losses were $271.0 million, or 1.28 percent of average
loans and leases, for the six months ended June 30, 1998, compared with
$226.8 million, or 1.14 percent, for the same period in 1997. The increase
in net credit losses over 1997 is principally due to higher levels of
consumer credit charge-offs.

Non-interest Income

Consolidated non-interest income was $950.2 million in the second quarter
of 1998, an increase of $193.8 million, or 25.6 percent, from the second
quarter of 1997. For the six months ended June 30, 1998, non-interest

23
<PAGE>

income was up $319.5 million to $1,760.5 million, an increase of 22.2
percent over 1997. Contributing to the 1998 increases was continued growth
in mortgage banking revenue, trust and investment fees and commissions,
service charges and fees, credit card fee revenue and insurance revenue,
partially offset by lower net venture capital gains.

The increase in mortgage banking revenue is attributed to increases in
origination and other closing fees and gains on sales of mortgages and
servicing rights, partially offset by increased amortization of capitalized
mortgage servicing rights related to the low mortgage interest rate
environment. Mortgage banking revenue derived from sales of servicing
rights are largely dependent upon portfolio characteristics and prevailing
market conditions. See Note 10 to the unaudited consolidated financial
statements for additional information about mortgage banking revenues for
the three and six months ended June 30, 1998 and 1997.

The increases in trust and investment fees and commissions, service charges
and fees, credit card fee revenue, and insurance revenue reflect overall
increases in business activity due to acquisitions and marketing efforts.

Net venture capital gains were $53.2 million for the three months and
$111.9 million for the six months ended June 30, 1998, compared with $93.3
million and $112.5 million, respectively, for the same periods in 1997.
Sales of venture capital securities generally relate to timing of holdings
becoming publicly traded and subsequent market conditions, causing venture
capital gains to be unpredictable in nature. Net unrealized appreciation
in the venture capital investment portfolio was $160.6 million at June 30,
1998.

The corporation's trading revenue for the second quarter of 1998 was $42.1
million, compared with $27.3 million in the second quarter of 1997.
Trading revenues amounted to $66.4 million in the first half of 1998,
compared with $52.2 million in the same period of 1997. See Note 11 to
the unaudited consolidated financial statements for a detailed analysis of
trading revenues for the three and six months ended June 30, 1998 and 1997.

Non-interest Expense

Consolidated non-interest expense was $1,324.5 million in the second
quarter of 1998, an increase of 18.3 percent from the second quarter of
1997. For the first six months of 1998, consolidated non-interest expense
increased $373.3 million, or 17.3 percent, over the six months ended
June 30, 1997. The increase in non-interest expense reflects increased
Mortgage Banking expenses associated with higher origination volume and
additional operating expenses related to acquisitions.

CONSOLIDATED BALANCE SHEET ANALYSIS

At June 30, 1998, earning assets were $79.4 billion, an increase of 5.9
percent from $75.0 billion at December 31, 1997. This increase was primarily
due to a $3.3 billion increase in mortgages held for sale related to the
increased mortgage origination activity during the first half of 1998. At
June 30, 1998, interest-bearing liabilities totaled $63.5 billion, a 3.2
percent increase from $61.5 billion at December 31, 1997. The increase was
primarily due to a $2.6 billion increase in short-term borrowings to fund
mortgage originations.

24
<PAGE>

Credit Quality

The major categories of loans and leases are included in Note 5 to the
unaudited consolidated financial statements for the quarter ended June 30,
1998.

At June 30, 1998, the allowance for credit losses totaled $1,262.1 million,
or 2.91 percent of loans and leases outstanding. Comparable amounts were
$1,071.1 million, or 2.63 percent, at June 30, 1997, and $1,233.9 million,
or 2.90 percent, at December 31, 1997. The ratio of the allowance for
credit losses to total non-performing assets and 90-day past due loans and
leases was 293.6 percent at June 30, 1998, compared with 307.7 percent at
June 30, 1997 and 322.7 percent at December 31, 1997.

Although it is impossible for any lender to predict future credit losses
with complete accuracy, management monitors the allowance for credit losses
with the intent to provide for all losses that can reasonably be
anticipated based on current conditions. The corporation maintains the
allowance for credit losses as a general allowance available to cover
future credit losses within the entire loan and lease portfolio and other
credit-related risks. However, management has prepared an allocation of
the allowance based on its views of risk characteristics of the portfolio.
This allocation of the allowance for credit losses does not represent the
total amount available for actual future credit losses in any single
category nor does it prohibit future credit losses from being absorbed by
portions of the allowance allocated to other categories or by the
unallocated portion.

The allocation of the allowance for credit losses to major categories of
loans at June 30, 1998 and December 31, 1997 was:

June 30, December 31,
1998 1997

Commercial .................... $ 231.5 207.7
Consumer ...................... 426.6 422.6
Real estate ................... 164.7 168.1
Foreign ....................... 71.7 42.0
Unallocated ................... 367.6 393.5
Total ...................... $1,262.1 1,233.9

Non-performing assets and 90-day past due loans and leases totaled $429.8
million, or 0.46 percent of total assets, at June 30, 1998, compared with
$348.1 million, or 0.42 percent, at June 30, 1997, and $382.3 million, or
0.43 percent, at December 31, 1997.

The corporation manages exposure to credit risk through loan portfolio
diversification by customer, product, industry and geography in order to
minimize concentrations in any single sector. The corporation's Banking
Group operates in 16 states, largely in the Midwest, Western/Rocky Mountain
and Southwest regions of the country. Distribution of average loans by
region during the first half of 1998 was approximately 51 percent in the
Midwest, 27 percent in the Western/Rocky Mountain and 22 percent in the
Southwest region.

Norwest Mortgage, Norwest Financial and Norwest Card Services operate on a
nationwide basis. Mortgage Banking includes the largest retail mortgage
origination network and the largest servicing portfolio in the United
States. The five states with the highest originations year to date in 1998
are: California $8,601.0 million; Minnesota $3,195.7 million; Illinois
$2,561.8 million; Texas $2,325.4 million; and Washington $2,064.5 million.
The originations in these five states comprise approximately 40 percent of

25
<PAGE>

total originations in 1998. The five largest states in the servicing
portfolio include: California $43.5 billion; Minnesota $13.1 billion;
Texas $11.6 billion; New York $10.3 billion; and New Jersey $9.8 billion.
These five states comprise approximately 40 percent of the total servicing
portfolio at June 30, 1998.

Norwest Financial engages in consumer finance activities in 47 states, Guam,
Saipan, all ten Canadian provinces, the Caribbean and Latin America. The
five states with the largest consumer finance receivables are: California
$646.4 million; Ohio $250.9 million; Illinois $246.6 million; Florida $240.0
million; and Texas $235.3 million. Consumer finance receivables in Puerto
Rico and Canada totaled $1.4 billion and $901.6 million, respectively, at
June 30, 1998. The consumer finance receivables of Puerto Rico, Canada, and
the five largest states listed above comprise approximately 46 percent of
total consumer finance receivables at June 30, 1998.

With respect to credit card receivables, approximately 66 percent of the
portfolio is within the corporation's 16-state banking region. Minnesota
represents approximately 13 percent of the total outstanding credit card
portfolio. No other state accounts for more than 10 percent of the
portfolio.

In general, the economy in regions of the U.S. where the corporation
primarily conducts operations continues to reflect modest growth. Consumer
past due delinquencies were as follows:

June 30, December 31, June 30,
1998 1997 1997

Banking Group 30 days past due ....... 1.66% 2.02 1.83
Norwest Financial 60 days past due ... 3.56 3.58 3.69
Credit card 30 days past due ......... 3.76 3.92 3.75

Capital and Liquidity Management

The corporation's regulatory capital and ratios are summarized as follows:

June 30, December 31,
1998 1997

Tier 1 capital......................... $ 5,846 5,525
Total capital.......................... 7,039 6,692
Total risk-adjusted assets............. 66,166 60,774
Tier 1 capital ratio................... 8.84% 9.09
Total capital to risk-adjusted assets.. 10.64% 11.01
Leverage ratio......................... 6.44% 6.63

The corporation's Tier 1 capital, total capital to risk-adjusted assets and
leverage ratios exceed the regulatory minimums of 4.0 percent, 8.0 percent
and 3.0 percent, respectively.

The corporation's dividend payout ratio was 33.0 percent for the second
quarter of 1998 compared with 34.9 percent for the second quarter of 1997.
In July 1998, the board of directors approved an increase in the
corporation's quarterly common stock dividend to 18.5 cents per share from
16.5 cents. The dividend is payable on September 1, 1998 to common
stockholders of record on August 7, 1998.

On June 7, 1998, the corporation and Wells Fargo & Company (Wells Fargo)
signed a definitive agreement for a merger of the two companies. In accordance
with the agreement, common stockholders of Wells Fargo will receive ten shares
of the corporation's stock in exchange for each share of Wells Fargo common

26
<PAGE>

stock. The transaction, which will be accounted for using the pooling of
interests method, is subject to customary stockholder and regulatory approvals
and is expected to be completed in the fourth quarter of 1998.

YEAR 2000

During 1998, the corporation has continued with its company-wide
program to prepare the corporation's systems for year 2000 compliance. The
year 2000 issue relates to computer systems that use two digits rather than
four to define the applicable year and whether such systems will properly
process information when the year changes to 2000. The
corporation has incurred charges totaling $52.2 million in testing and
correcting its computer systems and other systems with embedded technology,
such as security systems, to be year 2000 compliant. Such charges include
internal staff costs, as well as consulting and other expenses. Of the total
expenditures to date, $36.3 million was incurred in the first half of 1998.
The corporation now estimates the cost of implementing its year 2000
compliance program will be approximately $150 million based on the current
estimate of the project's size and, in part, the inclusion of accelerated
replacement of additional hardware and software costs within the scope of the
project.

The corporation has essentially completed the inventory and assessment phases of
the program to identify hardware and software requiring modification and has
developed implementation plans for remediation and testing. An assessment of
the readiness of significant customers, vendors, counterparties and others
with whom the corporation does business is underway. The implementation plans
provide for remediation and completion of testing for the corporation's
mission critical systems and the development of contingency plans for
unforeseen difficulties related to the year 2000 issue by December 31,
1998. As a result of modifications to existing systems, together with
conversions to new systems, management presently believes that the year
2000 issue will not pose a significant operational matter for the
corporation.

The preceding two paragraphs include forward-looking statements that
involve inherent risks and uncertainties. A number of important factors
could cause the actual cost of year 2000 compliance and impact of the year
2000 issue to differ materially from what is described in the forward-looking
statements. Those factors include but are not limited to uncertainties in the
cost of hardware and software, the availability and cost of programmers and
other systems personnel, inaccurate or incomplete inventory and assessment
phase results, ineffective remediation of computer code, and the ability of the
corporation's customers, vendors, competitors and counterparties to
effectively address the year 2000 issue.

