WELLS FARGO & COMPANY/MN (WFC)

CIK: 0000072971. SIC: 6021 National Commercial Banks. Latest 10-K as of: 2026-02-24.

SIC breadcrumb: Finance, Insurance, And Real Estate > Depository Institutions > SIC 6021 National Commercial Banks

SEC company page: https://www.sec.gov/edgar/browse/?CIK=72971. Latest filing source: 0000072971-26-000133.

Informational only - descriptive public-record data, not investment advice.

Selected Fundamentals

Metric	Value	Unit	FY	Filed
Revenue	83,699,000,000	USD	2025	2026-02-24
Net income	21,338,000,000	USD	2025	2026-02-24
Assets	2,148,631,000,000	USD	2025	2026-02-24

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-24. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000072971.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Metric	2013	2016	2017	2018	2019	2020	2021	2022	2023	2024	2025
Revenue				86,408,000,000	86,832,000,000	74,264,000,000	79,166,000,000	74,368,000,000	82,597,000,000	82,296,000,000	83,699,000,000
Net income		21,938,000,000	22,183,000,000	22,393,000,000	19,715,000,000	3,377,000,000	22,109,000,000	13,677,000,000	19,142,000,000	19,722,000,000	21,338,000,000
Diluted EPS		3.99	4.10	4.28	4.09	0.43	5.08	3.27	4.83	5.37	6.26
Operating cash flow	57,641,000,000		18,619,000,000	36,073,000,000	6,730,000,000	2,051,000,000	-11,525,000,000	27,048,000,000	40,358,000,000	3,035,000,000	-19,001,000,000
Dividends paid		7,472,000,000	7,480,000,000	7,692,000,000	8,198,000,000	4,852,000,000	2,422,000,000	4,178,000,000	4,789,000,000	5,133,000,000	5,434,000,000
Share buybacks		8,116,000,000	9,908,000,000	20,633,000,000	24,533,000,000	3,415,000,000	14,464,000,000	6,033,000,000	11,851,000,000	19,448,000,000	17,516,000,000
Assets		1,930,115,000,000	1,951,757,000,000	1,895,883,000,000	1,927,555,000,000	1,952,911,000,000	1,948,068,000,000	1,881,020,000,000	1,932,468,000,000	1,929,845,000,000	2,148,631,000,000
Liabilities		1,729,618,000,000	1,743,678,000,000	1,698,817,000,000	1,739,571,000,000	1,767,199,000,000	1,757,958,000,000	1,698,807,000,000	1,745,025,000,000	1,748,779,000,000	1,965,593,000,000
Stockholders' equity		199,581,000,000	206,936,000,000	196,166,000,000	187,146,000,000	184,680,000,000	187,606,000,000	180,227,000,000	185,735,000,000	179,120,000,000	181,117,000,000

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Metric	2016	2017	2018	2019	2020	2021	2022	2023	2024	2025
Net margin			25.92%	22.70%	4.55%	27.93%	18.39%	23.18%	23.96%	25.49%
Return on equity	10.99%	10.72%	11.42%	10.53%	1.83%	11.78%	7.59%	10.31%	11.01%	11.78%
Return on assets	1.14%	1.14%	1.18%	1.02%	0.17%	1.13%	0.73%	0.99%	1.02%	0.99%
Liabilities / equity	8.67	8.43	8.66	9.30	9.57	9.37	9.43	9.40	9.76	10.85

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-04-29. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000072971.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarter	End Date	Revenue	Net Income	Diluted EPS	Method
2022-Q2	2022-06-30			0.74	reported discrete quarter
2022-Q3	2022-09-30			0.85	reported discrete quarter
2023-Q1	2023-03-31			1.23	reported discrete quarter
2023-Q2	2023-06-30	20,533,000,000	4,938,000,000	1.25	reported discrete quarter
2023-Q3	2023-09-30	20,857,000,000	5,767,000,000	1.48	reported discrete quarter
2023-Q4	2023-12-31	20,478,000,000	3,446,000,000		derived Q4 = FY annual - nine-month YTD
2024-Q1	2024-03-31	20,863,000,000	4,619,000,000	1.20	reported discrete quarter
2024-Q2	2024-06-30	20,689,000,000	4,910,000,000	1.33	reported discrete quarter
2024-Q3	2024-09-30	20,366,000,000	5,114,000,000	1.42	reported discrete quarter
2024-Q4	2024-12-31	20,378,000,000	5,079,000,000		derived Q4 = FY annual - nine-month YTD
2025-Q1	2025-03-31	20,149,000,000	4,894,000,000	1.39	reported discrete quarter
2025-Q2	2025-06-30	20,822,000,000	5,494,000,000	1.60	reported discrete quarter
2025-Q3	2025-09-30	21,436,000,000	5,589,000,000	1.66	reported discrete quarter
2025-Q4	2025-12-31	21,292,000,000	5,361,000,000		derived Q4 = FY annual - nine-month YTD
2026-Q1	2026-03-31	21,446,000,000	5,253,000,000	1.60	reported discrete quarter

Quarterly Charts

Macro Cross-References

CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
UNRATE - Unemployment Rate
FEDFUNDS - Federal Funds Effective Rate
CES0500000003 - Average Hourly Earnings of All Employees, Total Private
DFEDTARU - Federal Funds Target Range - Upper Limit
DFEDTARL - Federal Funds Target Range - Lower Limit
DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
PCEPI - Personal Consumption Expenditures: Chain-type Price Index
PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
PPIACO - Producer Price Index by Commodity: All Commodities
T10YIE - 10-Year Breakeven Inflation Rate
U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
PAYEMS - All Employees, Total Nonfarm
CIVPART - Labor Force Participation Rate
EMRATIO - Employment-Population Ratio
UNEMPLOY - Unemployed
CE16OV - Employment Level
ICSA - Initial Claims
JTSJOL - Job Openings: Total Nonfarm
JTSQUR - Quits: Total Nonfarm
GDPC1 - Real Gross Domestic Product
A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
INDPRO - Industrial Production: Total Index
TCU - Capacity Utilization: Total Index
HOUST - New Privately-Owned Housing Units Started: Total Units
PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
RSAFS - Advance Retail Sales: Retail Trade
PCE - Personal Consumption Expenditures
DSPIC96 - Real Disposable Personal Income
PSAVERT - Personal Saving Rate
M2SL - M2
BOPGSTB - U.S. International Trade in Goods and Services: Balance
MSPUS - Median Sales Price of Houses Sold for the United States
HSN1F - New One Family Houses Sold: United States
RHORUSQ156N - Homeownership Rate in the United States
TTLCONS - Total Construction Spending: Total Construction in the United States
RRVRUSQ156N - Rental Vacancy Rate in the United States
TOTALSL - Total Consumer Credit Owned and Securitized
REVOLSL - Revolving Consumer Credit Owned and Securitized
DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
GDP - Gross Domestic Product
GPDI - Gross Private Domestic Investment
GCE - Government Consumption Expenditures and Gross Investment
PCEC - Personal Consumption Expenditures
NETEXP - Net Exports of Goods and Services
GFDEBTN - Federal Debt: Total Public Debt
GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
FYFSD - Federal Surplus or Deficit
FGRECPT - Federal Government Current Receipts
FGEXPND - Federal Government: Current Expenditures
MANEMP - All Employees, Manufacturing
USCONS - All Employees, Construction
USTRADE - All Employees, Retail Trade
USFIRE - All Employees, Financial Activities
USGOVT - All Employees, Government
AWHAETP - Average Weekly Hours of All Employees, Total Private
DGORDER - Manufacturers' New Orders: Durable Goods
NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
BUSINV - Total Business Inventories
EXPGS - Exports of Goods and Services
IMPGS - Imports of Goods and Services
IR - Import Price Index (End Use): All Commodities
PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0000072971-26-000217.

Extracted from a substantive MD&A body after the formal Item 2 span was a TOC or reference stub. Confidence: high. Filing date: 2026-04-29. Report date: 2026-03-31.

Financial Review

Overview

Wells Fargo & Company is a leading financial services company that has approximately $2.2 trillion in assets. We provide a diversified set of banking, investment and mortgage products and services, as well as consumer and commercial finance, through our four reportable operating segments: Consumer Banking and Lending, Commercial Banking, Corporate and

Investment Banking, and Wealth and Investment Management. Wells Fargo ranked No. 33 on Fortune’s 2025 rankings of America’s largest corporations. We ranked fourth in assets and fifth in the market value of our common stock among all U.S. banks at March 31, 2026.

Financial Performance

Consolidated Financial Highlights
	Quarter ended Mar 31,
($ in millions)		2026		2025		$ Change		% Change
Selected income statement data
Net interest income		$	12,096			11,495		601		5	%
Noninterest income		9,350			8,654		696		8
Total revenue		21,446			20,149		1,297		6
Net charge-offs		1,106			1,009		97		10
Change in the allowance for credit losses		29			(77)		106		138
Provision for credit losses (1)		1,135			932		203		22
Noninterest expense		14,330			13,891		439		3
Income tax expense		691			522		169		32
Wells Fargo net income		5,253			4,894		359		7
Wells Fargo net income applicable to common stock		5,000			4,616		384		8

(1)Includes provision for credit losses for loans, debt securities, and other financial assets.

In first quarter 2026, we generated $5.3 billion of net income and diluted earnings per share (EPS) of $1.60, compared with $4.9 billion of net income and diluted EPS of $1.39 in the same period a year ago. Financial performance for first quarter 2026, compared with first quarter 2025, included the following:

•total revenue increased due to higher noninterest income and higher net interest income;

•noninterest expense increased due to higher advertising and promotion expense, technology, telecommunications and equipment expense, and personnel expense;

•average loans increased due to growth in our commercial and industrial portfolio; and

•average deposits increased driven by growth in interest-bearing deposits, partially offset by a decline in noninterest-bearing deposits.

Capital and Liquidity

We maintained a strong capital and liquidity position in first quarter 2026, which included the following:

•our Common Equity Tier 1 (CET1) ratio was 10.29% under the Standardized Approach (our binding framework), which continued to exceed the regulatory minimum and buffers of 8.50%;

•our total loss absorbing capacity (TLAC) as a percentage of total risk-weighted assets was 22.98%, compared with the regulatory minimum of 21.50%; and

•our liquidity coverage ratio (LCR) was 120%, which continued to exceed the regulatory minimum of 100%.

See the “Capital Management” and the “Risk Management – Asset/Liability Management – Liquidity Risk and Funding” sections in this Report for additional information regarding our capital and liquidity, including the calculation of our regulatory capital and liquidity amounts.

Column 1	Column 2	Column 3
	Wells Fargo & Company	3

Overview (continued)

Credit Quality

Credit quality reflected the following:

•The allowance for credit losses (ACL) for loans of $14.4 billion at March 31, 2026, increased $37 million from December 31, 2025.

•Our provision for credit losses for loans was $1.1 billion in first quarter 2026, compared with $925 million in the same period a year ago, and included an increase in the allowance reflecting higher commercial and industrial and auto loan balances, partially offset by a lower allowance for commercial real estate loans and lower credit card balances.

•The allowance coverage for total loans was 1.41% at March 31, 2026, compared with 1.45% at December 31, 2025, reflecting a decrease in the allowance for our commercial real estate portfolio driven by improved credit performance.

•Commercial portfolio net loan charge-offs were $360 million, or 24 basis points of average commercial loans, in first quarter 2026, compared with net loan charge-offs of $211 million, or 16 basis points, in the same period a year ago, driven by higher losses in our commercial and industrial portfolio, partially offset by lower losses in our commercial real estate portfolio.

•Consumer portfolio net loan charge-offs were $740 million, or 78 basis points of average consumer loans, in first quarter 2026, compared with net loan charge-offs of $798 million, or 86 basis points, in the same period a year ago, due to lower losses in our credit card portfolio.

•Nonperforming assets (NPAs) of $8.8 billion at March 31, 2026, increased $265 million from December 31, 2025, driven by higher commercial and industrial nonaccrual loans, partially offset by lower commercial real estate nonaccrual loans. NPAs represented 0.86% of total loans at March 31, 2026.

Column 1	Column 2
4	Wells Fargo & Company

Earnings Performance

Wells Fargo net income for first quarter 2026 was $5.3 billion ($1.60 diluted EPS), compared with $4.9 billion ($1.39 diluted EPS) in the same period a year ago. Net income increased in first quarter 2026, compared with the same period a year ago, predominantly due to a $696 million increase in noninterest income and a $601 million increase in net interest income, partially offset by a $439 million increase in noninterest expense and a $203 million increase in provision for credit losses.

Net Interest Income

Net interest income increased in first quarter 2026, compared with the same period a year ago, driven by lower deposit costs, higher loan and investment securities balances, improved results in our Corporate and Investment Banking Markets (Markets) business, and fixed rate asset repricing, partially offset by the impact of lower interest rates on floating rate assets and deposit mix changes.

Net interest margin decreased in first quarter 2026, compared with the same period a year ago, driven by growth in lower-yielding assets in our Markets business as well as growth in interest-bearing deposits and other short-term borrowings.

We also evaluate the Company’s net interest income excluding the net interest income of our Markets business. Markets net interest income includes interest income earned on the assets and interest expense paid on the liabilities of the line of business, as well as funding charges and credits using our funds transfer pricing methodology. Net interest income excluding Markets is a non-GAAP financial measure that management believes is useful because it enables management, investors, and others to assess the net interest income from the Company’s lending, investing, and deposit-raising activities without the volatility that may be associated with Markets activities. Table 1 provides a reconciliation of this non-GAAP financial measure to a GAAP financial measure.

Table 1: Net Interest Income excluding Markets

	Quarter ended March 31,
($ in millions)	2026		2025
Net interest income	$	12,096			11,495
Markets net interest income	481			131
Net interest income excluding Markets	$	11,615			11,364

Column 1	Column 2	Column 3
	Wells Fargo & Company	5

Earnings Performance (continued)

Table 2 presents the individual components of net interest income and net interest margin. Net interest income and net interest margin are presented on a taxable-equivalent basis in Table 2 to consistently reflect income from taxable and tax-exempt assets. The calculation for taxable-equivalent basis was based on a federal statutory tax rate of 21%.

For additional information about net interest income and net interest margin, see the “Earnings Performance – Net Interest Income” section in our 2025 Form 10-K.

Table 2: Average Balances, Yields and Rates Paid (Taxable-Equivalent Basis) (1)

[[GREPCENT_TABLE]]
[["","Quarter ended March 31,"],["","2026","","2025"],["($ in millions)","Average balance","","Interest income/ expense","","Average interestrates","","Average balance","","Interest income/ expense","","Average interestrates"],["Assets"],["Interest-earning deposits with banks","$","152,119","","","1,268","","","3.38","%","","$","150,855","","","1,473","","","3.96","%"],["Federal funds sold and securities purchased under resale agreements","192,250","","","1,738","","","3.67","","","101,175","","","1,062","","","4.26"],["Trading assets","192,209","","","1,863","","","3.89","","","156,417","","","1,523","","","3.91"],["Available-for-sale debt securities","217,181","","","2,400","","","4.44","","","175,550","","","1,961","","","4.48"],["Held-to-maturity debt securities","209,089","","","1,185","","","2.27","","","233,952","","","1,406","","","2.41"],["Loans:"],["Commercial and industrial \u2013 U.S.","383,360","","","5,415","","","5.72","","","319,351","","","5,004","","","6.35"],["Commercial and industrial \u2013 Non-U.S.","79,704","","","1,068","","","5.44","","","62,351","","","962","","","6.26"],["Commercial real estate","132,134","","","1,830","","","5.62","","","135,271","","","2,064","","","6.19"],["Lease financing","15,462","","","225","","","5.81","","","16,182","","","234","","","5.78"],["Total commercial loans","610,660","","","8,538","","","5.67","","","533,155","","","8,264","","","6.28"],["Residential mortgage","241,078","","","2,239","","","3.72","","","248,739","","","2,287","","","3.68"],["Credit card","58,215","","","1,767","","","12.31","","","55,363","","","1,739","","","12.74"],["Auto","52,099","","","735","","","5.72","","","41,967","","","551","","","5.33"],["Other consumer","33,973","","","558","","","6.66","","","28,958","","","544","","","7.61"],["Total consumer loans","385,365","","","5,299","","","5.55","","","375,027","","","5,121","","","5.51"],["Total loans","996,025","","","13,837","","","5.62","","","908,182","","","13,385","","","5.96"],["Equity securities","13,123","","","91","","","2.79","","","12,084","","","79","","","2.62"],["Other interest-earning assets","15,321","","","135","","","3.55","","","14,102","","","160","","","4.59"],["Total interest-earning assets","$","1,987,317","","","22,517","","","4.58","%","","$","1,752,317","","","21,049","","","4.85","%"],["Cash and due from banks","28,975","","","\u2014","","","","","28,757","","","\u2014"],["Goodwill","24,967","","","\u2014","","","","","25,135","","","\u2014"],["Other noninterest-earning assets","126,965","","","\u2014","","","","","113,452","","","\u2014"],["Total noninterest-earning assets","$","180,907","","","\u2014","","","","","167,344","","","\u2014"],["Total assets","$","2,168,224","","","22,517","","","","","1,919,661","","","21,049"],["Liabilities"],["Deposits:"],["Demand deposits","$","532,394","","","2,446","","","1.86","%","","$","470,502","","","2,591","","","2.23","%"],["Savings deposits","349,125","","","950","","","1.10","","","360,294","","","1,172","","","1.32"],["Time deposits","176,190","","","1,547","","","3.56","","","127,764","","","1,338","","","4.25"],["Deposits in non-U.S. offices","6,324","","","31","","","1.96","","","14,367","","","108","","","3.04"],["Total interest-bearing deposits","1,064,033","","","4,974","","","1.90","","","972,927","","","5,209","","","2.17"],["Federal funds purchased and securities loaned or sold under agreements to repurchase","242,429","","","2,234","","","3.74","","","115,503

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted from a substantive MD&A body after the formal Item 7 span was a TOC or reference stub. Source document followed from filing index: wfc-20251231.htm. Confidence: high. Filing date: 2026-02-24. Report date: 2025-12-31.

Overview

Wells Fargo & Company is a leading financial services company that has approximately $2.1 trillion in assets. We provide a diversified set of banking, investment and mortgage products and services, as well as consumer and commercial finance, through our four reportable operating segments: Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth and Investment Management. Wells Fargo ranked No. 33 on Fortune’s 2025 rankings of America’s largest corporations. We ranked fourth in assets and third in the market value of our common stock among all U.S. banks at December 31, 2025.

Financial Performance

In 2025, we generated $21.3 billion of net income and diluted earnings per share (EPS) of $6.26, compared with $19.7 billion of net income and diluted EPS of $5.37 in 2024. Financial performance for 2025, compared with 2024, included the following:

•total revenue increased due to higher noninterest income, partially offset by lower net interest income;

•noninterest expense increased due to higher technology, telecommunications and equipment expense and personnel expense, partially offset by lower operating losses;

•average loans increased due to growth in our commercial and industrial portfolio, partially offset by declines in our commercial real estate and residential mortgage portfolios; and

•average deposits increased driven by growth in noninterest-bearing deposits, partially offset by a decline in interest-bearing deposits.

Capital and Liquidity

We maintained a strong capital and liquidity position in 2025, which included the following:

•our Common Equity Tier 1 (CET1) ratio was 10.61% under the Standardized Approach (our binding framework), which continued to exceed the regulatory minimum and buffers of 8.50%;

•our total loss absorbing capacity (TLAC) as a percentage of total risk-weighted assets was 23.22%, compared with the regulatory minimum of 21.50%; and

•our liquidity coverage ratio (LCR) was 119%, which continued to exceed the regulatory minimum of 100%.

Credit Quality

Credit quality reflected the following:

•The allowance for credit losses (ACL) for loans of $14.3 billion at December 31, 2025, decreased $299 million from December 31, 2024.

•Our provision for credit losses for loans was $3.7 billion in 2025, compared with $4.3 billion in 2024, reflecting a decrease in net loan charge-offs due to lower losses in our commercial real estate portfolio driven by the office property type and lower losses in our auto and other consumer portfolios.

•The allowance coverage for total loans was 1.45% at December 31, 2025, compared with 1.60% at December 31, 2024, reflecting a decrease in the allowance for our commercial real estate portfolio driven by improved credit performance.

•Commercial portfolio net loan charge-offs were $1.0 billion, or 19 basis points of average commercial loans, in 2025, compared with net loan charge-offs of $1.5 billion, or 29 basis points, in 2024, due to lower losses in our commercial real estate portfolio driven by the office property type.

•Consumer portfolio net loan charge-offs were $3.0 billion, or 79 basis points of average consumer loans, in 2025, compared with net loan charge-offs of $3.2 billion, or 85 basis points, in 2024, due to lower losses in our auto and other consumer portfolios.

•Nonperforming assets (NPAs) of $8.5 billion at December 31, 2025, increased $567 million from December 31, 2024, driven by higher commercial and industrial nonaccrual loans. NPAs represented 0.86% of total loans at December 31, 2025.

Column 1	Column 2
2	Wells Fargo & Company

Table 1 presents a three-year summary of selected financial data and Table 2 presents selected ratios and per common share data.

Table 1: Summary of Selected Financial Data

	Year ended December 31,
(in millions, except per share amounts)	2025		2024		$ Change 2025/ 2024	% Change 2025/ 2024		2023		$ Change 2024/ 2023		% Change 2024/ 2023
Income statement
Net interest income	$	47,484			47,676		(192)			—	%		$	52,375		(4,699)		(9)	%
Noninterest income	36,215			34,620		1,595			5			30,222			4,398		15
Total revenue	83,699			82,296		1,403			2			82,597			(301)		—
Net charge-offs	3,990			4,759		(769)			(16)			3,450			1,309		38
Change in the allowance for credit losses	(332)			(425)		93			22		1,949			(2,374)		NM
Provision for credit losses (1)	3,658			4,334		(676)			(16)		5,399			(1,065)		(20)
Noninterest expense	54,842			54,598		244			—			55,562			(964)		(2)
Income tax expense	3,841			3,399		442			13			2,607			792		30
Wells Fargo net income	21,338			19,722		1,616			8			19,142			580		3
Wells Fargo net income applicable to common stock	20,285			18,606		1,679			9			17,982			624		3
Earnings per common share	6.34			5.43		0.91			17		4.88			0.55		11
Diluted earnings per common share	6.26			5.37		0.89			17		4.83			0.54		11
Dividends declared per common share	1.70			1.50		0.20			13			1.30			0.20		15
Balance sheet (period-end)
Available-for-sale and held-to-maturity debt securities	421,596			397,926		23,670			6			393,156			4,770		1
Loans	986,167			912,745		73,422			8			936,682			(23,937)		(3)
Allowance for credit losses for loans	14,337			14,636		(299)			(2)			15,088			(452)		(3)
Assets	2,148,631			1,929,845		218,786			11			1,932,468			(2,623)		—
Deposits	1,426,207			1,371,804		54,403			4			1,358,173			13,631		1
Common stockholders’ equity	164,651			160,656		3,995			2			166,444			(5,788)		(3)
Wells Fargo stockholders’ equity	181,117			179,120		1,997			1			185,735			(6,615)		(4)
Total equity	183,038			181,066		1,972			1			187,443			(6,377)		(3)

NM – Not meaningful

(1)Includes provision for credit losses for loans, debt securities, and other financial assets.

Column 1	Column 2	Column 3
	Wells Fargo & Company	3

Overview (continued)

Table 2: Ratios and Per Common Share Data

	Year ended December 31,
	2025		2024		2023
Performance ratios
Return on average assets (ROA) (1)	1.07	%		1.03		1.02
Return on average equity (ROE) (2)	12.4			11.4		11.0
Return on average tangible common equity (ROTCE) (3)	14.6			13.4		13.1
Efficiency ratio (4)	66			66		67
Capital and other metrics (5)
Wells Fargo common stockholders’ equity to assets	7.66			8.32		8.61
Total equity to assets	8.52			9.38		9.70
Risk-based capital ratios and components:
Standardized Approach:
Common Equity Tier 1 (CET1)	10.61			11.07		11.43
Tier 1 capital	11.86			12.57		12.98
Total capital	14.27			15.18		15.67
Risk-weighted assets (RWAs) (in billions)	$	1,294.6			1,216.1		1,231.7
Advanced Approach:
Common Equity Tier 1 (CET1)	12.35	%		12.40		12.63
Tier 1 capital	13.80			14.09		14.34
Total capital	15.70			16.08		16.40
Risk-weighted assets (RWAs) (in billions)	$	1,112.5			1,085.0		1,114.3
Tier 1 leverage ratio	7.48	%		8.08		8.50
Supplementary Leverage Ratio (SLR)	6.23			6.74		7.09
Total Loss Absorbing Capacity (TLAC) Ratio (6)	23.22			24.83		25.05
Liquidity Coverage Ratio (LCR) (7)	119			125		125
Average balances:
Average Wells Fargo common stockholders’ equity to average assets	8.27			8.54		8.67
Average total equity to average assets	9.24			9.59		9.80
Per common share data
Dividend payout ratio (8)	27.2			27.9		26.9
Book value (9)	$	53.24			48.85		46.25

(1)Represents Wells Fargo net income divided by average assets.

(2)Represents Wells Fargo net income applicable to common stock divided by average common stockholders’ equity.

(3)Tangible common equity and return on average tangible common equity are non-GAAP financial measures. For additional information, including a corresponding reconciliation to generally accepted accounting principles (GAAP) financial measures, see the “Capital Management – Tangible Common Equity” section in this Report.

(4)The efficiency ratio is noninterest expense divided by total revenue (net interest income and noninterest income).

(5)For additional information, see the “Capital Management” section and Note 25 (Regulatory Capital Requirements and Other Restrictions) to Financial Statements in this Report.

(6)Represents TLAC divided by risk-weighted assets (RWAs), which is our binding TLAC ratio, determined by using the greater of RWAs under the Standardized and Advanced Approaches.

(7)Represents average high-quality liquid assets divided by average projected net cash outflows, as each is defined under the LCR rule.

(8)Dividend payout ratio is dividends declared per common share as a percentage of diluted earnings per common share.

(9)Book value per common share is common stockholders’ equity divided by common shares outstanding.

Column 1	Column 2
4	Wells Fargo & Company

Earnings Performance

Wells Fargo net income for 2025 was $21.3 billion ($6.26 diluted EPS), compared with $19.7 billion ($5.37 diluted EPS) in 2024. Net income increased in 2025, compared with 2024, predominantly due to a $1.6 billion increase in noninterest income and a $676 million decrease in provision for credit losses, partially offset by a $442 million increase in income tax expense and a $244 million increase in noninterest expense.

For a discussion of our 2024 financial results, compared with 2023, see the “Earnings Performance” section of our Annual Report on Form 10-K for the year ended December 31, 2024.

Net Interest Income

Net interest income is the interest earned on interest-earning assets, such as trading assets, debt securities, and loans (including yield-related loan fees) minus the interest paid on interest-bearing liabilities, such as deposits, securities loaned or sold under agreements to repurchase, and long-term debt. The net interest margin is the average yield on earning assets minus the average interest rate paid for deposits and our other sources of funding.

Net interest income and the net interest margin in any one period can be significantly affected by a variety of factors including the mix and overall size of our earning assets portfolio and the cost of funding those assets. In addition, variable sources of interest income, such as loan fees, periodic dividends, and

collection of interest on nonaccrual loans, can fluctuate from period to period.

Net interest income decreased in 2025, compared with 2024, driven by the impact of lower interest rates on floating rate assets and deposit mix, partially offset by higher debt securities and loan balances, lower deposit costs, fixed rate asset repricing, and improved results in our Corporate and Investment Banking Markets (Markets) business.

Net interest margin decreased in 2025, compared with 2024, driven by growth in our Markets business.

We also evaluate the Company’s net interest income excluding the net interest income of our Markets business. Markets net interest income includes interest income earned on the assets and interest expense paid on the liabilities of the line of business, as well as funding charges and credits using our funds transfer pricing methodology. Net interest income excluding Markets is a non-GAAP financial measure that management believes is useful because it enables management, investors, and others to assess the net interest income from the Company’s lending, investing, and deposit-raising activities without the volatility that may be associated with Markets activities. Table 3 provides a reconciliation of this non-GAAP financial measure to a GAAP financial measure.

Table 3: Net Interest Income excluding Markets

	Year ended December 31,
($ in millions)	2025		2024		2023
Net interest income	$	47,484			47,676		52,375
Markets net interest income	737			396		1,068
Net interest income excluding Markets	$	46,747			47,280		51,307

Column 1	Column 2	Column 3
	Wells Fargo & Company	5

Earnings Performance (continued)

Table 4 presents the individual components of net interest income and net interest margin. Net interest income and net interest margin are presented on a taxable-equivalent basis in

Table 4 to consistently reflect income from taxable and tax-exempt assets. The calculation for taxable-equivalent basis was based on a federal statutory tax rate of 21%.

Table 4: Average Balances, Yields and Rates Paid (Taxable-Equivalent Basis) (1)

	Year ended December 31,
					2025						2024					2023
($ in millions)	Average balance		Interest income/ expense		Average interest rates		Average balance		Interest income/ expense		Average interest rates		Average balance	Interest income/ expense		Average interest rates
Assets
Interest-earning deposits with banks	$	147,793			5,757			3.90	%		$	189,261		9,182			4.85	%		$	149,401	6,973		4.67	%
Federal funds sold and securities borrowed or purchased under resale agreements	122,113			5,046			4.13			79,128			4,021		5.08			69,878			3,374	4.83
Trading assets (2)	167,647			6,710			4.00			138,446			5,552		4.01			120,024			4,246	3.54
Available-for-sale debt securities	194,053			8,910			4.59			154,866			6,592		4.26			142,743			5,365	3.76
Held-to-maturity debt securities	224,054			5,243			2.34			254,048			6,623		2.61			275,441			7,246	2.63
Loans:
Commercial and industrial – U.S.	335,405			20,886			6.23			307,909			21,742		7.06			307,953			20,941	6.80
Commercial and industrial – Non-U.S.	66,899			4,053			6.06			64,803			4,630		7.14			74,410			5,043	6.78
Commercial real estate	132,750			8,117			6.11			144,763			9,879		6.82			153,761			10,210	6.64
Lease financing	15,609			906			5.81			16,428			914		5.56			15,386			749	4.87
Total commercial loans	550,663			33,962			6.17			533,903			37,165		6.96			551,510			36,943	6.70
Residential mortgage	245,646			9,103			3.71			255,027			9,316		3.65			264,931			9,313	3.51
Credit card	56,262			7,081			12.59			53,665			6,858		12.78			48,202			6,246	12.96
Auto	44,106			2,439			5.53			44,535			2,291		5.14			51,116			2,415	4.72
Other consumer	30,814			2,265			7.35			28,246			2,379		8.42			28,157			2,349	8.34
Total consumer loans	376,828			20,888			5.54			381,473			20,844		5.46			392,406			20,323	5.18
Total loans	927,491			54,850			5.91			915,376			58,009		6.34			943,916			57,266	6.07
Equity securities (2)	12,072			291			2.41			11,986			386		3.22			12,059			342	2.83
Other interest-earning assets (2)	16,808			810			4.81			13,084			751		5.71			13,825			726	5.17
Total interest-earning assets	$	1,812,031			87,617			4.84	%		$	1,756,195		91,116			5.19	%		$	1,727,287	85,538		4.95	%
Cash and due from banks	28,483			—					28,193			—				27,463			—
Goodwill	25,082			—					25,172			—				25,173			—
Other noninterest-earning assets	120,662			—					107,137			—				105,552			—
Total noninterest-earning assets	$	174,227			—					160,502			—				158,188			—
Total assets	$	1,986,258			87,617					1,916,697			91,116				1,885,475			85,538
Liabilities
Deposits:
Demand deposits	$	489,564			10,532			2.15	%		$	448,689		10,258			2.29	%		$	418,542	6,947		1.66	%
Savings deposits	350,604			4,087			1.17			353,916			4,527		1.28			376,233			2,723	0.72
Time deposits	139,115			5,628			4.05			171,622			8,758		5.10			132,492			6,215	4.69
Deposits in non-U.S. offices	7,915			202			2.55			19,309			739		3.83			19,278			618	3.21
Total interest-bearing deposits	987,198			20,449			2.07			993,536			24,282		2.44			946,545			16,503	1.74
Federal funds purchased and securities loaned or sold under agreements to repurchase	161,433			6,907			4.28			91,363			4,766		5.22			65,696			3,313	5.04
Short-term borrowings (2)	9,476			448			4.73			3,458			215		6.22			4,262			242	5.68
Trading liabilities (2)	32,587			1,042			3.20			26,729			820		3.07			23,625			643	2.72
Long-term debt	175,366			10,268			5.85			184,551			12,463		6.75			180,464			11,572	6.41
Other interest-bearing liabilities (2)	19,745			716			3.63			18,270			554		3.06			20,400			470	2.32
Total interest-bearing liabilities	$	1,385,805			39,830			2.87	%		$	1,317,907		43,100			3.27	%		$	1,240,992	32,743		2.64	%
Noninterest-bearing deposits	360,047			—					352,379			—				399,737			—
Other noninterest-bearing liabilities	56,930			—					62,532			—				59,886			—
Total noninterest-bearing liabilities	$	416,977			—					414,911			—				459,623			—
Total liabilities	$	1,802,782			39,830					1,732,818			43,100				1,700,615			32,743
Total equity	183,476			—					183,879			—				184,860			—
Total liabilities and equity	$	1,986,258			39,830					1,916,697			43,100				1,885,475			32,743
Interest rate spread on a taxable-equivalent basis (3)					1.97	%						1.92	%					2.31	%
Net interest margin and net interest income on a taxable-equivalent basis (3)			$	47,787			2.64	%				$	48,016		2.73	%				$	52,795	3.06	%

(1)The average balance amounts represent amortized costs, except for certain held-to-maturity (HTM) debt securities, which exclude unamortized basis adjustments related to the transfer of those securities from available-for-sale (AFS) debt securities. Amortized cost amounts exclude any valuation allowances and unrealized gains or losses, which are included in other noninterest-earning assets and other noninterest-bearing liabilities. Nonaccrual loans and any related income are included in their respective loan categories. The average interest rates are based on interest income or expense amounts for the period and are annualized. Interest rates and amounts include the effects of hedge and risk management activities associated with the respective asset and liability categories.