RECENTLY ISSUED ACCOUNTING STANDARDS

In June 1997, the FASB issued Statement of Financial Accounting Standards
No. 131, "Disclosures about Segments of an Enterprise and Related
Information" (FAS 131). FAS 131 requires disclosure of selected information
about operating segments including segment income, revenues and asset data.
Operating segments, as defined in FAS 131, would include those components
for which financial information is available and evaluated regularly by the

27
<PAGE>

chief operating decision maker in assessing performance and making resource
allocation determinations for operating components such as those which exceed
ten percent or more of combined revenue, income or assets.

In February 1998, the FASB issued Statement of Financial Accounting
Standards No. 132 "Employers' Disclosures about Pensions and Other
Postretirement Benefits" (FAS 132). FAS 132 standardizes disclosure
requirements for pension and other postretirement plans, and requires
certain additional information on changes in benefit obligations and fair
values of plan assets.

The corporation will be required to adopt the provisions of FAS 131 and FAS
132 at the end of 1998, and adoption is not expected to have a material
impact on the corporation's consolidated financial statements.

In March 1998, the AICPA issued Statement of Position 98-1, "Accounting for
the Costs of Computer Software Developed or Obtained for Internal Use" (SOP
98-1). SOP 98-1 requires capitalization of certain costs associated with
software developed or obtained for internal use. The corporation will be
required to adopt the provisions of SOP 98-1 in 1999. The adoption of SOP 98-1
is not expected to have a material effect on the corporation's consolidated
financial statements.

In June 1998, the FASB issued Statement of Financial Accounting Standards
No. 133 "Accounting for Derivative Instruments and Hedging Activities" (FAS
133). FAS 133 requires recognition of all derivative instruments as either
assets or liabilities in the statement of financial position and
measurement of those instruments at fair value. A derivative may be
designated as a hedge of an exposure to changes in the fair value of a
recognized asset or liability, an exposure to variable cash
flows of a forecasted transaction, or a foreign currency exposure. The
accounting for gains and losses associated with changes in the fair value
of a derivative and the impact on the corporation's consolidated financial
statements will depend on its hedge designation and whether the hedge is
highly effective in offsetting changes in the fair value or cash flows of
the underlying hedged item. The corporation will be required to adopt the
provisions of FAS 133 in the year 2000 and has currently not determined the
impact of FAS 133 on its consolidated financial statements.

28
<PAGE>

Norwest Corporation and Subsidiaries
CONSOLIDATED AVERAGE BALANCE SHEETS AND RELATED YIELDS AND RATES

<TABLE>
<CAPTION>
Quarter Ended June 30,
In millions, except ratios 1998 1997
Interest Average Interest Average
Average Income/ Yields/ Average Income/ Yields/
Balance Expense* Rates* Balance Expense* Rates*

<S> <C> <C> <C> <C> <C> <C>
Assets
Money market investments .... $ 680 $ 10.0 5.91% $ 663 $ 9.4 5.64%
Trading account securities .. 1,150 17.2 5.92 591 11.1 7.48

Investment securities
available for sale:
U.S. Treasury & federal
agencies ................ 4,369 62.8 5.78 3,854 64.4 6.63
State, municipal and
housing tax-exempt ...... 1,485 30.7 8.72 1,389 29.9 8.78
Mortgage-backed ........... 12,581 222.6 7.27 14,626 270.7 7.39
Other ..................... 999 11.6 6.11 1,068 9.6 5.17
Total investment
securities available
for sale ............. 19,434 327.7 6.99 20,937 374.6 7.26

Investment securities held to
maturity ................ 746 6.5 3.48 738 7.1 3.83

Total investment
securities ........... 20,180 334.2 6.85 21,675 381.7 7.14

Loans held for sale ......... 3,489 68.4 7.86 2,841 55.9 7.89
Mortgages held for sale ..... 11,304 197.0 6.97 5,391 97.8 7.26
Loans and leases
(net of unearned discount)
Commercial ................ 14,491 324.1 8.97 13,430 307.5 9.19
Real estate ............... 15,123 368.3 9.75 15,077 365.8 9.71
Consumer .................. 13,238 507.3 15.34 11,737 444.1 15.16
Total loans and leases .. 42,852 1,199.7 11.21 40,244 1,117.4 11.12
Allowance for credit losses (1,257) (1,075)
Net loans and leases .... 41,595 39,169

Total earning assets
(before the allowance for
credit losses) .......... 79,655 1,826.5 9.26 71,405 1,673.3 9.42

Cash and due from banks ..... 4,007 3,514
Other assets ................ 10,231 8,608
Total assets .............. $92,636 $82,452

</TABLE>
(Continued on page 30)
29
<PAGE>

Norwest Corporation and Subsidiaries
CONSOLIDATED AVERAGE BALANCE SHEETS AND RELATED YIELDS AND RATES

(Continued from page 29)
<TABLE>

Quarter Ended June 30,
In millions, except ratios 1998 1997
Interest Average Interest Average
Average Income/ Yields/ Average Income/ Yields/
Balance Expense* Rates* Balance Expense* Rates*
<S> <C> <C> <C> <C> <C> <C>
Liabilities and
Stockholders' Equity

Noninterest-bearing deposits. $17,625 $ - -% $13,460 $ - -%

Interest-bearing deposits
Savings and NOW accounts .. 10,601 42.7 1.62 9,552 39.4 1.65
Money market accounts ..... 11,773 99.5 3.39 10,619 83.7 3.16
Savings certificates ...... 12,537 169.8 5.43 13,082 176.8 5.42
Certificates of deposit
and other time .......... 3,902 54.2 5.56 3,440 48.6 5.68
Foreign time .............. 500 5.9 4.76 858 10.1 4.71
Total interest-bearing
deposits .............. 39,313 372.1 3.80 37,551 358.6 3.83
Federal funds purchased
repurchase agreements ..... 6,030 77.2 5.13 3,811 46.5 4.89
Short-term borrowings ....... 6,335 90.0 5.69 5,061 69.5 5.51
Long-term debt .............. 12,407 194.2 6.26 11,958 187.1 6.26

Total interest-bearing
liabilities ........... 64,085 733.5 4.59 58,381 661.7 4.54

Other liabilities ........... 3,796 4,339
Preferred stock ............. 185 187
Common stockholders' equity . 6,945 6,085
Total liabilities and
stockholders' equity .. $92,636 $82,452

Net interest income
(tax-equivalent basis) .. $ 1,093.0 $ 1,011.6

Yield spread .............. 4.67 4.88

Net interest margin ....... 5.54 5.69

Interest-bearing liabilities
to earning assets ....... 80.45 81.76
</TABLE>
30
<PAGE>

Norwest Corporation and Subsidiaries
CONSOLIDATED AVERAGE BALANCE SHEETS AND RELATED YIELDS AND RATES

<TABLE>
Six Months Ended June 30,
In millions, except ratios 1998 1997
Interest Average Interest Average
Average Income/ Yields/ Average Income/ Yields/
Balance Expense* Rates* Balance Expense* Rates*
Assets
<S> <C> <C> <C> <C> <C> <C>
Money market investments .... $ 763 $ 21.7 5.73% $1,138 $ 30.5 5.39%
Trading account securities .. 919 28.0 6.12 433 15.8 7.32

Investment securities
available for sale:
U.S. Treasury & federal
agencies ................ 3,365 97.1 5.80 2,965 96.5 6.48
State, municipal and
housing tax-exempt ...... 1,488 61.3 8.72 1,202 51.5 8.80
Mortgage-backed ........... 13,140 469.6 7.34 14,446 535.0 7.43
Other ..................... 991 23.7 6.20 1,098 24.1 6.06
Total investment
securities available
for sale ............. 18,984 651.7 7.12 19,711 707.1 7.31

Investment securities held to
maturity ................ 745 13.1 3.52 729 14.1 3.86

Total investment
securities ............ 19,729 664.8 6.98 20,440 721.2 7.18

Loans held for sale ......... 3,547 138.9 7.90 2,882 112.1 7.84
Mortgages held for sale ..... 10,168 352.8 6.94 5,438 195.5 7.19
Loans and leases
(net of unearned discount)
Commercial ................ 14,221 640.0 9.07 13,371 604.7 9.12
Real estate ............... 15,091 732.8 9.74 15,025 723.6 9.66
Consumer .................. 13,238 1,014.1 15.37 11,700 886.2 15.20
Total loans and leases .. 42,550 2,386.9 11.27 40,096 2,214.5 11.10
Allowance for credit losses (1,248) (1,067)
Net loans and leases .... 41,302 39,029

Total earning assets
(before the allowance for
credit losses) .......... 77,676 3,593.1 9.36 70,427 3,289.6 9.42

Cash and due from banks ..... 3,975 3,580
Other assets ................ 9,950 8,381
Total assets .............. $90,353 $81,321

</TABLE>

(Continued on page 32)

31
<PAGE>

Norwest Corporation and Subsidiaries
CONSOLIDATED AVERAGE BALANCE SHEETS AND RELATED YIELDS AND RATES

(Continued from page 31)

Liabilities and
Stockholders' Equity

Noninterest-bearing deposits. $17,164 $ - -% $13,274 $ - -%

Interest-bearing deposits
Savings and NOW accounts .. 10,429 82.7 1.60 9,498 78.1 1.66
Money market accounts ..... 11,665 194.4 3.36 10,543 173.4 3.32
Savings certificates ...... 12,708 343.5 5.45 13,141 353.2 5.42
Certificates of deposit
and other time .......... 3,903 107.9 5.57 3,426 96.2 5.66
Foreign time .............. 452 10.7 4.78 650 13.8 4.29
Total interest-bearing
deposits .............. 39,157 739.2 3.81 37,258 714.7 3.87
Federal funds purchased
repurchase agreements ..... 4,897 123.6 5.09 3,152 76.4 4.89
Short-term borrowings ....... 5,936 167.9 5.70 5,157 138.7 5.42
Long-term debt .............. 12,432 390.7 6.28 12,337 381.0 6.18

Total interest-bearing
liabilities ........... 62,422 1,421.4 4.58 57,904 1,310.8 4.55

Other liabilities ........... 3,682 3,947
Preferred stock ............. 186 188
Common stockholders' equity . 6,899 6,008
Total liabilities and
stockholders' equity .. $90,353 $81,321

Net interest income
(tax-equivalent basis) .. $2,171.7 $1,978.8

Yield spread .............. 4.78 4.87

Net interest margin ....... 5.65 5.66

Interest-bearing liabilities
to earning assets ....... 80.36 82.22

</TABLE>

* Interest income and yields are calculated on a tax-equivalent basis using
a federal incremental tax rate of 35% in each period presented. Non-accrual
loans and the related negative income effect have been included in the
calculation of yields.