(2)In fourth quarter 2025, we changed the presentation of certain items on our consolidated balance sheet, including trading assets and liabilities and short-term borrowings, with corresponding changes to our consolidated statement of income. Prior period balances have been revised to conform with the current period presentation. For additional information, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

(3)Includes taxable-equivalent adjustments of $303 million, $340 million, and $420 million for the years ended December 31, 2025, 2024, and 2023, respectively, predominantly related to tax-exempt income on certain loans and securities.

Column 1	Column 2
6	Wells Fargo & Company

Table 5 allocates the changes in net interest income on a taxable-equivalent basis to changes in either average balances or average rates for both interest-earning assets and interest-bearing liabilities. Because of the numerous simultaneous volume and rate changes during any period, it is not possible to precisely

allocate such changes between volume and rate. For this table, changes that are not solely due to either volume or rate are allocated to these categories on a pro-rata basis based on the absolute value of the change due to average volume and average rate.

Table 5: Analysis of Changes in Net Interest Income

	Year ended December 31,
	2025 vs. 2024		2024 vs. 2023
(in millions)	Volume		Rate		Total	Volume		Rate		Total
Increase (decrease) in interest income:
Interest-earning deposits with banks	$	(1,808)			(1,617)		(3,425)			1,930		279		2,209
Federal funds sold and securities borrowed or purchased under resale agreements	1,881			(856)		1,025			465		182		647
Trading assets (1)	1,172			(14)		1,158			700		606		1,306
Available-for-sale debt securities	1,775			543		2,318			478		749		1,227
Held-to-maturity debt securities	(736)			(644)		(1,380)			(568)		(55)		(623)
Loans:
Commercial and industrial – U.S.	1,837			(2,693)		(856)			(3)		804		801
Commercial and industrial – Non-U.S.	145			(722)		(577)			(672)		259		(413)
Commercial real estate	(781)			(981)		(1,762)			(605)		274		(331)
Lease financing	(48)			40		(8)			54		111		165
Total commercial loans	1,153			(4,356)		(3,203)			(1,226)		1,448		222
Residential mortgage	(359)			146		(213)			(358)		361		3
Credit card	327			(104)		223			700		(88)		612
Auto	(22)			170		148			(328)		204		(124)
Other consumer	204			(318)		(114)			7		23		30
Total consumer loans	150			(106)		44			21		500		521
Total loans	1,303			(4,462)		(3,159)			(1,205)		1,948		743
Equity securities (1)	3			(98)		(95)			(2)		46		44
Other interest-earning assets (1)	190			(131)		59			(42)		67		25
Total increase (decrease) in interest income	$	3,780			(7,279)		(3,499)			1,756		3,822		5,578
Increase (decrease) in interest expense:
Deposits:
Demand deposits	$	916			(642)		274			528		2,783		3,311
Savings deposits	(43)			(397)		(440)			(171)		1,975		1,804
Time deposits	(1,500)			(1,630)		(3,130)			1,962		581		2,543
Deposits in non-U.S. offices	(343)			(194)		(537)			1		120		121
Total interest-bearing deposits	(970)			(2,863)		(3,833)			2,320		5,459		7,779
Federal funds purchased and securities loaned or sold under agreements to repurchase	3,125			(984)		2,141			1,332		121		1,453
Short-term borrowings (1)	296			(63)		233			(49)		22		(27)
Trading liabilities (1)	186			36		222			89		88		177
Long-term debt	(597)			(1,598)		(2,195)			266		625		891
Other interest-bearing liabilities (1)	49			113		162			(53)		137		84
Total increase (decrease) in interest expense	2,089			(5,359)		(3,270)			3,905		6,452		10,357
Increase (decrease) in net interest income on a taxable-equivalent basis	$	1,691			(1,920)		(229)			(2,149)		(2,630)		(4,779)

(1)In fourth quarter 2025, we changed the presentation of certain items on our consolidated balance sheet, including trading assets and liabilities and short-term borrowings, with corresponding changes to our consolidated statement of income. Prior period balances have been revised to conform with the current period presentation. For additional information, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

Column 1	Column 2	Column 3
	Wells Fargo & Company	7

Earnings Performance (continued)

Noninterest Income

Table 6: Noninterest Income


($ in millions)	2025		2024		$ Change 2025/ 2024	% Change 2025/ 2024		2023		$ Change 2024/ 2023		% Change 2024/ 2023
Deposit-related fees	$	5,099			5,015		84			2	%		$	4,694		321		7	%
Lending-related fees	1,514			1,500		14			1			1,446			54		4
Investment advisory and other asset-based fees	10,498			9,775		723			7			8,670			1,105		13
Commissions and brokerage services fees	2,556			2,521		35			1			2,375			146		6
Investment banking fees	3,027			2,665		362			14			1,649			1,016		62
Card fees	4,589			4,342		247			6			4,256			86		2
Mortgage banking	1,152			1,047		105			10			829			218		26
Net gains from trading activities (1)	5,147			5,366		(219)			(4)			4,879			487		10
Net gains (losses) from debt securities	(144)			(920)		776			84			10			(930)		NM
Net gains (losses) from equity securities	244			1,070		(826)			(77)			(441)			1,511		343
Other (1)(2)	2,533			2,239		294			13			1,855			384		21
Total	$	36,215			34,620		1,595			5			$	30,222		4,398		15

NM – Not meaningful

(1)In fourth quarter 2025, we changed the presentation of certain items on our consolidated balance sheet, including trading assets and liabilities. In connection with these changes, we reclassified the gains (losses) related to our physical commodities inventory, including the related hedging impacts, from other noninterest income to net gains from trading activities. Prior period balances have been revised to conform with the current period presentation. For additional information, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

(2)In fourth quarter 2025, we reclassified lease income into other noninterest income. Prior period balances have been revised to conform with the current period presentation.

Full year 2025 vs. full year 2024

Deposit-related fees increased reflecting higher treasury management fees on commercial accounts driven by lower earnings credits due to a decrease in interest rates, as well as higher transaction volumes and repricing, partially offset by lower overdraft fees.

Investment advisory and other asset-based fees increased driven by higher asset-based fees reflecting higher market valuations.

Fees from the majority of Wealth and Investment Management (WIM) advisory assets are based on a percentage of the market value of the assets at the beginning of the quarter. For additional information on certain client investment assets, see the “Earnings Performance – Operating Segment Results – Wealth and Investment Management – WIM Advisory Assets” section in this Report.

Investment banking fees increased due to higher debt underwriting fees.

Card fees increased driven by higher revenue following our merchant services joint venture acquisition in 2025, as well as increased consumer credit card activity. Following the acquisition, the revenue from the merchant services business has been included in card fees. Prior to the acquisition, our share of the net earnings of the joint venture was included in other noninterest income.

Mortgage banking increased driven by valuation adjustments associated with sales of mortgage servicing rights (MSRs), partially offset by lower net servicing fees resulting from portfolio run-off and servicing sales, including the sale of the non-agency portion of our commercial mortgage third-party servicing business in 2025.

Net gains from trading activities decreased driven by lower revenue from mortgage trading, partially offset by higher revenue in commodities products.

Net losses from debt securities decreased driven by higher net losses related to a repositioning of our investment securities portfolio in 2024.

Net gains from equity securities decreased driven by lower realized and unrealized gains from our venture capital investments, partially offset by lower impairment losses.

Other income increased driven by:

•a $263 million gain on the sale of the non-agency portion of our commercial mortgage third-party servicing business in 2025; and

•a $253 million gain associated with our merchant services joint venture acquisition in 2025;

partially offset by:

•lower lease income driven by a gain associated with the resolution of a legacy lease transaction in 2024.

Column 1	Column 2
8	Wells Fargo & Company

Noninterest Expense

Table 7: Noninterest Expense


($ in millions)	2025		2024		$ Change 2025/ 2024	% Change 2025/ 2024		2023		$ Change 2024/ 2023		% Change 2024/ 2023
Personnel	$	36,281			35,729		552			2	%		$	35,829		(100)		—	%
Technology, telecommunications and equipment	5,203			4,583		620			14			3,920			663		17
Occupancy	3,151			3,052		99			3			2,884			168		6
Professional and outside services	4,540			4,607		(67)			(1)			5,085			(478)		(9)
Advertising and promotion	1,094			869		225			26			812			57		7
Other (1)	4,573			5,758		(1,185)			(21)			7,032			(1,274)		(18)
Total	$	54,842			54,598		244			—			$	55,562		(964)		(2)

(1)In fourth quarter 2025, we reclassified operating losses and lease expense into other noninterest expense. Prior period balances have been revised to conform with the current period presentation.

Full year 2025 vs. full year 2024

Personnel expense increased due to:

•higher revenue-related compensation expense driven by higher fees in our Wealth and Investment Management business;

•higher severance expense; and

•expense for a special award to employees related to the removal of our asset cap in 2025;

partially offset by:

•the impact of efficiency initiatives.

For additional information on personnel expense, see Note 20 (Revenue and Expenses) to Financial Statements in this Report.

Technology, telecommunications and equipment expense increased due to higher expense for the amortization of internally developed software, higher software maintenance and licenses expense, and higher hardware depreciation expense.

Advertising and promotion expense increased reflecting higher marketing campaign volume.

Other expense decreased reflecting lower expense for customer remediation activities and lower regulatory charges and assessments expense driven by updates to the Federal Deposit Insurance Corporation (FDIC) special assessment to recover losses to the FDIC deposit insurance fund as a result of bank failures in the first half of 2023.

For additional information on other expense, see Note 20 (Revenue and Expenses) to Financial Statements in this Report.

Income Tax Expense

Table 8: Income Tax Expense

									Year ended December 31,
($ in millions)	2025		2024		$ Change 2025/ 2024	% Change 2025/ 2024			2023		$ Change 2024/ 2023		% Change 2024/ 2023
Income before income tax expense	$	25,199			23,364		1,835		8	%				$	21,636		1,728		8	%
Income tax expense	3,841			3,399		442		13					2,607			792		30
Effective income tax rate	15.2	%		14.7							12.0	%

The increase in the effective income tax rate for 2025, compared with 2024, was driven by higher pre-tax income and lower discrete tax benefits.

For additional information on income taxes, see Note 22 (Income Taxes) to Financial Statements in this Report.

Column 1	Column 2	Column 3
	Wells Fargo & Company	9

Earnings Performance (continued)

Operating Segment Results

Our management reporting is organized into four reportable operating segments: Consumer Banking and Lending; Commercial Banking; Corporate and Investment Banking; and Wealth and Investment Management. All other business activities that are not included in the reportable operating segments have been included in Corporate. We define our reportable operating segments based on the product or service provided and the type of customer served, and their results are based on our management reporting process. The management reporting process measures the performance of the reportable operating segments based on the Company’s management structure, and the results are regularly reviewed with our Chief Executive Officer (CEO) and relevant senior management. The management reporting process is based on U.S. GAAP and includes specific adjustments, such as funds transfer pricing for asset/liability management, shared revenue and expenses, and taxable-equivalent adjustments to consistently reflect income from taxable and tax-exempt sources, which allows management to assess performance consistently across the operating segments.

Funds Transfer Pricing. Corporate treasury manages a funds transfer pricing methodology that considers interest rate risk, liquidity risk, and other product characteristics. Operating segments pay a funding charge for their assets and receive a funding credit for their deposits, both of which are included in net interest income. The net impact of the funding charges or credits is recognized in corporate treasury.

Revenue Sharing and Expense Allocations. When lines of business jointly serve customers, the line of business that is responsible for providing the product or service recognizes revenue or expense with a referral fee paid or an allocation of cost to the other line of business based on established internal revenue-sharing agreements.

When a line of business uses a service provided by another line of business, expense is generally allocated based on the cost and use of the service provided. Enterprise functions, such as operations, technology, and risk management, are included in Corporate with an allocation of their applicable costs to the reportable operating segments based on the level of support provided by the enterprise function. We periodically assess and update our revenue sharing and expense allocation methodologies.

Taxable-Equivalent Adjustments. Taxable-equivalent adjustments related to tax-exempt income on certain loans and debt securities are included in net interest income, while taxable-equivalent adjustments related to income tax credits for affordable housing and renewable energy investments are included in noninterest income, in each case with corresponding impacts to income tax expense (benefit). Adjustments are included in Corporate, Commercial Banking, and Corporate and Investment Banking and are eliminated to reconcile to the Company’s consolidated financial results.

Allocated Capital. Reportable operating segments are allocated capital under a risk-sensitive framework that is primarily based on aspects of our regulatory capital requirements, and the assumptions and methodologies used to allocate capital are periodically assessed and updated. Management believes that return on allocated capital is a useful financial measure because it enables management, investors, and others to assess a reportable operating segment’s use of capital.

Selected Metrics. We present certain financial and nonfinancial metrics that management uses when evaluating reportable operating segment results. Management believes that these metrics are useful to investors and others to assess the performance, customer growth, and trends of reportable operating segments or lines of business.

Column 1	Column 2
10	Wells Fargo & Company

Table 9 and the following discussion present our results by reportable operating segment. For additional information, see Note 19 (Operating Segments) to Financial Statements in this Report.

Table 9: Operating Segment Results – Highlights

(in millions)	Consumer Banking and Lending			Corporate and Investment Banking	Wealth and Investment Management			Reconciling Items (2)	Consolidated Company
Year ended December 31, 2025
Net interest income	$	29,183		7,902		7,557		3,684		(539)		(303)		47,484
Noninterest income	8,179		4,076		11,675		12,644		1,286		(1,645)		36,215
Total revenue	37,362		11,978		19,232		16,328		747		(1,948)		83,699
Provision for credit losses	3,362		288		74		—		(66)		—		3,658
Noninterest expense	23,515		6,077		9,436		13,518		2,296		—		54,842
Income (loss) before income tax expense (benefit)	10,485		5,613		9,722		2,810		(1,483)		(1,948)		25,199
Income tax expense (benefit)	2,620		1,421		2,439		691		(1,382)		(1,948)		3,841
Net income (loss) before noncontrolling interests	7,865		4,192		7,283		2,119		(101)		—		21,358
Less: Net income from noncontrolling interests	—		8		—		—		12		—		20
Net income (loss)	$	7,865		4,184		7,283		2,119		(113)		—		21,338
Year ended December 31, 2024
Net interest income	$	28,303		9,096		7,935		3,473		(791)		(340)		47,676
Noninterest income	7,898		3,682		11,409		11,963		1,129		(1,461)		34,620
Total revenue	36,201		12,778		19,344		15,436		338		(1,801)		82,296
Provision for credit losses	3,561		290		521		(22)		(16)		—		4,334
Noninterest expense	23,274		6,190		9,029		12,884		3,221		—		54,598
Income (loss) before income tax expense (benefit)	9,366		6,298		9,794		2,574		(2,867)		(1,801)		23,364
Income tax expense (benefit)	2,357		1,599		2,456		672		(1,884)		(1,801)		3,399
Net income (loss) before noncontrolling interests	7,009		4,699		7,338		1,902		(983)		—		19,965
Less: Net income from noncontrolling interests	—		10		—		—		233		—		243
Net income (loss)	$	7,009		4,689		7,338		1,902		(1,216)		—		19,722
Year ended December 31, 2023
Net interest income	$	30,185		10,034		9,498		3,966		(888)		(420)		52,375
Noninterest income	7,734		3,415		9,693		10,725		431		(1,776)		30,222
Total revenue	37,919		13,449		19,191		14,691		(457)		(2,196)		82,597
Provision for credit losses	3,299		75		2,007		6		12		—		5,399
Noninterest expense	24,024		6,555		8,618		12,064		4,301		—		55,562
Income (loss) before income tax expense (benefit)	10,596		6,819		8,566		2,621		(4,770)		(2,196)		21,636
Income tax expense (benefit)	2,657		1,704		2,140		657		(2,355)		(2,196)		2,607
Net income (loss) before noncontrolling interests	7,939		5,115		6,426		1,964		(2,415)		—		19,029
Less: Net income (loss) from noncontrollinginterests	—		11		—		—		(124)		—		(113)
Net income (loss)	$	7,939		5,104		6,426		1,964		(2,291)		—		19,142

(1)All other business activities that are not included in the reportable operating segments have been included in Corporate. For additional information, see the “Corporate” section below.

(2)Taxable-equivalent adjustments related to tax-exempt income on certain loans and debt securities are included in net interest income, while taxable-equivalent adjustments related to income tax credits for affordable housing and renewable energy investments are included in noninterest income, in each case with corresponding impacts to income tax expense (benefit). Adjustments are included in Corporate, Commercial Banking, and Corporate and Investment Banking and are eliminated to reconcile to the Company’s consolidated financial results.

Column 1	Column 2	Column 3
	Wells Fargo & Company	11

Earnings Performance (continued)

Consumer Banking and Lending offers diversified financial products and services for consumers and small businesses. These financial products and services include checking and savings accounts, credit and debit cards, as well as home, auto, personal, and small business lending.

Table 9a and Table 9b provide additional information for Consumer Banking and Lending.

Table 9a: Consumer Banking and Lending – Income Statement and Selected Metrics

	Year ended December 31,
($ in millions, unless otherwise noted)	2025		2024		$ Change 2025/ 2024	% Change 2025/ 2024		2023		$ Change 2024/ 2023		% Change 2024/ 2023
Income Statement
Net interest income	$	29,183			28,303		880			3	%		$	30,185			(1,882)		(6)	%
Noninterest income:
Deposit-related fees	2,694			2,734		(40)			(1)			2,702			32			1
Card fees (1)	4,337			4,076		261			6			3,967			109			3
Mortgage banking	769			650		119			18			512			138			27
Other	379			438		(59)			(13)			553			(115)			(21)
Total noninterest income	8,179			7,898		281			4			7,734			164			2
Total revenue	37,362			36,201		1,161			3			37,919			(1,718)			(5)
Net charge-offs	3,236			3,546		(310)			(9)			2,784			762			27
Change in the allowance for credit losses	126			15		111			740			515			(500)			(97)
Provision for credit losses	3,362			3,561		(199)			(6)			3,299			262			8
Noninterest expense	23,515			23,274		241			1			24,024			(750)			(3)
Income before income tax expense	10,485			9,366		1,119			12			10,596			(1,230)			(12)
Income tax expense	2,620			2,357		263			11			2,657			(300)			(11)
Net income	$	7,865			7,009		856			12			$	7,939			(930)		(12)
Revenue by Line of Business
Consumer, Small and Business Banking	$	25,427			24,510		917			4			$	25,922			(1,412)		(5)
Consumer Lending:
Home Lending	3,364			3,383		(19)			(1)			3,389			(6)			—
Credit Card	6,375			5,908		467			8			5,809			99			2
Auto	1,016			1,118		(102)			(9)			1,464			(346)			(24)
Personal Lending	1,180			1,282		(102)			(8)			1,335			(53)			(4)
Total revenue	$	37,362			36,201		1,161			3			$	37,919			(1,718)		(5)
Selected Metrics
Consumer Banking and Lending:
Return on allocated capital (2)	16.7	%		14.8						17.5	%
Efficiency ratio (3)	63			64						63
Retail bank branches (#, period-end)	4,090			4,177				(2)			4,311					(3)
Digital active customers (# in millions, period-end) (4)	37.2			36.0				3			34.8					3
Mobile active customers (# in millions, period-end) (4)	32.8			31.4				4			29.9					5
Consumer, Small and Business Banking:
Deposit spread (5)	2.58	%		2.50						2.61	%
Debit card purchase volume ($ in billions) (6)	$	530.5			507.5		23.0			5			$	492.8			14.7		3
Debit card purchase transactions (# in millions) (6)	10,511			10,230				3			10,000					2

(continued on following page)

Column 1	Column 2
12	Wells Fargo & Company

(continued from previous page)

	Year ended December 31,
($ in millions, unless otherwise noted)	2025		2024		$ Change 2025/ 2024	% Change 2025/ 2024		2023		$ Change 2024/ 2023		% Change 2024/ 2023
Home Lending:
Mortgage banking:
Net servicing income	$	619			422		197			47	%		$	300			122		41	%
Net gains on mortgage loan originations/sales	150			228		(78)			(34)			212			16			8
Total mortgage banking	$	769			650		119			18			$	512			138		27
Mortgage loan originations ($ in billions)	$	26.3			20.2		6.1			30			$	24.2			(4.0)		(17)
% of originations held for sale (HFS)	30.4	%		40.6						44.6	%
Third-party mortgage loans serviced ($ in billions, period-end) (7)	$	397.0			486.9		(89.9)			(18)			$	559.7			(72.8)		(13)
Mortgage servicing rights (MSR) carrying value (period-end)	5,696			6,844		(1,148)			(17)			7,468			(624)			(8)
Home lending loans 30+ days delinquency rate (period-end) (8)(9)(10)	0.31	%		0.29						0.32
Credit Card (6):
Credit card purchase volume ($ in billions)	$	186.0			170.5		15.5			9			$	153.1			17.4		11
Credit card new accounts (# in thousands)	2,930			2,429				21			2,566					(5)
Credit card loans 30+ days delinquency rate (period-end) (9)(10)	2.80	%		2.91						2.80
Credit card loans 90+ days delinquency rate (period-end) (9)(10)	1.43			1.51						1.41
Auto:
Auto loan originations ($ in billions)	$	30.5			16.9		13.6			80			$	17.2			(0.3)		(2)
Auto loans 30+ days delinquency rate (period-end) (9)(10)	1.52	%		2.31						2.80	%

(1)In April 2025, we completed our acquisition of the remaining interest in our merchant services joint venture. Following the acquisition, the revenue from this business has been included in card fees. Prior to the acquisition, our share of the net earnings of the joint venture was included in other noninterest income.

(2)Return on allocated capital is segment net income (loss) applicable to common stock divided by segment average allocated capital. Segment net income (loss) applicable to common stock is segment net income (loss) less allocated preferred stock dividends.

(3)Efficiency ratio is segment noninterest expense divided by segment total revenue (net interest income and noninterest income).

(4)Digital and mobile active customers is based on the number of consumer and small business customers who have logged on via a digital or mobile device, respectively, in the prior 90 days. Digital active customers includes both online and mobile customers.

(5)Deposit spread is (i) the internal funds transfer pricing credit on segment deposits minus interest paid to customers for segment deposits, divided by (ii) average segment deposits.

(6)Reflects combined activity for consumer and small business customers.

(7)Excludes residential mortgage loans subserviced for others.

(8)Excludes residential mortgage loans that are insured or guaranteed by U.S government agencies.

(9)Excludes loans held for sale.

(10)Delinquency balances exclude nonaccrual loans.

Full year 2025 vs. full year 2024

Revenue increased driven by:

•higher net interest income reflecting lower deposit pricing and higher deposit balances due to the impact of the transfer of certain business customers from the Commercial Banking operating segment in 2025;

•higher card fees driven by higher revenue following our merchant services joint venture acquisition, as well as increased consumer credit card activity; and

•higher mortgage banking income driven by valuation adjustments associated with MSR sales, partially offset by lower net servicing fees resulting from portfolio run-off and servicing sales.

Provision for credit losses decreased reflecting lower net charge-offs, partially offset by a higher change in allowance for auto loans driven by higher loan balances.

Noninterest expense increased driven by:

•higher advertising expense;

•higher branch personnel expense; and

•the impact of the transfer of certain business customers from the Commercial Banking operating segment in 2025;

partially offset by:

•lower operating losses; and

•the impact of efficiency initiatives.

Column 1	Column 2	Column 3
	Wells Fargo & Company	13

Earnings Performance (continued)

Table 9b: Consumer Banking and Lending – Balance Sheet

	Year ended December 31,
($ in millions)	2025		2024		$ Change 2025/ 2024	% Change 2025/ 2024		2023		$ Change 2024/ 2023		% Change 2024/ 2023
Selected Balance Sheet Data (average)
Loans by Line of Business:
Consumer, Small and Business Banking (1)	$	9,815			6,292		3,523			56	%		$	6,740		(448)		(7)	%
Consumer Lending:
Home Lending	202,756			210,972		(8,216)			(4)			219,601			(8,629)		(4)
Credit Card	51,027			48,322		2,705			6			42,894			5,428		13
Auto	44,602			45,048		(446)			(1)			51,689			(6,641)		(13)
Personal Lending	13,852			14,529		(677)			(5)			14,996			(467)		(3)
Total loans	$	322,052			325,163		(3,111)			(1)			$	335,920		(10,757)		(3)
Total deposits (1)	779,994			774,660		5,334			1			811,091			(36,431)		(4)
Allocated capital	45,500			45,500		—			—			44,000			1,500		3
Selected Balance Sheet Data (period-end)
Loans by Line of Business:
Consumer, Small and Business Banking (1)	$	13,674			6,256		7,418			119			$	6,735		(479)		(7)
Consumer Lending:
Home Lending	199,742			207,022		(7,280)			(4)			215,823			(8,801)		(4)
Credit Card	54,059			50,992		3,067			6			46,735			4,257		9
Auto	50,954			42,914		8,040			19			48,283			(5,369)		(11)
Personal Lending	14,052			14,246		(194)			(1)			15,291			(1,045)		(7)
Total loans	$	332,481			321,430		11,051			3			$	332,867		(11,437)		(3)
Total deposits (1)	790,962			783,490		7,472			1			782,309			1,181		—

(1)In third quarter 2025, we prospectively transferred approximately $8 billion of loans and approximately $6 billion of deposits related to certain business customers from the Commercial Banking operating segment to Consumer, Small and Business Banking in the Consumer Banking and Lending operating segment.

Full year 2025 vs. full year 2024

Total loans (period-end) increased due to:

•the impact of the transfer of certain business customers from the Commercial Banking operating segment in 2025;

•an increase in loan balances in our Auto business driven by higher origination volumes reflecting growth across the portfolio, including the impact of a new financing partnership; and

•an increase in loan balances in our Credit Card business due to higher purchase volume and the impact of new account growth;

partially offset by:

•a decline in loan balances in our Home Lending business reflecting paydowns of legacy residential mortgage loans.

Total deposits (average and period-end) increased driven by the impact of the transfer of certain business customers from the Commercial Banking operating segment in 2025.

Column 1	Column 2
14	Wells Fargo & Company

Commercial Banking provides financial solutions to private, family owned and certain public companies. Products and services include banking and credit products across multiple industry sectors and municipalities, secured lending and lease products, and treasury management.

Table 9c and Table 9d provide additional information for Commercial Banking.

Table 9c: Commercial Banking – Income Statement and Selected Metrics

	Year ended December 31,
($ in millions)	2025		2024		$ Change 2025/ 2024	% Change 2025/ 2024		2023		$ Change 2024/ 2023		% Change 2024/ 2023
Income Statement
Net interest income	$	7,902			9,096		(1,194)			(13)	%		$	10,034		(938)		(9)	%
Noninterest income:
Deposit-related fees	1,290			1,180		110			9			998			182		18
Lending-related fees	565			555		10			2			531			24		5
Lease income	473			532		(59)			(11)			644			(112)		(17)
Other	1,748			1,415		333			24			1,242			173		14
Total noninterest income	4,076			3,682		394			11			3,415			267		8
Total revenue	11,978			12,778		(800)			(6)			13,449			(671)		(5)
Net charge-offs	318			333		(15)			(5)			96			237		247
Change in the allowance for credit losses	(30)			(43)		13			30		(21)			(22)		NM
Provision for credit losses	288			290		(2)			(1)			75			215		287
Noninterest expense	6,077			6,190		(113)			(2)			6,555			(365)		(6)
Income before income tax expense	5,613			6,298		(685)			(11)			6,819			(521)		(8)
Income tax expense	1,421			1,599		(178)			(11)			1,704			(105)		(6)
Less: Net income from noncontrolling interests	8			10		(2)			(20)			11			(1)		(9)
Net income	$	4,184			4,689		(505)			(11)			$	5,104		(415)		(8)
Revenue by Product
Lending and leasing	$	5,034			5,201		(167)			(3)			$	5,314		(113)		(2)
Treasury management and payments	5,000			5,690		(690)			(12)			6,214			(524)		(8)
Other	1,944			1,887		57			3			1,921			(34)		(2)
Total revenue	$	11,978			12,778		(800)			(6)			$	13,449		(671)		(5)
Selected Metrics
Return on allocated capital	15.1	%		17.1						19.1	%
Efficiency ratio	51			48						49

NM – Not meaningful

Full year 2025 vs. full year 2024

Revenue decreased driven by:

•lower net interest income reflecting the impact of lower interest rates and the impact of the transfer of certain business customers to the Consumer Banking and Lending operating segment in 2025, partially offset by lower deposit pricing and higher deposit balances;

partially offset by:

•higher other noninterest income related to equity securities, including tax credit investments; and

•higher deposit-related fees reflecting higher treasury

management fees on commercial accounts driven by lower

earnings credits due to a decrease in interest rates.

Noninterest expense decreased driven by the impact of the transfer of certain business customers to the Consumer Banking and Lending operating segment in 2025, as well as the impact of efficiency initiatives.

Column 1	Column 2	Column 3
	Wells Fargo & Company	15

Earnings Performance (continued)

Table 9d: Commercial Banking – Balance Sheet

	Year ended December 31,
($ in millions)	2025		2024		$ Change 2025/ 2024		% Change 2025/ 2024		2023		$ Change 2024/ 2023		% Change 2024/ 2023
Selected Balance Sheet Data (average)
Loans:
Commercial and industrial	$	167,207			162,827			4,380			3	%		$	164,062			(1,235)		(1)	%
Commercial real estate	41,218			44,898			(3,680)			(8)			45,705			(807)			(2)
Lease financing and other	14,974			15,332			(358)			(2)			14,335			997			7
Total loans (1)	$	223,399			223,057			342			—			$	224,102			(1,045)		—
Total deposits (1)	178,432			172,129			6,303			4			165,235			6,894			4
Allocated capital	26,000			26,000		—			—			25,500		500			2
Selected Balance Sheet Data (period-end)
Loans:
Commercial and industrial	$	173,931			163,464			10,467			6			$	163,797			(333)		—
Commercial real estate	39,227			44,506			(5,279)			(12)			45,534			(1,028)			(2)
Lease financing and other	15,469			15,348			121			1			15,443			(95)			(1)
Total loans (1)	$	228,627			223,318			5,309			2			$	224,774			(1,456)		(1)
Total deposits (1)	190,004			188,650			1,354			1			162,526			26,124			16

Full year 2025 vs. full year 2024

Total loans (average and period-end) increased driven by higher client activity, partially offset by the impact of the transfer of certain business customers to the Consumer Banking and Lending operating segment in 2025.

Total deposits (average and period-end) increased driven by additions of deposits from new and existing customers, partially offset by the impact of the transfer of certain business customers to the Consumer Banking and Lending operating segment in 2025.

Column 1	Column 2
16	Wells Fargo & Company

estate lending and capital markets, equity and fixed income solutions as well as sales, trading, and research capabilities.

Table 9e and Table 9f provide additional information for Corporate and Investment Banking.

Table 9e: Corporate and Investment Banking – Income Statement and Selected Metrics

	Year ended December 31,
($ in millions)	2025		2024		$ Change 2025/ 2024	% Change 2025/ 2024		2023		$ Change 2024/ 2023		% Change 2024/ 2023
Income Statement
Net interest income	$	7,557			7,935		(378)			(5)	%		$	9,498		(1,563)		(16)	%
Noninterest income:
Deposit-related fees	1,086			1,073		13			1			976			97		10
Lending-related fees	844			842		2			—			790			52		7
Investment banking fees	2,985			2,675		310			12			1,738			937		54
Net gains from trading activities (1)	4,987			5,173		(186)			(4)			4,633			540		12
Other (1)	1,773			1,646		127			8			1,556			90		6
Total noninterest income	11,675			11,409		266			2			9,693			1,716		18
Total revenue	19,232			19,344		(112)			(1)			19,191			153		1
Net charge-offs	450			909		(459)			(50)			581			328		56
Change in the allowance for credit losses	(376)			(388)		12			3			1,426			(1,814)		NM
Provision for credit losses	74			521		(447)			(86)		2,007			(1,486)		(74)
Noninterest expense	9,436			9,029		407			5			8,618			411		5
Income before income tax expense	9,722			9,794		(72)			(1)			8,566			1,228		14
Income tax expense	2,439			2,456		(17)			(1)			2,140			316		15
Net income	$	7,283			7,338		(55)			(1)			$	6,426		912		14
Revenue by Line of Business
Banking:
Lending	$	2,522			2,758		(236)			(9)			$	2,872		(114)		(4)
Treasury Management and Payments	2,507			2,712		(205)			(8)			3,036			(324)		(11)
Investment Banking	2,008			1,814		194			11			1,404			410		29
Total Banking	7,037			7,284		(247)			(3)			7,312			(28)		—
Commercial Real Estate	5,083			5,144		(61)			(1)			5,311			(167)		(3)
Markets:
Fixed Income, Currencies, and Commodities (FICC)	5,292			5,093		199			4			4,688			405		9
Equities	1,738			1,789		(51)			(3)			1,809			(20)		(1)
Credit Adjustment (CVA/DVA/FVA) and Other (2)	31			(14)		45			321		65			(79)		NM
Total Markets	7,061			6,868		193			3			6,562			306		5
Other	51			48		3			6			6			42		700
Total revenue	$	19,232			19,344		(112)			(1)			$	19,191		153		1
Selected Metrics
Return on allocated capital	15.6	%		15.7						13.8	%
Efficiency ratio	49			47						45

NM – Not meaningful

(2)In fourth quarter 2024, we implemented a change to incorporate funding valuation adjustments (FVA) for our derivatives, which resulted in a loss of $85 million.

Full year 2025 vs. full year 2024

Revenue decreased driven by:

•lower net interest income driven by lower interest rates, partially offset by lower deposit pricing and higher deposit and loan balances; and

•lower gains from trading activities driven by lower revenue from mortgage trading, partially offset by higher revenue in commodities products;

partially offset by:

•higher investment banking fees due to higher debt underwriting fees; and

•a $263 million gain on the sale of the non-agency portion of our commercial mortgage third-party servicing business in 2025.

Column 1	Column 2	Column 3
	Wells Fargo & Company	17

Earnings Performance (continued)

Provision for credit losses decreased reflecting lower net charge-offs on commercial real estate loans.

Noninterest expense increased driven by higher operating costs and higher professional and outside services expense, partially offset by the impact of efficiency initiatives.

Table 9f: Corporate and Investment Banking – Balance Sheet

	Year ended December 31,
($ in millions)	2025		2024		$ Change 2025/ 2024	% Change 2025/ 2024		2023		$ Change 2024/ 2023		% Change 2024/ 2023
Selected Balance Sheet Data (average)
Loans:
Commercial and industrial	$	210,955			183,792		27,163			15	%		$	191,602		(7,810)		(4)	%
Commercial real estate	82,134			93,247		(11,113)			(12)			100,373			(7,126)		(7)
Total loans	$	293,089			277,039		16,050			6			$	291,975		(14,936)		(5)
Loans by Line of Business:
Banking	$	92,358			87,318		5,040			6			$	95,783		(8,465)		(9)
Commercial Real Estate	117,232			125,799		(8,567)			(7)			135,702			(9,903)		(7)
Markets	83,499			63,922		19,577			31			60,490			3,432		6
Total loans	$	293,089			277,039		16,050			6			$	291,975		(14,936)		(5)
Trading-related assets:
Trading assets, excluding derivative assets (1)	$	173,358			138,764		34,594			25			$	120,045		18,719		16
Derivative assets	22,051			18,883		3,168			17			18,636			247		1
Resale agreements/securities borrowed	114,875			72,374		42,501			59			61,510			10,864		18
Total trading-related assets (1)	$	310,284			230,021		80,263			35			$	200,191		29,830		15
Total assets	667,299			568,035		99,264			17			553,722			14,313		3
Total deposits	206,251			192,592		13,659			7			162,062			30,530		19
Allocated capital	44,000			44,000		—			—			44,000			—		—
Selected Balance Sheet Data (period-end)
Loans:
Commercial and industrial	$	253,004			192,573		60,431			31			$	189,379		3,194		2
Commercial real estate	80,505			86,107		(5,602)			(7)			98,053			(11,946)		(12)
Total loans	$	333,509			278,680		54,829			20			$	287,432		(8,752)		(3)
Loans by Line of Business:
Banking	$	111,260			86,328		24,932			29			$	93,987		(7,659)		(8)
Commercial Real Estate	118,516			117,213		1,303			1			131,968			(14,755)		(11)
Markets	103,733			75,139		28,594			38			61,477			13,662		22
Total loans	$	333,509			278,680		54,829			20			$	287,432		(8,752)		(3)
Trading-related assets:
Trading assets, excluding derivative assets (1)	$	205,356			147,514		57,842			39			$	117,824		29,690		25
Derivative assets	22,474			21,332		1,142			5			18,023			3,309		18
Resale agreements/securities borrowed	170,661			96,470		74,191			77			63,614			32,856		52
Total trading-related assets (1)	$	398,491			265,316		133,175			50			$	199,461		65,855		33
Total assets	787,751			597,278		190,473			32			547,203			50,075		9
Total deposits	224,146			212,948		11,198			5			185,142			27,806		15

(1)In fourth quarter 2025, we changed the presentation of certain items on our consolidated balance sheet, including trading assets. Prior period balances have been revised to conform with the current period presentation. For additional information, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

Full year 2025 vs. full year 2024

Total loans (average and period-end) increased driven by commercial and industrial loan originations and draws on existing loan accounts exceeding loan payoffs.

Total trading-related assets (average and period-end) increased reflecting:

•an increased volume of resale agreements; and

•higher trading assets driven by growth across all asset classes.

Total deposits (average and period-end) increased driven by additions of deposits from new and existing customers.

Column 1	Column 2
18	Wells Fargo & Company

Wealth and Investment Management provides personalized wealth management, brokerage, financial planning, lending, private banking, trust and fiduciary products and services to affluent, high-net worth and ultra-high-net worth clients. We operate through financial advisors in our brokerage and wealth

offices, consumer bank branches, independent offices, and digitally through WellsTrade® and Intuitive Investor®.

Table 9g and Table 9h provide additional information for Wealth and Investment Management (WIM).

Table 9g: Wealth and Investment Management

	Year ended December 31,
($ in millions, unless otherwise noted)	2025		2024		$ Change 2025/ 2024	% Change 2025/ 2024		2023		$ Change 2024/ 2023		% Change 2024/ 2023
Income Statement
Net interest income	$	3,684			3,473		211			6	%		$	3,966		(493)		(12)	%
Noninterest income:
Investment advisory and other asset-based fees	10,259			9,534		725			8			8,446			1,088		13
Commissions and brokerage services fees	2,162			2,153		9			—			2,058			95		5
Other	223			276		(53)			(19)			221			55		25
Total noninterest income	12,644			11,963		681			6			10,725			1,238		12
Total revenue	16,328			15,436		892			6			14,691			745		5
Net charge-offs	(1)			(2)		1			50		(1)			(1)		(100)
Change in the allowance for credit losses	1			(20)		21			105			7			(27)		NM
Provision for credit losses	—			(22)		22			100			6			(28)		NM
Noninterest expense	13,518			12,884		634			5			12,064			820		7
Income before income tax expense	2,810			2,574		236			9			2,621			(47)		(2)
Income tax expense	691			672		19			3			657			15		2
Net income	$	2,119			1,902		217			11			$	1,964		(62)		(3)
Selected Metrics
Return on allocated capital	31.7	%		28.3						30.7	%
Efficiency ratio	83			83						82
Client assets ($ in billions, period-end):
Advisory assets	$	1,127			998		129			13			$	891		107		12
Other brokerage assets and deposits	1,382			1,295		87			7			1,193			102		9
Total client assets	$	2,509			2,293		216			9			$	2,084		209		10
Selected Balance Sheet Data (average)
Total loans	$	86,019			83,005		3,014			4			$	82,755		250		—
Total deposits	127,257			107,689		19,568			18			112,069			(4,380)		(4)
Allocated capital	6,500			6,500		—			—			6,250			250		4
Selected Balance Sheet Data (period-end)
Total loans	$	90,635			84,340		6,295			7			$	82,555		1,785		2
Total deposits	147,616			127,008		20,608			16			103,902			23,106		22

NM – Not meaningful

Full year 2025 vs. full year 2024

Revenue increased driven by:

•higher investment advisory and other asset-based fees driven by higher asset-based fees reflecting higher market valuations; and

•higher net interest income driven by lower deposit pricing and higher deposit and loan balances.

Noninterest expense increased reflecting higher personnel expense driven by higher revenue-related compensation expense, partially offset by the impact of efficiency initiatives.

Total loans (average and period-end) increased driven by higher securities-based lending.

Total deposits (average and period-end) increased driven by higher brokerage deposit balances.

Column 1	Column 2	Column 3
	Wells Fargo & Company	19

Earnings Performance (continued)

WIM Advisory Assets. In addition to transactional accounts, WIM offers advisory account relationships to brokerage customers. Fees from advisory accounts are based on a percentage of the market value of the assets as of the beginning of the quarter, which vary across the account types based on the distinct services provided, and are affected by investment performance as well as asset inflows and outflows. Advisory accounts include assets that are financial advisor-directed and separately managed by third-party managers as well as certain client-directed brokerage assets where we earn a fee for advisory and other services, but do not have investment discretion.

WIM also manages personal trust and other assets for high net worth clients, with fee income earned based on a percentage of the market value of these assets.

Table 9h presents advisory assets activity by WIM line of business. Management believes that advisory assets is a useful metric because it allows management, investors, and others to assess how changes in asset amounts may impact the generation of certain asset-based fees. For the years ended December 31, 2025, 2024, and 2023, the average fee rate by account type ranged from 50 to 120 basis points.

Table 9h: WIM Advisory Assets


(in billions)	Balance, beginningof period		Inflows (outflows), net (1)	Marketimpact (2)	Balance, end of period
December 31, 2025
Client-directed (3)	$	205.7			(3.8)		19.5		221.4
Financial advisor-directed (4)	309.2			6.5		48.0		363.7
Separate accounts (5)	225.7			10.7		33.7		270.1
Mutual fund advisory (6)	85.7			(5.0)		11.0		91.7
Total Wells Fargo Advisors	$	826.3			8.4		112.2		946.9
The Private Bank (7)	171.4			(8.6)		17.4		180.2
Total WIM advisory assets	$	997.7			(0.2)		129.6		1,127.1
December 31, 2024
Client-directed (3)	$	185.3			(2.5)		22.9		205.7
Financial advisor-directed (4)	264.6			1.4		43.2		309.2
Separate accounts (5)	198.4			2.6		24.7		225.7
Mutual fund advisory (6)	83.3			(5.3)		7.7		85.7
Total Wells Fargo Advisors	$	731.6			(3.8)		98.5		826.3
The Private Bank (7)	159.5			(2.8)		14.7		171.4
Total WIM advisory assets	$	891.1			(6.6)		113.2		997.7
December 31, 2023
Client-directed (3)	$	165.2			(1.7)		21.8		185.3
Financial advisor-directed (4)	222.9			2.0		39.7		264.6
Separate accounts (5)	176.5			(2.4)		24.3		198.4
Mutual fund advisory (6)	78.6			(5.4)		10.1		83.3
Total Wells Fargo Advisors	$	643.2			(7.5)		95.9		731.6
The Private Bank (7)	153.6			(9.5)		15.4		159.5
Total WIM advisory assets	$	796.8			(17.0)		111.3		891.1

(1)Inflows include new advisory account assets, contributions, dividends, and interest. Outflows include closed advisory account assets, withdrawals, and client management fees.

(2)Market impact reflects gains and losses on portfolio investments.

(3)Investment advice and other services are provided to the client, but decisions are made by the client and the fees earned are based on a percentage of the advisory account assets, not the number and size of transactions executed by the client.

(4)Professionally managed portfolios with fees earned based on respective strategies and as a percentage of certain client assets.

(5)Professional advisory portfolios managed by third-party asset managers. Fees are earned based on a percentage of certain client assets.

(6)Program with portfolios constructed of load-waived, no-load, and institutional share class mutual funds. Fees are earned based on a percentage of certain client assets.

(7)Discretionary and non-discretionary portfolios held in personal trusts, investment agency, or custody accounts with fees earned based on a percentage of client assets.

Column 1	Column 2
20	Wells Fargo & Company

Corporate includes corporate treasury and enterprise functions, net of expense allocations, in support of the reportable operating segments (including funds transfer pricing, capital, and liquidity), as well as our investment portfolio and venture capital and private equity investments. Corporate also includes certain lines of business that management has determined are no longer consistent with the long-term strategic goals of the Company as well as results for previously divested businesses.

In May 2025, the Company announced it had entered into an agreement to sell the assets of its rail car leasing business. This sale closed on January 1, 2026, which reduced other assets on our consolidated balance sheet by $5.3 billion, consisting of $1.0 billion of finance leases held for sale and $4.3 billion of operating lease assets held for sale. We expect lower noninterest expense of approximately $400 million on an annual basis, offset by a similar reduction in noninterest income, as a result of this sale.

Table 9i and Table 9j provide additional information for Corporate.

Table 9i: Corporate – Income Statement

	Year ended December 31,
($ in millions)	2025		2024		$ Change 2025/ 2024	% Change 2025/ 2024		2023		$ Change 2024/ 2023		% Change 2024/ 2023
Income Statement
Net interest income	$	(539)			(791)		252			32	%		$	(888)		97		11	%
Noninterest income	1,286			1,129		157			14		431			698		162
Total revenue	747			338		409			121		(457)			795		174
Net charge-offs	(13)			(27)		14			52			(10)			(17)		NM
Change in the allowance for credit losses	(53)			11		(64)			NM		22			(11)		(50)
Provision for credit losses	(66)			(16)		(50)			NM		12			(28)		NM
Noninterest expense	2,296			3,221		(925)			(29)			4,301			(1,080)		(25)
Loss before income tax benefit	(1,483)			(2,867)		1,384			48			(4,770)			1,903		40
Income tax benefit	(1,382)			(1,884)		502			27		(2,355)			471		20
Less: Net income (loss) from noncontrolling interests (1)	12			233		(221)			(95)		(124)			357		288
Net loss	$	(113)			(1,216)		1,103			91			$	(2,291)		1,075		47

NM – Not meaningful

(1)Reflects results attributable to noncontrolling interests associated with our venture capital investments.

Full year 2025 vs. full year 2024

Revenue increased driven by:

•lower net losses from debt securities driven by the impact of a repositioning of our investment securities portfolio in 2024;

•a $253 million gain associated with our merchant services

joint venture acquisition; and

•higher net interest income driven by lower funding credits to the operating segments due to the impact of lower interest rates;

partially offset by:

•lower net gains from equity securities reflecting lower

realized and unrealized gains from our venture capital

investments, partially offset by lower impairment losses.

Noninterest expense decreased reflecting:

•lower FDIC assessment expense driven by a higher FDIC

special assessment in 2024;

•lower operating losses due to lower expense for customer

remediation activities; and

•lower personnel expense due to the impact of efficiency initiatives.

Column 1	Column 2	Column 3
	Wells Fargo & Company	21

Earnings Performance (continued)

Table 9j: Corporate – Balance Sheet

	Year ended December 31,
($ in millions)	2025		2024		$ Change 2025/ 2024	% Change 2025/ 2024		2023		$ Change 2024/ 2023		% Change 2024/ 2023
Selected Balance Sheet Data (average)
Available-for-sale debt securities	$	181,536			138,983		42,553			31	%		$	123,542		15,441		12	%
Held-to-maturity debt securities	216,958			246,577		(29,619)			(12)			267,672			(21,095)		(8)
Equity securities	15,854			15,441		413			3			15,635			(194)		(1)
Total assets	623,701			652,024		(28,323)			(4)			619,002			33,022		5
Total deposits	55,311			98,845		(43,534)			(44)			95,825			3,020		3
Selected Balance Sheet Data (period-end)
Available-for-sale debt securities	$	205,670			154,397		51,273			33			$	118,923		35,474		30
Held-to-maturity debt securities	204,811			231,892		(27,081)			(12)			259,748			(27,856)		(11)
Equity securities	16,451			15,437		1,014			7			15,810			(373)		(2)
Total assets	638,664			633,799		4,865			1			674,075			(40,276)		(6)
Total deposits	73,479			59,708		13,771			23			124,294			(64,586)		(52)

Full year 2025 vs. full year 2024

Total assets (average) decreased reflecting a decrease in interest-earning deposits with banks that are managed by corporate treasury, partially offset by purchases of available-for-sale debt securities of U.S. Treasury and federal agencies.

Total assets (period-end) increased reflecting purchases of available-for-sale debt securities of U.S. Treasury and federal agencies and an increased volume of resale agreements, partially offset by a decrease in interest-earning deposits with banks that are managed by corporate treasury.

Total deposits (average) decreased driven by maturities of certificates of deposit (CDs) issued by corporate treasury.

Total deposits (period-end) increased driven by issuances of CDs by corporate treasury.

Column 1	Column 2
22	Wells Fargo & Company

Balance Sheet Analysis

At December 31, 2025, our assets totaled $2.1 trillion, up $218.8 billion from December 31, 2024.

The following discussion provides additional information about the major components of our consolidated balance sheet. See the “Capital Management” section in this Report for information on changes in our equity.

Available-for-Sale and Held-to-Maturity Debt Securities

Table 10: Available-for-Sale and Held-to-Maturity Debt Securities

	December 31, 2025		December 31, 2024
($ in millions)	Amortized cost, net (1)		Net unrealized gains (losses)		Fair value	Weighted average expected maturity (yrs)		Amortized cost, net (1)		Net unrealized gains (losses)	Fair value		Weighted average expected maturity (yrs)
Available-for-sale (2)	$	215,775			(2,202)		213,573			7.2		$	170,607			(7,629)			162,978			7.2
Held-to-maturity (3)	208,023			(32,226)		175,797			10.2		234,948			(41,169)			193,779			8.3
Total	$	423,798			(34,428)		389,370			n/a	$	405,555			(48,798)			356,757			n/a

(1)Represents amortized cost of the securities, net of the allowance for credit losses of $23 million and $34 million related to available-for-sale debt securities at December 31, 2025 and 2024, respectively, and $95 million related to held-to-maturity debt securities at both December 31, 2025 and 2024.

(2)Available-for-sale debt securities are carried on our consolidated balance sheet at fair value.

(3)Held-to-maturity debt securities are carried on our consolidated balance sheet at amortized cost, net of the allowance for credit losses.

Table 10 presents a summary of our portfolio of investments in available-for-sale (AFS) and held-to-maturity (HTM) debt securities. See Note 2 (Available-for-Sale and Held-to-Maturity Debt Securities) to Financial Statements in this Report for additional information on AFS and HTM debt securities, including a summary of debt securities by security type, contractual maturities and weighted average yields. The size and composition of our AFS and HTM debt securities portfolio is dependent upon the Company’s liquidity and interest rate risk management objectives. The AFS debt securities portfolio can be used to meet funding needs that arise in the normal course of business or due to market stress. Changes in our interest rate risk profile may occur due to changes in overall economic or market conditions, which could influence loan origination demand, prepayment rates, or deposit balances and mix. In response, the AFS debt securities portfolio can be rebalanced to meet the Company’s interest rate risk management objectives. In addition to meeting liquidity and interest rate risk management objectives, the AFS and HTM debt securities portfolios may provide yield enhancement over other short-term assets. See the “Risk Management – Asset/Liability Management” section in this Report for additional information on liquidity and interest rate risk.

The AFS and HTM debt securities portfolios predominantly consist of liquid, high-quality U.S. Treasury and federal agency debt, and agency mortgage-backed securities (MBS). The portfolios also include securities issued by U.S. states and political subdivisions and highly rated collateralized loan obligations (CLOs). Debt securities are classified as HTM at the time of purchase or when transferred from the AFS debt securities portfolio. Our intent is to hold these securities to maturity and collect the contractual cash flows.

The amortized cost, net of the allowance for credit losses, of the total AFS and HTM debt securities portfolio increased from December 31, 2024. Purchases of AFS debt securities were partially offset by paydowns and maturities of AFS and HTM debt securities, as well as sales of AFS debt securities. The total net unrealized losses on AFS and HTM debt securities decreased from December 31, 2024, due to changes in interest rates.

At December 31, 2025, 99% of the combined AFS and HTM debt securities portfolio was rated AA- or above. Ratings are based on external ratings where available and, where not available, based on internal credit grades.

Column 1	Column 2	Column 3
	Wells Fargo & Company	23

Balance Sheet Analysis (continued)

Loan Portfolios

Table 11 provides a summary of total outstanding loans by portfolio segment. Commercial loans increased from December 31, 2024, driven by an increase in commercial and industrial loans as a result of increased originations and loan

draws, partially offset by paydowns. Consumer loans increased from December 31, 2024, driven by increases in the auto, securities-based loan, and credit card portfolios, partially offset by a decrease in the residential mortgage portfolio.

Table 11: Loan Portfolios

($ in millions)	Dec 31, 2025			$ Change	% Change
Commercial	$	599,895		534,159		65,736		12	%
Consumer	386,272		378,586		7,686		2
Total loans	$	986,167		912,745		73,422		8

Average loan balances and a comparative detail of average loan balances is included in Table 4 under “Earnings Performance – Net Interest Income” earlier in this Report. Additional information on total loans outstanding by portfolio segment and class of financing receivable is included in the “Risk Management – Credit Risk Management” section in this Report. Period-end balances and other loan related information are in Note 3 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.

Table 12 shows loan maturities based on contractually scheduled repayment timing and the distribution by changes in interest rates for loans with a contractual maturity greater than one year. Nonaccrual loans and loans with indeterminate maturities have been classified as maturing within one year.

Table 12: Loan Maturities

	December 31, 2025
	Loan maturities		Loans maturing after one year
(in millions)	Within one year		After one year through five years		After five years through fifteen years	After fifteen years		Total		Fixed interest rates	Floating/variable interest rates
Commercial and industrial	$	162,370			255,431		32,804			1,463		452,068		28,110		261,588
Commercial real estate	59,616			59,743		11,455			1,470		132,284		15,753		56,915
Lease financing	3,332			10,883		1,319			9		15,543		12,056		155
Total commercial	225,318			326,057		45,578			2,942		599,895		55,919		318,658
Residential mortgage	9,790			29,522		85,819			117,059		242,190		159,375		73,025
Credit card	59,540			—		—			—		59,540		—		—
Auto	12,283			34,375		3,829			—		50,487		38,204		—
Other consumer	27,951			6,023		64			17		34,055		5,884		220
Total consumer	109,564			69,920		89,712			117,076		386,272		203,463		73,245
Total loans	$	334,882			395,977		135,290			120,018		986,167		259,382		391,903

Column 1	Column 2
24	Wells Fargo & Company

Deposits

Deposits increased from December 31, 2024, reflecting:

•growth in consumer deposits driven by higher brokerage deposits in WIM;

•growth in commercial deposits driven by additions of deposits from new and existing customers; and

•higher time deposits due to issuances of CDs by corporate treasury.

Table 13 provides additional information regarding deposit balances. Information regarding the impact of deposits on net interest income and a comparison of average deposit balances is provided in the “Earnings Performance – Net Interest Income” section and Table 4 earlier in this Report. Our average deposit cost in fourth quarter 2025 decreased to 1.44%, compared with 1.73% in fourth quarter 2024.

Table 13: Deposits

($ in millions)	Dec 31, 2025				% Change
Noninterest-bearing deposits	$	365,368		383,616		(18,248)		(5)	%
Interest-bearing deposits	1,060,839		988,188		72,651		7
Total deposits	$	1,426,207		1,371,804		54,403		4

As of December 31, 2025 and 2024, total deposits that exceed FDIC insurance limits, or are otherwise uninsured, were estimated to be $600 billion and $550 billion, respectively. Estimated uninsured domestic deposits reflect amounts disclosed in the U.S. regulatory reports of our subsidiary banks, with adjustments for amounts related to consolidated

subsidiaries. All non-U.S. deposits are treated for these purposes as uninsured.

Table 14 presents the contractual maturities of estimated time deposits that exceed FDIC insurance limits, or are otherwise uninsured. All non-U.S. time deposits are uninsured.

Table 14: Uninsured Time Deposits by Maturity

(in millions)	Three months or less			After six months through twelve months	After twelve months
December 31, 2025
Domestic time deposits	$	12,469		7,629		5,181		465		25,744
Non-U.S. time deposits	1,534		1,109		504		—		3,147
Total	$	14,003		8,738		5,685		465		28,891

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	Wells Fargo & Company	25

Off-Balance Sheet Arrangements

In the ordinary course of business, we engage in financial transactions that are not recognized on our consolidated balance sheet or may be recognized on our consolidated balance sheet in amounts that are different from the full contract or notional amount of the transaction. Our off-balance sheet arrangements include unfunded credit commitments, derivatives, transactions with unconsolidated entities, guarantees, and other commitments. These transactions are designed to (1) meet the financial needs of customers, (2) manage our credit, market or liquidity risks, and/or (3) diversify our funding sources.

Unfunded Credit Commitments

Unfunded credit commitments are legally binding agreements to lend to customers with terms covering usage of funds, contractual interest rates, expiration dates, and any required collateral. The maximum credit risk for these commitments will generally be lower than the contractual amount because these commitments may expire without being used or may be cancelled at the customer’s request. Our credit risk monitoring activities include managing the amount of commitments, both to individual customers and in total, and the size and maturity structure of these commitments. For additional information, see Note 3 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.

Derivatives

We use derivatives to manage exposure to market risk, including interest rate risk, credit risk and foreign currency risk, and to assist customers with their risk management objectives. Derivatives are recognized on our consolidated balance sheet at fair value, and volume can be measured in terms of the notional amount, which is generally not exchanged, but is used only as the basis on which interest and other payments are determined. The notional amount is not recognized on our consolidated balance sheet and is not, when viewed in isolation, a meaningful measure of the risk profile of the instruments. For additional information, see Note 13 (Derivatives) to Financial Statements in this Report.

Transactions with Unconsolidated Entities

In the normal course of business, we enter into various types of on- and off-balance sheet transactions with special purpose entities (SPEs), which are corporations, trusts, limited liability companies or partnerships that are established for a limited purpose. Generally, SPEs are formed in connection with securitization transactions and are considered variable interest entities (VIEs). For additional information, see Note 15 (Securitizations and Variable Interest Entities) to Financial Statements in this Report.

Guarantees and Other Commitments

Guarantees are contracts that contingently require us to make payments to a guaranteed party based on an event or a change in an underlying asset, liability, rate or index. Guarantees are generally in the form of standby and direct pay letters of credit, written options, recourse obligations, exchange and clearing house guarantees, indemnifications, and other types of similar arrangements. We also enter into other commitments such as commitments to purchase securities under resale agreements. For additional information, see Note 16 (Guarantees and Other Commitments) to Financial Statements in this Report.

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26	Wells Fargo & Company

Risk Management

Wells Fargo manages a variety of risks that can significantly affect our financial performance and our ability to meet the expectations of our customers, shareholders, regulators and other stakeholders.

Risk is Part of our Business Model. Risk is the possibility of an event occurring that could adversely affect the Company’s ability to achieve its strategic and business objectives. The Company routinely takes risks to achieve its business goals and to serve its customers. These risks include financial risks, such as credit and interest rate risks, and non-financial risks, such as operational and strategic risks.

Risk Profile. The Company’s risk profile is an assessment of the aggregate risks associated with the Company’s exposures and business activities after taking into consideration risk management effectiveness. The Company monitors its risk profile, and the Board reviews risk profile reports and analysis.

Risk Capacity. Risk capacity is the maximum level of risk that the Company could assume given its current level of resources before triggering regulatory and other constraints on its capital and liquidity needs.

Risk Appetite. Risk appetite is the nature and level of risk the Company is willing to take, within its risk capacity, while pursuing its strategic and business objectives. Risk appetite is articulated in our Statement of Risk Appetite, which establishes acceptable risks and at what level and includes risk appetite principles. The Company’s Statement of Risk Appetite is defined by senior management, approved at least annually by the Board, and helps guide the Company’s business and risk leaders. The Company continuously monitors its risk appetite, and the Board reviews reports which include risk appetite information and analysis.

Risk and Strategy. The Chief Executive Officer (CEO) drives the Company’s strategic planning process, which identifies the Company’s most significant opportunities and challenges, develops plans to address them, evaluates the risks of those plans, and articulates the resulting decisions in the form of a company-wide strategic plan. The Company’s risk profile, risk capacity, risk appetite, and risk management effectiveness are considered in the strategic planning process, which is linked with the Company’s capital planning process. The Company’s Independent Risk Management (IRM) organization participates in strategic planning, providing challenge to and independent assessment of the risks associated with strategic initiatives. IRM also independently assesses and challenges the impact of the strategic plan on risk capacity, risk appetite, and risk management effectiveness at the principal lines of business, enterprise functions, and aggregate Company levels. The strategic plan is presented to the Board each year with IRM’s evaluation.

Risk is Managed by Everyone. Every employee, in the course of their daily activities, creates risk and is responsible for managing risk. Every employee has a role to play in risk management, including establishing and maintaining the Company’s risk and control environment. Every employee must comply with applicable laws, regulations, and Company policies.

Risk and Culture. Senior management sets the tone at the top by supporting a strong culture, defined by the Company’s expectations and Code of Conduct, that guides how employees conduct themselves and make decisions. The Board is responsible for holding senior management accountable for establishing and maintaining this culture and effectively managing risk. Senior management expects employees to speak up when they see something that could cause harm to the Company’s customers, communities, employees, shareholders,

or reputation. Because risk management is everyone’s responsibility, all employees are empowered to and expected to challenge risk decisions when appropriate and to escalate their concerns when they have not been addressed. The Company’s performance management and incentive compensation programs are designed to establish a balanced framework for risk and reward under core principles that employees are expected to know and practice. The Board, through its Human Resources Committee, plays an important role in overseeing the Company’s performance management and incentive compensation programs. Effective risk management is a central component of employee performance evaluations.

Risk Management Framework. The Company’s risk management framework sets forth the Company’s core principles for managing and governing its risk. It is approved by the Board’s Risk Committee and reviewed and updated annually. Many other documents and policies flow from its core principles.

Risk Governance

Role of the Board. The Board oversees the Company’s business, including its risk management. It designates and delegates authority to executive officers, assesses senior management’s performance and holds senior management accountable for maintaining and adhering to an effective risk management program.

Board Committee Structure. The Board carries out its risk oversight responsibilities directly and through its committees. The Risk Committee reviews and approves the Company’s risk management framework and oversees management’s implementation of the framework, including how the Company manages and governs risk. The Risk Committee also oversees the Company’s adherence to its risk appetite. In addition, the Risk Committee supports the stature, authority and independence of IRM and oversees and receives reports on its operation. The Chief Risk Officer (CRO) reports functionally to the Risk Committee and administratively to the CEO.

Management Committee Structure. The Company has established management committees, including those focused on risk, that support management in carrying out its governance and risk management responsibilities. One type of management committee is a governance committee, which is a decision-making body that operates for a particular purpose and may report to a Board committee.

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Risk Management (continued)

Each management governance committee, in accordance with its charter, is expected to discuss, document, and make decisions regarding high priority and significant risks, emerging risks, risk acceptances, and risks and issues escalated to it; review and monitor progress related to critical and high-risk issues and remediation efforts, including lessons learned; and report key

challenges, decisions, escalations, other actions, and open issues as appropriate.

Table 15 presents the structure of the Company’s Board committees and escalation paths of relevant management governance committees reporting to a Board committee.

Table 15: Board and Relevant Management-level Governance Committee Structure


Audit Committee (1)	Finance Committee	RiskCommittee	Governance & Nominating Committee		Human Resources Committee
				Management Governance Committees
Disclosure Committee		Capital Management Committee	Allowance for Credit Losses Approval Governance Committee		Enterprise Risk & Control Committee		Incentive Compensation & Performance Management Committee
Regulatory Reporting Oversight Committee		Corporate Asset/Liability Committee				Risk & Control Committees
			Recovery & Resolution Committee					Risk Type Committees
									Risk Topic Committees

(1)The Audit Committee assists the Board in its oversight of the Company’s financial statements and disclosures to shareholders and bank regulatory agencies; oversees the internal audit function and external auditor qualifications, independence, activities, and performance; and assists the Board and the Risk Committee in the oversight of the Company’s compliance with legal and regulatory requirements.

Management Governance Committees Reporting to the Risk Committee of the Board. The Enterprise Risk & Control Committee (ERCC) is a decision-making and escalation body that governs the management of all risk types. The ERCC receives information about risk and control issues, addresses escalated risks and issues, and actively oversees risk controls. The ERCC also makes decisions related to significant risks and changes to the Company’s risk appetite. The Risk Committee receives regular updates from the ERCC chairs and senior management regarding current and emerging risks and senior management’s assessment of the effectiveness of the Company’s risk management program.

The ERCC is co-chaired by the CEO and CRO, with membership comprising the heads of principal lines of business and certain enterprise functions. The Chief Auditor or a designee attends all meetings of the ERCC. The ERCC has a direct escalation path to the Risk Committee. The ERCC also has an escalation path for certain human capital risks and issues to the Human Resources Committee. In addition, the CRO may escalate directly to the Board. Risks and issues are escalated to the ERCC in accordance with the Company’s escalation management policy.

Each principal line of business and enterprise function has a risk and control committee, which is a management governance committee with a mandate that aligns with the ERCC but with its scope limited to the respective principal line of business or enterprise function. These committees focus on and consider risks that the respective principal line of business or enterprise

function generate and manage, and the controls the principal line of business or enterprise function are expected to have in place.

As a complement to these risk and control committees, management governance committees dedicated to specific risk types and risk topics also report to the ERCC to enable more comprehensive governance of risks.

Risk Operating Model – Roles and Responsibilities

The Company has three lines of defense for managing risk: the Front Line, Independent Risk Management, and Internal Audit.

•Front Line. The Front Line, which comprises principal line of business and certain enterprise function activities, is the first line of defense. The Front Line is responsible for understanding the risks generated by its activities, applying adequate controls, and managing risk in the course of its business activities. The Front Line identifies, measures and assesses, controls, monitors, and reports on risk generated by or associated with its business activities and balances risk and reward in decision making while operating within the Company’s risk appetite.

•Independent Risk Management. IRM is the second line of defense. It establishes and maintains the Company’s risk management program and provides oversight, including challenge to and independent assessment and monitoring, of the Front Line’s execution of its risk management responsibilities.

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•Internal Audit. Internal Audit is the third line of defense. It is responsible for acting as an independent assurance function.

Risk Type Classifications

The Company uses common classifications, hierarchies, and ratings to enable consistency across risk management programs and aggregation of information. Risk type classifications permit the Company to identify and prioritize its risk exposures, including emerging risk exposures.

Operational Risk Management

Operational risk, which in addition to those discussed in this section, includes compliance risk and model risk, is the risk resulting from inadequate or failed internal processes, people and systems, or from external events.

The Board’s Risk Committee has primary oversight responsibility for operational risk, including significant supporting programs and/or policies regarding the Company’s business resiliency and disaster recovery, change management, data management, information security, technology, and third-party risk management. As part of its oversight responsibilities, the Board’s Risk Committee reviews and approves significant operational risk policies and oversees the Company’s operational risk management program.

At the management level, Operational Risk Management and Technology Risk Management, both part of IRM, have oversight responsibility for operational risk. Operational Risk Management and Technology Risk Management report to the CRO and provide periodic reports related to operational risk to the Board’s Risk Committee. Operational Risk Management’s oversight responsibilities include change management risk, fraud risk, human capital risk, information management risk, and third-party risk. Technology Risk Management has oversight responsibility for data management risk, technology risk, and information security risk.

Information Security Risk Management. Information security risk, which includes cybersecurity risk, is a significant operational risk for financial institutions such as Wells Fargo and includes the risk arising from unauthorized access, use, disclosure, disruption, modification, or destruction of information or information systems.

The Board’s Risk Committee has primary oversight responsibility for information security risk and approves the Company’s information security program, which includes information protection and cyber resiliency. The Risk Committee receives regular reports from the Company’s Head of Technology and Chief Information Security Officer (CISO), as well as from Technology Risk Management representatives, on information security risks and significant information security developments, including certain incidents involving third parties.

As described above, at the management level, Technology Risk Management has oversight responsibility for information security risk. As a second line of defense, Technology Risk Management reviews and provides guidance to the Front Line technology team, including with respect to the development and maintenance of risk management policies, governance documents, processes, and controls, and oversees and challenges the Front Line technology team’s risk assessment activities.