32
<PAGE>

Item 3. Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes in market risk exposures that affect the
quantitative or qualitative disclosures presented in the corporation's annual
report on Form 10-K for the year ended December 31, 1997.

33
<PAGE>

PART II. OTHER INFORMATION

Item 4. Submission of Matters to a Vote of Security Holders

The annual meeting of stockholders of the corporation was held on April 28,
1998. There were 758,124,007 shares of common stock outstanding and entitled
to vote at said meeting; and a total of 585,119,697 (77.18%) shares were
present at the meeting in person or by proxy. The stockholders voted to
approve an amendment to the corporation's Restated Certificate of
Incorporation to increase the authorized shares of common stock from
1,000,000,000 to 2,000,000,000 shares (551,238,646 for, 31,178,279 against,
2,702,772 abstained and no broker non-votes), approve the corporation's
amended and restated Performance-Based Compensation Policy (550,395,607 for,
30,514,381 against, 4,209,709 abstained and no broker non-votes), increase
the number of shares of common stock that may be awarded under the
corporation's Long-Term Incentive Compensation Plan by 37,000,000
(448,538,473 for, 132,207,808 against, 4,373,416 abstained and no broker
non-votes) and ratified the appointment of KPMG Peat Marwick LLP to audit
the books of the corporation for the year ending December 31, 1998
(582,535,844 for, 1,111,849 against, 1,472,004 abstained and no broker
non-votes). The stockholders did not approve a proposal requesting the
Board of Directors to take steps to provide for cumulative voting in the
election of directors if a stockholder or group of stockholders holds 30
percent or more of the corporation's common stock (156,927,899 for,
353,792,315 against, 15,445,570 abstained and 58,953,913 broker non-votes).

In addition, 13 nominees were elected directors of the corporation, as
follows:

Shares FOR Shares WITHHELD

Leslie S. Biller 582,873,820 2,245,877
J.A. Blanchard III 582,836,950 2,282,747
David A. Christensen 582,872,859 2,246,838
William A. Hodder 582,588,123 2,531,574
Lloyd P. Johnson 582,574,425 2,545,272
Reatha Clark King 582,764,780 2,354,917
Richard M. Kovacevich 582,848,318 2,271,379
Richard S. Levitt 582,688,776 2,430,921
Richard D. McCormick 582,841,740 2,277,957
Cynthia H. Milligan 582,744,488 2,375,209
Benjamin F. Montoya 582,641,157 2,478,540
Ian M. Rolland 582,734,393 2,385,304
Michael W. Wright 582,866,272 2,253,425

34
<PAGE>

Item 5. Other Information

Deadline for Stockholder Proposals Submitted Other Than Pursuant to Rule14a-8
under the Securities Exchange Act of 1934

Any proposal from a stockholder to be presented at the 1999 Annual Meeting of
Stockholders of the corporation that is submitted outside the processes of
Rule 14a-8 of the Securities Exchange Act of 1934 and therefore will not be
included in proxy materials to be sent to stockholders by the corporation,
must be received by the Secretary of the corporation, at Norwest Center, Sixth
and Marquette, Minneapolis, Minnesota 55479-1026, no earlier than February 26,
1998 and no later than March 28, 1998 in order to be considered timely
received under the By-laws of the corporation.

Item 6. Exhibits and Reports on Form 8-K.

(a) Exhibits.

The following exhibits are filed or incorporated by reference in
response to Item 601 of Regulation S-K.

Exhibit
No. Exhibit Page No.

2. Agreement and Plan of Merger with Wells Fargo & Company
(incorporated by reference to Exhibit 2 of the
corporation's Current Report on Form 8-K dated June 7,
1998 and filed on June 18, 1998).

3(a). Restated Certificate of Incorporation, as amended
(incorporated by reference to Exhibit 3(b) to the
corporation's Current Report on Form 8-K dated
June 28, 1993, Exhibit 3 to the corporation's Current
Report on Form 8-K dated July 3, 1995, and Exhibit 3 to
the corporation's Current Report on Form 8-K dated
June 12, 1998).

3(b). Certificate of Designations of Powers, Preferences and
Rights of the corporation's ESOP Cumulative Convertible
Preferred Stock (incorporated by reference to Exhibit 4
to the corporation's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1994).

3(c). Certificate of Designations of Powers, Preferences and
Rights of the corporation's Cumulative Tracking
Preferred Stock (incorporated by reference to Exhibit 3
to the corporation's Current Report on Form 8-K dated
January 9, 1995).

3(d). Certificate of Designations of Powers, Preferences and
Rights of the corporation's 1995 ESOP Cumulative
Convertible Preferred Stock (incorporated by reference to
Exhibit 4 to the corporation's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1995).

3(e). Certificate of Designations with respect to the 1996 ESOP
Cumulative Convertible Preferred Stock (incorporated by
reference to Exhibit 3 to the corporation's Current Report
on Form 8-K dated February 26, 1996).

3(f). Certificate of Designations with respect to the 1997 ESOP
Cumulative Convertible Preferred Stock (incorporated by
reference to Exhibit 3 to the corporation's Current Report
on Form 8-K dated April 14, 1997).

3(g). Certificate of Designations with respect to the 1998 ESOP
Cumulative Convertible Preferred Stock (incorporated by
reference to Exhibit 3 to the corporation's Current Report
on Form 8-K dated April 20, 1998).

35
<PAGE>

Exhibit
No. Exhibit Page No.

3(h). By-Laws (incorporated by reference to Exhibit 3 to the
corporation's Current Report on Form 8-K dated October 10,
1997).

4(a). See 3(a) through 3(h) of this Item.

4(b). Rights Agreement dated as of November 22, 1988 between
the corporation and Citibank, N.A., as Rights Agent
(incorporated by reference to Exhibit 1 to the corporation's
Form 8-A dated December 6, 1988).

4(c). Certificate of Adjustment, dated October 10, 1997, to Rights
Agreement (incorporated by reference to Exhibit 5 to the
corporation's Form 8-A/A dated October 14, 1997).

4(d). Amendment No. 1 to Rights Agreement, dated as of June 7, 1998,
between the corporation and Citibank, N.A., as Rights Agent
(incorporated by reference to Exhibit 4(b) to the corporation's
Current Report on Form 8-K, dated June 7, 1998 and filed on
June 18, 1998.

4(e). Copies of instruments with respect to long-term debt will be
furnished to the Commission upon request.

10(a). Performance-Based Compensation Policy, as amended and
restated effective as of January 1, 1998. 39

10(b). Long-Term Incentive Plan, as amended effective April 28,
1998 43

11. Computation of Earnings Per Share. 55

12(a). Computation of Ratio of Earnings to Fixed Charges. 57

12(b). Computation of Ratio of Earnings to Fixed Charges
and Preferred Stock Dividends. 58

27. Financial Data Schedule (filed electronically).

99(a). Norwest Corporation and Wells Fargo & Company unaudited
pro forma combined financial information as of June 30,
1998 and for the six months ended June 30, 1998 and 1997. 60

99(b). Wells Fargo & Company unaudited consolidated financial
statements as of June 30, 1998 and for the three- and six-
month periods ended June 30, 1998 and 1997(incorporated
by reference to Item 1 of the Wells Fargo & Company
Quarterly Report on Form 10-Q for the quarter ended
June 30, 1998).

Stockholders may obtain a copy of any Exhibit not contained herein, upon
payment of a reasonable fee, by writing Norwest Corporation, Office of the
Secretary, Norwest Center, Sixth and Marquette, Minneapolis, Minnesota 55479-
1026.

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<PAGE>

(b) Reports on Form 8-K.

On April 22, 1998, the corporation filed a Current Report on Form 8-K,
dated April 14, 1998, reporting consolidated operating results of the
corporation for the quarter ended March 31, 1998.

On April 20, 1998, the corporation filed a Current Report on Form 8-K,
dated April 20, 1998, placing on file the Certificate of Designations
relating to the corporation's 1998 ESOP Cumulative Convertible Preferred
Stock.

On June 8, 1998, the corporation filed a Current Report on Form 8-K,
dated June 7, 1998, reporting the corporation's execution and terms of an
agreement to merge with Wells Fargo & Company and filing a presentation to
analysts regarding the merger. On June 9, 1998, the corporation filed
a Current Report on Form 8-K dated June 8, 1998, and on July 22, 1998,
filed a Current Report on Form 8-K dated July 14, 1998, which amended
certain of the analyst presentation materials included in the Current
Report on Form 8-K filed on June 8, 1998, and also placed on file an
abridged analyst presentation.

On June 12, 1998, the corporation filed a Current Report on Form 8-K,
dated June 12, 1998, placing on file a Certificate of Amendment of
Certificate of Incorporation, amending the corporation's Restated
Certificate of Incorporation to increase the corporation's authorized
common stock from one billion to two billion shares.

On June 18, 1998, the corporation filed a Current Report on Form 8-K,
dated June 7, 1998, placing on file the Agreement and Plan of Merger with
Wells Fargo & Company dated as of June 7, 1998. Stock option agreements
between the corporation and Wells Fargo & Company and an amendment to the
corporation's Rights Agreement were also filed as exhibits to this Form
8-K.

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<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

NORWEST CORPORATION

August 14, 1998 By /s/ Michael A. Graf
Senior Vice President
and Controller
(Chief Accounting Officer)

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<PAGE>

Exhibit 10(a)

NORWEST CORPORATION

PERFORMANCE-BASED COMPENSATION POLICY
(as Amended and Restated Effective as of January 1, 1998)

1. Purpose. The purpose of the "Norwest Corporation Performance-Based
Compensation Policy" (the "Policy") is to establish one or more performance
goals for payment of incentive compensation other than stock options and the
maximum amount of such incentive compensation that may be paid to certain
executive officers. It is the intention of the Human Resources Committee the
("Committee") of the Board of Directors of the Corporation that incentive
compensation awarded to each Covered Executive Officer (as defined below)
be deductible by the Corporation for federal income tax purposes in
accordance with Section 162(m) of the Internal Revenue Code of 1986, as amended
(the "Code"), any regulations promulgated thereunder, and ruling or advisory
opinions published by the Internal Revenue Service related thereto (the
"Regulations").

2. Covered Executive Officers. This Policy shall apply to any
individual (a "Covered Executive Officer") who, on the last day of a taxable
year is (a) the chief executive officer of the Corporation or is acting in
such capacity, or (b) is among the four highest compensated executive
officers (other than the chief executive officer) of the Corporation. Whether
an individual is the chief executive officer or among the four highest
compensated executive officers shall be determined pursuant to the executive
compensation disclosure rules under the Securities Exchange Act of 1934.