The Company’s cybersecurity team, which is part of the broader technology team, provides Front Line information security risk assessment and management and is responsible for protecting the Company’s information systems, networks, and data, including customer and employee data, through the design, execution, and oversight of our information security program.

The Company has processes designed to defend against, detect, mitigate, escalate, and remediate cybersecurity incidents, including monitoring of the Company’s networks for actual or potential attacks or breaches. The Company’s incident response program includes notification, escalation, and remediation protocols for cybersecurity incidents, including to our Head of Technology and CISO as appropriate. In addition, to help monitor and assess our exposure to ongoing and evolving risks in these areas, the Company has a cyber and information security focused risk committee led by the CISO and a technology risk committee led by the Head of Technology.

Additional components of the Company’s information security program include: (i) enhancing and strengthening of our practices, policies, and procedures in response to the evolving information security landscape; (ii) designing our information security program to align with regulatory and industry standards; (iii) investing in emerging technologies to proactively monitor new vulnerabilities and reduce risk; (iv) conducting periodic internal and third-party assessments to test our information security systems and controls; (v) leveraging third-party specialists and advisors to review and strengthen our information security program; (vi) evaluating and updating our incident response planning and protocols; and (vii) requiring employees and third-party service providers who have access to our systems to complete annual information security training modules designed to provide guidance for identifying and avoiding information security risks.

In addition, Operational Risk Management oversees the Company’s third-party risk management program, which, among other things, is designed to identify and address information security risks arising from third-party service providers. Components of this program include incorporating information security and cybersecurity incident notification requirements into contracts with third-party service providers, requiring third parties to adhere to defined information security and control standards, and performing periodic third-party risk assessments.

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Risk Management (continued)

cloud-based and other products and services provided by third parties, and have targeted the infrastructure of the internet causing the widespread unavailability of websites and degrading website performance. As a result, information security and the continued development and enhancement of our controls, processes and systems designed to protect our networks, computers, software and data from attack, damage or unauthorized access remain a priority for Wells Fargo. Wells Fargo is also involved in industry cybersecurity efforts and working with other parties, including our third-party service providers and governmental agencies, to continue to enhance defenses and improve resiliency to information security threats. See the “Risk Factors” section in this Report for additional information regarding the risks and potential impacts associated with a failure or breach of our operational or security systems or infrastructure, including as a result of cyberattacks or other information security incidents.

Compliance Risk Management

Compliance risk (a type of operational risk) is the risk resulting from the failure to comply with laws (legislation, regulations and rules) and regulatory guidance, and the failure to appropriately address associated impact, including to customers. Compliance risk encompasses violations of applicable internal policies, program requirements, procedures, and standards related to ethical principles applicable to the Company.

The Board’s Risk Committee has primary oversight responsibility for all aspects of compliance risk, including financial crimes risk. As part of its oversight responsibilities, the Board’s Risk Committee reviews and approves significant supporting compliance risk and financial crimes risk policies and programs and oversees the Company’s compliance risk management and financial crimes risk management programs.

Conduct risk, a sub-category of compliance risk, is the risk that the behavior of an employee or third party acting on behalf of the Company involves, or a business practice produces, conduct that is unlawful, unethical, or conflicts with the Company’s expectations for lawful and ethical behavior outlined in its Code of Conduct, which has the potential to adversely affect customers, employees, the Company, or its stakeholders. The Board’s Risk Committee has primary oversight responsibility for conduct risk and risk management components of the Company’s culture, while the responsibilities of the Board’s Human Resources Committee include oversight of the Company’s culture, Code of Conduct, human capital management (including talent management and succession planning), performance management program, and incentive compensation risk management program.

At the management level, the Compliance function, which is part of IRM, monitors the implementation of the Company’s compliance and conduct risk programs. The Compliance function reports to the CRO and provides periodic reports related to compliance risk to the Board’s Risk Committee. Financial Crimes Risk Management, also part of IRM, oversees and monitors financial crimes risk, a sub-category of compliance risk. Financial Crimes Risk Management reports to the CRO and provides periodic reports related to financial crimes risk to the Board’s Risk Committee.

Model Risk Management

Model risk (a type of operational risk) is the risk arising from the potential for adverse consequences of decisions made based on model output that may be incorrect or used inappropriately.

The Board’s Risk Committee has primary oversight responsibility for model risk. As part of its oversight responsibilities, the Board’s Risk Committee oversees the Company’s model risk management policy, model governance, model performance, model issue remediation status, and adherence to model risk appetite metrics.

At the management level, the Model Risk function, which is part of IRM, has oversight responsibility for model risk and is responsible for governance, validation and monitoring of model risk across the Company. The Model Risk function reports to the CRO and provides periodic reports related to model risk to the Board’s Risk Committee.

Strategic Risk Management

Strategic risk is the risk to earnings, capital, or liquidity arising from adverse business decisions, improper implementation of strategic initiatives, or inadequate responses to changes in the external operating environment.

The Board has primary oversight responsibility for strategic planning and oversees management’s development and implementation of and approves the Company’s strategic plan, and considers whether it is aligned with the Company’s risk appetite and risk management effectiveness. Management develops, executes and recommends significant strategic corporate transactions and the Board evaluates management’s proposals, including their impact on the Company’s risk profile and financial position. The Board’s Risk Committee has primary oversight responsibility for the Company’s strategic risk and the adequacy of the Company’s strategic risk management program, including associated risk management practices, processes and controls.

At the management level, the Strategic Risk Oversight function, which is part of IRM, has oversight responsibility for strategic risk. The Strategic Risk Oversight function reports into the CRO and supports periodic reports related to strategic risk provided to the Board’s Risk Committee.

Credit Risk Management

Credit risk is the risk of loss associated with a borrower or counterparty default (failure to meet obligations in accordance with agreed upon terms). Credit risk exists with many of the Company’s assets and exposures such as debt security holdings, certain derivatives, and loans.

The Board’s Risk Committee has primary oversight responsibility for credit risk. At the management level, Corporate Credit Risk, which is part of IRM, and the chief risk officers aligned with each principal line of business, have oversight responsibility for credit risk. Corporate Credit Risk and the business-aligned chief risk officers report to the CRO and support periodic reports related to credit risk provided to the Board’s Risk Committee.

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Loan Portfolio. Our loan portfolios represent the largest component of assets on our consolidated balance sheet for which we have credit risk. Table 16 presents our total loans outstanding by portfolio segment and class of financing receivable.

Table 16: Total Loans Outstanding by Portfolio Segment and Class of Financing Receivable

(in millions)	Dec 31, 2025
Commercial and industrial	$	452,068		381,241
Commercial real estate	132,284		136,505
Lease financing	15,543		16,413
Total commercial	599,895		534,159
Residential mortgage	242,190		250,269
Credit card	59,540		56,542
Auto	50,487		42,367
Other consumer	34,055		29,408
Total consumer	386,272		378,586
Total loans	$	986,167		912,745

We manage our credit risk by establishing what we believe are sound credit policies for underwriting new business, while monitoring and reviewing the performance of our existing loan portfolios. We employ various credit risk management and monitoring activities to mitigate risks, including those related to:

•Loan concentrations;

•Borrower or counterparty performance and related credit risk;

•Economic and market conditions;

•Changes in interest rates; and

•Legislative or regulatory mandates.

Our credit risk management oversight process is governed centrally, but provides for direct management and accountability by our lines of business. Our overall credit process includes comprehensive credit policies, disciplined credit underwriting, frequent and detailed risk measurement and modeling, extensive credit training programs, and a continual loan review and audit process.

A key to our credit risk management is adherence to a well-controlled underwriting process, which we believe is appropriate for the needs of our customers as well as investors who purchase the loans or securities collateralized by the loans.

Credit Quality Overview. Table 17 provides credit quality trends.

Table 17: Credit Quality Overview

($ in millions)	Dec 31, 2025
Nonaccrual loans
Commercial loans	$	5,266		4,618
Consumer loans	2,935		3,112
Total nonaccrual loans	$	8,201		7,730
Nonaccrual loans as a % of total loans	0.83	%	0.85
Allowance for credit losses (ACL) for loans	$	14,337		14,636
ACL for loans as a % of total loans	1.45	%	1.60
Net loan charge-offs as a % of:
Average commercial loans	0.19	%	0.29
Average consumer loans	0.79		0.85

The following discussion provides additional information and analysis of our loan portfolios. See Note 3 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report for more analysis and credit information.

COMMERCIAL AND INDUSTRIAL LOANS AND LEASE FINANCING. For purposes of portfolio risk management, we aggregate commercial and industrial loans and lease financing according to market segmentation and standard industry codes. We generally subject commercial and industrial loans and lease financing to individual risk assessment using our internal borrower and collateral quality ratings. Our ratings are aligned to regulatory definitions of pass and criticized categories with criticized segmented among special mention, substandard, doubtful, and loss categories.

Generally, the primary source of repayment for our commercial and industrial loans and lease financing portfolio is the operating cash flows of customers, with the collateral securing this portfolio representing a secondary source of repayment. The majority of this portfolio is secured by short-term assets, such as accounts receivable, inventory, and debt securities, as well as long-lived assets, such as equipment and other business assets.

Loans to our largest industry category, financials except banks, are generally secured and have features to help manage credit risk, such as structural credit enhancements, collateral eligibility requirements, contractual re-margining of collateral supporting the loans, and loan amounts limited to a percentage of the value of the underlying assets considering underlying credit risk, asset duration, and ongoing performance.

We had $15.9 billion of the commercial and industrial loans and lease financing portfolio classified as criticized in accordance with regulatory guidance at December 31, 2025, compared with $16.5 billion at December 31, 2024. The decrease was primarily driven by the retail and technology, telecom and media industries.

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Risk Management – Credit Risk Management (continued)

The portfolio increase at December 31, 2025, compared with December 31, 2024, was a result of increased originations and loan draws, partially offset by paydowns, and was primarily driven by the financials except banks industry.

Table 18 provides our commercial and industrial loans and lease financing by industry using the North American Industry Classification System.

Table 18: Commercial and Industrial Loans and Lease Financing by Industry

	December 31, 2025		December 31, 2024
($ in millions)	Nonaccrual loans		Loans outstanding balance		% of total loans	Total commitments (1)(2)		Nonaccrual loans	Loans outstanding balance		% of total loans	Total commitments (1)(2)
Financials except banks
Asset managers and funds (3)	$	1			84,854		9	%	$	141,129		1	59,847		6	%	$	106,926
Commercial finance (4)	108			60,955		6		97,757		2		51,786	6	84,652
Consumer finance (5)	129			27,794		3		45,321		5		20,840	2	34,669
Real estate finance (6)	7			34,514		3		39,043		16		24,358	3	29,329
Total financials except banks	245			208,117		21		323,250		24		156,831	17	255,576
Technology, telecom and media	49			26,552		3		78,922		106		23,590	3	61,813
Real estate and construction	66			29,321		3		60,900		92		24,839	3	52,741
Equipment, machinery and parts manufacturing	33			25,985		3		54,078		35		25,135	3	51,150
Retail	208			19,644		2		42,865		91		17,709	2	43,374
Materials and commodities	100			13,609		1		35,731		100		13,624	1	37,365
Food and beverage manufacturing	286			17,838		2		33,951		9		16,665	2	35,079
Auto related	7			16,984		2		32,169		8		16,507	2	30,537
Oil, gas and pipelines	3			10,237		1		31,738		3		10,503	1	30,486
Health care and pharmaceuticals	22			13,513		1		31,552		27		13,620	1	30,726
Diversified or miscellaneous	58			11,905		1		29,908		9		9,115	*	22,847
Utilities	18			8,232		*		28,187		—		6,641	*	24,735
Commercial services	65			11,481		1		27,563		78		11,152	1	26,968
Entertainment and recreation	17			13,208		1		20,841		53		12,672	1	19,691
Insurance and fiduciaries	1			6,128		*		19,223		2		4,368	*	15,753
Transportation services	156			8,237		*		16,737		154		9,560	1	16,477
Other (7)	53			26,620		3		45,906		56		25,123	3	44,324
Total	$	1,387			467,611		47	%	$	913,521		847	397,654		44	%	$	799,642

*Less than 1%.

(1)Total commitments consist of loans outstanding plus unfunded credit commitments, excluding issued letters of credit and discretionary amounts where our approval or consent is required prior to any loan funding or commitment increase. For additional information on issued letters of credit, see Note 16 (Guarantees and Other Commitments) to Financial Statements in this Report.

(2)We use credit derivatives, which had notional amounts of $8.2 billion and $1.7 billion at December 31, 2025 and 2024, respectively, to hedge certain loan exposures. These amounts are not shown as reductions to total commitments. For additional information on credit derivatives, see Note 13 (Derivatives) to Financial Statements in this Report.

(3)Includes loans for subscription or capital calls and loans to prime brokerage customers and securities firms.

(4)Includes asset-based lending and leasing, including loans to special purpose entities, loans to commercial leasing entities, and structured lending facilities to commercial loan managers.

(5)Includes originators or servicers of financial assets collateralized by consumer loans such as auto loans and leases, and credit cards.

(6)Includes originators or servicers of financial assets collateralized by commercial or residential real estate loans.

(7)No other single industry had total loans in excess of $8.4 billion and $7.8 billion at December 31, 2025 and 2024, respectively.

Our commercial and industrial loans and lease financing portfolio included non-U.S. loans of $81.0 billion and $62.6 billion at December 31, 2025 and 2024, respectively. Significant industry concentrations of non-U.S. loans at December 31, 2025 and 2024, respectively, included:

•$51.8 billion and $36.3 billion in the financials except banks industry;

•$8.2 billion and $7.4 billion in the banks industry; and

•$1.8 billion and $2.3 billion in the oil, gas and pipelines industry.

COMMERCIAL REAL ESTATE (CRE). Our CRE loan portfolio is composed of CRE mortgage and CRE construction loans. The total CRE loan portfolio decreased $4.2 billion from December 31, 2024, as paydowns exceeded originations and advances. Unfunded credit commitments at December 31, 2025 and 2024, were $6.2 billion and $5.4 billion, respectively, for CRE mortgage loans and $9.2 billion and $7.1 billion, respectively, for CRE construction loans.

The portfolio is diversified both geographically and by property type. At December 31, 2025, the five states with the largest

geographic concentrations of CRE loans, as shown in Table 19, represented a combined 52% of the total CRE portfolio. The largest property type concentrations were apartments at 28% and industrial/warehouse at 20% of the portfolio at December 31, 2025. With respect to the office property type, loans in California and New York represented approximately 40% of this property type at both December 31, 2025 and 2024. We continue to closely monitor the credit quality of the office property type given weakened demand for office space.

We generally subject CRE loans to individual risk assessment using our internal borrower and collateral quality ratings. We had $13.4 billion of CRE mortgage loans classified as criticized in accordance with regulatory guidance at December 31, 2025, compared with $17.8 billion at December 31, 2024. We had $1.7 billion of CRE construction loans classified as criticized in accordance with regulatory guidance at December 31, 2025, compared with $1.5 billion at December 31, 2024. The decrease in criticized CRE mortgage loans was primarily driven by the apartments, office, and hotel/motel property types.

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Table 19 provides our CRE loans by state and property type.

Table 19: CRE Loans by State and Property Type

								December 31, 2025		December 31, 2024
		Real estate mortgage		Real estate construction		Total commercial real estate		Total commercial real estate
($ in millions)	Nonaccrual loans	Loans outstanding balance		Nonaccrual loans	Loans outstanding balance		Nonaccrual loans	Loans outstanding balance	Loans as % of total loans	Total commitments (1)	Loans outstanding balance	Total commitments (1)
By state:
California		$	836		23,837			—		2,371		836		26,208		3%	$	28,918		27,999		30,802
New York		403		13,121			—		2,769		403		15,890		2	17,182			15,481	16,225
Texas		328		8,896			77		1,310		405		10,206		1	13,018			10,967	11,808
Florida		279		8,917			—		1,754		279		10,671		1	11,413			11,078	12,081
Arizona		90		4,945			—		419		90		5,364		*	6,045			5,323	6,129
Other (2)		1,668		56,972			198		6,973		1,866		63,945		6	71,077			65,657	71,965
Total		$	3,604		116,688			275		15,596		3,879		132,284		13%	$	147,653		136,505		149,010
By property type:
Apartments		$	367		27,989			19		8,985		386		36,974		4%	$	41,554		39,758		44,783
Industrial/warehouse		42		24,285			—		1,674		42		25,959		3	31,377			24,038	26,178
Office		2,206		20,161			255		1,797		2,461		21,958		2	23,360			27,380	28,768
Hotel/motel		719		12,039			—		725		719		12,764		1	13,154			11,506	12,015
Retail (excl shopping center)		42		10,444			1		124		43		10,568		1	11,476			11,345	11,951
Shopping center		53		9,215			—		138		53		9,353		*	9,800			8,113	8,571
Institutional		11		4,736			—		666		11		5,402		*	5,852			5,186	5,524
Other		164		7,819			—		1,487		164		9,306		*	11,080			9,179	11,220
Total		$	3,604		116,688			275		15,596		3,879		132,284		13	%	$	147,653		136,505		149,010

* Less than 1%.

(1)Total commitments consist of loans outstanding plus unfunded credit commitments, excluding issued letters of credit. For additional information on issued letters of credit, see Note 16 (Guarantees and Other Commitments) to Financial Statements in this Report.

(2)Includes 45 states and non-U.S. loans. No state in Other had loans in excess of $4.8 billion and $5.9 billion at December 31, 2025 and 2024, respectively. Non-U.S. loans were $5.7 billion and $5.1 billion at December 31, 2025 and 2024, respectively.

COMMERCIAL CREDIT RISK MITIGATION. Risk mitigation actions, including the restructuring of repayment terms, securing collateral or guarantees, and entering into extensions, are based on a re-underwriting of the loan and our assessment of the borrower’s ability to perform under the agreed-upon terms. Extension terms generally range from six to 36 months and may require that the borrower provide additional economic support, such as partial repayment, or additional collateral or guarantees. In cases where the value of collateral or financial condition of the borrower is insufficient to repay our loan, we may rely upon the support of an outside repayment guarantee in providing the extension.

Our ability to seek performance under a guarantee is directly related to the guarantor’s creditworthiness, capacity and willingness to perform, which is evaluated on an annual basis, or more frequently as warranted. Our evaluation is based on the most current financial information available and is focused on various key financial metrics, including net worth, leverage, and current and future liquidity. We consider the guarantor’s creditworthiness and willingness to work with us based on our analysis, as well as other lenders’ experience with the guarantor. Our assessment of the guarantor’s credit strength is reflected in our loan risk ratings for such loans. The loan risk rating and accruing status are important factors in our allowance for credit losses methodology.

In considering the accrual status of the loan, we evaluate

the collateral and future cash flows, as well as the anticipated support of any repayment guarantor. In many cases, the

strength of the guarantor provides sufficient assurance that full repayment of the loan is expected. When full and timely collection of the loan becomes uncertain, including the performance of the guarantor, we place the loan on nonaccrual status. As appropriate, we also charge the loan down in accordance with our charge-off policies, generally to the net realizable value of the collateral securing the loan, if any.

NON-U.S. LOANS. Our classification of non-U.S. loans is based on whether the borrower’s primary address is outside of the United States. At December 31, 2025, non-U.S. loans totaled $86.7 billion, representing approximately 9% of our total consolidated loans outstanding, compared with $67.9 billion, or approximately 7% of our total consolidated loans outstanding, at December 31, 2024. Non-U.S. loans were approximately 4% of our total consolidated assets at both December 31, 2025, and December 31, 2024.

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	Wells Fargo & Company	33

Risk Management – Credit Risk Management (continued)

COUNTRY RISK EXPOSURE. Our country risk monitoring process incorporates centralized monitoring of economic, political, social, legal, and transfer risks in countries where we do or plan to do business, along with frequent dialogue with our customers, counterparties and regulatory agencies. We establish exposure limits for each country through a centralized oversight process based on customer needs, and through consideration of the relevant and distinct risk of each country. We monitor exposures closely and adjust our country limits in response to changing conditions. We evaluate our individual country risk exposure based on our assessment of a borrower’s ability to repay,

which gives consideration for allowable transfers of risk, such as guarantees and collateral, and may be different from the reporting based on a borrower’s primary address.

Our largest single country exposure outside the U.S. at December 31, 2025, was the United Kingdom, which totaled $33.2 billion, or approximately 2% of our total assets, of which $3.1 billion were sovereign exposures and included deposits we have placed with the Bank of England pursuant to regulatory requirements in support of our London branch.

Table 20 provides information regarding our top 20 exposures by country (excluding the U.S.), based on our assessment of risk, which gives consideration to the country of any guarantors and/or underlying collateral. With respect to Table 20:

•Lending exposure consists of loans outstanding plus unfunded credit commitments (excluding discretionary amounts where our approval or consent is required prior to any loan funding or commitment increase) and is presented prior to the deduction of the allowance for credit losses or collateral received under the terms of the credit agreements, if any.

•Securities exposure represents debt and equity securities of non-U.S. issuers. If applicable, long and short positions are netted.

•Derivatives and other exposure represents foreign exchange contracts, derivative contracts, securities resale agreements, and securities lending agreements.

Table 20: Top 20 Country Exposures (1)

	December 31, 2025		December 31, 2024
(in millions)	Deposits with banks (2)		Lending		Securities	Derivatives and other		Total (3)		Total (4)
United Kingdom	$	3,475			26,882		(160)			3,036		33,233		28,079
Canada	960			13,589		3,633			1,366		19,548		16,971
Japan	15,654			498		937			207		17,296		16,027
Luxembourg	90			10,222		16			544		10,872		8,456
Cayman Islands	—			9,198		—			680		9,878		8,011
Ireland	23			5,530		142			527		6,222		5,597
Guernsey	—			5,835		2			29		5,866		2,855
France	19			3,935		234			252		4,440		4,183
Germany	264			3,685		47			163		4,159		3,337
Bermuda	—			3,629		37			68		3,734		3,730
Netherlands	—			3,358		104			144		3,606		2,465
South Korea	12			2,200		(9)			22		2,225		1,502
Switzerland	59			1,448		40			603		2,150		1,842
Spain	1			1,630		58			294		1,983		868
Chile	1			1,129		379			2		1,511		1,372
Australia	313			871		160			88		1,432		1,191
Jersey	—			1,012		85			224		1,321		925
China	153			555		493			81		1,282		1,682
Hong Kong	39			319		811			8		1,177		1,226
Brazil	—			909		49			2		960		887
Total	$	21,063			96,434		7,058			8,340		132,895		111,206

(1)Top 20 country exposures reflected 90% of our total non-U.S. exposure at both December 31, 2025, and December 31, 2024.

(2)Predominantly deposited with central banks.

(3)Top 20 country exposures to central banks and financial institutions was $79.7 billion.

(4)The 2024 exposures correspond to the ranking of the top 20 country exposures at December 31, 2025, and do not necessarily reflect our top 20 country exposures at December 31, 2024.

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34	Wells Fargo & Company

RESIDENTIAL MORTGAGE LOANS. Our residential mortgage loan portfolio is composed of 1–4 family first and junior lien mortgage loans. Junior lien mortgage loans consist of residential mortgage lines of credit and loans that are subordinate in rights to an existing lien on the same property. Residential mortgage – first lien loans represented 97% of the total residential mortgage loan portfolio at December 31, 2025, compared with 96% at December 31, 2024.

The residential mortgage loan portfolio includes loans with adjustable-rate features. We monitor the risk of default as a result of interest rate increases on adjustable-rate mortgage (ARM) loans, which may be mitigated by product features that limit the amount of the increase in the contractual interest rate. The default risk of these loans is considered in our ACL for loans. ARM loans were $70.8 billion, or 7% of total loans, at December 31, 2025, compared with $66.3 billion, or 7% of total loans, at December 31, 2024, with an initial reset date in 2027 or later for the majority of this portfolio at December 31, 2025. We do not offer option ARM products or loans with negative amortization features.

The outstanding balance of residential mortgage lines of credit (both first and junior lien) was $10.3 billion at December 31, 2025, compared with $12.4 billion at December 31, 2024. The unfunded credit commitments for these lines of credit totaled $15.2 billion at December 31, 2025, compared with $22.5 billion at December 31, 2024. Our residential mortgage lines of credit generally have draw periods of 10 years followed by an amortizing repayment period. The lines that enter their repayment period may experience higher delinquencies and higher loss rates than the ones in their draw period. We have considered this increased risk in our ACL for loans estimate. Interest-only lines and loans were $17.6 billion, or 2% of total

loans, at December 31, 2025, compared with $18.7 billion, or 2% of total loans, at December 31, 2024.

We monitor changes in real estate values and underlying economic or market conditions for the geographic areas of our residential mortgage loan portfolio as part of our credit risk management process. Our periodic review of this portfolio includes estimating property values using home valuation models and indices. We have risk management guidelines that address the usage of these models, including periodic validation. For additional information about our monitoring of property values, see Note 3 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.

Part of our credit monitoring includes tracking delinquency, current Fair Isaac Corporation (FICO) credit scores, and loan to collateral values (LTV) on the entire residential mortgage loan portfolio. For junior lien mortgages, LTV uses the total combined loan balance of first and junior lien mortgages, including unused line of credit amounts. For additional information regarding credit quality indicators, see Note 3 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.

Borrowers experiencing financial difficulties may seek additional assistance through a loan modification. For additional information on loan modifications, see Note 3 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.

Our residential mortgage loan portfolio decreased $8.1 billion from December 31, 2024, due to loan paydowns, partially offset by originations. Table 21 shows the outstanding balances of our first and junior lien mortgage loan portfolios.

Table 21: Residential Mortgage Loans

	December 31, 2025		December 31, 2024
($ in millions)	Outstanding balance		% of total loans		Outstanding balance		% of total loans
California (1)	$	108,080			11	%		$	108,000		12	%
New York	30,128			3			30,777			3
Washington	10,727			1			10,621			1
New Jersey	9,481			1			9,841			1
Florida	8,922			1			9,368			1
Other (2)	61,580			6			65,336			7
Government insured/guaranteed loans (3)	5,569			1			7,097			1
Total first lien mortgage portfolio	234,487			24			241,040			26
Total junior lien mortgage portfolio (4)	7,703			1			9,229			1
Total residential mortgage loan portfolio	$	242,190			25	%		$	250,269		27	%

(1)Our first lien mortgage loans to borrowers in California are located predominantly within the larger metropolitan areas, with no single California metropolitan area consisting of more than 4% of total loans.

(2)Consists of 45 states; no state in Other had loans in excess of $6.4 billion and $6.9 billion at December 31, 2025 and 2024, respectively.

(3)Represents loans, substantially all of which were purchased from Government National Mortgage Association (GNMA) loan securitization pools, where the repayment of the loans is insured or guaranteed by U.S. government agencies, such as the Federal Housing Administration (FHA) or the Department of Veterans Affairs (VA). For additional information on GNMA loan securitization pools, see the “Risk Management – Credit Risk Management – Mortgage Banking Activities” section in this Report.

(4)Includes loans of $2.4 billion and $2.7 billion in California, and no other state had loans in excess of $730 million and $1.0 billion at December 31, 2025 and 2024, respectively.

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	Wells Fargo & Company	35

Risk Management – Credit Risk Management (continued)

CREDIT CARD, AUTO, AND OTHER CONSUMER LOANS. Table 22 shows the outstanding balance of our credit card, auto, and other consumer loan portfolios. For information regarding credit

quality indicators for these portfolios, see Note 3 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.

Table 22: Credit Card, Auto, and Other Consumer Loans

	December 31, 2025		December 31, 2024
($ in millions)	Outstanding balance		% of total loans		Outstanding balance		% of total loans
Credit card	$	59,540			6	%		$	56,542		6	%
Auto	50,487			5			42,367			5
Other consumer:
Securities-based	26,206			3			21,448			2
Other	7,849			1			7,960			1
Total other consumer	34,055			4			29,408			3
Total	$	144,082			15	%		$	128,317		14	%

Credit Card. The increase in the outstanding balance at December 31, 2025, compared with December 31, 2024, was due to higher purchase volume and the impact of new account growth.

Auto. The increase in the outstanding balance at December 31, 2025, compared with December 31, 2024, was due to loan originations exceeding paydowns.

Other Consumer. The increase in the outstanding balance at December 31, 2025, compared with December 31, 2024, was due to an increase in securities-based lending in our WIM operating segment.

Securities-based loans, such as margin loans, originated by the WIM operating segment are collateralized by assets in customer brokerage accounts. These loans have provisions that allow us to require additional collateral if the fair value of the existing collateral declines. Accordingly, these loans generally do not have an allowance for credit losses given their minimal expected credit risk.

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36	Wells Fargo & Company

NONPERFORMING ASSETS (NONACCRUAL LOANS AND FORECLOSED ASSETS). We generally place loans on nonaccrual status when:

•the full and timely collection of interest or principal becomes uncertain (generally based on an assessment of the borrower’s financial condition and the adequacy of collateral, if any), such as in bankruptcy or other circumstances;

•they are 90 days (120 days with respect to residential mortgage loans) past due for interest or principal, unless the loan is both well-secured and in the process of collection;

•part of the principal balance has been charged off; or

•for junior lien mortgage loans, we have evidence that the related first lien mortgage may be 120 days past due or in the process of foreclosure regardless of the junior lien delinquency status.

Certain nonaccrual loans may be returned to accrual status after they perform for a period of time. Credit card loans are not placed on nonaccrual status, but are generally fully charged off when the loan reaches 180 days past due.

Table 23 summarizes nonperforming assets.

Table 23: Nonperforming Assets (Nonaccrual Loans and Foreclosed Assets)

($ in millions)	Dec 31, 2025
Nonaccrual loans:
Commercial and industrial	$	1,312		763
Commercial real estate	3,879		3,771
Lease financing	75		84
Total commercial	5,266		4,618
Residential mortgage (1)	2,838		2,991
Auto	70		89
Other consumer	27		32
Total consumer	2,935		3,112
Total nonaccrual loans	$	8,201		7,730
As a percentage of total loans	0.83	%	0.85
Foreclosed assets:
Government insured/guaranteed (2)	$	8		3
Commercial	262		169
Consumer	32		34
Total foreclosed assets	302		206
Total nonperforming assets	$	8,503		7,936
As a percentage of total loans	0.86	%	0.87

(1)Residential mortgage loans are not placed on nonaccrual status when they are insured or guaranteed by U.S. government agencies, such as the FHA or the VA.

(2)Consistent with regulatory reporting requirements, foreclosed real estate resulting from government insured/guaranteed loans are classified as nonperforming. Both principal and interest related to these foreclosed real estate assets are collectible because the loans were insured or guaranteed by U.S. government agencies. Receivables related to the foreclosure of certain government guaranteed real estate mortgage loans are excluded from this table and included in accounts receivable in other assets. For additional information on the classification of certain government-guaranteed mortgage loans upon foreclosure, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

Total nonaccrual loans increased $471 million from December 31, 2024, driven by higher commercial and industrial nonaccrual loans.

For additional information on commercial nonaccrual loans, see the “Risk Management – Credit Risk Management – Commercial and Industrial Loans and Lease Financing” and “Risk Management – Credit Risk Management – Commercial Real Estate” sections in this Report.

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	Wells Fargo & Company	37

Risk Management – Credit Risk Management (continued)

Table 24 provides an analysis of the changes in nonaccrual loans. Typically, changes to nonaccrual loans period-over-period represent inflows for loans that are placed on nonaccrual status in accordance with our policies, offset by reductions for loans

that are paid down, charged off, sold, foreclosed, or are no longer classified as nonaccrual as a result of continued performance and an improvement in the borrower’s financial condition and loan repayment capabilities.

Table 24: Analysis of Changes in Nonaccrual Loans

	Year ended December 31,
(in millions)	2025		2024
Commercial nonaccrual loans
Balance, beginning of period	$	4,618			4,914
Inflows	6,237			4,613
Outflows:
Returned to accruing	(790)			(966)
Foreclosures	(95)			(58)
Charge-offs	(1,180)			(1,635)
Payments, sales and other	(3,524)			(2,250)
Total outflows	(5,589)			(4,909)
Balance, end of period	5,266			4,618
Consumer nonaccrual loans
Balance, beginning of period	3,112			3,342
Inflows	1,234			1,283
Outflows:
Returned to accruing	(512)			(571)
Foreclosures	(76)			(88)
Charge-offs	(84)			(85)
Payments, sales and other	(739)			(769)
Total outflows	(1,411)			(1,513)
Balance, end of period	2,935			3,112
Total nonaccrual loans	$	8,201			7,730

We considered the risk of losses on nonaccrual loans in developing our allowance for loan losses. We believe exposure to losses on nonaccrual loans is mitigated by the following factors at December 31, 2025:

•98% of total commercial nonaccrual loans were secured, predominantly by real estate.

•74% of total commercial nonaccrual loans were current on interest and 63% of commercial nonaccrual loans were current on both principal and interest, but were on nonaccrual status because the full or timely collection of interest or principal had become uncertain.

•99% of total consumer nonaccrual loans were secured, of which 97% were secured by real estate and 98% had an LTV ratio of 80% or less.

•$378 million of the $461 million of consumer loans in bankruptcy or discharged in bankruptcy, and classified as nonaccrual, were current.

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38	Wells Fargo & Company

NET CHARGE-OFFS. Table 25 presents net loan charge-offs.

Table 25: Net Loan Charge-offs

		Quarter ended December 31,		Year ended December 31,
		2025		2024		2025		2024
($ in millions)	Net loan charge- offs		% ofaverageloans (1)		Net loan charge- offs		% of average loans (1)		Net loan charge- offs		% of average loans		Net loan charge- offs		% of average loans
Commercial and industrial	$	157			0.15	%		$	132			0.14	%		$	575		0.14	%		$	597		0.16	%
Commercial real estate	158			0.48			261			0.74			421			0.32		903			0.62
Lease financing	10			0.26			10			0.23			37			0.24		35			0.20
	Total commercial	325			0.22			403			0.30			1,033			0.19		1,535			0.29
Residential mortgage	(13)			(0.02)			(14)			(0.02)			(53)			(0.02)		(69)			(0.03)
Credit card	583			3.97			628			4.49			2,426			4.31		2,455			4.58
Auto	60			0.49			82			0.77			204			0.46		356			0.80
Other consumer	91			1.09			112			1.56			384			1.25		495			1.75
	Total consumer	721			0.75			808			0.85			2,961			0.79		3,237			0.85
	Total	$	1,046			0.43	%		$	1,211			0.53	%		$	3,994		0.43	%		$	4,772		0.52	%

(1)Net loan charge-offs (recoveries) as a percentage of average loans are annualized.