3. Incentive Compensation Award/Establishment of Performance Goals. An
incentive compensation award to a Covered Executive Officer may be paid in
the form of cash, stock, or restricted stock, or any combination thereof.
Payment of an incentive compensation award to a Covered Executive Officer
will be contingent upon the attainment of the performance goal or goals for
the Performance Period established for such Covered Executive Officer by the
Committee as provided herein. The Committee shall retain the discretion to

39
<PAGE>

reduce the incentive compenseation award payable to a Covered Executive Officer,
notwithstanding attainment of any performance goal.

The Committee shall establish in writing one or more performance goals
to be attained (which performance goals may be stated as alternative
performance goals) for a Performance Period for each Covered Executive
Officer on or before the latest date permitted under Section 162(m) of the Code
or the Regulations. Performance goals may be based on any one or more of the
following business criteria (as defined in paragraph 4 below) as the Committee
may select:

Earnings Per Share
Business Unit Net Earnings
Return on Realized Common Equity.

The maximum amount of an incentive compensation award for any
Performance Period to any Covered Executive Officer shall be a dollar
amount not to exceed eight-tenths of one percent (0.8%) of the Corporation's
Net Income (as defined below).

4. Definitions. For purposes of this Policy and for determining whether a
particular performance goal is attained, the following terms shall have the
meanings given them below:

(a) The term "Business Unit Net Earnings" shall mean the net
earnings of the business unit of the Corporation managed by a Covered
Executive Officer, as determined in accordance with generally accepted
accounting principles, adjusted in accordance with the Corporation's
management accounting practices and conventions in effect at the beginning of
the Performance Period, and as further adjusted in the same manner as provided
below for Net Income.

(b) The term "Earnings Per Share" shall mean the Corporation's
diluted earnings per share as reported in the Corporation's consolidated

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<PAGE>

financial statements for the Performance Period, adjusted in the same manner as
provided below for Net Income.

(c) The term "Net Income" shall mean the Corporation's net
income for the applicable Performance Period as reported in the Corporation's
consolidated financial statements, adjusted to eliminate the effect of (1)
restatements of prior periods' financial results relating to an acquisition
accounted for as a pooling of interests; (2) losses resulting from
discontinued operations; (3) extraordinary gains or losses; (4) the
cumulative effect of changes in generally accepted accounting principles; an
curring gain or loss which is separately identified and quantified in the
Corporation's financial statements.

(d) The term "Performance Period" shall mean a calendar year,
commencing January 1 and ending December 31.

(e) The term "Return on Realized Common Equity" shall mean the
Net Income of the Corporation on an annualized basis less dividends accrued
on outstanding preferred stock, divided by the Corporation's average total
common equity excluding average accumulated comprehensive income as reported in
the Corporation's consolidated financial statements for the Performance Period.

5. Applicability of Certain Provisions of the Long-Term Incentive
Compensation Plan and the Employees' Deferred Compensation Plan to Incentive
Compensation Awards. An incentive compensation award paid in stock or
restricted stock pursuant to this Policy shall be governed by the provisions
(other than provisions with respect to the computation of such award) of the
Corporation's Long-Term Incentive Compensation Plan. Deferral of an incentive
compensation award paid in cash under this Policy shall be made pursuant to the
provisions of the Corporation's Employees' Deferred Compensation Plan.

6. Effective Date; Amendment and Termination. This Policy shall be
effective as of January 1, 1998; provided, however, that no incentive

41
<PAGE>

compensation award shall be paid pursuant to this Policy, unless this Policy
has been approved by the stockholders of the Corporation. The Committee may
at any time terminate, suspend, amend or modify this Policy except that
stockholder approval shall be required for any amendment or modification to
this Policy that, in the opinion of counsel, would be required by Section 162
(m) of the code or the Regulations.

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<PAGE>

Exhibit 10(b)

LONG-TERM INCENTIVE COMPENSATION PLAN
(As amended effective April 28, 1998)

1. Purpose. The purpose of Norwest Corporation's Long-Term Incentive
Compensation Plan (the "Plan") is to motivate key employees to produce a
superior return to the stockholders of Norwest Corporation by offering them
an opportunity to participate in stockholder gains, by facilitating stock
ownership and by rewarding them for achieving a high level of corporate
financial performance. The Plan is also intended to facilitate recruiting and
retaining talented executives for key positions by providing an attractive
capital accumulation opportunity.

2. Definitions.

2.1 The following terms, whenever used in this Plan, shall have the
meanings set forth below:

(a) "Affiliate" means any corporation, a majority of the voting
stock or membership interests of which is directly or
indirectly owned by the Corporation, and any partnership
designated by the Committee in which any such corporation is a
partner.

(b) "Award" means a grant made under this Plan in the form of
Performance Shares, Restricted Stock, Stock Options,
Performance Units, Stock Appreciation Rights, or Stock.

(d) "Committee" means a committee of at least three members of
the Board who are not eligible, and have not at any time
within one year prior to service on the Committee been
eligible, to receive any Award under the Plan or under any
other benefit plan of the Corporation or any of its Affiliates
entitling the participants therein to acquire stock, stock
options or stock appreciation rights of the Corporation or any
of its Affiliates.

(e) "Corporation" means Norwest Corporation.

(f) "Employee" means a regular salaried employee (including an
officer or director who is also an employee) of the
Corporation or an Affiliate.

(g) "Fair Market Value" as of any date means the average of the
highest and lowest price of a share of Stock as reported by
the consolidated tape of the New York Stock Exchange for

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<PAGE>

that date. If there are no Stock transactions reported for
said date, the determination of said average shall be made as
of the last immediately preceding date on which Stock
transactions were reported by said consolidated tape.

(h) "Incentive Stock Option" means any Option designated as such
and granted in accordance with the requirements of Section
422A of the Internal Revenue Code of 1986, as amended.

(i) "Non-Qualified Stock Option" means an Option other than an
Incentive Stock Option.

(j) "Option" means a right to purchase Stock.

(k) "Participant" means a person designated by the Committee to
receive an Award under the Plan who is an Employee at the time
of such designation.

(l) "Performance Cycle" means the period of time of not fewer
than two years nor more than five years as specified by the
Committee over which Performance Shares or Performance Units
are to be earned.

(m) "Performance Shares" means an Award made pursuant to Section 6
which entitles a Participant to receive Shares, their cash
equivalent or a combination thereof based on the achievement
of performance targets during a Performance Cycle.

(n) "Performance Units" means an Award made pursuant to Section 6
which entitles a Participant to receive cash, Stock or a
combination thereof based on the achievement of performance
targets during a Performance Cycle.

(o) "Plan" means this Long-Term Incentive Compensation Plan, as
amended from time to time.

(p) "Restricted Stock" means Stock granted under Section 7 that is
subject to restrictions imposed pursuant to said Section.

(q) "Retirement" means retirement which entitles a Participant to
a benefit under Section 6.1 or Section 6.2 of the Norwest
Corporation Pension Plan or under Section 4.1 or Section
4.2 of the Norwest Financial Pension Plan as said sections
may be amended from time to time.

(r) "Share" means a share of Stock.

(s) "Stock" means the common stock, $1-2/3 par value per share, of
the Corporation.

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<PAGE>

(t) "Stock Appreciation Right" means the right to receive a
payment in cash or in Stock or a combination thereof in an
amount equal to the excess of the Fair Market Value of the
Stock at the time of exercise over the Fair Market Value of
the Stock at the time of grant.

(u) "Successor" means the legal representative of the estate of a
deceased Participant or the person or persons who may acquire
the right to exercise an Option or to receive Shares
issuable in satisfaction of an Award, by bequest or
inheritance.

(v) "Term" means the period during which an Option or Stock
Appreciation Right may be exercised or the period during
which the restrictions placed on Restricted Stock are in
effect.

2.2 Gender and Number. Except when otherwise indicated by context,
reference to the masculine gender shall include, when used, the
feminine gender and any term used in the singular shall also include
the plural.

3. Administration. The Plan shall be administered by the Committee. Subject
to the provisions of the Plan, the Committee shall have exclusive power
to determine when and to whom Awards will be granted, the form of each
Award,the amount of each Award, and any other terms or conditions of
each Award. The Committee's interpretation of the Plan and of any Awards
made under the Plan shall be final and binding on all persons with an
interest therein. The Committee shall have the authority, subject to the
provisions of the Plan, to establish, adopt and revise rules and
regulations relating to the Plan as it may deem necessary or advisable
for the administration of the Plan.

4. Shares Available Under the Plan; Limitation on Awards. The maximum
number of Shares that may be issued under this Plan on and after April 28,
1998 (in addition to Shares which prior to April 28, 1998 were subject to
Awards) shall not exceed the sum of (i) the number of Shares available
for, but not yet subject to, an Award as of April 28, 1998, plus (ii)
37,000,000 Shares. These Shares may consist, in whole or in part, of
authorized but unissued Stock or treasury Stock not reserved for any
other purpose. Any Share subject to the terms and conditions of an
Award under this Plan which are forfeited or not issued because the
terms and conditions of the Award are not met or for which payment is
not made in Stock and any Shares which are used for full or partial
payment of the purchase price of Shares with respect to which an Option
is exercised may again be used for and Award under the Plan. No
Employee may be awarded in any calander year Options or Stock
Appreciation Rights covering an aggregate of more than 7,000,000 Shares.

5. Participation. Participation in the Plan shall be limited to key
Employees of the Corporation or an Affiliate selected by the Committee.

45
<PAGE>

Participation is entirely at the discretion of the Committee, and is not
automatically continued after an initial period of participation.

6. Performance Shares and Performance Units. An Award of Performance
Shares or Performance Units under the Plan shall entitle the Participant to
future payments or Shares or a combination thereof based upon the
achievement of pre-established performance targets.

6.1 Amount of Award. The Committee shall establish a maximum amount
of a Participant's Award, which amount shall be denominated in
Shares in the case of Performance Shares or in dollars in the case
of Performance Units.

6.2 Communication of Award. Written notice of the maximum amount of a
Participant's Award and the Performance Cycle determined by the
Committee shall be given to a Participant as soon as practicable
after approval of the Award by the Committee.