The decrease in commercial net loan charge-offs in 2025, compared with 2024, was due to lower losses in our commercial real estate portfolio driven by the office property type.

The decrease in consumer net loan charge-offs in 2025, compared with 2024, was due to lower losses in our auto and other consumer portfolios.

ALLOWANCE FOR CREDIT LOSSES. We maintain an allowance for credit losses (ACL) for loans, which is management’s estimate of the expected lifetime credit losses in the loan portfolio and unfunded credit commitments, at the balance sheet date, excluding loans and unfunded credit commitments carried at fair value or held for sale. Additionally, we maintain an ACL for debt securities classified as either AFS or HTM, other financial assets measured at amortized cost, including deposits with banks, net investments in leases, and other off-balance sheet credit exposures.

The process for establishing the ACL for loans takes into consideration many factors, including historical and forecasted loss trends, loan-level credit quality ratings and loan grade-specific characteristics. The process involves subjective and complex judgments. In addition, we review a variety of credit metrics and trends. These credit metrics and trends, however, do not solely determine the amount of the allowance as we use several analytical tools. For additional information on our ACL, see the “Critical Accounting Policies – Allowance for Credit Losses” section and Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report. For additional information on our ACL for loans, see Note 3 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report, and for additional information on our ACL for debt securities, see Note 2 (Available-for-Sale and Held-to-Maturity Debt Securities) to Financial Statements in this Report.

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	Wells Fargo & Company	39

Risk Management – Credit Risk Management (continued)

Table 26 presents the allocation of the ACL for loans by loan portfolio segment and class.

Table 26: Allocation of the ACL for Loans

	Dec 31, 2025		Dec 31, 2024
($ in millions)	ACL		ACL as % of loan class		Loans as % of total loans		ACL		ACL as % of loan class		Loans as % of total loans
Commercial and industrial	$	4,510			1.00	%		46			$	4,151		1.09	%	42
Commercial real estate	2,737			2.07			13			3,583			2.62		15
Lease financing	210			1.35			1			212			1.29		2
Total commercial	7,457			1.24			60			7,946			1.49		59
Residential mortgage (1)	555			0.23			25			541			0.22		27
Credit card	4,956			8.32			6			4,869			8.61		6
Auto	817			1.62			5			636			1.50		5
Other consumer	552			1.62			4			644			2.19		3
Total consumer	6,880			1.78			40			6,690			1.77		41
Total	$	14,337			1.45	%		100			$	14,636		1.60	%	100
Components:
Allowance for loan losses					$	13,797						14,183
Allowance for unfunded credit commitments					540						453
Allowance for credit losses					$	14,337						14,636
Ratio of allowance for loan losses to total net loan charge-offs					3.45x						2.97
Ratio of allowance for loan losses to total nonaccrual loans					1.68							1.83
Allowance for loan losses as a percentage of total loans					1.40	%						1.55

(1)Includes negative allowance for expected recoveries of amounts previously charged off.

The ratios for the allowance for loan losses and the ACL for loans presented in Table 26 may fluctuate from period to period due to such factors as the mix of loan types in the portfolio, borrower credit strength, and the value and marketability of collateral.

The ACL for loans decreased $299 million, or 2%, from December 31, 2024, reflecting improved credit performance for commercial real estate loans, partially offset by a higher allowance for commercial and industrial and auto loans due to portfolio growth. The detail of the changes in the ACL for loans by portfolio segment (including charge-offs and recoveries by loan class) is included in Note 3 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.

We consider multiple economic scenarios to develop our estimate of the ACL for loans, which generally include a base scenario, along with an optimistic (upside) and one or more pessimistic (downside) scenarios. We weighted the base scenario and the downside scenarios in our estimate of the ACL for loans at December 31, 2025. The base scenario assumed uncertainty related to trade policies, increased inflation along with slowing economic growth, increased unemployment rates, and a decline in commercial real estate prices. The downside scenarios assumed a more substantial economic contraction due to lower business and consumer confidence, declining property values, and uncertainty related to trade policies.

Additionally, we consider qualitative factors that represent management’s judgment of risks related to our processes and assumptions used in establishing the ACL such as economic environmental factors, modeling assumptions and performance, process risk, and other subjective factors, including industry trends and emerging risk assessments.

The forecasted key economic variables used in our estimate of the ACL for loans at December 31 and September 30, 2025, are presented in Table 27.

Table 27: Forecasted Key Economic Variables

	2Q 2026
Weighted blend of economic scenarios:
U.S. unemployment rate (1):
December 31, 2025	4.7	%	5.3	5.8
September 30, 2025	4.9		5.6	5.9
U.S. real GDP (2):
December 31, 2025	(0.8)		(0.5)	1.0
September 30, 2025	(1.3)		0.3	1.7
Home price index (3):
December 31, 2025	(2.3)		(5.2)	(5.5)
September 30, 2025	(4.7)		(6.0)	(5.1)
Commercial real estate asset prices (3):
December 31, 2025	(6.9)		(9.0)	(6.9)
September 30, 2025	(9.6)		(9.4)	(6.0)

(1)Quarterly average.

(2)Percent change from the preceding period, seasonally adjusted annualized rate.

(3)Percent change year over year of national average; outlook differs by geography and property type.

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40	Wells Fargo & Company

We believe the ACL for loans of $14.3 billion at December 31, 2025, was appropriate to cover expected credit losses, including unfunded credit commitments, at that date. The entire allowance is available to absorb credit losses from the total loan portfolio. The ACL for loans is subject to change and reflects existing factors as of the date of determination, including economic or market conditions and ongoing internal and external examination processes. Due to the sensitivity of the ACL for loans to changes in the economic and business environment, it is possible that we will incur incremental credit losses not anticipated as of the balance sheet date. Our process for determining the ACL is discussed in the “Critical Accounting Policies – Allowance for Credit Losses” section and Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

MORTGAGE BANKING ACTIVITIES. We sell residential and commercial mortgage loans to various parties, including (1) government-sponsored enterprises (GSEs), Federal Home Loan Mortgage Corporation (FHLMC) and Federal National Mortgage Association (FNMA), who include the mortgage loans in GSE-guaranteed mortgage securitizations, (2) SPEs that issue private label MBS, and (3) other financial institutions that purchase mortgage loans for investment or private label securitization. In addition, we may pool FHA-insured and VA-guaranteed residential mortgage loans that are then used to back securities guaranteed by the Government National Mortgage Association (GNMA). We may be required to repurchase these mortgage loans, indemnify the securitization trust, investor or insurer, or reimburse the securitization trust, investor or insurer for credit losses incurred on loans (collectively, repurchase) in the event of a breach of contractual representations or warranties that is not remedied within a period (usually 90 days or less) after we receive notice of the breach.

In connection with our sales and securitization of residential mortgage loans, we have established a mortgage repurchase liability, initially at fair value, related to various representations and warranties that reflect management’s estimate of losses for loans for which we could have a repurchase obligation, whether or not we currently service those loans, based on a combination of factors. See Note 15 (Securitizations and Variable Interest Entities) to Financial Statements in this Report for additional information about our liability for mortgage loan repurchase losses.

We provide recourse to GSEs for commercial mortgage loans sold under various programs and arrangements. The terms of certain programs require that we incur a pro-rata share of actual losses in the event of borrower default. See Note 16 (Guarantees and Other Commitments) to Financial Statements in this Report for additional information about our exposure to loss related to these programs.

In addition to servicing loans in our portfolio, we may also service residential and commercial mortgage loans included in GSE mortgage securitizations, GNMA-guaranteed mortgage securitizations of FHA-insured/VA-guaranteed mortgages and private label mortgage securitizations, as well as for unsecuritized loans owned by institutional investors.

The loans we service were originated by us or by other mortgage loan originators. As servicer, our primary duties are typically to (1) collect payments due from borrowers, (2) advance certain delinquent payments of principal and interest on the mortgage loans, (3) maintain and administer any hazard, title or primary mortgage insurance policies relating to the mortgage loans, (4) maintain any required escrow accounts for payment of taxes and insurance and administer escrow payments, and (5) foreclose on defaulted mortgage loans or, to the extent consistent with the related servicing agreement, consider alternatives to foreclosure, such as loan modifications or short sales, and for certain investors, manage the foreclosed property through liquidation. The amount and timing of reimbursement for advances of delinquent payments vary by investor and the applicable servicing agreements. See Note 6 (Mortgage Banking Activities) to Financial Statements in this Report for additional information about residential and commercial mortgage servicing rights, servicer advances and servicing fees.

In accordance with applicable servicing guidelines, upon transfer as servicer, we may have the option to repurchase loans from certain loan securitizations, which generally becomes exercisable based on delinquency status such as when three scheduled loan payments are past due. When we have the unilateral option to repurchase a loan, we recognize the loan and a corresponding liability on our balance sheet regardless of our intent to repurchase the loan.

Each agreement under which we act as servicer generally specifies a standard of responsibility for actions we take in such capacity. We are required to indemnify the securitization trustee against any failure by us as servicer to perform our servicing obligations. In addition, if we commit a breach of our obligations as servicer, we may be subject to termination if the breach is not cured within a specified period. The standards governing servicing in GSE-guaranteed securitizations, and the possible remedies for violations of such standards, vary, and those standards and remedies are determined by servicing guides maintained by the GSEs, contracts between the GSEs and individual servicers and topical guides published by the GSEs from time to time. Such remedies could include indemnification or repurchase of an affected mortgage loan. In addition, in connection with our servicing activities, we could continue to become subject to consent orders and settlement agreements with federal and state regulators for alleged servicing issues and practices. In general, these can require us to provide customers with loan modification relief, refinancing relief, and foreclosure prevention and assistance, and can result in business restrictions or the imposition of certain monetary penalties on us.

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	Wells Fargo & Company	41

Asset/Liability Management

Asset/liability management involves measuring, monitoring and managing interest rate risk, market risk, liquidity risk and funding. Primary oversight of interest rate risk and market risk resides with the Finance Committee of the Board, while primary oversight of liquidity risk and funding resides with the Risk Committee of the Board. These committees oversee the administration and effectiveness of financial risk management policies and processes used to assess and manage these risks.

At the management level, the Corporate Asset/Liability Committee, which consists of management from finance, risk and business groups, oversees interest rate risk and liquidity risk and funding and supports periodic reports provided to the Board’s Finance Committee and Risk Committee as appropriate. As discussed in more detail for market risk activities below, we employ separate management level oversight specific to market risk.

INTEREST RATE RISK. Interest rate risk is the risk that market fluctuations in interest rates, and/or product spreads, can cause a reduction in the Company’s earnings and capital stemming from mismatches in the Company’s asset and liability cash flows.

We are subject to interest rate risk because:

•assets and liabilities may mature or reprice at different times or at different amounts;

•short-term and long-term market interest rates may change independently or by different magnitudes;

•the remaining maturity for various assets or liabilities may shorten or lengthen as interest rates change; or

•interest rates may also have a direct or indirect effect on loan demand, collateral values, credit losses, loan origination volume, and the fair value of financial instruments and MSRs.

We measure interest rate risk exposure from lending, investing, and deposit-raising activities, as well as from issuances of long-term debt. Interest rate risk is measured by comparing the earnings outcomes from multiple interest rate scenarios relative to our base scenario. The base scenario is a reference point used by the Company for financial planning purposes. These scenarios may differ in the direction, degree, and speed of interest rate changes over time, and the projected shape of the yield curve. They also require assumptions regarding drivers of earnings and balance sheet composition such as loan originations, prepayment rates on loans and debt securities, deposit flows and mix, as well as pricing strategies. We periodically assess and enhance our scenarios and assumptions.

Table 28 presents the results of the estimated net interest income sensitivity over the next 12 months from the multiple scenarios compared with our base scenario. These hypothetical scenarios include instantaneous movements across the yield curve with both lower and higher interest rates under a parallel shift, as well as steeper and flatter non-parallel changes in the yield curve. Long-term interest rates are defined as all tenors three years and longer, and short-term interest rates are defined as all tenors less than three years. Markets trading net interest income is excluded from the sensitivity analysis since Markets trading net interest income may be offset by trading-related noninterest income. For additional information on the market risk of financial instruments used in our trading activities, which are measured at fair value through earnings, see the “Risk

Management – Asset/Liability Management – Market Risk – Trading Activities” section in this Report.

Our scenario assumptions reflected the following:

•Scenarios are dynamic and reflect anticipated changes to our assets and liabilities over time.

•Mortgage prepayment and origination assumptions vary across scenarios and reflect only the impact of the higher or lower interest rates.

•Other macroeconomic variables that could be correlated with the changes in interest rates are held constant.

•The funding forecast in our base scenario incorporates deposit mix changes and market funding levels consistent with the base interest rate trajectory. Our hypothetical scenarios incorporate deposit mix that is the same as in the base scenario. In higher interest rate scenarios, potential customer deposit activity that shifts balances into higher yielding products and/or requires additional market funding could reduce the expected benefit from higher rates. Conversely, in lower interest rate scenarios, a potential shift to a funding mix with lower yielding deposits and/or less market funding could reduce the impact of lower rates on earning assets in these scenarios.

•The interest rate sensitivity of deposits as market interest rates change, referred to as deposit betas, are informed by historical behavior and expectations for near-term pricing strategies. Our actual experience may differ from expectations due to the lag or acceleration of deposit repricing, changes in consumer behavior, and other factors.

Table 28: Net Interest Income Sensitivity Over the Next 12 Months Using Instantaneous Movements

($ in billions)	Dec 31, 2025
Parallel shift (1):
+100 bps shift in interest rates	$	1.9		1.3
-100 bps shift in interest rates	(2.3)		(2.2)
-200 bps shift in interest rates	(5.3)		(4.4)
Steeper yield curve (1):
+100 bps shift in long-term interest rates	0.5		0.4
-100 bps shift in short-term interest rates	(1.8)		(1.8)
Flatter yield curve (1):
+100 bps shift in short-term interest rates	1.4		0.9
-100 bps shift in long-term interest rates	(0.4)		(0.4)

(1)In first quarter 2025, we made an update to exclude the net interest income sensitivity for trading-related assets and liabilities of our Markets trading business. Prior period amounts have been revised to conform with the current period presentation.

The changes in our interest rate sensitivity from December 31, 2024, to December 31, 2025, reflected updates for our expected balance sheet composition. Our interest rate sensitivity indicates that we would expect to benefit from higher interest rates as our assets would reprice faster and to a greater degree than our liabilities, while in the case of lower interest rates, our assets would reprice downward and to a greater degree than our liabilities resulting in lower net interest income. The realized impact of interest rate changes may vary from our base and hypothetical scenarios for various reasons, including any deposit pricing lags. We use interest rate derivatives and our debt securities portfolio to manage our interest rate exposures.

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42	Wells Fargo & Company

We use derivatives for asset/liability management to (i) convert cash flows from selected assets and/or liabilities from floating-rate payments to fixed-rate payments, or vice versa, (ii) reduce accumulated other comprehensive income (AOCI) sensitivity of our AFS debt securities portfolio, and/or (iii) economically hedge our mortgage origination pipeline, funded mortgage loans, and MSRs. Derivatives used to hedge our interest rate risk exposures are presented in Note 13 (Derivatives) to Financial Statements in this Report. As interest rates increase, changes in the fair value of AFS debt securities may negatively affect AOCI, which lowers the amount of our regulatory capital. AOCI also includes unrealized gains or losses related to the transfer of debt securities from AFS to HTM, which are subsequently amortized into earnings over the life of the security with no further impact from interest rate changes. See Note 1 (Summary of Significant Accounting Policies) and Note 2 (Available-for-Sale and Held-to-Maturity Debt Securities) to Financial Statements in this Report for additional information on our debt securities portfolio.

In addition to the net interest income sensitivity above, we also measure and evaluate the economic value sensitivity (EVS) of our balance sheet. EVS is the change in the present value of the life-time cash flows of the Company’s assets and liabilities across a range of scenarios. It is based on the existing balance sheet, at a point in time, and helps indicate whether we are exposed to higher or lower interest rates. We manage EVS through a set of limits that are designed to align with our interest rate risk appetite.

Interest rate sensitive noninterest income is impacted by changes in earnings credit for noninterest-bearing deposits that reduce treasury management deposit-related service fees on commercial accounts. Our interest rate sensitive noninterest income is also impacted by mortgage banking activities that may have sensitivity impacts that move in the opposite direction of our net interest income. See the “Risk Management – Asset/Liability Management – Mortgage Banking Interest Rate and Market Risk” section in this Report for additional information.

MORTGAGE BANKING INTEREST RATE AND MARKET RISK. We originate and service mortgage loans, which subjects us to various risks, including market, interest rate, credit, and liquidity risks that can be substantial. Based on market conditions and other factors, we reduce credit and liquidity risks by selling or securitizing mortgage loans. We determine whether mortgage loans will be held for investment or held for sale at the time of commitment, but may change our intent to hold loans for investment or sale as part of our corporate asset/liability management activities. We may also retain securities in our investment portfolio at the time we securitize mortgage loans.

Changes in interest rates may impact mortgage banking noninterest income, including origination and servicing fees, and the fair value of our residential MSRs, loans held for sale (LHFS), and derivative loan commitments (interest rate “locks”) extended to mortgage applicants. Interest rate changes will generally impact our mortgage banking noninterest income on a lagging basis due to the time it takes for the market to reflect a shift in customer demand, as well as the time required for processing a new application, providing the commitment, and securitizing and selling the loan. The amount and timing of the impact will depend on the magnitude, speed and duration of the changes in interest rates.

The valuation of our residential MSRs is highly subjective and involves complex judgments by management about matters that are inherently unpredictable. Changes in interest rates influence a variety of significant assumptions captured in the periodic valuation of residential MSRs, including prepayment rates, costs to service, and other servicing valuation elements. See the “Critical Accounting Policies – Fair Value Measurements” section in this Report for additional information on the valuation of our residential MSRs.

An increase in interest rates generally reduces the propensity for refinancing, extends the expected duration of the managed servicing portfolio, and therefore increases the estimated fair value of the MSRs. However, an increase in interest rates can also reduce mortgage loan demand, including refinancing activity, which reduces noninterest income from origination activities. A decline in interest rates would generally have an opposite impact.

To reduce our exposure to changes in interest rates, our residential MSRs are economically hedged with a combination of derivative instruments, including interest rate swaps, Secured Overnight Financing Rate (SOFR) futures, highly liquid mortgage forward contracts, and interest rate options. Hedging the various sources of interest rate risk in mortgage banking is a complex process that requires sophisticated modeling and constant monitoring. There are several potential risks to earnings from mortgage banking related to origination volumes and mix, valuation of MSRs and associated hedging results, the relationship and degree of volatility between short-term and long-term interest rates, and changes in servicing and foreclosures costs. While we attempt to balance our mortgage banking interest rate and market risks, the financial instruments we use may not perfectly correlate with the values and income being hedged.

The size of the hedge and the particular combination of hedging instruments at any point in time is designed to reduce the volatility of our earnings over various time frames within a range of mortgage interest rates. Market factors, the composition of the managed servicing portfolio, and the relationship between the origination and servicing sides of our mortgage businesses change continually, and therefore the types of instruments used in our hedging are reviewed daily and rebalanced based on our evaluation of current market factors and the interest rate risk inherent in our portfolio. For additional information on mortgage banking, including key assumptions and the sensitivity of the fair value of MSRs, see Note 6 (Mortgage Banking Activities) and Note 14 (Fair Value Measurements) to Financial Statements in this Report.

MARKET RISK. Market risk is the risk of possible economic loss from adverse changes in market risk factors such as interest rates, credit spreads, foreign exchange rates, equity and commodity prices, and the risk of possible loss due to counterparty exposure. Market risk applies to implied volatility risk, basis risk, and market liquidity risk and includes price risk in the trading book, mortgage servicing rights, the hedge effectiveness risk associated with non-trading portfolios held at fair value, and impairment on private equity investments.

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	Wells Fargo & Company	43

Risk Management – Asset/Liability Management (continued)

The Board’s Finance Committee has primary oversight responsibility for market risk and oversees the Company’s market risk exposure and market risk management strategies. In addition, the Board’s Risk Committee has certain oversight responsibilities with respect to market risk, including counterparty risk. The Finance Committee also reports key market risk matters to the Risk Committee.

At the management level, the Market and Counterparty Risk Management function, which is part of IRM, has oversight responsibility for market risk across the enterprise. The Market and Counterparty Risk Management function reports into Corporate and Investment Banking Risk and provides periodic reports related to market risk to the Board’s Finance Committee and Risk Committee, as applicable.

MARKET RISK – TRADING ACTIVITIES. We engage in trading activities to accommodate the investment and risk management activities of our customers and to execute economic hedging to manage certain balance sheet risks. These trading activities predominantly occur within our Markets business. Trading debt and equity securities, trading loans, and trading derivatives are financial instruments used in our trading activities, and are measured at fair value through earnings. Income earned on the financial instruments used in our trading activities include net interest income, changes in fair value, and realized gains and losses. Changes in fair value and realized gains and losses of the financial instruments used in our trading activities are reflected in net gains from trading activities. For additional information on the financial instruments used in our trading activities, see

Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report. For additional information on the income from these trading activities, see Note 20 (Revenue and Expenses) to Financial Statements in this Report.

Value-at-risk (VaR) is a statistical risk measure used to estimate the potential loss from adverse moves in the financial markets, and Trading VaR is a measure used to provide insight into the market risk exhibited by the Company’s trading positions on our consolidated balance sheet. The Company uses these VaR metrics complemented with sensitivity analysis and stress testing in measuring and monitoring market risk. The Company calculates Trading VaR for risk management purposes to establish and monitor line of business and Company-wide risk limits.

Our Trading General VaR is calculated using a simulation model based on historical changes in market values, which estimates the potential loss on the portfolio over a one-day time interval at a 99% confidence level. Our historical simulation model is based on equally weighted data from a 12-month historical look-back period. We believe using a 12-month look-back period helps ensure the Company’s VaR is responsive to current market conditions. The 99% confidence level equates to an expectation that the Company would incur single-day trading losses in excess of the VaR estimate on average once every 100 trading days.

Table 29 shows the Company’s Trading General VaR by risk category.

Table 29: Trading 1-Day 99% General VaR by Risk Category

	Year ended December 31,
	2025 (1)							2024
(in millions)	Average		Low		High				Average		Low		High
Company Trading General VaR Risk Categories
Credit	$	19			11		36						35		23		58
Interest rate	5			2		14						32		13		68
Equity	21			14		41						20		15		27
Commodity	3			1		8						3		1		11
Foreign exchange	5			1		9						1		0		13
Diversification benefit (2)	(23)									(62)
Company Trading General VaR	$	30									29

(1)In second quarter 2025, we changed our approach for allocating VaR by risk category to align the primary product class of a trading position to a single risk category. Previously, products with multiple risks were allocated across several risk categories. This change did not affect the underlying assumptions, parameters, or the VaR model itself.

(2)The diversification effect arises because the risks are not perfectly correlated causing a portfolio of positions to usually be less risky than the sum of the risks of the positions alone. The diversification benefit is not meaningful for low and high metrics since they may occur on different days.

Sensitivity Analysis. Given the inherent limitations of the VaR models, the Company uses other measures, including sensitivity analysis, to measure and monitor risk. Sensitivity analysis is the measure of exposure to a single risk factor, such as a 0.01% increase in interest rates or a 1% increase in equity prices. We conduct and monitor sensitivity on interest rates, credit spreads, volatility, equity, commodity, and foreign exchange exposure. Sensitivity analysis complements VaR as it provides an indication of risk relative to each factor irrespective of historical market moves.

scenarios estimate the risk of losses based on management’s assumptions of abnormal but severe market movements such as severe credit spread widening or a large decline in equity prices. These scenarios assume that the market moves happen instantaneously and no repositioning or hedging activity takes place to mitigate losses as events unfold (a conservative approach since experience demonstrates otherwise).

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44	Wells Fargo & Company

Historical scenarios utilize an event-driven approach: the stress scenarios are based on plausible but rare events, and the analysis addresses how these events might affect the risk factors relevant to a portfolio.

The Company’s stress testing framework is also used in calculating results in support of the Federal Reserve Board’s Comprehensive Capital Analysis and Review (CCAR) and internal stress tests. Stress scenarios are regularly reviewed and updated to address potential market events or concerns. For more detail on the CCAR process, see the “Capital Management” section in this Report.

MARKET RISK – EQUITY SECURITIES. We are directly and indirectly affected by changes in the equity markets. We make and manage investments in various businesses, such as start-up companies and emerging growth companies, some of which are made by our venture capital business. We also invest in funds that make similar private equity investments.

Private equity investments are investments in nonmarketable equity securities and are approved by management and/or the Board depending on investment size. Management reviews these investments at least quarterly to assess for impairment and identify observable price changes for investments accounted for using the measurement alternative, both of which may require us to make fair value measurements. Impairment assessments are based on facts and circumstances of each individual investment and the expectations for that investment’s cash flows and capital needs, the viability of its business model, and our exit strategy. We account for private equity investments under the fair value method, the equity method, or the measurement alternative.

Additionally, as part of our business to support our customers, we trade public equities, listed/over-the-counter equity derivatives, and convertible bonds, and we have parameters for the oversight of these activities.

Changes in equity market prices may also indirectly affect our net income by (1) the value of third-party assets under management and, hence, fee income, (2) borrowers whose ability to repay principal and/or interest may be affected by the stock market, or (3) brokerage activity, related commission income and other business activities. Each business line monitors and manages these indirect risks.

For additional information on our equity securities, see Note 4 (Equity Securities) to Financial Statements in this Report.

LIQUIDITY RISK AND FUNDING. Liquidity risk is the risk arising from the inability of the Company to meet obligations when they come due, or roll over funds at a reasonable cost, without incurring heightened costs. In the ordinary course of business, we enter into contractual obligations that may require future cash payments, including funding for customer loan requests, customer deposit maturities and withdrawals, debt service, leases for premises and equipment, and other cash commitments. Liquidity risk also considers the stability of deposits, including the risk of losing uninsured or non-operational deposits. The objective of effective liquidity management is to be able to meet our contractual obligations and other cash commitments efficiently under both normal operating conditions and under periods of Wells Fargo-specific and/or market stress.

For additional information on these obligations, see the following sections and Notes to Financial Statements in this Report:

•“Unfunded Credit Commitments” section within Loans and Related Allowance for Credit Losses (Note 3)

•Leasing Activity (Note 7)

•Deposits (Note 8)

•Long-Term Debt (Note 9)

•Guarantees and Other Commitments (Note 16)

•Employee Benefits (Note 21)

•Income Taxes (Note 22)

To help achieve this objective, the Board establishes liquidity guidelines that require sufficient liquidity to cover potential funding requirements and to avoid over-dependence on volatile, less reliable funding markets. These guidelines are monitored on a monthly basis by the management-level Corporate Asset/Liability Committee and on a quarterly basis by the Board. These guidelines are established and monitored for both the Company and the Parent on a stand-alone basis so that the Parent is a source of strength for its banking subsidiaries.

Liquidity Stress Tests. Liquidity stress tests are performed to help the Company maintain sufficient liquidity to meet contractual and contingent outflows modeled under a variety of stress scenarios. Our scenarios utilize market-wide and idiosyncratic events, including a range of stress conditions and time horizons. Stress testing results facilitate evaluation of the Company’s projected liquidity position during stress and may inform future needs in the Company’s funding plan.

Contingency Funding Plan. Our contingency funding plan (CFP), which is approved by the Corporate Asset/Liability Committee and the Board’s Risk Committee, sets out the Company’s strategies and action plans to address potential liquidity needs during market-wide or idiosyncratic liquidity events. The CFP establishes measures for monitoring emerging liquidity events and describes the processes for communicating and managing stress events should they occur. The CFP also identifies alternate funding and liquidity strategies available to the Company in a period of stress.

Liquidity Standards. We are subject to a rule issued by the Board of Governors of the Federal Reserve System (FRB), the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) that establishes a quantitative minimum liquidity requirement, known as the liquidity coverage ratio (LCR). The rule requires a covered banking organization to hold high-quality liquid assets (HQLA) in an amount equal to or greater than its projected net cash outflows during a 30-day stress period. Our HQLA under the rule mainly consists of central bank deposits, government debt securities, and federal agency mortgage-backed securities. The LCR applies to the Company and to our insured depository institutions (IDIs) with total assets of $10 billion or more. In addition, rules issued by the FRB impose enhanced liquidity risk management standards on large bank holding companies (BHCs), such as Wells Fargo.

We are also subject to a rule issued by the FRB, OCC and FDIC that establishes a stable funding requirement, known as the net stable funding ratio (NSFR). The NSFR requires a covered banking organization, such as Wells Fargo, to maintain a minimum amount of stable funding, including common equity, long-term debt and most types of deposits, in relation to its assets, derivative exposures and commitments over a one-year

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	Wells Fargo & Company	45

Risk Management – Asset/Liability Management (continued)

horizon period. The NSFR applies to the Company and to our IDIs with total assets of $10 billion or more. As of December 31, 2025, we were compliant with the NSFR requirement.

Liquidity Coverage Ratio. As of December 31, 2025, the Company, Wells Fargo Bank, N.A., and Wells Fargo National Bank West exceeded the minimum LCR requirement of 100%. The LCR

represents average HQLA divided by average projected net cash outflows, as each is defined under the LCR rule.

Table 30 presents the Company’s quarterly average values for the daily-calculated LCR and its components calculated pursuant to the LCR rule requirements.

Table 30: Liquidity Coverage Ratio

	Average for quarter ended
(in millions, except ratio)	Dec 31, 2025		Sep 30, 2025		Dec 31, 2024
HQLA (1):
Eligible cash	$	139,271		153,816			164,386
Eligible securities (2)	250,520		227,259			205,715
Total HQLA	389,791		381,075			370,101
Projected net cash outflows (3)	327,403		315,355			295,537
LCR	119	%		121			125

(1)HQLA excludes excess HQLA at certain subsidiaries that is not transferable to other Wells Fargo entities.

(2)Net of applicable haircuts required under the LCR rule.

(3)Projected net cash outflows are calculated by applying a standardized set of outflow and inflow assumptions, defined by the LCR rule, to various exposures and liability types, such as deposits and unfunded loan commitments, which are prescribed based on a number of factors, including the type of customer and the nature of the account.

Liquidity Sources. As of December 31, 2025, the Company had approximately $872.2 billion of total available liquidity sources. Table 31 presents the components of our available liquidity sources.

We maintain primary sources of liquidity in the form of central bank deposits and high-quality liquid debt securities, which collectively totaled $499.5 billion as of December 31, 2025. Our high-quality liquid debt securities presented in Table 31 are substantially the same in composition as HQLA eligible securities under the LCR rule; however, they will generally exceed HQLA eligible securities due to the applicable LCR haircuts and the exclusion of LCR adjustments for excess liquidity that is not transferable from certain subsidiaries.

We believe our high-quality liquid debt securities provide reliable sources of liquidity through sales or by pledging to obtain financing, in both normal and stressed market conditions. High-quality liquid debt securities include AFS, HTM, and trading debt securities, as well as debt securities received through securities financing activities.

As of December 31, 2025, we had approximately $623.0 billion of borrowing capacity at the Federal Reserve Discount Window and Federal Home Loan Banks (FHLB). This borrowing capacity included $250.3 billion related to pledged high-quality liquid debt securities within our primary sources of liquidity and $372.7 billion related to pledged loans and other debt securities within our contingent sources of liquidity.

Table 31: Total Available Liquidity Sources

(in millions)	Dec 31, 2025			Dec 31, 2024
Primary sources of liquidity:
Central bank deposits	$	130,448		134,506		162,174
High-quality liquid debt securities (1)	369,007		372,003		368,508
Total	499,455		506,509		530,682
Contingent sources of liquidity (2):
Pledged loans and other	372,698		359,579		361,057
Total available liquidity	$	872,153		866,088		891,739

(1)Presented at fair value and includes unencumbered securities.

(2)Presented at borrowing capacity, net of haircuts.

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46	Wells Fargo & Company

Funding Sources. The Parent acts as a source of funding for the Company through the issuance of long-term debt and equity. WFC Holdings, LLC (the “IHC”) is an intermediate holding company and subsidiary of the Parent, which provides funding support for the ongoing operational requirements of the Parent and certain of its direct and indirect subsidiaries. For additional information on the IHC, see the “Regulation and Supervision – ‘Living Will’ Requirements and Related Matters” section in our 2025 Form 10-K. Additional subsidiary funding is provided by deposits, short-term funding, and long-term debt.

Deposits have historically provided a sizable source of relatively low-cost funds. Loans were 69% and 67% of total deposits at December 31, 2025 and 2024, respectively.

Short-term funding, which generally matures in less than 30 days, includes federal funds purchased and securities loaned or sold under repurchase agreements and short-term borrowings. The balances of securities loaned or sold under agreements to repurchase may vary over time due to client activity in our Markets business, our own demand for financing, and our overall mix of liabilities. Securities sold under agreements to repurchase increased at December 31, 2025, from December 31, 2024, driven by increased client-driven activity in our Markets business. For additional information, see the “Collateralized Financing Activities and Deposits”, “Short-term Borrowings”, and “Long-term Debt” sections of Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

We may pledge financial instruments that we own to collateralize repurchase agreements and other securities financings, as well as borrowings from the FHLB. For additional information, see the “Pledged Assets” section of Note 18 (Pledged Assets and Collateral) to Financial Statements in this Report.

We access domestic and international capital markets for long-term funding through issuances of registered debt securities, private placements, securitizations, and asset-backed secured funding. We issue long-term debt in a variety of maturities and currencies to achieve cost-efficient funding and to maintain an appropriate maturity profile. Proceeds from securities issued were used for general corporate purposes unless otherwise specified in the applicable prospectus or prospectus supplement, and we expect the proceeds from securities issued in the future will be used for the same purposes. Depending on market conditions and our liquidity position, we may redeem or repurchase, and subsequently retire, our outstanding debt securities in privately negotiated or open market transactions,

by tender offer, or otherwise. We issued $9.9 billion of long-term debt during January and February 2026.

Table 32 presents a summary of our long-term debt. For additional information on our long-term debt, including contractual maturities, see Note 9 (Long-Term Debt), and for additional information on the classification of our long-term debt, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

Table 32: Long-Term Debt

(in millions)	December 31, 2025
Wells Fargo & Company (Parent Only)	$	153,748		147,100
Wells Fargo Bank, N.A., and other bank entities (Bank)	19,236		24,709
Other consolidated subsidiaries	1,728		1,269
Total	$	174,712		173,078

Credit Ratings. Capital markets investors, as well as other market participants, generally will consider, among other factors, a company’s debt rating in making investment decisions. Rating agencies base their ratings on many quantitative and qualitative factors, including capital adequacy, liquidity, asset quality, business mix, the level and quality of earnings, and rating agency assumptions regarding the probability and extent of federal financial assistance or support for certain large financial institutions. Adverse changes in these factors could result in a reduction of our credit rating; however, our debt securities do not contain credit rating covenants.

There were no actions undertaken by the ratings agencies with regard to our credit ratings during fourth quarter 2025.

See the “Risk Factors” section in this Report for additional information regarding our credit ratings and the potential impact a credit rating downgrade would have on our liquidity and operations as well as Note 13 (Derivatives) to Financial Statements in this Report for information regarding additional collateral and funding obligations required for certain derivative instruments in the event our credit ratings were to fall below investment grade.

The credit ratings of the Parent and Wells Fargo Bank, N.A., as of December 31, 2025, are presented in Table 33.

Table 33: Credit Ratings as of December 31, 2025

		Wells Fargo & Company	Wells Fargo Bank, N.A.
	Long-term	Short-term	Outlook	Long-term	Short-term	Outlook
Moody’s Investors Service	A1	P-1	Stable	Aa2	P-1	Stable
S&P Global Ratings	BBB+	A-2	Positive	A+	A-1	Stable
Fitch Ratings	A+	F1	Stable	AA-	F1+	Stable

Column 1	Column 2	Column 3
	Wells Fargo & Company	47

Capital Management

Regulatory Capital Requirements

The Company and each of our IDIs are subject to various regulatory capital adequacy requirements administered by the FRB and the OCC. Risk-based capital rules establish risk-adjusted ratios relating regulatory capital to different categories of assets and off-balance sheet exposures as discussed below.

RISK-BASED CAPITAL AND RISK-WEIGHTED ASSETS. The Company is subject to rules issued by federal banking regulators to implement Basel III capital requirements for U.S. banking organizations. The rules contain two frameworks for calculating capital requirements, a Standardized Approach and an Advanced Approach applicable to certain institutions, including Wells Fargo, and we must calculate our risk-based capital ratios under both approaches. The Company is required to satisfy the risk-based capital ratio requirements to avoid restrictions on capital distributions and discretionary bonus payments.

Table 34 presents the risk-based capital requirements applicable to the Company under the Standardized Approach and Advanced Approach, respectively, as of December 31, 2025.

In addition to the risk-based capital requirements described in Table 34, if the FRB determines that a period of excessive credit growth is contributing to an increase in systemic risk, a countercyclical buffer of up to 2.50% could be added to the risk-based capital ratio requirements under federal banking regulations. The countercyclical buffer in effect at December 31, 2025, was 0.00%.

The capital conservation buffer is applicable to certain institutions, including Wells Fargo, under the Advanced Approach and is intended to absorb losses during times of economic or financial stress.

The stress capital buffer (SCB) is calculated based on the decrease in a BHC’s risk-based capital ratios under the severely adverse scenario in the FRB’s annual supervisory stress test and related Comprehensive Capital Analysis and Review (CCAR), plus four quarters of planned common stock dividends. Because the SCB is calculated annually based on data that can differ over time, our SCB, and thus our risk-based capital ratio requirements under the Standardized Approach, are subject to change in future periods. Our SCB for the period October 1, 2025, through September 30, 2026, is 2.50%. In February 2026, the FRB communicated that the current SCB for BHCs would remain in effect until September 30, 2027, due to proposed updates to enhance the transparency of the stress testing program.

Table 34: Risk-Based Capital Requirements – Standardized and Advanced Approaches

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48	Wells Fargo & Company

As a global systemically important bank (G-SIB), we are also subject to the FRB’s rule implementing an additional capital surcharge between 1.00-4.50% on the risk-based capital ratio requirements of G-SIBs. Under the rule, we must annually calculate our surcharge under two methods and use the higher of the two surcharges. The first method (method one) considers our size, interconnectedness, cross-jurisdictional activity, substitutability, and complexity, consistent with the methodology developed by the Basel Committee on Banking Supervision (BCBS) and the Financial Stability Board (FSB). The second method (method two) uses similar inputs, but replaces substitutability with use of short-term wholesale funding and will generally result in higher surcharges than under method one. Because the G-SIB capital surcharge is calculated annually based on data that can differ over time, the amount of the surcharge is subject to change in future years. If our annual calculation results in a decrease to our G-SIB capital surcharge, the decrease takes effect the next calendar year. If our annual calculation results in an increase to our G-SIB capital surcharge, the increase takes effect in two calendar years. Our G-SIB capital surcharge will continue to be 1.50% in 2026. On July 27, 2023, the FRB issued a

proposed rule that would impact the methodology used to calculate the G-SIB capital surcharge.

Risk-weighted assets (RWAs) include components for credit risk and market risk under both the Standardized and Advanced Approaches. Under the Standardized Approach, credit risk RWAs are determined by applying prescribed risk weights that vary by category of asset, including credit equivalent amounts of derivatives and off-balance sheet items. Under the Advanced Approach, credit risk RWAs are calculated using a risk-sensitive methodology, which relies upon the use of our internal credit models based upon our experience with internal rating grades. The Advanced Approach also includes an operational risk component to reflect the risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events.

The tables that follow provide information about our risk-based capital and related ratios as calculated under Basel III capital rules. Table 35 summarizes our CET1, Tier 1 capital, Total capital, RWAs and capital ratios.

Table 35: Capital Components and Ratios

		Standardized Approach		Advanced Approach
($ in millions)		Required Capital Ratios (1)		Dec 31, 2025		Dec 31, 2024		Required Capital Ratios (1)	Dec 31, 2025		Dec 31, 2024
Common Equity Tier 1	(A)			$	137,346			134,588				137,346			134,588
Tier 1 capital	(B)			153,567			152,866				153,567			152,866
Total capital	(C)			184,682			184,638				174,617			174,446
Risk-weighted assets	(D)			1,294,609			1,216,146				1,112,533			1,085,017
Common Equity Tier 1 capital ratio	(A)/(D)	8.50	%		10.61		*	11.07		8.50			12.35			12.40
Tier 1 capital ratio	(B)/(D)	10.00			11.86		*	12.57		10.00			13.80			14.09
Total capital ratio	(C)/(D)	12.00			14.27		*	15.18		12.00			15.70			16.08

*Denotes the binding framework, which is the lower of the Standardized and Advanced Approaches, at December 31, 2025.

(1)Represents the minimum ratios required to avoid restrictions on capital distributions and discretionary bonus payments at December 31, 2025.

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	Wells Fargo & Company	49

Capital Management (continued)

Table 36 provides information regarding the calculation and composition of our risk-based capital under the Standardized and Advanced Approaches.

Table 36: Risk-Based Capital Calculation and Components

(in millions)		Dec 31, 2025
Total equity		$	183,038		181,066
Adjustments:
Preferred stock		(16,608)		(18,608)
Additional paid-in capital on preferred stock		141		144
Noncontrolling interests		(1,920)		(1,946)
Total common stockholders’ equity		$	164,651		160,656
Adjustments:
Goodwill		(24,967)		(25,167)
Certain identifiable intangible assets (other than MSRs)		(823)		(73)
Goodwill and other intangibles on venture capital investments in consolidated portfolio companies (included in other assets)		(705)		(735)
Applicable deferred taxes related to goodwill and other intangible assets (1)		1,063		947
Other		(1,873)		(1,040)
Common Equity Tier 1 under the Standardized and Advanced Approaches		$	137,346		134,588
Preferred stock		16,608		18,608
Additional paid-in capital on preferred stock		(141)		(144)
Other		(246)		(186)
Total Tier 1 capital under the Standardized and Advanced Approaches	(A)	$	153,567		152,866
Long-term debt and other instruments qualifying as Tier 2		16,736		17,644
Qualifying allowance for credit losses (2)		14,659		14,471
Other		(280)		(343)
Total Tier 2 capital under the Standardized Approach	(B)	$	31,115		31,772
Total qualifying capital under the Standardized Approach	(A)+(B)	$	184,682		184,638
Long-term debt and other instruments qualifying as Tier 2		16,736		17,644
Qualifying allowance for credit losses (2)		4,594		4,279
Other		(280)		(343)
Total Tier 2 capital under the Advanced Approach	(C)	$	21,050		21,580
Total qualifying capital under the Advanced Approach	(A)+(C)	$	174,617		174,446

(1)Determined by applying the combined federal statutory rate and composite state income tax rates to the difference between book and tax basis of the respective goodwill and intangible assets at period-end.

(2)Differences between the approaches are driven by the qualifying amounts of ACL includable in Tier 2 capital. Under the Advanced Approach, eligible credit reserves represented by the amount of qualifying ACL in excess of expected credit losses (using regulatory definitions) is limited to 0.60% of Advanced credit RWAs, whereas the Standardized Approach includes ACL in Tier 2 capital up to 1.25% of Standardized credit RWAs. Under both approaches, any excess ACL is deducted from the respective total RWAs.

Column 1	Column 2
50	Wells Fargo & Company

Table 37 provides the composition and net changes in the components of RWAs under the Standardized and Advanced Approaches.

Table 37: Risk-Weighted Assets

	Standardized Approach		Advanced Approach
(in millions)	Dec 31, 2025		Dec 31, 2024		$ Change	Dec 31, 2025		Dec 31, 2024		$ Change
Risk-weighted assets (RWAs):
Credit risk	$	1,243,455			1,156,572		86,883			785,554		726,855		58,699
Market risk	51,154			59,574		(8,420)			51,154		59,574		(8,420)
Operational risk	N/A		N/A		N/A	275,825			298,588		(22,763)
Total RWAs	$	1,294,609			1,216,146		78,463			1,112,533		1,085,017		27,516

Table 38 provides an analysis of changes in CET1.

Table 38: Analysis of Changes in Common Equity Tier 1

(in millions)
Common Equity Tier 1 at December 31, 2024	$	134,588
Net income applicable to common stock	20,285
Common stock dividends	(5,442)
Common stock issued, repurchased, and stock compensation-related items	(16,349)
Changes in accumulated other comprehensive income (loss)	5,503
Goodwill	200
Certain identifiable intangible assets (other than MSRs)	(750)
Goodwill and other intangibles on venture capital investments in consolidated portfolio companies (included in other assets)	30
Applicable deferred taxes related to goodwill and other intangible assets (1)	116
Other	(835)
Change in Common Equity Tier 1	2,758
Common Equity Tier 1 at December 31, 2025	$	137,346

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	Wells Fargo & Company	51

Capital Management (continued)

TANGIBLE COMMON EQUITY. We also evaluate our business based on certain ratios that utilize tangible common equity. Tangible common equity is a non-GAAP financial measure and represents total equity less preferred equity, noncontrolling interests, goodwill, certain identifiable intangible assets (other than MSRs) and goodwill and other intangibles on venture capital investments in consolidated portfolio companies, net of applicable deferred taxes. The ratios are (i) tangible book value per common share, which represents tangible common equity divided by common shares outstanding; and (ii) return on average tangible common equity (ROTCE), which represents our

annualized earnings as a percentage of tangible common equity. The methodology of determining tangible common equity may differ among companies. Management believes that tangible book value per common share and return on average tangible common equity, which utilize tangible common equity, are useful financial measures because they enable management, investors, and others to assess the Company’s use of equity.

Table 39 provides a reconciliation of these non-GAAP financial measures to GAAP financial measures.

Table 39: Tangible Common Equity

		Balance at period-end					Average balance
		Period ended				Year ended
(in millions, except ratios)		Dec 31, 2025		Dec 31, 2024	Dec 31, 2023				Dec 31, 2025		Dec 31, 2024	Dec 31, 2023
Total equity		$	183,038			181,066		187,443					183,476		183,879		184,860
Adjustments:
Preferred stock		(16,608)			(18,608)		(19,448)					(17,517)			(18,581)		(19,698)
Additional paid-in capital on preferred stock		141			144		157					142			147		168
Noncontrolling interests		(1,920)			(1,946)		(1,708)					(1,860)			(1,751)		(1,844)
Total common stockholders’ equity	(A)	164,651			160,656		166,444					164,241			163,694		163,486
Adjustments:
Goodwill		(24,967)			(25,167)		(25,175)					(25,082)			(25,172)		(25,173)
Certain identifiable intangible assets (other than MSRs)		(823)			(73)		(118)					(670)			(95)		(136)
Goodwill and other intangibles on venture capital investments in consolidated portfolio companies (included in other assets)		(705)			(735)		(878)					(695)			(895)		(2,083)
Applicable deferred taxes related to goodwill and other intangible assets (1)		1,063			947		920					1,016			935		906
Tangible common equity	(B)	$	139,219			135,628		141,193					138,810			138,467		137,000
Common shares outstanding	(C)	3,092.6			3,288.9		3,598.9					N/A		N/A	N/A
Net income applicable to common stock	(D)	N/A		N/A	N/A				$	20,285			18,606		17,982
Book value per common share	(A)/(C)	$	53.24			48.85		46.25					N/A		N/A	N/A
Tangible book value per common share	(B)/(C)	45.02			41.24		39.23					N/A		N/A	N/A
Return on average common stockholders’ equity (ROE)	(D)/(A)	N/A		N/A	N/A				12.35	%		11.37		11.00
Return on average tangible common equity (ROTCE)	(D)/(B)	N/A		N/A	N/A				14.61			13.44		13.13

LEVERAGE REQUIREMENTS. As a BHC, we are required to maintain a supplementary leverage ratio (SLR) to avoid restrictions on capital distributions and discretionary bonus payments and maintain a minimum Tier 1 leverage ratio. Table 40 presents the leverage requirements applicable to the Company as of December 31, 2025.

Table 40: Leverage Requirements Applicable to the Company

In addition, our IDIs are required to maintain an SLR of at least 6.00% and a minimum Tier 1 leverage ratio of 5.00% to be considered well-capitalized under applicable regulatory capital adequacy rules. At December 31, 2025, each of our IDIs exceeded their applicable SLR and Tier 1 leverage requirements.

In November 2025, federal banking regulators issued a rule to modify the leverage requirements. The rule will replace the amount of the supplementary leverage buffer for the Company with an amount equal to half of our G-SIB capital surcharge calculated under method one. Similarly, the rule will replace the amount of the supplementary leverage buffer for our IDIs with an amount equal to half of our G-SIB capital surcharge calculated under method one, with the buffer capped at 1.00%. The rule becomes effective on April 1, 2026, with early adoption permitted beginning January 1, 2026. The Company intends to adopt this rule effective January 1, 2026.

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52	Wells Fargo & Company

Table 41 presents information regarding the calculation and components of the Company’s SLR and Tier 1 leverage ratio.

Table 41: Leverage Ratios for the Company

($ in millions)		Quarter ended December 31, 2025
Tier 1 capital	(A)	$	153,567
Total consolidated assets		2,148,631
Adjustments:
Derivatives (1)		75,158
Repo-style transactions (2)		11,337
Credit equivalent amounts of other off-balance sheet exposures		327,081
Other (3)		(95,584)
Total adjustments		317,992
Total leverage exposure	(B)	$	2,466,623
Supplementary leverage ratio	(A)/(B)	6.23	%
Total adjusted average assets (4)	(C)	$	2,052,117
Tier 1 leverage ratio	(A)/(C)	7.48	%

(1)Adjustment represents derivatives and collateral netting exposures as defined for supplementary leverage ratio determination purposes.

(2)Adjustment represents counterparty credit risk for repo-style transactions where Wells Fargo & Company is the principal counterparty facing the client.

(3)Adjustment represents other permitted Tier 1 capital deductions and certain other adjustments as determined under capital rule requirements.

(4)Represents total average assets less goodwill and other permitted Tier 1 capital deductions.

TOTAL LOSS ABSORBING CAPACITY. As a G-SIB, we are required to have a minimum amount of equity and unsecured long-term debt for purposes of resolvability and resiliency, often referred to as Total Loss Absorbing Capacity (TLAC). U.S. G-SIBs are required to have a minimum amount of TLAC (consisting of CET1 capital and additional Tier 1 capital issued directly by the top-tier or covered BHC plus eligible external long-term debt) to avoid restrictions on capital distributions and discretionary bonus payments as well as a minimum amount of eligible unsecured long-term debt. The components used to calculate our minimum TLAC and eligible unsecured long-term debt requirements as of December 31, 2025, are presented in Table 42.

Table 42: Components Used to Calculate TLAC and Eligible Unsecured Long-Term Debt Requirements

TLAC requirement Greater of:
18.00% of RWAs		7.50% of total leverage exposure (the denominator of the SLR calculation)
+	+
TLAC buffer (equal to 2.50% of RWAs + method one G-SIB capital surcharge + any countercyclical buffer)	External TLAC leverage buffer (equal to 2.00% of total leverage exposure)
Minimum amount of eligible unsecured long-term debt Greater of:
6.00% of RWAs		4.50% of total leverage exposure
+
Greater of method one and method two G-SIB capital surcharge

In August 2023, the FRB proposed rules that would, among other things, modify the calculation of eligible long-term debt that counts towards the TLAC requirements, which would reduce our TLAC ratios.

In addition, in November 2025, federal banking regulators issued a rule to modify the leverage requirements, which will also impact the TLAC and eligible unsecured long-term debt requirements. The rule will (i) replace the external TLAC leverage buffer of 2.00% of total leverage exposure with a buffer equal to half of our method one G-SIB capital surcharge, and (ii) replace the minimum leverage-based long-term debt requirement of 4.50% of total leverage exposure with a minimum equal to 2.50% of total leverage exposure plus a buffer equal to half of our method one G-SIB capital surcharge. The rule becomes effective on April 1, 2026, with early adoption permitted beginning January 1, 2026. The Company intends to adopt this rule effective January 1, 2026.

Table 43 provides our TLAC and eligible unsecured long-term debt and related ratios.

Table 43: TLAC and Eligible Unsecured Long-Term Debt

December 31, 2025
($ in millions)	TLAC		Regulatory Minimum (1)		Eligible Unsecured Long-term Debt	Regulatory Minimum
Total eligible amount	$	300,597				141,576
Percentage of RWAs (2)	23.22	%		21.50		10.94	7.50
Percentage of total leverage exposure	12.19			9.50		5.74	4.50

(1)Represents the minimum required to avoid restrictions on capital distributions and discretionary bonus payments.

(2)Our minimum TLAC and eligible unsecured long-term debt requirements are calculated based on the greater of RWAs determined under the Standardized and Advanced Approaches.

OTHER REGULATORY CAPITAL AND LIQUIDITY MATTERS. For information regarding the U.S. implementation of the Basel III LCR and NSFR, see the “Risk Management – Asset/Liability Management – Liquidity Risk and Funding – Liquidity Standards” section in this Report.

Our principal U.S. broker-dealer subsidiaries, Wells Fargo Securities, LLC, and Wells Fargo Clearing Services, LLC, are subject to regulations to maintain minimum net capital requirements. As of December 31, 2025, these broker-dealer subsidiaries were in compliance with their respective regulatory minimum net capital requirements.

Capital Planning and Stress Testing

Our planned long-term capital structure is designed to meet regulatory and market expectations. We believe that our long-term targeted capital structure enables us to invest in and grow our business, satisfy our customers’ financial needs in varying environments, access markets, and maintain flexibility to return capital to our shareholders. Our long-term targeted capital structure also considers capital levels sufficient to exceed capital requirements, including the G-SIB capital surcharge and the SCB, as well as potential changes to regulatory requirements for our capital ratios, planned capital actions, changes in our risk profile and other factors. Accordingly, our long-term target capital levels are set above their respective regulatory minimums plus buffers.

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	Wells Fargo & Company	53

Capital Management (continued)

The FRB capital plan rule establishes capital planning and other requirements that govern capital distributions, including dividends and share repurchases, by certain BHCs, including Wells Fargo. The FRB assesses, among other things, the overall financial condition, risk profile, and capital adequacy of BHCs when evaluating their capital plans.

As part of the annual CCAR, the FRB generates a supervisory stress test. The FRB reviews the supervisory stress test results as required under the Dodd-Frank Act using a common set of capital actions for all large BHCs and also reviews the Company’s proposed capital actions.

Federal banking regulators also require large BHCs and banks to conduct their own stress tests to evaluate whether the institution has sufficient capital to continue to operate during periods of adverse economic and financial conditions.

During 2025, we issued $1.1 billion of common stock, substantially all of which was issued in connection with employee compensation and benefits, and we repurchased 221 million shares of common stock at a cost of $17.7 billion. We paid $6.5 billion of common and preferred stock dividends during 2025.

Securities Repurchases

On April 29, 2025, we announced that the Board authorized the repurchase of up to $40 billion of common stock. Unless modified or revoked by the Board, this authorization does not expire. At December 31, 2025, we had remaining Board authority

to repurchase up to approximately $29.8 billion of common stock.

For additional information about share repurchases during fourth quarter 2025, see Part II, Item 5 in our 2025 Form 10-K.

Various factors impact the amount and timing of our share repurchases, including the earnings, cash requirements and financial condition of the Company, the impact to our balance sheet of expected customer activity, our capital requirements and long-term targeted capital structure, the results of supervisory stress tests, market conditions (including the trading price of our stock), and regulatory and legal considerations, including regulatory requirements under the FRB’s capital plan rule. Although we announce when the Board authorizes a share repurchase program, we typically do not give any public notice before we repurchase our shares. Due to the various factors that may impact the amount and timing of our share repurchases and the fact that we may be in the market throughout the year, our share repurchases occur at various prices. We may suspend share repurchase activity at any time.

Furthermore, the Company has a variety of benefit plans in which employees may own or obtain shares of our common stock. The Company may buy shares from these plans to accommodate employee preferences and these purchases are subtracted from our repurchase authority.

Regulation and Supervision

For a discussion of significant regulations and regulatory oversight initiatives that have affected or may affect our business, see the “Regulation and Supervision” section in our 2025 Form 10-K and the “Risk Factors” section in this Report.

Column 1	Column 2
54	Wells Fargo & Company

Critical Accounting Policies

Our significant accounting policies (see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this

Report) are fundamental to understanding our results of operations and financial condition because they require that we use estimates and assumptions that may affect the value of our assets or liabilities and financial results. Five of these policies are critical because they require management to make difficult, subjective and complex judgments about matters that are inherently uncertain and because it is likely that materially different amounts would be reported under different conditions or using different assumptions. These policies govern:

•the allowance for credit losses;

•fair value measurements;

•income taxes;

•liability for legal actions; and

•goodwill impairment.

Management has discussed these critical accounting policies and the related estimates and judgments with the Board’s Audit Committee.

Allowance for Credit Losses

We maintain an allowance for credit losses (ACL) for loans, which is management’s estimate of the expected credit losses in the loan portfolio and unfunded credit commitments, at the balance sheet date, excluding loans and unfunded credit commitments carried at fair value or held for sale. Additionally, we maintain an ACL for debt securities classified as either HTM or AFS, other financial assets measured at amortized cost, net investments in leases, and other off-balance sheet credit exposures. For additional information, see Note 1 (Summary of Significant Accounting Policies) and Note 3 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.

For loans and HTM debt securities, the ACL is measured based on the remaining contractual term of the financial asset (including off-balance sheet credit exposures) adjusted, as appropriate, for prepayments and permitted extension options using historical experience, current conditions, and forecasted information. For AFS debt securities, the ACL is measured using a discounted cash flow approach and is limited to the difference between the fair value of the security and its amortized cost.

Changes in the ACL and, therefore, in the related provision for credit losses can materially affect net income. In applying the judgment and review required to determine the ACL, management considerations include the evaluation of past events, historical experience, changes in economic forecasts and conditions, customer behavior, collateral values, the length of the initial loss forecast period, and other influences. From time to time, changes in economic factors or assumptions, business or investment strategy, or products or product mix may result in a corresponding increase or decrease in our ACL. While our methodology attributes portions of the ACL to specific financial asset classes (loan and debt security portfolios) or loan portfolio segments (commercial and consumer), the entire ACL is available to absorb credit losses of the Company.

Judgment is specifically applied in:

•Economic assumptions and the length of the initial loss forecast period. We forecast a wide range of economic variables to estimate expected credit losses. Our key economic variables

include gross domestic product (GDP), unemployment rate, and collateral asset prices. While many of these economic variables are evaluated at the macro-economy level, some economic variables are forecasted at more granular levels, for example, using the metro statistical area (MSA) level for unemployment rates, home prices and commercial real estate prices. At least annually, we assess the length of the initial loss forecast period and have currently set the period to two years. For the initial loss forecast period, we forecast multiple economic scenarios that generally include a base scenario with an optimistic (upside) and one or more pessimistic (downside) scenarios. Management exercises judgment when assigning weight to the economic scenarios that are used to estimate future credit losses.

•Reversion to historical loss expectations. Our long-term average loss expectations are estimated by reverting to the long-term average, on a linear basis, for each of the forecasted economic variables. These long-term averages are based on observations over multiple economic cycles. The reversion period, which may be up to two years, is assessed on a quarterly basis.

•Credit risk ratings applied to individual commercial loans, unfunded credit commitments, and debt securities. Individually assessed credit risk ratings are considered key credit variables in our modeled approaches to help assess probability of default and loss given default. Borrower quality ratings are aligned to the borrower’s financial strength and contribute to forecasted probability of default curves. Collateral quality ratings combined with forecasted collateral prices (as applicable) contribute to the forecasted severity of loss in the event of default. These credit risk ratings are reviewed by experienced senior credit officers and subjected to reviews by an internal team of credit risk specialists.

•Usage of credit loss estimation models. We use internally developed models that incorporate credit attributes and economic variables to generate credit loss estimates. Management uses judgment and quantitative analytics in the determination of segmentation, modeling approach, and variables that are leveraged in the models. These models are independently validated in accordance with the Company’s policies. We routinely assess our model performance and apply adjustments when necessary. We also assess our models for limitations against the company-wide risk inventory to help appropriately capture known and emerging risks in our estimate of expected credit losses and apply overlays as needed.

•Valuation of collateral. The current fair value of collateral is utilized to assess the expected credit losses when a financial asset is considered to be collateral dependent. Judgment is applied when valuing the collateral through appraisals, evaluation of the cash flows of the property, or other quantitative techniques. Decreases in collateral valuations support incremental ACL or charge-downs and increases in collateral valuations support lower ACL or are included in the ACL as a negative allowance when the financial asset has been previously written-down below current recovery value.

•Contractual term considerations. The remaining contractual term of a loan is adjusted for expected prepayments and certain expected extensions, renewals, or modifications. We extend the contractual term when we are not able to unconditionally cancel contractual renewals or extension

Column 1	Column 2	Column 3
	Wells Fargo & Company	55

Critical Accounting Policies (continued)

options. Credit card loans have indeterminate maturities, which requires that we determine a contractual life by estimating the application of future payments to the outstanding loan amount.

•Qualitative factors which may not be adequately captured in the loss models. These amounts represent management’s judgment of risks related to the processes and assumptions used in establishing the ACL. We also consider economic environmental factors, modeling assumptions and performance, process risk, and other subjective factors, including industry trends and emerging risk assessments.

Sensitivity. The ACL for loans is sensitive to changes in key assumptions and requires significant management judgment. Future amounts of the ACL for loans will be based on a variety of factors, including loan balance changes, portfolio credit quality, and general forecasted economic conditions. The forecasted economic variables used could have varying impacts on different financial assets or portfolios. Additionally, throughout numerous credit cycles, there are observed changes in economic variables such as the unemployment rate, GDP and real estate prices which may not move in a correlated manner as variables may move in opposite directions or differ across portfolios or geography.

Our sensitivity analysis does not represent management’s view of expected credit losses at the balance sheet date. We applied a 100% weight to a more severe downside scenario in our sensitivity analysis to reflect the potential for further economic deterioration. The outcome of the scenario was influenced by the duration, severity, and timing of changes in economic variables within the scenario. The sensitivity analysis resulted in a hypothetical increase in the ACL for loans of approximately $5.9 billion at December 31, 2025. The hypothetical increase in our ACL for loans does not incorporate the impact of management judgment for qualitative factors applied in the current ACL for loans, which may have a positive or negative effect on the results. It is possible that others performing similar sensitivity analyses could reach different conclusions or results. Management believes that the estimate for the ACL for loans was appropriate at the balance sheet date.

The sensitivity analysis excludes the ACL for debt securities and other financial assets given its size relative to the overall ACL.

Fair Value Measurements

Fair value represents the price that would be received to sell a financial asset or paid to transfer a financial liability in an orderly transaction between market participants at the measurement date.

We use fair value measurements to comply with recognition and disclosure requirements. For example, trading assets and trading liabilities, AFS debt securities, residential mortgage servicing rights (MSRs), derivatives, and marketable non-trading equity securities are recognized at fair value on our consolidated balance sheet each period. Other assets and liabilities, such as loans held for investment, commercial MSRs and certain nonmarketable equity securities are not recognized at fair value each period but may require nonrecurring fair value adjustments through the write-down of individual assets or the application of accounting methods such as lower of cost or fair value (LOCOM) and the measurement alternative.

Fair value measurements are made using a three-level hierarchy which is based on whether the significant inputs to the valuation

methodology used for measurement are observable or unobservable. Observable inputs reflect market-derived or market-based information obtained from independent sources, while unobservable inputs reflect our estimates of assumptions that market participants would use to value the asset or liability.

When developing fair value measurements, we maximize the use of observable inputs and minimize the use of unobservable inputs. When available, we use quoted prices in active markets to measure fair value. Such measurements are classified as Level 1 within the fair value hierarchy. If quoted prices in active markets are not available, fair value measurement is based upon internal models that generally use market-based or independently sourced market parameters, including interest rate yield curves, prepayment rates, option volatilities and currency rates. However, when observable market data is limited or not available, fair value measurement is based upon internal models that use unobservable inputs. These models are independently validated in accordance with the Company’s policies. We also obtain pricing information from third-party vendors to determine fair values and to corroborate internal prices. Validation procedures are performed over the reasonableness of prices received from third parties.

When using internal models that use unobservable inputs, management judgment is necessary as our assumptions reflect those that we believe market participants would use to estimate fair value of the asset or liability. Determination of these assumptions includes consideration of many factors, including market conditions and liquidity levels. Changes in market conditions, such as reduced liquidity in the capital markets or changes in secondary market activities, may reduce the availability and reliability of quoted prices or observable data used to determine fair value. In such cases, adjustments to available quoted prices or observable market data may be required. For example, we may adjust a price received from a third-party pricing service using internal models based on discounted cash flows when the impact of illiquid markets has not already been incorporated in the fair value measurement.

We continually assess the level and volume of market activity to determine when adjustments, if any, are made to quoted prices. Given market conditions can change over time, our determination of which markets are considered active or inactive can change. If we determine a market to be inactive, the degree to which quoted prices require adjustment may also change.

For assets and liabilities not classified as Level 1 within the fair value hierarchy, significant judgment may be needed to determine the classification as either Level 2 or Level 3. When making this judgment, we consider available information, including observable market data, indications of market liquidity and orderliness of transactions, and our understanding of the valuation techniques and significant inputs used to estimate fair value. The classification as Level 2 or Level 3 is based upon the specific facts and circumstances of each instrument or instrument category and judgments are made regarding the significance of unobservable inputs to each instrument’s fair value measurement in its entirety. If one or more unobservable inputs are considered significant to the fair value measurement, the instrument is classified as Level 3. Significant unobservable inputs used in our Level 3 fair value measurements include discount rates, default rates, comparability adjustments, and prepayment rates.

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MSRs are assets that represent the rights to service mortgage loans for others. We generally recognize MSRs when we retain servicing rights in connection with the sale or securitization of loans we originate. We have elected to carry our residential MSRs at fair value with changes recognized in earnings. We use internal models to estimate the fair value of residential MSRs, which represent our most significant Level 3 asset. These models calculate the present value of estimated future net servicing income and incorporate our estimates of inputs and assumptions that market participants would use to value the asset. Certain significant inputs and assumptions, such as discount rates, prepayment rates (blend of prepayment speeds and expected defaults), and costs to service residential mortgage loans, are generally not observable in the market and require judgment to determine. Both prepayment rate and discount rate assumptions can, and generally will, change quarterly as market conditions and mortgage interest rates change. We periodically benchmark our residential MSR fair value estimates to independent appraisals.

Table 44 presents our (i) assets and liabilities recognized at fair value on a recurring basis and (ii) Level 3 assets and liabilities recognized at fair value on a recurring basis, both presented as a percentage of our total assets and total liabilities.

Table 44: Fair Value Level 3 Summary

	December 31, 2025		December 31, 2024
($ in billions)	Total balance		Level 3 (1)		Total balance	Level 3 (1)
Assets recognized at fairvalue on a recurring basis	$	513.2			7.0		421.7		8.3
As a percentage oftotal assets	23.9	%		0.3		21.8		0.4
Liabilities recognized at fair value on a recurring basis	$	126.2			1.9		132.0		5.6
As a percentage of total liabilities	6.4	%		0.1		7.5		0.3

(1)Before derivative netting adjustments.

See Note 14 (Fair Value Measurements) to Financial Statements in this Report for a complete discussion on fair value measurements, our related measurement techniques and the impact to our financial statements, including MSRs. See Note 6 (Mortgage Banking Activities) to Financial Statements in this Report for key weighted-average assumptions used in the valuation of residential MSRs and sensitivity to immediate adverse changes in those assumptions.

Income Taxes

We file income tax returns in the jurisdictions in which we operate and evaluate income tax expense in two components: current and deferred income tax expense. Current income tax expense represents our estimated taxes to be paid or refunded for the current period and includes income tax expense related to uncertain tax positions and proportional amortization of certain affordable housing and renewable energy investments. Uncertain tax positions that meet the more likely than not recognition threshold are measured to determine the amount of benefit to recognize. An uncertain tax position is measured at the largest amount of benefit that management believes has a greater than 50% likelihood of realization upon settlement. Tax benefits not meeting our realization criteria represent unrecognized tax benefits.