6.3 Amount of Award Payable. The Committee shall establish maximum
and minimum performance targets to be achieved during the
applicable Performance Cycle. Performance targets established by
the Committee shall relate to corporate, group, unit or individual
performance and may be established in terms of earnings, growth in
earnings, ratios of earnings to equity or assets, or such other
measures or standards determined by the Committee. Multiple
performance targets may be used and the components of multiple
performance measured against other groups, units, individuals
or entities. Achievement of the maximum performance target shall
entitle the Participant to payment (subject to Section 6.5) at
the full or maximum amount specified with respect to the Award;
provided, however, that notwithstanding any other provision of this
Plan, in the case of an Award of Performance Shares the Committee in
its discretion may establish an upper limit on the amount payable
(whether in cash or Stock) as a result of the acievement or the
maximum amount of a Participant's Award will be paid (subject
to Section 6.5) for performance which exceeds the minimum
performance target but falls below the maximum performance
target applicable to such Award.

6.4 Adjustments. At any time prior to payment of a Performance
Share or Performance Unit Award, the Committee may adjust
previously established performance targets or other terms and
conditions to reflect events such as changes in law, regulation,

46
<PAGE>

or accounting practice, or mergers, acquisitions or divestitures.

6.5 Payment of Awards. Following the conclusion of each Performance
Cycle, the Committee shall determine the extent to which performance
targets have been attained, and the satisfaction of any other terms
and conditions with respect to an Award relating to such Performance
Cycle. The Committee shall determine what, if any, payment is due
with respect to an Award and whether such payment shall be made in
cash, Stock or some combination. Payment shall be made in a lump
sum or installments, as determined by the Committee, commencing as
practicable following the end of the applicable Performance Cycle,
subject to such terms and conditions and in such form as may be
prescribed by the Committee. Payment in Stock may be in Restricted
stock.

6.6 Termination of Employment. If a Participant ceases to be an
Employee before the end of a Performance Cycle by reason of his
death, permanent disability or Retirement, the Performance Cycle for
such Participant for the purpose of determining the amount of Award
payable shall end at the end of the calendar quarter immediately
preceding the date on which such Participant ceased to be an
Employee. The amount of an Award payable to a Participant to whom
the preceding sentence is applicable shall be paid at the end of
the Performance Cycle and shall be that fraction of the Award
computed pursuant to the preceding sentence the numerator of which
is the number of calendar quarters during the Performance Cycle
during all of which said Participant was an Employee and the
denominator or which is the number of full calendar quarters
in the Performance Cycle. Upon any other termination of
employment of a Participant during a Performance Cycle,
participation in the Plan shall cease and all outstanding Awards
of Performance shares or Performance Units to such Participant
shall be cancelled.

7. Restricted Stock Awards. An Award of Restricted Stock under the Plan
shall consist of Shares subject to restrictions on transfer, conditions
of forfeiture, and such other terms and conditions as the Committee
shall determine.

7.1 Agreements. An Award of Restricted Stock shall be evidenced by a
Restricted Stock agreement in such form and not inconsistent with
this Plan as the Committee shall approve from time to time, which
shall include the following terms and conditions:

(a) Restrictions. A statement of the terms, conditions, and
restrictions to which the Restricted Stock awarded is subject,
including, without limitation, terms requiring forfeiture and

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<PAGE>

imposing restriction on transfer for such Term or Terms as
shall be determined by the Committee. The Committee shall have
the authority to permit in its discretion an acceleration of
the expiration of the applicable Term with respect to any part
or all of the Restricted Stock awarded to a Participant.

(b) Lapse of Restrictions. A statement of the terms and any
other conditions upon which any restrictions upon Restricted
Stock awarded shall lapse, as determined by the Committee.
Upon the lapse of the restrictions, Shares free of
restrictive legend, if any, shall be issued to the Participant
or his Successor.

7.2 Nontransferability. Restricted Stock awarded, and the right to
vote such Restricted Stock and to receive dividends thereon, may
not be sold, assigned, transferred, exchanged, pledged, or
otherwise encumbered, during the Term applicable to the Award. A
Participant with a Restricted Stock Award shall have all the other
rights of a stockholder including, but not limited to, the right to
receive dividends and the right to vote the Shares.

7.3 Termination of Employment. If a Participant ceases to be an
Employee prior to the lapse of restrictions by reason of his death,
permanent disability or Retirement, all restrictions on Shares of
Restricted Stock held for his benefit shall immediately lapse.
Upon any other termination of employment prior to the lapse of
restrictions, participation in the Plan shall cease and all
Shares of Restricted Stock held for the benefit of a Participant
shall be forfeited by the Participant.

7.4 Certificates. Each certificate issued in respect to an Award of
Restricted Stock shall be deposited with the Corporation or its
designee and may, at the election of the Committee, bear the
following legend:

"This certificate and the shares of stock represented hereby
are subject to the terms and conditions (including forfeiture
provisions and restrictions against transfer) contained in the
Long-Term Incentive Compensation Plan and an Agreement entered
into between the registered owner and Norwest Corporation.
Release from such terms and conditions shall obtain only in
accordance with the provisions of the Plan and Agreement, a copy
of each of which is on file in the office of the Secretary of
Norwest Coporation."

8. Stock Awards. Awards of Stock without restrictions may be made according
to terms and conditions established by the Committee.

9. Stock Options.

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<PAGE>

9.1 Agreements. An Award of an Option shall be evidenced by an
Option agreement in such form and not inconsistent with the
Plan as the Committee shall approve from time to time, which
shall include the following terms and conditions:

(a) Type of Option; Number of Shares. A statement identifying
the Option represented thereby as an Incentive Stock Option
or Non-Qualified Stock Option, as the case may be, and the
number of Shares to which the Option applies.

(b) Option Price. A statement of the purchase price of the
Stock subject to Option which shall not be less than the
Fair Market Value, and in any event not less than the par
value, of the Stock on the date the Option is granted.

(c) Exercise Term. A statement of the Term of each Option
granted as established by the Committee, provided that no
Option shall be exercisable after ten years from the date of
grant. The Committee shall have the authority to permit an
acceleration of previously established Terms, at its
discretion.

(d) Payment for Shares. A statement that the purchase price of
the Shares with respect to which an Option is exercised shall
be payable at the time of exercise in accordance with
procedures established by the Corporation. The purchase price
may be payable in cash, in Stock having a Fair Market Value on
the date the Option is exercised equal to the Option price of
the Stock being purchased pursuant to the Option, or a
combination thereof, as the Committee shall determine.

(e) Nontransferability. Each Option agreement shall state that
the Option is not transferable other than by will or the
laws of descent and distribution, and during the lifetime
of the Participant is exercisable only by him or by his
guardian or legal representative.

(f) Incentive Stock Options. In the case of an Incentive Stock
Option, each Option agreement shall be subject to any terms,
conditions and provisions as the Committee determines necessary
or desirable in order to qualify the Option as an Incentive
Stock Option (within the meaning of Section 422A of the
Internal Revenue Code of 1986, or any amendment or
regulation pertaining to it) or any other law or regulation
providing special tax treatment for stock options and related
stock. Provided, however, that the agggregate Fair Market
Value (as determined at the effective date of the grant) of
the Stock with respect to which Incentive Stock Options are
exercisable for the first time by the Participant during any
calander year shall no exceed $100,000.

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<PAGE>

9.2 Termination of Employment Due to Death, Disability, or Retirement.

(a) If a Participant ceases to be an Employee by reason of
his death, permanent disability or Retirement, all Options
outstanding shall become immediately exercisable and
remain exercisable to the extent and for such period or
periods determined by the Committee but not beyond the
expiration date of said Options.

(b) If a Participant ceases to be an Employee by reason of
his death, permanent disability or Retirement,
all outstanding Stock Appreciation Rights granted in
conjunction with Options shall become immediately
exercisable and remain exercisable to the extent and
for such period or periods determined by the Committee but
not beyond the expiration date of said Stock Appreciation
Rights.

9.3 Termination of Employment for Reasons Other Than Death,
Disability, or Retirement. Except as otherwise determined by the
Committee, in the event a Participant ceases to be an Employee for
any reason other than his death, permanent disability or
Retirement, all rights of the Participant under this Plan shall
immediately terminate without notice of any kind.

10. Stock Appreciation Rights. An Award of a Stock Appreciation Right
shall entitle the Participant, subject to terms and conditions determined
by the Committee, to receive upon exercise of the right all or a portion
of the excess of (i) the Fair Market Value of a specified number of Shares
at the time of exercise over (ii) a specified price which shall not be
less than 100% of the Fair Market Value of the Shares at the time of
grant. Stock Appreciation Rights may be granted in connection with a
previously or contemporaneously granted Option, or independent of any
Option. If issued in connection with an Option, the Committee may impose a
condition that exercise of a Stock Appreciation Right cancels the Option
with which it is connected. A Stock Appreciation Right may not be
exercised at any time when the Fair Market Value of teh Shares of Stock to
which it relates does not exceed the exercise price of the Option
associated with those Shares.

10.1 Agreement. An Award of a Stock Appreciation Right shall be
evidenced by a Stock Appreciation Right agreement in such form
and not inconsistent with this Plan as the Committee shall
approve from time to time, which shall include a statement of the
Term within which the Stock Appreciation Right may be exercised
subject to terms and conditions prescribed by the Committee,
provided that no Stock Appreciation Right shall be exercisable
after ten years from the date of grant. The Committee shall have

50
<PAGE>
the authority to permit an acceleration of previously established
exercise Terms.

10.2 Termination of Employment Due to Death, Disability, or Retirement.
If a Participant ceases to be an Employee by reason of his death,
permanent disability or Retirement, all Stock Appreciation Rights
then outstanding which were granted independent of any Option shall
become immediately exercisable and remain exercisable to the extent
and for such period or periods determined by the Committee but not
beyond the expiration date of said Stock Appreciation Rights.

10.3 Termination of Employment for Reasons Other Than Death,
Disability, or Retirement. Except as otherwise determined by the
Committee, in the event a Participant ceases to be an Employee for
any reason other than his death, permanent disability or
Retirement, all rights of the Participant under this Plan shall
immediately terminate without notice of any kind.

10.4 Payment. Upon exercise of a Stock Appreciation Right, payment
shall be made in the form of cash or Stock or some combination
thereof as determined by the Committee. However, notwithstanding
any other provisions of this Plan, in no event may the payment
(whether in cash or Stock) upon exercise of a Stock Appreciation
Right exceed an amount equal to 100% of the Fair Market Value
of the Shares at the time of grant.

11. Nontransferability of Rights. No rights under any Award will be
transferable other than by will or the laws of descent and distribution,
and the rights and the benefits of any Award may be exercised and
received during the lifetime of the Participant only by him or his
guardian or legal representative.

12. Termination of Employment.

12.1 Transfers of employment between the Corporation and an Affiliate,
or between Affiliates, will not constitute termination of
employment for purposes of any Award.

12.2 The Committee may specify in the agreement relating to an Award
whether any authorized leave of absence or absence for military
or government service or for any other reasons will constitute a
termination of employment for purposes of the Award and the Plan.