Deferred income taxes are based on the balance sheet method and deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Under the balance sheet method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax basis of assets and liabilities, and enacted changes in income tax rates and laws are recognized in the period in which they occur. Deferred tax assets, including those related to net operating losses and tax credit carryforwards, are recognized subject to management’s judgment that realization is more likely than not. When necessary, valuation allowances are established to reduce deferred tax assets to the realizable amounts.

The income tax laws of the jurisdictions in which we operate are complex and subject to different interpretations by management and the relevant government taxing authorities. In establishing a provision for income tax expense, we make judgments about the application of these tax laws. We also make estimates about when in the future certain items will affect taxable income in the various tax jurisdictions. Our interpretations may be subjected to review during examination by taxing authorities and disputes may arise over the respective tax positions. We attempt to resolve these disputes during the tax examination and audit process and ultimately through the court systems when applicable.

We monitor relevant tax authorities and may update our estimate of accrued income taxes due to changes in income tax laws and their interpretation by the courts and regulatory authorities on a quarterly basis. Updates to our estimate of accrued income taxes also may result from our own income tax planning and from the resolution of income tax controversies. Such updates to our estimates may be material to our operating results for any period.

See Note 22 (Income Taxes) to Financial Statements in this Report for a further description of our provision for income taxes and related income tax assets and liabilities.

Liability for Legal Actions

The Company is involved in a number of judicial, regulatory, governmental, arbitration and other proceedings or investigations that expose the Company to potential financial losses or other adverse consequences. We recognize accruals for legal actions when potential losses associated with the actions become probable and the costs can be reasonably estimated. For such accruals, we recognize the amount we consider to be the best estimate within a range of potential losses that are both probable and estimable. If we cannot determine a best estimate, we recognize the amount at the low end of the range of those potential losses. The actual costs of resolving legal actions may be substantially higher or lower than the amounts accrued for those actions.

We apply judgment when recognizing an accrual for potential losses associated with legal actions and in establishing the range of reasonably possible losses in excess of the accrual. Our judgment is influenced by our understanding of information currently available related to the legal evaluation and potential outcome of actions, including input and advice on these matters from our external counsel. These matters may be in various stages of investigation, discovery or proceedings. They may also involve a wide variety of claims across our businesses, legal entities and jurisdictions. The eventual outcome may be a scenario that was not considered or was considered remote in

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	Wells Fargo & Company	57

Critical Accounting Policies (continued)

anticipated occurrence. Accordingly, our estimate of potential losses will change over time and the actual losses may vary significantly given the inherent and unpredictable nature of legal actions.

See Note 12 (Legal Actions) to Financial Statements in this Report for additional information.

Goodwill Impairment

We assess goodwill for impairment annually in the fourth quarter or more frequently depending on macroeconomic and other business factors. These factors may include trends in short-term or long-term interest rates, negative trends from reduced revenue generating activities or increased costs, adverse actions by regulators, or company specific factors such as a decline in market capitalization.

We identify reporting units to be assessed for goodwill impairment at the reportable operating segment level or one level below. Goodwill is allocated to the reporting unit at the time we acquire a business and does not change unless there is goodwill impairment or a significant business reorganization impacting the reporting unit. We determine the reporting unit carrying amounts as the allocated capital plus assigned goodwill and other intangible assets. We allocate capital to the reporting units under a risk-sensitive framework driven by our regulatory capital requirements. We estimate fair value of the reporting units based on a balanced weighting of fair values estimated using both an income approach and a market approach which are intended to reflect Company performance and expectations as well as external market conditions. The methodologies for determining the carrying amounts and estimating the fair values are periodically assessed and updated as necessary.

The income approach is a discounted cash flow (DCF) analysis, which estimates the present value of future cash flows associated with each reporting unit. A DCF analysis requires significant judgment to estimate financial forecasts for our reporting units, which includes future expectations of economic conditions and balance sheet changes, as well as considerations related to future business activities. The forecasts are reviewed by senior management. For periods after our financial forecasts, we incorporate a terminal value estimate. We discount these forecasted cash flows using a rate derived from the capital asset pricing model that produces an estimated cost of equity for our reporting units, which reflects risks and uncertainties in the financial markets and in our financial forecasts.

The market approach utilizes observable market data from comparable publicly traded companies, such as price-to-earnings or price-to-tangible book value ratios, to estimate a reporting unit’s fair value. We use judgment to select comparable companies for each reporting unit and include those with the most similar business activities.

Our 2025 assessment indicated goodwill was not impaired as of December 31, 2025, based on the fair value of each reporting unit exceeding its carrying amount by a significant amount. The aggregate fair value of our reporting units exceeded our market capitalization, and we believe factors that contributed to this difference included an overall control premium.

Adverse changes to forecasts or a significant increase in the discount rates may result in an impairment. Additionally, declines in our ability to generate revenue, significant increases in credit losses or other expenses, or adverse actions from regulators are factors that could result in material goodwill impairment of any reporting unit in a future period.

For additional information on goodwill and our reportable operating segments, see Note 1 (Summary of Significant Accounting Policies), Note 5 (Intangible Assets and Other Assets), and Note 19 (Operating Segments) to Financial Statements in this Report.

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Current Accounting Developments

Table 45 provides significant Accounting Standard Updates (ASU or Update) applicable to us that have been issued by the Financial Accounting Standards Board (FASB) but are not yet effective.

Table 45: Current Accounting Developments – Issued Standards

Standard	Description and Effective Date	Impact
ASU 2024-03 – Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses	•Effective January 1, 2027; early adoption permitted•Requires tabular disclosure in the notes to the financial statements and disaggregation of certain costs and expenses included within certain captions on the income statement•Requires disclosure of the total amount of selling expenses and, in annual reporting periods, the definition of selling expenses	Currently evaluating the impact to the notes to our consolidated financial statements.
ASU 2025-06 – Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software	•Effective January 1, 2028; early adoption permitted •Eliminates the use of “project stages” in determining whether internal‑use software costs should be expensed or capitalized•Requires capitalization once (1) management has authorized and committed funding for the project, and (2) it is probable the project will be completed and used as intended	Currently evaluating and do not expect a material impact on our consolidated financial statements.
ASU 2025-07 – Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract	•Effective January 1, 2027; early adoption permitted•Introduces a new derivatives scope exception for contracts tied to the operations or activities of a party to the contract (e.g., environmental, social or governance linked financial instruments)•Clarifies the accounting for share‑based noncash customer consideration provided in exchange for goods or services	Currently evaluating and do not expect a material impact on our consolidated financial statements.
ASU 2025-08 – Financial Instruments – Credit Losses (Topic 326): Purchased Loans	•Effective January 1, 2027; early adoption permitted•Expands the scope of acquired financial assets subject to the gross-up approach to include purchased seasoned loans that are not purchased credit deteriorated loans•Applies when the acquired loan is (a) obtained through a business combination, or (b) acquired outside a business combination or through consolidation of a variable interest entity and the loan was purchased more than 90 days after origination with no involvement by the purchaser in its origination	Currently evaluating and do not expect a material impact on our consolidated financial statements.
ASU 2025-09 – Derivatives and Hedging (Topic 815): Hedge Accounting Improvements	•Effective January 1, 2027; early adoption permitted•Aligns hedge accounting with entities’ risk management economics, primarily affecting cash flow hedges and certain fair value and net investment hedges	Currently evaluating and do not expect a material impact on our consolidated financial statements.
ASU 2025-10 – Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities	•Effective January 1, 2029; early adoption permitted•Provides recognition, measurement, and presentation guidance for government grants received by business entities•Requires that a grant not be recognized until (1) it is probable the entity will comply with the grant’s conditions and (2) the grant will be received	Currently evaluating and do not expect a material impact on our consolidated financial statements.

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Forward-Looking Statements

This document contains forward-looking statements. In addition, we may make forward-looking statements in our other documents filed or furnished with the Securities and Exchange Commission (SEC), and our management may make forward-looking statements orally to analysts, investors, representatives of the media and others. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “target,” “projects,” “outlook,” “forecast,” “will,” “may,” “could,” “should,” “can” and similar references to future periods. In particular, forward-looking statements include, but are not limited to, statements we make about: (i) the future operating or financial performance of the Company or any of its businesses, including our outlook for future growth; (ii) our expectations regarding noninterest expense and our efficiency ratio; (iii) future credit quality and performance, including our expectations regarding future loan losses, our allowance for credit losses, and the economic scenarios considered to develop the allowance; (iv) our expectations regarding net interest income and net interest margin; (v) loan growth or the reduction or mitigation of risk in our loan portfolios; (vi) future capital or liquidity levels, ratios or targets; (vii) the expected outcome and impact of legal, regulatory and legislative developments, as well as our expectations regarding compliance therewith; (viii) future common stock dividends, common share repurchases and other uses of capital; (ix) our targeted range for return on assets, return on equity, and return on tangible common equity; (x) expectations regarding our effective income tax rate; (xi) the outcome of contingencies, such as legal actions; (xii) sustainability and governance related goals or commitments; and (xiii) the Company’s plans, objectives and strategies.

Forward-looking statements are not based on historical facts but instead represent our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. We caution you, therefore, against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. While there is no assurance that any list of risks and uncertainties or risk factors is complete, important factors that could cause actual results to differ materially from those in the forward-looking statements include the following, without limitation:

•current and future economic and market conditions, including the effects of declines in housing prices, high unemployment rates, declines in commercial real estate prices, U.S. fiscal debt, budget and tax matters, geopolitical matters, trade policies, and any slowdown in global economic growth;

•our capital and liquidity requirements (including under regulatory capital standards, such as the Basel III capital standards) and our ability to generate capital internally or raise capital on favorable terms;

•current, pending or future legislation or regulation that could have a negative effect on our revenue and businesses, including rules and regulations relating to bank products and financial services;

•our ability to realize any efficiency ratio or expense target as part of our expense management initiatives, including as a result of business and economic cyclicality, seasonality, changes in our business composition and operating environment, growth in our businesses and/or acquisitions, and unexpected expenses relating to, among other things, litigation and regulatory matters;

•the effect of the current interest rate environment or changes in interest rates or in the level or composition of our assets or liabilities on our net interest income and net interest margin;

•significant turbulence or a disruption in the capital or financial markets, which could result in, among other things, a reduction in the availability of funding or increased funding costs, a reduction in our ability to sell or securitize loans, and declines in asset values and/or recognition of impairment of securities held in our debt securities and equity securities portfolios;

•the effect of a fall in stock market prices on our investment banking business and our fee income from our brokerage and wealth management businesses;

•negative effects from instances where customers may have experienced financial harm, including on our legal, operational and compliance costs, our ability to engage in certain business activities or offer certain products or services, our ability to keep and attract customers, our ability to attract and retain qualified employees, and our reputation;

•regulatory matters, including the failure to resolve outstanding matters on a timely basis and the potential impact of new matters, litigation, or other legal actions, which may result in, among other things, additional costs, fines, penalties, restrictions on our business activities, reputational harm, or other adverse consequences;

•a failure in or breach of our operational or security systems or infrastructure, or those of our third-party vendors or other service providers, including as a result of cyberattacks;

•the effect of changes in the level of checking or savings account deposits on our funding costs and net interest margin;

•fiscal and monetary policies of the Federal Reserve Board;

•changes to tax laws, regulations, and guidance as well as the effect of discrete items on our effective income tax rate;

•our ability to develop and execute effective business plans and strategies; and

•the other risk factors and uncertainties described under “Risk Factors” in this Report.

In addition to the above factors, we also caution that the amount and timing of any future common stock dividends or repurchases will depend on the earnings, cash requirements and financial condition of the Company, the impact to our balance sheet of expected customer activity, our capital requirements and long-term targeted capital structure, the results of supervisory stress tests, market conditions (including the trading price of our stock), regulatory and legal considerations, including regulatory requirements under the Federal Reserve Board’s capital plan rule, and other factors deemed relevant by the Company, and may be subject to regulatory approval or conditions.

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For additional information about factors that could cause actual results to differ materially from our expectations, refer to our reports filed with the SEC, including the discussion under “Risk Factors” in this Report, as filed with the SEC and available on its website at www.sec.gov.1

Any forward-looking statement made by us speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

1 We do not control this website. Wells Fargo has provided this link for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of this website.

Forward-looking Non-GAAP Financial Measures. From time to time we may provide forward-looking non-GAAP financial measures, such as forward-looking estimates or targets for return on average tangible common equity or for net interest income excluding Markets. We are unable to provide a reconciliation of forward-looking non-GAAP financial measures to their most directly comparable GAAP financial measures because we are unable to provide, without unreasonable effort, a meaningful or accurate calculation or estimation of amounts that would be necessary for the reconciliation due to the complexity and inherent difficulty in forecasting and quantifying future amounts or when they may occur. Such unavailable information could be significant to future results.

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MD&A history

Prior-year 10-K MD&A spans are extracted from SEC filings with the same bounded parser used for the latest filing. The latest 10-K appears above; prior years are below.

FY 2024 filed 2025-02-25
FY 2023 filed 2024-02-20
FY 2022 filed 2023-02-21
FY 2021 filed 2022-02-22

FY 2024 10-K MD&A

SEC filing source: 0000072971-25-000066.

Extracted from a substantive MD&A body after the formal Item 7 span was a TOC or reference stub. Source document followed from filing index: wfc-20241231_d2.htm. Confidence: high. Filing date: 2025-02-25. Report date: 2024-12-31.

Overview

Wells Fargo & Company is a leading financial services company that has approximately $1.9 trillion in assets. We provide a diversified set of banking, investment and mortgage products and services, as well as consumer and commercial finance, through our four reportable operating segments: Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth and Investment Management. Wells Fargo ranked No. 34 on Fortune’s 2024 rankings of America’s largest corporations. We ranked fourth in assets and third in the market value of our common stock among all U.S. banks at December 31, 2024.

Federal Reserve Board Consent Order Regarding Governance Oversight and Compliance and Operational Risk Management

On February 2, 2018, the Company entered into a consent order with the Board of Governors of the Federal Reserve System (FRB). As required by the consent order, the Company’s Board of Directors (Board) submitted to the FRB a plan to further enhance the Board’s governance and oversight of the Company, and the Company submitted to the FRB a plan to further improve the Company’s compliance and operational risk management program. The Company continues to engage with the FRB as the Company works to address the consent order provisions. The consent order also requires the Company, following the FRB’s acceptance and approval of the plans and the Company’s adoption and implementation of the plans, to complete an initial third-party review of the enhancements and improvements provided for in the plans. Until this third-party review is complete and the plans are adopted and implemented to the satisfaction of the FRB, the Company’s total consolidated assets as defined under the consent order will be limited to the level as of December 31, 2017. Compliance with this asset cap is measured on a two-quarter daily average basis to allow for management of temporary fluctuations. After removal of the asset cap, a second

third-party review must also be conducted to assess the efficacy and sustainability of the enhancements and improvements.

Consent Orders with the Consumer Financial Protection Bureau and Office of the Comptroller of the Currency Regarding Compliance Risk Management Program

On April 20, 2018, the Company entered into consent orders with the Consumer Financial Protection Bureau (CFPB) and the Office of the Comptroller of the Currency (OCC) requiring the Company to enhance its compliance risk management program and its management of customer remediation activities. On February 13, 2025, the Company announced the OCC had terminated its consent order.

Consent Order with the OCC Regarding Loss Mitigation Activities

Consent Order with the CFPB Regarding Automobile Lending, Consumer Deposit Accounts, and Mortgage Lending

On December 20, 2022, the Company entered into a consent order with the CFPB that the Company announced was terminated on January 28, 2025.

Formal Agreement with the OCC Regarding Anti-Money Laundering and Sanctions Risk Management Practices

On September 12, 2024, the Company announced that Wells Fargo Bank, N.A. entered into a formal agreement with the OCC requiring the bank to enhance its anti-money laundering and sanctions risk management practices.

Customer Remediation Activities

Customer remediation activities are associated with our efforts to identify areas or instances where customers may have experienced financial harm and provide remediation as appropriate. We have accrued for the probable and estimable costs related to our customer remediation activities, which amounts may change based on additional facts and information, as well as ongoing reviews and communications with our regulators. We had $236 million and $819 million of accrued liabilities for customer remediation activities as of December 31, 2024 and 2023, respectively.

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Recent Developments

Federal Deposit Insurance Corporation Special Assessment

In November 2023, the Federal Deposit Insurance Corporation (FDIC) finalized a rule to recover losses to the FDIC deposit insurance fund as a result of bank failures in the first half of 2023. Under the rule, the FDIC will collect a special assessment based on an insured depository institution’s estimated amount of uninsured deposits. Upon the FDIC’s finalization of the rule, we expensed an estimated amount of our special assessment of $1.9 billion (pre-tax) in fourth quarter 2023. During 2024, the FDIC provided updates on losses to the deposit insurance fund, which resulted in an additional expense of $243 million (pre-tax) for the year ended December 31, 2024, for the estimated amount of the special assessment. We expect the ultimate amount of the special assessment may continue to change as the FDIC determines the actual net losses to the deposit insurance fund.

Overdraft Fees Rule

In December 2024, the CFPB issued a final rule addressing overdraft fees that provides the following three options for banks with more than $10 billion in assets when charging an overdraft fee: charge no more than a five-dollar fee, charge a fee that covers no more than a bank’s costs or losses related to an overdraft, or treat the overdraft as a loan. The rule becomes effective October 1, 2025, but is pending third-party litigation challenging the rule. Additionally, the status of certain proposed and enacted rules and regulations is uncertain based on directions given to the CFPB and other agencies. If the rule becomes effective in its current form, we would expect a significant reduction to our fees for overdraft services, which are included in deposit-related fees.

Debit Card Interchange Fees Proposal

On October 25, 2023, the FRB issued a proposed rule that would reduce the amount of debit card interchange fees received by debit card issuers. In addition, the proposed rule would allow for an update to the debit card interchange fee cap every other year based on an analysis of certain costs incurred by debit card issuers. We expect a significant reduction to our debit card interchange fees, which are included in card fees, if the rule is adopted as currently proposed.

Financial Performance

In 2024, we generated $19.7 billion of net income and diluted EPS of $5.37, compared with $19.1 billion of net income and diluted EPS of $4.83 in 2023. Financial performance for 2024, compared with 2023, included the following:

•total revenue decreased due to lower net interest income, partially offset by higher noninterest income;

•noninterest expense decreased due to lower expense for the FDIC special assessment, and lower professional and outside services expense, partially offset by higher technology, telecommunications and equipment expense and higher operating losses;

•average loans decreased driven by declines in our commercial and consumer loan portfolios; and

•average deposits decreased driven by a decline in our noninterest-bearing deposits, partially offset by an increase in our interest-bearing deposits.

Capital and Liquidity

We maintained a strong capital and liquidity position in 2024, which included the following:

•our Common Equity Tier 1 (CET1) ratio was 11.07% under the Standardized Approach (our binding ratio), which continued to exceed the regulatory minimum and buffers of 9.80%;

•our total loss absorbing capacity (TLAC) as a percentage of total risk-weighted assets was 24.83%, compared with the regulatory minimum of 21.50%; and

•our liquidity coverage ratio (LCR) was 125%, which continued to exceed the regulatory minimum of 100%.

Credit Quality

Credit quality reflected the following:

•The allowance for credit losses (ACL) for loans of $14.6 billion at December 31, 2024, decreased $452 million from December 31, 2023.

•Our provision for credit losses for loans was $4.3 billion in 2024, compared with $5.4 billion in 2023, reflecting an increase in net loan charge-offs which was more than offset by the change in allowance for credit losses for loans driven by decreases across most loan portfolios, partially offset by increases for credit card loans.

•The allowance coverage for total loans was 1.60% at December 31, 2024, compared with 1.61% at December 31, 2023.

•Commercial portfolio net loan charge-offs were $1.5 billion, or 29 basis points of average commercial loans, in 2024, compared with net loan charge-offs of $923 million, or 17 basis points, in 2023, due to higher losses, primarily in our commercial real estate portfolio driven by the office property type.

•Consumer portfolio net loan charge-offs were $3.2 billion, or 85 basis points of average consumer loans, in 2024, compared with net loan charge-offs of $2.5 billion, or 65 basis points, in 2023, due to higher losses in our credit card portfolio driven by higher loan balances, partially offset by lower losses in our auto portfolio.

•Nonperforming assets (NPAs) of $7.9 billion at December 31, 2024, decreased $507 million, or 6%, from December 31, 2023, driven by a decrease in commercial real estate and residential mortgage nonaccrual loans, partially offset by an increase in commercial and industrial nonaccrual loans. NPAs represented 0.87% of total loans at December 31, 2024.

•Criticized loans in the commercial portfolio were $35.7 billion at December 31, 2024, compared with $33.0 billion at December 31, 2023, primarily driven by increases in criticized commercial and industrial loans.

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Overview (continued)

Table 1 presents a three-year summary of selected financial data and Table 2 presents selected ratios and per common share data.

Table 1: Summary of Selected Financial Data

	Year ended December 31,
(in millions, except per share amounts)	2024		2023		$ Change 2024/ 2023	% Change 2024/ 2023		2022		$ Change 2023/ 2022		% Change 2023/ 2022
Income statement
Net interest income	$	47,676			52,375		(4,699)			(9)	%		$	44,950		7,425		17	%
Noninterest income	34,620			30,222		4,398			15			29,418			804		3
Total revenue	82,296			82,597		(301)			—			74,368			8,229		11
Net charge-offs	4,759			3,450		1,309			38			1,609			1,841		114
Change in the allowance for credit losses	(425)			1,949		(2,374)			NM		(75)			2,024		NM
Provision for credit losses (1)	4,334			5,399		(1,065)			(20)		1,534			3,865		252
Noninterest expense	54,598			55,562		(964)			(2)			57,205			(1,643)		(3)
Income tax expense	3,399			2,607		792			30			2,251			356		16
Wells Fargo net income	19,722			19,142		580			3			13,677			5,465		40
Wells Fargo net income applicable to common stock	18,606			17,982		624			3			12,562			5,420		43
Earnings per common share	5.43			4.88		0.55			11		3.30			1.58		48
Diluted earnings per common share	5.37			4.83		0.54			11		3.27			1.56		48
Dividends declared per common share	1.50			1.30		0.20			15			1.10			0.20		18
Balance sheet (period-end)
Debt securities	519,131			490,458		28,673			6			496,808			(6,350)		(1)
Loans	912,745			936,682		(23,937)			(3)			955,871			(19,189)		(2)
Allowance for credit losses for loans	14,636			15,088		(452)			(3)			13,609			1,479		11
Equity securities	60,644			57,336		3,308			6			64,414			(7,078)		(11)
Assets	1,929,845			1,932,468		(2,623)			—			1,881,020			51,448		3
Deposits	1,371,804			1,358,173		13,631			1			1,383,985			(25,812)		(2)
Long-term debt	173,078			207,588		(34,510)			(17)			174,870			32,718		19
Common stockholders’ equity	160,656			166,444		(5,788)			(3)			160,952			5,492		3
Wells Fargo stockholders’ equity	179,120			185,735		(6,615)			(4)			180,227			5,508		3
Total equity	181,066			187,443		(6,377)			(3)			182,213			5,230		3

NM – Not meaningful

(1)Includes provision for credit losses for loans, debt securities, and other financial assets.

Column 1	Column 2
4	Wells Fargo & Company

Table 2: Ratios and Per Common Share Data

	Year ended December 31,
	2024		2023		2022
Performance ratios
Return on average assets (ROA) (1)	1.03	%		1.02		0.72
Return on average equity (ROE) (2)	11.4			11.0		7.8
Return on average tangible common equity (ROTCE) (3)	13.4			13.1		9.3
Efficiency ratio (4)	66			67		77
Capital and other metrics (5)
Wells Fargo common stockholders’ equity to assets	8.32			8.61		8.56
Total equity to assets	9.38			9.70		9.69
Risk-based capital ratios and components:
Standardized Approach:
Common Equity Tier 1 (CET1)	11.07			11.43		10.60
Tier 1 capital	12.57			12.98		12.11
Total capital	15.18			15.67		14.82
Risk-weighted assets (RWAs) (in billions)	$	1,216.1			1,231.7		1,259.9
Advanced Approach:
Common Equity Tier 1 (CET1)	12.40	%		12.63		12.00
Tier 1 capital	14.09			14.34		13.72
Total capital	16.08			16.40		15.94
Risk-weighted assets (RWAs) (in billions)	$	1,085.0			1,114.3		1,112.3
Tier 1 leverage ratio	8.08	%		8.50		8.26
Supplementary Leverage Ratio (SLR)	6.74			7.09		6.86
Total Loss Absorbing Capacity (TLAC) Ratio (6)	24.83			25.05		23.27
Liquidity Coverage Ratio (LCR) (7)	125			125		122
Average balances:
Average Wells Fargo common stockholders’ equity to average assets	8.54			8.67		8.53
Average total equity to average assets	9.59			9.80		9.67
Per common share data
Dividend payout ratio (8)	27.9			26.9		33.6
Book value (9)	$	48.85			46.25		41.98

(1)Represents Wells Fargo net income divided by average assets.

(2)Represents Wells Fargo net income applicable to common stock divided by average common stockholders’ equity.

(3)Tangible common equity is a non-GAAP financial measure and represents total equity less preferred equity, noncontrolling interests, goodwill, certain identifiable intangible assets (other than mortgage servicing rights) and goodwill and other intangibles on investments in consolidated portfolio companies, net of applicable deferred taxes. The methodology of determining tangible common equity may differ among companies. Management believes that return on average tangible common equity, which utilizes tangible common equity, is a useful financial measure because it enables management, investors, and others to assess the Company’s use of equity. For additional information, including a corresponding reconciliation to generally accepted accounting principles (GAAP) financial measures, see the “Capital Management – Tangible Common Equity” section in this Report.

(4)The efficiency ratio is noninterest expense divided by total revenue (net interest income and noninterest income).

(5)See the “Capital Management” section and Note 26 (Regulatory Capital Requirements and Other Restrictions) to Financial Statements in this Report for additional information.

(6)Represents TLAC divided by risk-weighted assets (RWAs), which is our binding TLAC ratio, determined by using the greater of RWAs under the Standardized and Advanced Approaches.

(7)Represents average high-quality liquid assets divided by average projected net cash outflows, as each is defined under the LCR rule.

(8)Dividend payout ratio is dividends declared per common share as a percentage of diluted earnings per common share.

(9)Book value per common share is common stockholders’ equity divided by common shares outstanding.

Column 1	Column 2	Column 3
	Wells Fargo & Company	5

Earnings Performance

Wells Fargo net income for 2024 was $19.7 billion ($5.37 diluted EPS), compared with $19.1 billion ($4.83 diluted EPS) in 2023. Net income increased in 2024, compared with 2023, predominantly due to a $4.4 billion increase in noninterest income, a $1.1 billion decrease in provision for credit losses, and a $1.0 billion decrease in noninterest expense, partially offset by a $4.7 billion decrease in net interest income and a $792 million increase in income tax expense.

For a discussion of our 2023 financial results, compared with 2022, see the “Earnings Performance” section of our Annual Report on Form 10-K for the year ended December 31, 2023.

Net Interest Income

Net interest income is the interest earned on debt securities, loans (including yield-related loan fees) and other interest-earning assets minus the interest paid on deposits, short-term borrowings and long-term debt. The net interest margin is the average yield on earning assets minus the average interest rate paid for deposits and our other sources of funding.

Net interest income and net interest margin decreased in 2024, compared with 2023, driven by the impact of higher interest rates on interest-bearing liabilities, including a deposit mix shift to interest-bearing deposits, as well as lower loan balances, partially offset by higher interest rates on interest-earning assets.

Table 3 presents the individual components of net interest income and net interest margin. Net interest income and net interest margin are presented on a taxable-equivalent basis in Table 3 to consistently reflect income from taxable and tax-exempt loans and debt and equity securities. The calculation for taxable-equivalent basis was based on a federal statutory tax rate of 21%.

Column 1	Column 2
6	Wells Fargo & Company

Table 3: Average Balances, Yields and Rates Paid (Taxable-Equivalent Basis) (1)

	Year ended December 31,
					2024						2023					2022
($ in millions)	Average balance		Interest income/ expense		Average interest rates		Average balance		Interest income/ expense		Average interest rates		Average balance	Interest income/ expense		Interest rates
Assets
Interest-earning deposits with banks	$	189,261			9,182			4.85	%		$	149,401		6,973			4.67	%		$	145,802	2,245		1.54	%
Federal funds sold and securities purchased under resale agreements	79,128			4,021			5.08			69,878			3,374		4.83			62,137			859	1.38
Debt securities:
Trading debt securities	121,398			5,051			4.16			104,588			3,805		3.64			91,515			2,490	2.72
Available-for-sale debt securities	154,866			6,592			4.26			142,743			5,365		3.76			141,404			3,167	2.24
Held-to-maturity debt securities	254,048			6,623			2.61			275,441			7,246		2.63			296,540			6,480	2.19
Total debt securities	530,312			18,266			3.44			522,772			16,416		3.14			529,459			12,137	2.29
Loans held for sale (2)	6,794			491			7.23			5,762			363		6.29			13,900			513	3.69
Loans:
Commercial and industrial – U.S.	307,909			21,742			7.06			307,953			20,941		6.80			291,996			11,293	3.87
Commercial and industrial – Non-U.S.	64,803			4,630			7.14			74,410			5,043		6.78			80,033			2,681	3.35
Commercial real estate	144,763			9,879			6.82			153,761			10,210		6.64			152,814			5,965	3.91
Lease financing	16,428			914			5.56			15,386			749		4.87			14,555			607	4.17
Total commercial loans	533,903			37,165			6.96			551,510			36,943		6.70			539,398			20,546	3.81
Residential mortgage	255,027			9,316			3.65			264,931			9,313		3.51			264,688			8,641	3.27
Credit card	53,665			6,858			12.78			48,202			6,246		12.96			41,275			4,752	11.51
Auto	44,535			2,291			5.14			51,116			2,415		4.72			55,429			2,366	4.27
Other consumer	28,246			2,379			8.42			28,157			2,349		8.34			29,030			1,489	5.13
Total consumer loans	381,473			20,844			5.46			392,406			20,323		5.18			390,422			17,248	4.42
Total loans (2)	915,376			58,009			6.34			943,916			57,266		6.07			929,820			37,794	4.06
Equity securities	26,105			678			2.60			25,920			683		2.63			30,575			708	2.31
Other interest-earning assets	9,219			469			5.08			9,638			463		4.80			13,275			204	1.54
Total interest-earning assets	$	1,756,195			91,116			5.19	%		$	1,727,287		85,538			4.95	%		$	1,724,968	54,460		3.16	%
Cash and due from banks	28,193			—					27,463			—				25,817			—
Goodwill	25,172			—					25,173			—				25,177			—
Other noninterest-earning assets	107,137			—					105,552			—				118,341			—
Total noninterest-earning assets	$	160,502			—					158,188			—				169,335			—
Total assets	$	1,916,697			91,116					1,885,475			85,538				1,894,303			54,460
Liabilities
Deposits:
Demand deposits	$	448,689			10,258			2.29	%		$	418,542		6,947			1.66	%		$	432,745	1,356		0.31	%
Savings deposits	353,916			4,527			1.28			376,233			2,723		0.72			433,415			406	0.09
Time deposits	171,622			8,758			5.10			132,492			6,215		4.69			33,148			449	1.36
Deposits in non-U.S. offices	19,309			739			3.83			19,278			618		3.21			19,191			138	0.72
Total interest-bearing deposits	993,536			24,282			2.44			946,545			16,503		1.74			918,499			2,349	0.26
Short-term borrowings:
Federal funds purchased and securities sold under agreements to repurchase	91,363			4,766			5.22			65,696			3,313		5.04			24,553			407	1.66
Other short-term borrowings	13,849			544			3.93			15,337			535		3.49			15,257			175	1.15
Total short-term borrowings	105,212			5,310			5.05			81,033			3,848		4.75			39,810			582	1.46
Long-term debt	184,551			12,463			6.75			180,464			11,572		6.41			157,742			5,505	3.49
Other interest-bearing liabilities	34,608			1,045			3.02			32,950			820		2.49			34,126			638	1.87
Total interest-bearing liabilities	$	1,317,907			43,100			3.27	%		$	1,240,992		32,743			2.64	%		$	1,150,177	9,074		0.79	%
Noninterest-bearing deposits	352,379			—					399,737			—				505,770			—
Other noninterest-bearing liabilities	62,532			—					59,886			—				55,189			—
Total noninterest-bearing liabilities	$	414,911			—					459,623			—				560,959			—
Total liabilities	$	1,732,818			43,100					1,700,615			32,743				1,711,136			9,074
Total equity	183,879			—					184,860			—				183,167			—
Total liabilities and equity	$	1,916,697			43,100					1,885,475			32,743				1,894,303			9,074
Interest rate spread on a taxable-equivalent basis (3)					1.92	%						2.31	%					2.37	%
Net interest margin and net interest income on a taxable-equivalent basis (3)			$	48,016			2.73	%				$	52,795		3.06	%				$	45,386	2.63	%

(1)The average balance amounts represent amortized costs, except for certain held-to-maturity (HTM) debt securities, which exclude unamortized basis adjustments related to the transfer of those securities from available-for-sale (AFS) debt securities. Amortized cost amounts exclude any valuation allowances and unrealized gains or losses, which are included in other noninterest-earning assets and other noninterest-bearing liabilities. The average interest rates are based on interest income or expense amounts for the period and are annualized. Interest rates and amounts include the effects of hedge and risk management activities associated with the respective asset and liability categories.

(2)Nonaccrual loans and any related income are included in their respective loan categories.

(3)Includes taxable-equivalent adjustments of $340 million, $420 million, and $436 million for the years ended December 31, 2024, 2023 and 2022, respectively, predominantly related to tax-exempt income on certain loans and securities.