13. Reorganization. If substantially all of the assets of the Corporation
are acquired by another corporation or in case of a reorganization of
the Corporation involving the acquisition of the Corporation by another
entity, then as to each Participant who is an Employee immediately prior
to the consummation of the transaction:

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<PAGE>

(a) All outstanding Options and Stock Appreciation Rights shall
become exercisable immediately prior to the consummation of the
transaction.

(b) All restrictions with respect to Restricted Stock shall lapse
immediately prior to the consummation of the transaction.

(c) All Performance Cycles for the purpose of determining the amounts
of Awards of Performance Shares and Performance Units payable shall
end at the end of the calendar quarter immediately preceding the
consummation of the transaction. The amount of an Award payable
shall be that fraction of the Award computed pursuant to the
preceding sentence the numerator of which is the number of
calendar quarters completed in the Performance Cycle through
the end of the calendar quarter immediately preceding the
consummation of the transaction and the denominator of which is the
number of full calendar quarters in the Performance Cycle. The
amount of an Award payable shall be paid within sixty days after
consummation of the transaction.

The Committee shall take such action as in their discretion may be necessary
or advisable to carry out the provisions of this Section.

14. Board Changes. On the date that a majority of the Board shall be
persons other than persons (a) for whose election proxies shall have
been solicited by the Board or (b) who are then serving as directors
appointed by the Board to fill vacancies on the Board caused by death
or resignation (but not by removal) or to fill newly-created directorships,
then as to any Participant who is an Employee immediately prior to said
date and who ceases to be an Employee within six months after said date
for any reason other than as a result of death, permanent disability or
Retirement:

(i) All outstanding Options and Stock Appreciation Rights shall
become immediately exercisable and may be exercised at any time
within six months after the Participant ceases to be an Employee.

(ii) All restrictions with respect to Restricted Stock shall lapse
and Shares free of restrictive legend shall be delivered to the
Participant.

(iii) All Performance Cycles for the purpose of determining the amounts
of Awards of Performance Shares and Performance Units payable shall
end at the end of the calendar quarter immediately preceding the
date on which said Participant ceased to be an Employee. The
amount of an Award payable to said Participant shall be that
fraction of the Award computed pursuant to the preceding sentence
the numerator of which is the number of calendar quarters during
the Performance Cycle during all of which said Participant was

52
<PAGE>

an employee and the denominator of which is the number of full
calendar quarters in the Performance Cycle. The amount of an Award
payable shall be paid within sixty days after said Participant
ceases to be an Employee.

The Committee shall take such action as in their discretion may be
necessary or advisable to carry out the provisions of this Section.

15. Effective Date of the Plan.

15.1 Effective Date. The Plan shall become effective as of September
25, 1984 upon the approval and ratification of the Plan by the
affirmative vote of the holders of a majority of the outstanding
Shares of Stock present or represented and entitled to vote in
person or by proxy at a meeting of the stockholders of the
Corporation.

15.2 Duration of the Plan. The Plan shall remain in effect until all
Stock subject to it shall be distributed, until the Term of all
Options or Stock Appreciation Rights granted under this Plan
shall expire, until all restrictions on Restricted Stock granted
under this Plan shall lapse, or until the Performance Cycle for any
Performance Shares or Performance Units awarded under this Plan
shall end.

16. Right to Terminate Employment. Nothing in the Plan shall confer upon
any Participant the right to continue in the employment of the
Corporation or any Affiliate or affect any right which the Corporation or
any Affiliate may have to terminate employment of the Participant.

17. Withholding Taxes. The Corporation and its Affiliates shall have the
right to deduct from all payments under this Plan, whether in cash or
in Stock, an amount necessary to satisfy any federal, state or local
withholding tax requirements.

18. Deferral of Payments. The Corporation may, from time to time, establish
rules and conditions under which a Participant may defer the payment of
Awards. Such terms and conditions shall be included in a deferral
agreement signed by a Participant electing such deferral.

19. Amendment, Modification and Termination of the Plan. The Board or
Committee may at any time terminate, suspend or modify the Plan, except
that the Board or Committee will not, without authorization of the
stockholders of the Corporation, effect any change (other than through
adjustment for changes in capitalization as provided in Section 20)
which will:

(a) Increase the total amount of Stock which may be awarded under the
Plan.

53
<PAGE>

(b) Change the class of Employees eligible to participate in the Plan.

(d) Permit any person, while a member of the Committee, to be
eligible to participate in the Plan.

(e) Extend the duration of the Plan.

No termination, suspension, or modification of the Plan will adversely
affect any right acquired by any Participant or any Successor under an
Award granted before the date of termination, suspension, or modification,
unless otherwise agreed to by the Participant; but it will be
conclusively presumed that any adjustment for changes in capitalization
provided for in Section 20 does not adversely affect any right.

20. Adjustment for Changes in Capitalization. Any change in the number of
outstanding Shares occurring through Stock splits, reverse Stock splits,
or Stock dividends after the grant of an Award will be reflected
proportionately in the aggregate number of Shares then available for
Awards and in the number of Shares subject to Awards then outstanding;
and a proportionate change will be made in the per share Option price
as to any outstanding Options. Any fractional Shares resulting from
adjustments will be rounded to the nearest whole Share.

54
<PAGE>

Exhibit 11.

Norwest Corporation and Subsidiaries
COMPUTATION OF EARNINGS PER SHARE
(Unaudited)

In thousands, except per common share amounts Quarter Ended
June 30,
1998 1997
BASIC:
Weighted average number of common shares
outstanding ..................................... 757,868 749,138

Net income ....................................... $382,132 331,391
Less dividends accrued on preferred stock ........ (4,440) (4,440)
Net income, as adjusted .......................... $377,692 326,951

Net income per common share ...................... $ 0.50 0.43

DILUTED:
Weighted average number of common shares
outstanding ..................................... 757,868 749,138
Net effect of assumed exercise of stock options
based on treasury stock method using average
market price .................................... 13,092 10,255
Assumed conversion of 6 3/4% convertible
subordinated debentures due 2003 as of the
beginning of the period ......................... 34 35
770,994 759,428

Net income ....................................... $382,132 331,391
Less dividends accrued on preferred stock ........ (4,440) (4,440)
Add 6 3/4% convertible subordinated debentures
interest and amortization of debt expense,
net of income tax effect ........................ 1 1
Net income, as adjusted .......................... $377,693 326,952

Net income per common share....................... $ 0.49 0.43

<PAGE>

Exhibit 11.
(continued)

Norwest Corporation and Subsidiaries
COMPUTATION OF EARNINGS PER SHARE
(Unaudited)

In thousands, except per common share amounts Six Months Ended
June 30,
1998 1997
BASIC:
Weighted average number of common shares
outstanding ..................................... 757,787 747,366

Net income ....................................... $749,838 653,252
Less dividends accrued on preferred stock ........ (8,881) (8,881)
Net income, as adjusted .......................... $740,957 644,371

Net income per common share ...................... $ 0.98 0.86

DILUTED:
Weighted average number of common shares
outstanding ..................................... 757,787 747,366
Net effect of assumed exercise of stock options
based on treasury stock method using average
market price .................................... 13,655 10,289
Assumed conversion of 6 3/4% convertible
subordinated debentures due 2003 as of the
beginning of the period ......................... 35 35
771,477 757,690

Net income ....................................... $749,838 653,252
Less dividends accrued on preferred stock ........ (8,881) (8,881)
Add 6 3/4% convertible subordinated debentures
interest and amortization of debt expense,
net of income tax effect ........................ 2 2

Net income, as adjusted .......................... $740,959 644,373

Net income per common share....................... $ 0.96 0.85

56
<PAGE>

Exhibit 12(a).

Norwest Corporation and Subsidiaries
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Unaudited)
<TABLE>
Six Months Ended
June 30, Year Ended December 31,
In thousands 1998 1997 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C> <C>
Computation of Income:
Income before
income taxes $1,109,836 1,006,075 2,049,726 1,781,509 1,422,814 1,180,601 879,755
Capitalized interest - - (22) (14) (112) (69) (65)
Income before income
taxes and capitalized
interest 1,109,836 1,006,075 2,049,704 1,781,495 1,422,702 1,180,532 879,690
Fixed charges 1,459,862 1,345,026 2,734,466 2,685,447 2,503,603 1,640,049 1,485,936
Total income for
computation $2,569,698 2,351,101 4,784,170 4,466,942 3,926,305 2,820,581 2,365,626
Total income for
computation excluding
interest on deposits
from fixed charges $1,830,479 1,636,410 3,337,488 3,142,024 2,770,005 1,957,224 1,513,317

Computation of Fixed
Charges:
Net rental
expense (a) $ 115,443 102,730 211,191 205,409 166,591 149,462 128,573
Portion of rentals
deemed
representative
of interest $ 38,481 34,243 70,397 68,470 55,530 49,821 42,858
Interest:
Interest on
deposits 739,219 714,691 1,446,682 1,324,918 1,156,300 863,357 852,309
Interest on
federal funds
and other
short-term
borrowings 291,499 215,131 439,492 454,013 515,646 290,211 238,046
Interest on
long-term debt 390,663 380,961 777,873 838,032 776,015 436,591 352,658
Capitalized
interest - - 22 14 112 69 65
Total interest 1,421,381 1,310,783 2,664,069 2,616,977 2,448,073 1,590,228 1,443,078
Total fixed
charges $1,459,862 1,345,026 2,734,466 2,685,447 2,503,603 1,640,049 1,485,936
Total fixed
charges excluding
interest on
deposits $ 720,643 630,335 1,287,784 1,360,529 1,347,303 776,692 633,627
Ratio of Income
to Fixed Charges:
Excluding
interest on
deposits 2.54x 2.60 2.59 2.31 2.06 2.52 2.39
Including
interest on
deposits 1.76x 1.75 1.75 1.66 1.57 1.72 1.59
</TABLE>
(a) Includes equipment rentals.

57
<PAGE>

Exhibit 12(b).
Norwest Corporation and Subsidiaries
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(Unaudited)
<TABLE>
Six Months Ended
June 30, Year Ended December 31,
In thousands 1998 1997 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C> <C>
Computation of Income:
Income before
income taxes $1,109,836 1,006,075 2,049,726 1,781,509 1,422,814 1,180,601 879,755
Capitalized interest - - (22) (14) (112) (69) (65)
Income before income
taxes and capitalized
interest 1,109,836 1,006,075 2,049,704 1,781,495 1,422,702 1,180,532 879,690
Fixed charges 1,459,862 1,345,026 2,734,466 2,685,447 2,503,603 1,640,049 1,485,936
Total income for
computation $2,569,698 2,351,101 4,784,170 4,466,942 3,926,305 2,820,581 2,365,626
Total income for
computation excluding
interest on deposits
from fixed charges $1,830,479 1,636,410 3,337,488 3,142,024 2,770,005 1,957,224 1,513,317

Computation of Fixed
Charges:
Net rental
expense (a) $ 115,443 102,730 211,191 205,409 166,591 149,462 128,573
Portion of rentals
deemed
representative
of interest $ 38,481 34,243 70,397 68,470 55,530 49,821 42,858
Interest:
Interest on
deposits 739,219 714,691 1,446,682 1,324,918 1,156,300 863,357 852,309
Interest on
federal funds
and other
short-term
borrowings 291,499 215,131 439,492 454,013 515,646 290,211 238,046
Interest on
long-term debt 390,663 380,961 777,873 838,032 776,015 436,591 352,658
Capitalized
interest - - 22 14 112 69 65
Total interest 1,421,381 1,310,783 2,664,069 2,616,977 2,448,073 1,590,228 1,443,078
Total fixed
charges $1,459,862 1,345,026 2,734,466 2,685,447 2,503,603 1,640,049 1,485,936
Total fixed
charges excluding
interest on
deposits $ 720,643 630,335 1,287,784 1,360,529 1,347,303 776,692 633,627
Preferred stock
dividends 8,881 8,881 17,763 17,763 41,220 27,827 31,170
Pre-tax earnings
needed to meet
preferred stock
dividend
requirements 13,146 13,678 26,950 27,424 61,349 41,044 44,728
Total combined fixed
charges and preferred
stock dividends $1,473,008 1,358,704 2,761,416 2,712,871 2,564,952 1,681,093 1,530,664
Total combined
fixed charges
and preferred stock
dividends excluding
interest on
deposits $ 733,789 644,013 1,314,734 1,387,953 1,408,652 817,736 678,355

</TABLE>
(a) Includes equipment rentals.

58
<PAGE>
Exhibit 12(b).
(continued)

Norwest Corporation and Subsidiaries
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(Unaudited)
<TABLE>
Six Months Ended
June 30, Year Ended December 31,
In thousands 1998 1997 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Income to Combined
Fixed Charges and Preferred
Stock Dividends:
Excluding interest on
deposits 2.49x 2.54 2.54 2.26 1.97 2.39 2.23
Including interest on
deposits 1.74x 1.73 1.73 1.65 1.53 1.68 1.55

</TABLE>

59
<PAGE>

Exhibit 99(a)

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

On June 7, 1998, Norwest Corporation ("Norwest") entered into
a definitive agreement for a merger of equals ("Merger") with Wells Fargo &
Company ("Wells Fargo"). In accordance with the agreement, common stockholders
of Wells Fargo will receive ten shares of Norwest common stock in exchange for
each share of Wells Fargo common stock. The transaction is subject to
customary stockholder and regulatory approvals and is expected to close in the
fourth quarter of 1998. The pending Merger is significant to the financial
statements of Norwest, as specified in Rules 1-02(w) and 3-05 of Regulation S-
X. Consequently, pro forma financial statements are presented below.

Pro forma Financial Information

The following unaudited pro forma condensed combined financial information and
explanatory notes are presented to show the impact of the Merger using the
"pooling of interests" method of Accounting on the historical financial
positions and results of operations of Norwest and Wells Fargo. The
unaudited pro forma condensed combined financial information combines the
historical financial information of Norwest and Wells Fargo as of June 30, 1998
and for the six months ended June 30, 1998 and 1997, respectively. The
unaudited pro forma condensed combined statements of income give effect to the
Merger as if the Merger had been consummated at the beginning of the earliest
period presented.

The pro forma condensed combined balance sheet assumes the Merger was
consummated on June 30, 1998. The Merger, which is expected to be completed in
the fourth quarter of 1998, provides for the exchange of ten shares of Norwest
common stock for each outstanding share of Wells Fargo common stock. The pro
forma condensed combined financial information as of June 30, 1998 and for the
six months ended June 30, 1998 and 1997 is based on, and derived from, and
should be read in conjunction with the historical consolidated financial
statements and the related notes thereto of Norwest and Wells Fargo. Pro forma
stockholders' equity at June 30, 1998 includes the effect of an estimated non-
recurring Merger charge of $950 million ($625 million after taxes). See Note 3
to the unaudited pro forma condensed financial information on page 66 for
further information. The pro forma condensed combined financial statements do
not give effect to anticipated cost savings or potential revenue enhancements
in connection with the Merger.

The pro forma data are presented for comparative purposes only and are not
necessarily indicative of the future financial position or results of
or the results of operations that would have been realized had the Merger been
consummated during the periods or as of the dates for which the pro forma data
are presented.

<PAGE>
NORWEST CORPORATION AND WELLS FARGO & COMPANY
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
AT JUNE 30, 1998
(in millions)

WELLS PROFORMA
NORWEST FARGO ADJUSTMENTS COMBINED

ASSETS
Cash and due from banks ............ $ 4,954 7,130 - 12,084
Interest-bearing deposits .......... 63 17 - 80
Federal funds sold and
resale agreements ................ 866 590 - 1,456
Total cash and cash equivalents .... 5,883 7,737 - 13,620
Trading account securities
held to maturity ................. 247 941 - 1,188
Investment securities
available for sale ............... 18,432 8,449 - 26,881
Investment securities .............. 752 405 - 1,157
Total investment securities ........ 19,184 8,854 - 28,038
Loans held for sale ................ 3,470 1,085 - 4,555
Mortgages held for sale ............ 12,191 319 - 12,510
Loans and leases, net of
unearned discount ................ 43,391 62,916 - 106,307
Allowance for credit losses ........ (1,262) (1,835) - (3,097)
Net loans and leases ............... 42,129 61,081 - 103,210
Premises and equipment, net ........ 1,377 2,017 (107) 3,287
Mortgage servicing rights, net ..... 2,904 - - 2,904
Goodwill and intangible assets ..... 1,141 8,596 - 9,737
Interest receivable
and other assets ................. 4,627 2,570 - 7,197
Total assets .................. $93,153 93,200 (107) 186,246

LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Noninterest-bearing .............. $17,797 23,411 - 41,208
Interest bearing ................. 38,998 47,039 - 86,037
Total deposits ................. 56,795 70,450 - 127,245
Short-term borrowings .............. 12,188 1,549 - 13,737
Accrued expenses and
other liabilities ................ 4,508 2,537 660 7,705
Long-term debt ..................... 12,316 4,415 - 16,731
Guaranteed preferred
beneficial interest in Wells
Fargo subordinated debentures .... - 1,299 - 1,299
Preferred stock .................... 186 275 - 461
Common stock ....................... 1,285 425 993 2,703
Surplus ............................ 483 8,347 (993) 7,837
Retained earnings .................. 5,365 3,837 (767) 8,435
Accumulated other
comprehensive income ............. 375 66 - 441
Notes receivable from ESOP ......... (5) - - (5)
Treasury stock ..................... (343) - - (343)
Total stockholders' equity .... 7,346 12,950 (767) 19,529
Total liabilities and
Stockholders' equity ........ $93,153 93,200 (107) 186,246

The accompanying notes are an integral part of the unaudited pro forma combined
financial information.
61
<PAGE>

NORWEST CORPORATION AND WELLS FARGO & COMPANY
UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME
SIX MONTHS ENDED JUNE 30, 1998
(in millions, except for per share amounts)

WELLS PROFORMA
NORWEST FARGO ADJUSTMENTS COMBINED
INTEREST INCOME ON
Loans and leases .................... $ 2,384 2,959 - 5,343
Investment securites
available for sale ................ 631 275 - 906
Investment securities
held to maturity .................. 13 12 - 25
Loans held for sale ................. 139 42 - 181
Mortgages held for sale ............. 353 26 - 379
Money market investments ............ 21 17 - 38
Trading account securities .......... 28 30 - 58
Total interest income .......... 3,569 3,361 - 6,930

INTEREST EXPENSE ON
Deposits ............................ 739 811 - 1,550
Short-term borrowing ................ 291 72 - 363
Long-term debt ...................... 391 148 - 539
Guaranteed preferred beneficial
interest in Wells Fargo
subordinated debentures ........... - 51 - 51
Total interest expense ......... 1,421 1,082 - 2,503
Net interest income ............ 2,148 2,279 - 4,427
Provision for credit losses ......... 264 350 - 614
Net interest income after
provision for credit losses .. 1,884 1,929 - 3,813

NON-INTEREST INCOME
Mortgage banking .................... 540 38 - 578
Trust and investment fees
and commissions ................... 256 271 - 527
Service charges and fees ............ 311 607 - 918
Credit card fee revenue ............. 73 176 - 249
Insurance ........................... 205 - - 205
Data processing ..................... 33 - - 33
Net investment securities
available for sale gains .......... 42 23 - 65
Net venture capital gains ........... 112 - - 112
Trading ............................. 66 38 - 104
Other ............................... 123 283 - 406
Total non-interest income ...... 1,761 1,436 - 3,197

NON-INTEREST EXPENSES
Salaries and benefits ............... 1,389 875 (4) 2,260
Net occupancy ....................... 174 199 - 373
Equipment rentals, depreciation
and maintenance ................... 183 197 5 385
Business development ................ 132 87 - 219
Communication ....................... 159 127 - 286
Data processing ..................... 78 30 - 108
Intangible asset amortization ....... 86 293 - 379
Other ............................... 334 357 - 691
Total non-interest expenses .... 2,535 2,165 1 4,701
(continued on page 63)
62

<PAGE>
NORWEST CORPORATION AND WELLS FARGO & COMPANY
UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME
SIX MONTHS ENDED JUNE 30, 1998
(in millions, except for per share amounts)

(Continued from page 62)

WELLS PRO FORMA
NORWEST FARGO ADJUSTMENTS COMBINED

INCOME BEFORE INCOME TAXES .......... 1,110 1,200 (1) 2,309
Income tax expense .................. 360 548 - 908
NET INCOME .......................... $ 750 652 (1) 1,401

NET INCOME PER COMMON SHARE
Basic ............................... $ 0.98 7.52 - 0.86
Diluted ............................. 0.96 7.45 - 0.85

WEIGHTED AVERAGE COMMON AND
POTENTIAL COMMON SHARES
Basic ............................... 757.8 85.5 769.7 1,613.0
Diluted ............................. 771.5 86.4 777.1 1,635.0

The accompanying notes are an integral part of the unaudited pro forma combined
financial information.

63
<PAGE>
NORWEST CORPORATION AND WELLS FARGO & COMPANY
UNAUDITED PRO FORMA COMBINED STAETEMENTS OFINCOME
SIX MONTHS ENDED JUNE 30, 1997
(in millions, except for per share amounts)

WELLS PRO FORMA
NORWEST FARGO ADJUSTMENTS COMBINED
INTEREST INCOME ON
Loans and leases .................... $ 2,211 3,002 - 5,213
Investment securites
available for sale ................ 690 398 - 1,088
Investment securities
held.to maturity .............. 14 12 - 26
Loans held for sale ................. 112 42 - 154
Mortgages held for sale ............. 196 13 - 209
Money market investments ............ 31 12 - 43
Trading account securities .......... 15 11 - 26
Total interest income .......... 3,269 3,490 - 6,759

INTEREST EXPENSE ON
Deposits ............................ 715 851 - 1,566
Short-term borrowing ................ 215 71 - 286
Long-term debt ...................... 381 159 - 540
Guaranteed preferred beneficial
interest in Wells Fargo
subordinated debentures ........... - 50 - 50
Total interest expense ......... 1,311 1,131 - 2,442
Net interest income ............ 1,958 2,359 - 4,317
Provision for credit losses ......... 232 245 - 477
Net interest income after
provision for credit losses .. 1,726 2,114 - 3,840

NON-INTEREST INCOME
Mortgage banking .................... 399 14 - 413
Trust and investment fees
and commissions ................... 209 253 - 462
Service charges and fees ............ 276 580 - 856
Credit card fee revenue ............. 56 146 - 202
Insurance ........................... 190 - - 190
Data processing ..................... 36 - - 36
Net investment securities
available for sale gains .......... 4 7 - 11
Net venture capital gains ........... 113 - - 113
Trading ............................. 52 38 - 90
Other ............................... 106 251 - 357
Total non-interest income ...... 1,441 1,289 - 2,730

NON-INTEREST EXPENSES
Salaries and benefits ............... 1,117 872 (4) 1,985
Net occupancy ....................... 160 196 - 356
Equipment rentals, depreciation
and maintenance ................... 166 192 5 363
Business development ................ 122 63 - 185
Communication ....................... 143 154 - 297
Data processing ..................... 87 26 - 113
Intangible asset amortization ....... 83 308 - 391
Other ............................... 283 522 - 805
Total non-interest expenses .... 2,161 2,333 1 4,495

(continued on page 65)
64
<PAGE>
NORWEST CORPORATION AND WELLS FARGO & COMPANY
UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME
SIX MONTHS ENDED JUNE 30, 1997
(in millions, except for per share amounts)

(Continued from page 64)

WELLS PRO FORMA
NORWEST FARGO ADJUSTMENTS COMBINED

INCOME BEFORE INCOME TAXES 1,006 1,070 (1) 2,075
Income tax expense .................. 353 502 - 855
NET INCOME .......................... $ 653 568 (1) 1,220

NET INCOME PER COMMON SHARE
Basic ............................... $ 0.86 6.12 - 0.73
Diluted ............................. 0.85 6.06 - 0.72

WEIGHTED AVERAGE COMMON AND
POTENTIAL COMMON SHARES
Basic ............................... 747.4 89.9 809.1 1,646.4
Diluted ............................. 759.0 90.9 818.2 1,668.1

The accompanying notes are an integral part of the unaudited pro forma combined
financial information.

65
<PAGE>
NORWEST CORPORATION
AND WELLS FARGO & COMPANY

Notes to Unaudited Pro Forma Condensed Financial Information

1. Basis of Presentation
The unaudited pro forma condensed financial information has been prepared
using the pooling of interests method of accounting, giving effect to the
Merger as if it had occurred as of the beginning of the earliest period
presented. The pro forma financial information presented is not
necessarily indicative of the results of the operations had the Merger been
consummated at the beginning of the periods presented, nor is it
necessarily indicative of the results of operations in future periods or
the future financial position of the combined entities. Certain historical
financial information has been reclassified to conform with the current
presentation. The Merger, which is expected to be completed in the fourth
quarter of 1998, provides for issuance of ten shares of Norwest common
stock for each outstanding share of Wells Fargo common stock, and is
subject to regulatory and Norwest stockholder and Wells Fargo stockholder
approvals. At June 30, 1998, Norwest had five pending acquisitions
(exclusive of the Merger) with total assets of approximately $2.3 billion,
and it is expected that approximately 14.0 million common shares will be
issued upon consummation of these acquisitions. The pro forma information
does not give effect to these other pending acquisitions of Norwest as they
are not material to the pro forma condensed financial information, either
individually or in the aggregate. Norwest and Wells Fargo anticipate that,
in order to comply with Department of Justice merger guidelines, the
companies will be requested to sell a modest level of deposits. In this
connection, the companies expect to propose divestitures in various
markets. The impact of such divestitures is not expected to be material
and no adjustment has been included in the unaudited pro forma combined
financial statements for the anticipated divestitures.

2. Accounting Policies and Financial Statement Classifications
Norwest and Wells Fargo have identified and conformed certain accounting
policies, and as described below in Note 4, the accompanying pro forma
financial information reflects such conforming accounting adjustments. The
accounting policies of both Norwest and Wells Fargo are in the process of
being reviewed in detail. Upon completion of such review, other conforming
adjustments or financial statement reclassifications may be determined. At
June 30, 1998, Wells Fargo goodwill and intangibles amounted to $8.6
billion, and Norwest goodwill and intangibles amounted to $1.1 billion. In
conjunction with the Merger and recent financial projections, management is
currently in the process of assessing such intangibles for impairment.
Transactions between Norwest and Wells Fargo are not material in relation
to the pro forma financial information and, therefore, intercompany
balances have not been eliminated from the pro forma combined amounts.

3. Non-recurring Merger Charge
Pro forma stockholders' equity includes the effect of an estimated non-
recurring charge of approximately $950 million, $625 million net of income
taxes. Since the estimated charge is non-recurring, it has not been
reflected in the pro forma combined condensed statements of income and
related per common share calculations. The charge does not include any
impairment of intangibles that may be identified upon completion of the
review discussed in Note 2.

66
<PAGE>
The estimated non-recurring charge consists of the following (in millions):

Employee-related expense ...................................... $295
Costs associated with systems integration,
operations and customer conversions ......................... 350
Branch consolidations, name change and signage ................ 185
Investment banking, legal and accounting fees ................. 120
950
Income tax benefit ............................................ 325
Total estimated non-recurring charge .......................... $625

The pro forma condensed combined financial information does not reflect any
benefit expected from revenue enhancements or derived from potential cost
savings related to the Merger. Although management anticipates revenue
enhancements and cost savings will result from the Merger, there can be no
assurance these items will be achieved.

4. Pro Forma Adjustments
The following pro forma adjustments have been reflected in the pro forma
condensed combined financial information:

- Common stock and surplus were adjusted by $993 million, based on 85.1
million shares of Wells Fargo common stock outstanding at June 30, 1998,
reflecting the exchange of 10 shares of Norwest common stock for each
share of Wells Fargo common stock, and accounting for the Merger as a
pooling of interests. The adjustment reflects the reclassification from
surplus to common stock to reflect the $1 2/3 par value of Norwest common
stock. The number of shares of Norwest common stock to be issued upon
consummation of the Merger will be based on the number of shares of Wells
Fargo common stock outstanding at that time and will include
approximately 2.5 million "tainted" shares of Wells Fargo common stock
that Wells Fargo intends to issue prior to the Merger. From June 1, 1996
to the announcement date of the Merger, Wells Fargo repurchased shares of
Wells Fargo common stock that are presumed to be tainted under Accounting
Principles Board (APB) Opinion No. 16 and authoritative interpretations
thereof. Such shares previously reacquired by Wells Fargo were retired
upon acquisition. Wells Fargo rescinded its share repurchase programs as
of June 7, 1998. These tainted shares result in violations of certain
conditions for the use of pooling of interests accounting for the Merger.
Wells Fargo intends to cure such "tainted" shares prior to the effective
time of the Merger by issuing shares of Wells Fargo common stock in a manner
that complies with the requirements of APB Opinion No. 16 and authoritative
interpretations thereof.

- Other liabilities and retained earnings were adjusted by $950 million
($625 million, net of income taxes), to reflect the non-recurring Merger
charge discussed in Note 3.

- Other liabilities and retained earnings have been adjusted by $153
million before taxes ($100 million, net of income taxes) reflecting the
transition obligation for the Wells Fargo postretirement medical and life
insurance benefits upon initial adoption of Statement of Financial
Accounting Standards No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions" (FAS 106) at the beginning of 1992.
Norwest adopted FAS 106 in 1992 and immediately recognized the
accumulated postretirement benefit obligations at the time of adoption as
a cumulative effect of change in accounting principle. Subsequent to

67
<PAGE>
1992, salaries and benefits expense has been reduced and retained
earnings has been credited to eliminate the annual pre-tax charge of $8
million ($5 million, net of income taxes) related to the amortization
of the Wells Fargo transition obligations.

Premises and equipment and retained earnings have been adjusted by $107
million before taxes ($70 million, net of income taxes) reflecting the
conforming of capitalization policies for premises and equipment. The
capitalization policy of the pro forma combined company reflects a higher
dollar threshold for capitalizing purchases of furniture and equipment that
is currently used by one of the parties to the Merger. Use of a higher
dollar threshold is consistent with the size of the combined company.
Equipment expense has been adjusted by $5 million for the first half of
1998 and 1997, respectively, reflecting adjustments for capitalization of
such items, partially offset by related depreciation previously recorded.

5. Pro forma Earnings Per Share

The pro forma combined basic and diluted earnings per share for the
respective periods presented is based on the combined weighted average
number of common and dilutive potential common shares and adjusted weighted
shares of Norwest and Wells Fargo. The number of weighted average common
shares and adjusted weighted average shares, including all dilutive
potential common shares, reflects the exchange of ten shares of Norwest
common stock for each share of Wells Fargo common stock. Amounts used in
the determination of pro forma basic and diluted earnings per share are as
follows:

(In millions)

For the Six Months
Ended June 30,
1998 1997
Net income $1,401 1,220
Less dividends accrued on preferred stock 18 26
Income available to common stockholders $1,383 1,194

Weighted average shares outstanding 1,613.0 1,646.4
Adjustments for dilutive securities:
Assumed exercise of stock options and
restricted share rights 22.0 21.7
Assumed conversion of preferred stock and
convertible subordinated debentures - -
Diluted common shares 1,635.0 1,668.1

<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
JUNE 30, 1998 QUARTERLY REPORT ON FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS. THE AMOUNTS PRESENTED FOR [EPS-
PRIMARY] AND [EPS-DILUTED] IN THE TABLE REPRESENT THE CORPORATION'S BASIC AND
DILUTED EARNINGS PER SHARE, RESPECTIVELY, FOR THE SIX MONTHS ENDED JUNE 30,
1998.
</LEGEND>

<S> <C>
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<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
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0
186
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