Column 1	Column 2	Column 3
	Wells Fargo & Company	7

Earnings Performance (continued)

Table 4 allocates the changes in net interest income on a taxable-equivalent basis to changes in either average balances or average rates for both interest-earning assets and interest-bearing liabilities. Because of the numerous simultaneous volume and rate changes during any period, it is not possible to precisely

Table 4: Analysis of Changes in Net Interest Income

	Year ended December 31,
	2024 vs. 2023		2023 vs. 2022
(in millions)	Volume		Rate		Total	Volume		Rate		Total
Increase (decrease) in interest income:
Interest-earning deposits with banks	$	1,930			279		2,209			56		4,672		4,728
Federal funds sold and securities purchased under resale agreements	465			182		647			120		2,395		2,515
Debt securities:
Trading debt securities	660			586		1,246			391		924		1,315
Available-for-sale debt securities	478			749		1,227			30		2,168		2,198
Held-to-maturity debt securities	(568)			(55)		(623)			(482)		1,248		766
Total debt securities	570			1,280		1,850			(61)		4,340		4,279
Loans held for sale	70			58		128			(396)		246		(150)
Loans:
Commercial and industrial – U.S.	(3)			804		801			650		8,998		9,648
Commercial and industrial – Non-U.S.	(672)			259		(413)			(200)		2,562		2,362
Commercial real estate	(605)			274		(331)			37		4,208		4,245
Lease financing	54			111		165			36		106		142
Total commercial loans	(1,226)			1,448		222			523		15,874		16,397
Residential mortgage	(358)			361		3			8		664		672
Credit card	700			(88)		612			854		640		1,494
Auto	(328)			204		(124)			(191)		240		49
Other consumer	7			23		30			(46)		906		860
Total consumer loans	21			500		521			625		2,450		3,075
Total loans	(1,205)			1,948		743			1,148		18,324		19,472
Equity securities	4			(9)		(5)			(116)		91		(25)
Other interest-earning assets	(20)			26		6			(70)		329		259
Total increase in interest income	$	1,814			3,764		5,578			681		30,397		31,078
Increase (decrease) in interest expense:
Deposits:
Demand deposits	$	528			2,783		3,311			(46)		5,637		5,591
Savings deposits	(171)			1,975		1,804			(58)		2,375		2,317
Time deposits	1,962			581		2,543			3,173		2,593		5,766
Deposits in non-U.S. offices	1			120		121			1		479		480
Total interest-bearing deposits	2,320			5,459		7,779			3,070		11,084		14,154
Short-term borrowings:
Federal funds purchased and securities sold under agreements to repurchase	1,332			121		1,453			1,312		1,594		2,906
Other short-term borrowings	(55)			64		9			1		359		360
Total short-term borrowings	1,277			185		1,462			1,313		1,953		3,266
Long-term debt	266			625		891			891		5,176		6,067
Other interest-bearing liabilities	43			182		225			(23)		205		182
Total increase (decrease) in interest expense	3,906			6,451		10,357			5,251		18,418		23,669
Increase (decrease) in net interest income on a taxable-equivalent basis	$	(2,092)			(2,687)		(4,779)			(4,570)		11,979		7,409

Column 1	Column 2
8	Wells Fargo & Company

Noninterest Income

Table 5: Noninterest Income

	Year ended December 31,
($ in millions)	2024		2023		$ Change 2024/ 2023	% Change 2024/ 2023		2022		$ Change 2023/ 2022		% Change 2023/ 2022
Deposit-related fees	$	5,015			4,694		321			7	%		$	5,316		(622)		(12)	%
Lending-related fees	1,500			1,446		54			4			1,397			49		4
Investment advisory and other asset-based fees	9,775			8,670		1,105			13			9,004			(334)		(4)
Commissions and brokerage services fees	2,521			2,375		146			6			2,242			133		6
Investment banking fees	2,665			1,649		1,016			62			1,439			210		15
Card fees	4,342			4,256		86			2			4,355			(99)		(2)
Mortgage banking	1,047			829		218			26			1,383			(554)		(40)
Net gains from trading activities	5,284			4,799		485			10			2,116			2,683		127
Net gains (losses) from debt securities	(920)			10		(930)			NM		151			(141)		(93)
Net gains (losses) from equity securities	1,070			(441)		1,511			343			(806)			365		45
Lease income	1,231			1,237		(6)			—			1,269			(32)		(3)
Other	1,090			698		392			56			1,552			(854)		(55)
Total	$	34,620			30,222		4,398			15			$	29,418		804		3

NM – Not meaningful

Full year 2024 vs. full year 2023

Deposit-related fees increased reflecting higher treasury management fees on commercial accounts driven by increased transaction service volumes and repricing.

Investment advisory and other asset-based fees increased driven by higher asset-based fees reflecting higher market valuations.

Commissions and brokerage services fees increased driven by higher brokerage transaction activity, partially offset by lower other brokerage service fees.

Investment banking fees increased due to higher debt and equity underwriting fees and higher advisory fees driven by increased activity.

Mortgage banking increased due to:

•higher net gains on mortgage loan originations/sales related to increased commercial mortgage loan securitization sales volumes; and

•higher income from net hedge results related to mortgage servicing rights (MSR) valuations.

Net gains from trading activities increased driven by higher revenue in foreign exchange and structured products, partially offset by losses related to our implementation of a change to incorporate funding valuation adjustments (FVA) for our derivatives.

Net gains (losses) from debt securities decreased driven by losses related to a repositioning of our investment portfolio.

Net gains (losses) from equity securities increased driven by:

•higher realized and unrealized gains on equity securities from our venture capital investments; and

•lower impairment of equity securities from our venture capital investments.

Other income increased driven by impacts related to the expanded use of the proportional amortization method of accounting for renewable energy tax credit investments, which reclassified the amortization of the investment cost from other noninterest income to income tax expense. For additional information on our adoption in first quarter 2024 of Accounting Standards Update (ASU) 2023-02 – Investments – Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

Column 1	Column 2	Column 3
	Wells Fargo & Company	9

Earnings Performance (continued)

Noninterest Expense

Table 6: Noninterest Expense

	Year ended December 31,
($ in millions)	2024		2023		$ Change 2024/ 2023	% Change 2024/ 2023		2022		$ Change 2023/ 2022		% Change 2023/ 2022
Personnel	$	35,729			35,829		(100)			—	%		$	34,340		1,489		4	%
Technology, telecommunications and equipment	4,583			3,920		663			17			3,375			545		16
Occupancy	3,052			2,884		168			6			2,881			3		—
Operating losses (1)	1,757			1,183		574			49			6,984			(5,801)		(83)
Professional and outside services	4,607			5,085		(478)			(9)			5,188			(103)		(2)
Leases (2)	633			697		(64)			(9)			750			(53)		(7)
Advertising and promotion	869			812		57			7			505			307		61
Other	3,368			5,152		(1,784)			(35)			3,182			1,970		62
Total	$	54,598			55,562		(964)			(2)			$	57,205		(1,643)		(3)

(1)Includes expenses for legal actions of $290 million, $179 million, and $3.3 billion for the years ended December 31, 2024, 2023, and 2022, respectively, and expenses for customer remediation activities of $722 million, $207 million, and $2.7 billion for the years ended December 31, 2024, 2023, and 2022, respectively.

(2)Represents expenses for assets we lease to customers.

Full year 2024 vs. full year 2023

Personnel expense decreased slightly due to lower severance expense and the impact of efficiency initiatives, partially offset by higher revenue-related compensation expense driven by higher fees in our Wealth and Investment Management business.

For additional information on personnel expense, see

Note 21 (Revenue and Expenses) to Financial Statements in this Report.

Technology, telecommunications and equipment expense increased due to higher expense for the amortization of internally developed software and higher expense for software maintenance and licenses.

Operating losses increased driven by higher expense for customer remediation activities related to the further refinement of the remediation costs for historical mortgage lending and other consumer products matters, and higher expense for legal actions.

For additional information on customer remediation activities, see the “Overview” section above. For additional information on operating losses, see Note 21 (Revenue and Expenses) to Financial Statements in this Report.

Professional and outside services expense decreased driven by lower expense for consulting projects related to our risk and control work, as well as efficiency initiatives to reduce our spending on consultants and contractors.

Other expense decreased reflecting lower expense for the FDIC special assessment. For additional information on the FDIC’s special assessment, see Note 21 (Revenue and Expenses) to Financial Statements in this Report.

Income Tax Expense

Table 7: Income Tax Expense

	Year ended December 31,
($ in millions)	2024		2023		$ Change 2024/ 2023	% Change 2024/ 2023		2022		$ Change 2023/ 2022		% Change 2023/ 2022
Income before income tax expense	$	23,364			21,636		1,728			8	%		$	15,629		6,007		38	%
Income tax expense	3,399			2,607		792			30			2,251			356		16
Effective income tax rate (1)	14.7	%		12.0						14.1	%

(1)Represents (i) Income tax expense (benefit) divided by (ii) Income (loss) before income tax expense (benefit) less Net income (loss) from noncontrolling interests.

The increase in the effective income tax rate for 2024, compared with 2023, was driven by higher pre-tax income and the impacts related to the adoption of ASU 2023-02 in first quarter 2024 for our renewable energy tax credit investments, which reclassified the amortization of the investment cost from other noninterest income to income tax expense. For additional information on our adoption of ASU 2023-02 – Investments – Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

For additional information on income taxes, see Note 23 (Income Taxes) to Financial Statements in this Report.

Column 1	Column 2
10	Wells Fargo & Company

Operating Segment Results

Our management reporting is organized into four reportable operating segments: Consumer Banking and Lending; Commercial Banking; Corporate and Investment Banking; and Wealth and Investment Management. All other business activities that are not included in the reportable operating segments have been included in Corporate. For additional information, see Table 8 below. We define our reportable operating segments by type of product and customer segment, and their results are based on our management reporting process. The management reporting process measures the performance of the reportable operating segments based on the Company’s management structure, and the results are regularly reviewed with our Chief Executive Officer and relevant senior management. The management reporting process is based on U.S. GAAP and includes specific adjustments, such as funds transfer pricing for asset/liability management, shared revenue and expenses, and taxable-equivalent adjustments to consistently reflect income from taxable and tax-exempt sources, which allows management to assess performance consistently across the operating segments.

When a line of business uses a service provided by another line of business, expense is generally allocated based on the cost

and use of the service provided. Enterprise functions, such as operations, technology, and risk management, are included in Corporate with an allocation of their applicable costs to the reportable operating segments based on the level of support provided by the enterprise function. We periodically assess and update our revenue sharing and expense allocation methodologies.

Table 8: Management Reporting Structure

	Wells Fargo & Company
			Consumer Banking and Lending				Commercial Banking				Corporate and Investment Banking				Wealth and Investment Management			Corporate
			• Consumer, Small and Business Banking • Home Lending • Credit Card • Auto • Personal Lending				• Middle Market Banking • Asset-Based Lending and Leasing				• Banking • Commercial Real Estate • Markets				• Wells Fargo Advisors • The Private Bank				• Corporate Treasury • Enterprise Functions • Investment Portfolio • Venture capital and private equity investments • Non-strategic businesses

Column 1	Column 2	Column 3
	Wells Fargo & Company	11

Earnings Performance (continued)

Table 9 and the following discussion present our results by reportable operating segment. For additional information, see Note 20 (Operating Segments) to Financial Statements in this Report.

Table 9: Operating Segment Results – Highlights

(in millions)	Consumer Banking and Lending			Corporate and Investment Banking	Wealth and Investment Management			Reconciling Items (2)	Consolidated Company
Year ended December 31, 2024
Net interest income	$	28,303		9,096		7,935		3,473		(791)		(340)		47,676
Noninterest income	7,898		3,682		11,409		11,963		1,129		(1,461)		34,620
Total revenue	36,201		12,778		19,344		15,436		338		(1,801)		82,296
Provision for credit losses	3,561		290		521		(22)		(16)		—		4,334
Noninterest expense	23,274		6,190		9,029		12,884		3,221		—		54,598
Income (loss) before income tax expense (benefit)	9,366		6,298		9,794		2,574		(2,867)		(1,801)		23,364
Income tax expense (benefit)	2,357		1,599		2,456		672		(1,884)		(1,801)		3,399
Net income (loss) before noncontrolling interests	7,009		4,699		7,338		1,902		(983)		—		19,965
Less: Net income from noncontrolling interests	—		10		—		—		233		—		243
Net income (loss)	$	7,009		4,689		7,338		1,902		(1,216)		—		19,722
Year ended December 31, 2023
Net interest income	$	30,185		10,034		9,498		3,966		(888)		(420)		52,375
Noninterest income	7,734		3,415		9,693		10,725		431		(1,776)		30,222
Total revenue	37,919		13,449		19,191		14,691		(457)		(2,196)		82,597
Provision for credit losses	3,299		75		2,007		6		12		—		5,399
Noninterest expense	24,024		6,555		8,618		12,064		4,301		—		55,562
Income (loss) before income tax expense (benefit)	10,596		6,819		8,566		2,621		(4,770)		(2,196)		21,636
Income tax expense (benefit)	2,657		1,704		2,140		657		(2,355)		(2,196)		2,607
Net income (loss) before noncontrolling interests	7,939		5,115		6,426		1,964		(2,415)		—		19,029
Less: Net income (loss) from noncontrolling interests	—		11		—		—		(124)		—		(113)
Net income (loss)	$	7,939		5,104		6,426		1,964		(2,291)		—		19,142
Year ended December 31, 2022
Net interest income	$	27,044		7,289		8,733		3,927		(1,607)		(436)		44,950
Noninterest income	8,766		3,631		6,509		10,895		1,192		(1,575)		29,418
Total revenue	35,810		10,920		15,242		14,822		(415)		(2,011)		74,368
Provision for credit losses	2,276		(534)		(185)		(25)		2		—		1,534
Noninterest expense	26,277		6,058		7,560		11,613		5,697		—		57,205
Income (loss) before income tax expense (benefit)	7,257		5,396		7,867		3,234		(6,114)		(2,011)		15,629
Income tax expense (benefit)	1,816		1,366		1,989		812		(1,721)		(2,011)		2,251
Net income (loss) before noncontrolling interests	5,441		4,030		5,878		2,422		(4,393)		—		13,378
Less: Net income (loss) from noncontrollinginterests	—		12		—		—		(311)		—		(299)
Net income (loss)	$	5,441		4,018		5,878		2,422		(4,082)		—		13,677

(1)All other business activities that are not included in the reportable operating segments have been included in Corporate. For additional information, see the “Corporate” section below.

Column 1	Column 2
12	Wells Fargo & Company

Consumer Banking and Lending offers diversified financial products and services for consumers and small businesses with annual sales generally up to $10 million. These financial products and services include checking and savings accounts, credit and

debit cards, as well as home, auto, personal, and small business lending. Table 9a and Table 9b provide additional information for Consumer Banking and Lending.

Table 9a: Consumer Banking and Lending – Income Statement and Selected Metrics


($ in millions, unless otherwise noted)	2024		2023		$ Change 2024/ 2023	% Change 2024/ 2023		2022		$ Change 2023/ 2022		% Change 2023/ 2022
Income Statement
Net interest income	$	28,303			30,185		(1,882)			(6)	%		$	27,044			3,141		12	%
Noninterest income:
Deposit-related fees	2,734			2,702		32			1			3,093			(391)			(13)
Card fees	4,076			3,967		109			3			4,067			(100)			(2)
Mortgage banking	650			512		138			27			1,100			(588)			(53)
Other	438			553		(115)			(21)			506			47			9
Total noninterest income	7,898			7,734		164			2			8,766			(1,032)			(12)
Total revenue	36,201			37,919		(1,718)			(5)			35,810			2,109			6
Net charge-offs	3,546			2,784		762			27			1,693			1,091			64
Change in the allowance for credit losses	15			515		(500)			(97)		583			(68)			(12)
Provision for credit losses	3,561			3,299		262			8			2,276			1,023			45
Noninterest expense	23,274			24,024		(750)			(3)			26,277			(2,253)			(9)
Income before income tax expense	9,366			10,596		(1,230)			(12)			7,257			3,339			46
Income tax expense	2,357			2,657		(300)			(11)			1,816			841			46
Net income	$	7,009			7,939		(930)			(12)			$	5,441			2,498		46
Revenue by Line of Business
Consumer, Small and Business Banking	$	24,510			25,922		(1,412)			(5)			$	22,967			2,955		13
Consumer Lending:
Home Lending	3,383			3,389		(6)			—			4,221			(832)			(20)
Credit Card	5,908			5,809		99			2			5,725			84			1
Auto	1,118			1,464		(346)			(24)			1,716			(252)			(15)
Personal Lending	1,282			1,335		(53)			(4)			1,181			154			13
Total revenue	$	36,201			37,919		(1,718)			(5)			$	35,810			2,109		6
Selected Metrics
Consumer Banking and Lending:
Return on allocated capital (1)	14.8	%		17.5						10.8	%
Efficiency ratio (2)	64			63						73
Retail bank branches (#, period-end)	4,177			4,311				(3)			4,598					(6)
Digital active customers (# in millions, period-end) (3)	36.0			34.8				3			33.5					4
Mobile active customers (# in millions, period-end) (3)	31.4			29.9				5			28.3					6
Consumer, Small and Business Banking:
Deposit spread (4)	2.5	%		2.6						2.0	%
Debit card purchase volume ($ in billions) (5)	$	507.5			492.8		14.7			3			$	486.6			6.2		1
Debit card purchase transactions (# in millions) (5)	10,230			10,000				2			9,852					2

(continued on following page)

Column 1	Column 2	Column 3
	Wells Fargo & Company	13

Earnings Performance (continued)

(continued from previous page)


($ in millions, unless otherwise noted)	2024		2023		$ Change 2024/ 2023	% Change 2024/ 2023		2022		$ Change 2023/ 2022		% Change 2023/ 2022
Home Lending:
Mortgage banking:
Net servicing income	$	422			300		122			41	%		$	368			(68)		(18)	%
Net gains on mortgage loan originations/sales	228			212		16			8			732			(520)			(71)
Total mortgage banking	$	650			512		138			27			$	1,100			(588)		(53)
Retail originations ($ in billions)	$	20.2			24.2		(4.0)			(17)			$	64.3			(40.1)		(62)
% of originations held for sale (HFS)	40.6	%		44.6						52.5	%
Third-party mortgage loans serviced ($ in billions, period-end) (6)	$	486.9			559.7		(72.8)			(13)			$	679.2			(119.5)		(18)
Mortgage servicing rights (MSR) carrying value (period-end)	6,844			7,468		(624)			(8)			9,310			(1,842)			(20)
Ratio of MSR carrying value (period-end) to third-party mortgage loans serviced (period-end) (6)	1.41	%		1.33						1.37	%
Home lending loans 30+ days delinquency rate (period-end) (7)(8)(9)	0.29			0.32						0.31
Credit Card:
Point of sale (POS) volume ($ in billions)	$	170.5			153.1		17.4			11			$	135.9			17.2		13
New accounts (# in thousands)	2,429			2,566				(5)			2,247					14
Credit card loans 30+ days delinquency rate (period-end) (8)(9)	2.91	%		2.80						2.00	%
Credit card loans 90+ days delinquency rate (period-end) (8)(9)	1.51			1.41						0.96
Auto:
Auto originations ($ in billions)	$	16.9			17.2		(0.3)			(2)			$	23.1			(5.9)		(26)
Auto loans 30+ days delinquency rate (period-end) (8)(9)	2.31	%		2.80						2.64	%
Personal Lending:
New volume ($ in billions)	$	10.1			11.9		(1.8)			(15)			$	12.6			(0.7)		(6)

(1)Return on allocated capital is segment net income (loss) applicable to common stock divided by segment average allocated capital. Segment net income (loss) applicable to common stock is segment net income (loss) less allocated preferred stock dividends.

(2)Efficiency ratio is segment noninterest expense divided by segment total revenue (net interest income and noninterest income).

(3)Digital and mobile active customers is based on the number of consumer and small business customers who have logged on via a digital or mobile device, respectively, in the prior 90 days. Digital active customers includes both online and mobile customers.

(4)Deposit spread is (i) the internal funds transfer pricing credit on segment deposits minus interest paid to customers for segment deposits, divided by (ii) average segment deposits.

(5)Debit card purchase volume and transactions reflect combined activity for both consumer and business debit card purchases.

(6)Excludes residential mortgage loans subserviced for others.

(7)Excludes residential mortgage loans insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA).

(8)Excludes loans held for sale.

(9)Delinquency balances exclude nonaccrual loans.

Full year 2024 vs. full year 2023

Revenue decreased driven by lower net interest income due to lower deposit balances and lower loan balances.

Provision for credit losses reflected an increase in net charge-offs driven by credit card loans.

Noninterest expense decreased due to:

•lower personnel expense driven by lower severance expense and the impact of efficiency initiatives;

•lower professional and outside services expense driven by the impact of efficiency initiatives; and

•lower operating costs;

partially offset by:

•higher operating losses.

Column 1	Column 2
14	Wells Fargo & Company

Table 9b: Consumer Banking and Lending – Balance Sheet


($ in millions)	2024		2023		$ Change 2024/ 2023	% Change 2024/ 2023		2022		$ Change 2023/ 2022		% Change 2023/ 2022
Selected Balance Sheet Data (average)
Loans by Line of Business:
Consumer, Small and Business Banking	$	6,292			6,740		(448)			(7)	%		$	7,895		(1,155)		(15)	%
Consumer Lending:
Home Lending	210,972			219,601		(8,629)			(4)			219,157			444		—
Credit Card	48,322			42,894		5,428			13			36,388			6,506		18
Auto	45,048			51,689		(6,641)			(13)			55,994			(4,305)		(8)
Personal Lending	14,529			14,996		(467)			(3)			12,999			1,997		15
Total loans	$	325,163			335,920		(10,757)			(3)			$	332,433		3,487		1
Total deposits	774,660			811,091		(36,431)			(4)			883,130			(72,039)		(8)
Allocated capital	45,500			44,000		1,500			3			48,000			(4,000)		(8)
Selected Balance Sheet Data (period-end)
Loans by Line of Business:
Consumer, Small and Business Banking	$	6,256			6,735		(479)			(7)			$	7,411		(676)		(9)
Consumer Lending:
Home Lending	207,022			215,823		(8,801)			(4)			223,525			(7,702)		(3)
Credit Card	50,992			46,735		4,257			9			40,768			5,967		15
Auto	42,914			48,283		(5,369)			(11)			54,281			(5,998)		(11)
Personal Lending	14,246			15,291		(1,045)			(7)			14,544			747		5
Total loans	$	321,430			332,867		(11,437)			(3)			$	340,529		(7,662)		(2)
Total deposits	783,490			782,309		1,181			—			859,695			(77,386)		(9)

Full year 2024 vs. full year 2023

Total loans (average and period-end) decreased due to:

•a decline in loan balances in our Home Lending business reflecting our more focused strategy for Home Lending, including paydowns of legacy residential mortgage loans; and

•a decline in loan balances in our Auto business as paydowns exceeded originations reflecting our actions related to credit tightening;

partially offset by:

•an increase in loan balances in our Credit Card business due to higher point of sale volume and the impact of new product launches.

Total deposits (average) decreased driven by customer migration to higher yielding deposit products.

Column 1	Column 2	Column 3
	Wells Fargo & Company	15

Earnings Performance (continued)

Commercial Banking provides financial solutions to private, family owned and certain public companies. Products and services include banking and credit products across multiple

industry sectors and municipalities, secured lending and lease products, and treasury management. Table 9c and Table 9d provide additional information for Commercial Banking.

Table 9c: Commercial Banking – Income Statement and Selected Metrics


($ in millions)	2024		2023		$ Change 2024/ 2023	% Change 2024/ 2023		2022		$ Change 2023/ 2022		% Change 2023/ 2022
Income Statement
Net interest income	$	9,096			10,034		(938)			(9)	%		$	7,289		2,745		38	%
Noninterest income:
Deposit-related fees	1,180			998		182			18			1,131			(133)		(12)
Lending-related fees	555			531		24			5			491			40		8
Lease income	532			644		(112)			(17)			710			(66)		(9)
Other	1,415			1,242		173			14			1,299			(57)		(4)
Total noninterest income	3,682			3,415		267			8			3,631			(216)		(6)
Total revenue	12,778			13,449		(671)			(5)			10,920			2,529		23
Net charge-offs	333			96		237			247			4			92		NM
Change in the allowance for credit losses	(43)			(21)		(22)			NM		(538)			517		96
Provision for credit losses	290			75		215			287		(534)			609		114
Noninterest expense	6,190			6,555		(365)			(6)			6,058			497		8
Income before income tax expense	6,298			6,819		(521)			(8)			5,396			1,423		26
Income tax expense	1,599			1,704		(105)			(6)			1,366			338		25
Less: Net income from noncontrolling interests	10			11		(1)			(9)			12			(1)		(8)
Net income	$	4,689			5,104		(415)			(8)			$	4,018		1,086		27
Revenue by Line of Business
Middle Market Banking	$	8,562			8,762		(200)			(2)			$	6,574		2,188		33
Asset-Based Lending and Leasing	4,216			4,687		(471)			(10)			4,346			341		8
Total revenue	$	12,778			13,449		(671)			(5)			$	10,920		2,529		23
Revenue by Product
Lending and leasing	$	5,201			5,314		(113)			(2)			$	5,253		61		1
Treasury management and payments	5,690			6,214		(524)			(8)			4,483			1,731		39
Other	1,887			1,921		(34)			(2)			1,184			737		62
Total revenue	$	12,778			13,449		(671)			(5)			$	10,920		2,529		23
Selected Metrics
Return on allocated capital	17.1	%		19.1						19.7	%
Efficiency ratio	48			49						55

NM – Not meaningful

Full year 2024 vs. full year 2023

Revenue decreased driven by:

•lower net interest income reflecting the impact of higher interest rates on deposit costs;

partially offset by:

•higher deposit-related fees reflecting higher treasury management fees on commercial accounts driven by increased transaction service volumes and repricing; and

•higher other noninterest income related to renewable energy tax credit investments.

Provision for credit losses reflected an increase in net charge-offs.

Noninterest expense decreased due to lower personnel expense reflecting lower severance expense and the impact of efficiency initiatives.

Column 1	Column 2
16	Wells Fargo & Company

Table 9d: Commercial Banking – Balance Sheet


($ in millions)	2024		2023		$ Change 2024/ 2023		% Change 2024/ 2023		2022		$ Change 2023/ 2022		% Change 2023/ 2022
Selected Balance Sheet Data (average)
Loans:
Commercial and industrial	$	162,827			164,062			(1,235)			(1)	%		$	147,379			16,683		11	%
Commercial real estate	44,898			45,705			(807)			(2)			45,130			575			1
Lease financing and other	15,332			14,335			997			7			13,523			812			6
Total loans	$	223,057			224,102			(1,045)			—			$	206,032			18,070		9
Loans by Line of Business:
Middle Market Banking	$	125,414			120,819			4,595			4			$	114,634			6,185		5
Asset-Based Lending and Leasing	97,643			103,283			(5,640)			(5)			91,398			11,885			13
Total loans	$	223,057			224,102			(1,045)			—			$	206,032			18,070		9
Total deposits	172,129			165,235			6,894			4			186,079			(20,844)			(11)
Allocated capital	26,000			25,500		500			2			19,500		6,000			31
Selected Balance Sheet Data (period-end)
Loans:
Commercial and industrial	$	163,464			163,797			(333)			—			$	163,797			—		—
Commercial real estate	44,506			45,534			(1,028)			(2)			45,816			(282)			(1)
Lease financing and other	15,348			15,443			(95)			(1)			13,916			1,527			11
Total loans	$	223,318			224,774			(1,456)			(1)			$	223,529			1,245		1
Loans by Line of Business:
Middle Market Banking	$	126,877			118,482			8,395			7			$	121,192			(2,710)		(2)
Asset-Based Lending and Leasing	96,441			106,292			(9,851)			(9)			102,337			3,955			4
Total loans	$	223,318			224,774			(1,456)			(1)			$	223,529			1,245		1
Total deposits	188,650			162,526			26,124			16			173,942			(11,416)			(7)

Full year 2024 vs. full year 2023

Total loans (average and period-end) decreased driven by lower loan demand reflecting the impact of a higher interest rate environment, partially offset by increased client working capital needs.

Total deposits (average and period-end) increased driven by additions of deposits from new and existing customers.

Column 1	Column 2	Column 3
	Wells Fargo & Company	17

Earnings Performance (continued)

Corporate and Investment Banking delivers a suite of capital markets, banking, and financial products and services to corporate, commercial real estate, government and institutional clients globally. Products and services include corporate banking, investment banking, treasury management, commercial real estate lending and servicing, equity and fixed income solutions as well as sales, trading, and research capabilities. In August 2024,

we entered into a definitive agreement to sell the non-agency third-party servicing segment of our commercial mortgage servicing business, including the related mortgage servicing rights and servicer advances. We will continue to service agency and government-sponsored enterprise loans and loans held on our balance sheet. Table 9e and Table 9f provide additional information for Corporate and Investment Banking.

Table 9e: Corporate and Investment Banking – Income Statement and Selected Metrics


($ in millions)	2024		2023		$ Change 2024/ 2023	% Change 2024/ 2023		2022		$ Change 2023/ 2022		% Change 2023/ 2022
Income Statement
Net interest income	$	7,935			9,498		(1,563)			(16)	%		$	8,733		765		9	%
Noninterest income:
Deposit-related fees	1,073			976		97			10			1,068			(92)		(9)
Lending-related fees	842			790		52			7			769			21		3
Investment banking fees	2,675			1,738		937			54			1,492			246		16
Net gains from trading activities	5,091			4,553		538			12			1,886			2,667		141
Other	1,728			1,636		92			6			1,294			342		26
Total noninterest income	11,409			9,693		1,716			18			6,509			3,184		49
Total revenue	19,344			19,191		153			1			15,242			3,949		26
Net charge-offs	909			581		328			56			(48)			629		NM
Change in the allowance for credit losses	(388)			1,426		(1,814)			NM		(137)			1,563		NM
Provision for credit losses	521			2,007		(1,486)			(74)			(185)			2,192		NM
Noninterest expense	9,029			8,618		411			5			7,560			1,058		14
Income before income tax expense	9,794			8,566		1,228			14			7,867			699		9
Income tax expense	2,456			2,140		316			15			1,989			151		8
Net income	$	7,338			6,426		912			14			$	5,878		548		9
Revenue by Line of Business
Banking:
Lending	$	2,758			2,872		(114)			(4)			$	2,222		650		29
Treasury Management and Payments	2,712			3,036		(324)			(11)			2,369			667		28
Investment Banking	1,814			1,404		410			29			1,206			198		16
Total Banking	7,284			7,312		(28)			—			5,797			1,515		26
Commercial Real Estate	5,144			5,311		(167)			(3)			4,534			777		17
Markets:
Fixed Income, Currencies, and Commodities (FICC)	5,093			4,688		405			9			3,660			1,028		28
Equities	1,789			1,809		(20)			(1)			1,115			694		62
Credit Adjustment (CVA/DVA/FVA) and Other (1)	(14)			65		(79)			NM		20			45		225
Total Markets	6,868			6,562		306			5			4,795			1,767		37
Other	48			6		42			700			116			(110)		(95)
Total revenue	$	19,344			19,191		153			1			$	15,242		3,949		26
Selected Metrics
Return on allocated capital	15.7	%		13.8						15.3	%
Efficiency ratio	47			45						50

NM – Not meaningful

(1)In fourth quarter 2024, we implemented a change to incorporate funding valuation adjustments (FVA) for our derivatives, which resulted in a loss of $85 million.

Full year 2024 vs. full year 2023

Revenue increased driven by:

•higher investment banking fees due to higher debt and equity underwriting fees and higher advisory fees driven by increased activity; and

•higher net gains from trading activities driven by higher revenue in foreign exchange and structured products, partially offset by losses related to our implementation of a change to incorporate funding valuation adjustments (FVA) for our derivatives;

partially offset by:

•lower net interest income driven by higher deposit costs and lower loan balances.

Provision for credit losses reflected a decrease in the allowance for credit losses driven by commercial real estate loans.

Noninterest expense increased driven by higher operating costs, partially offset by the impact of efficiency initiatives.

Column 1	Column 2
18	Wells Fargo & Company

Table 9f: Corporate and Investment Banking – Balance Sheet


($ in millions)	2024		2023		$ Change 2024/ 2023	% Change 2024/ 2023		2022		$ Change 2023/ 2022		% Change 2023/ 2022
Selected Balance Sheet Data (average)
Loans:
Commercial and industrial	$	183,792			191,602		(7,810)			(4)	%		$	198,424		(6,822)		(3)	%
Commercial real estate	93,247			100,373		(7,126)			(7)			98,560			1,813		2
Total loans	$	277,039			291,975		(14,936)			(5)			$	296,984		(5,009)		(2)
Loans by Line of Business:
Banking	$	87,318			95,783		(8,465)			(9)			$	106,440		(10,657)		(10)
Commercial Real Estate	125,799			135,702		(9,903)			(7)			133,719			1,983		1
Markets	63,922			60,490		3,432			6			56,825			3,665		6
Total loans	$	277,039			291,975		(14,936)			(5)			$	296,984		(5,009)		(2)
Trading-related assets:
Trading account securities	$	135,751			118,130		17,621			15			$	112,213		5,917		5
Reverse repurchase agreements/securities borrowed	72,374			61,510		10,864			18			50,491			11,019		22
Derivative assets	18,883			18,636		247			1			27,421			(8,785)		(32)
Total trading-related assets	$	227,008			198,276		28,732			14			$	190,125		8,151		4
Total assets	568,035			553,722		14,313			3			557,396			(3,674)		(1)
Total deposits	192,592			162,062		30,530			19			161,720			342		—
Allocated capital	44,000			44,000		—			—			36,000			8,000		22
Selected Balance Sheet Data (period-end)
Loans:
Commercial and industrial	$	192,573			189,379		3,194			2			$	196,529		(7,150)		(4)
Commercial real estate	86,107			98,053		(11,946)			(12)			101,848			(3,795)		(4)
Total loans	$	278,680			287,432		(8,752)			(3)			$	298,377		(10,945)		(4)
Loans by Line of Business:
Banking	$	86,328			93,987		(7,659)			(8)			$	101,183		(7,196)		(7)
Commercial Real Estate	117,213			131,968		(14,755)			(11)			137,495			(5,527)		(4)
Markets	75,139			61,477		13,662			22			59,699			1,778		3
Total loans	$	278,680			287,432		(8,752)			(3)			$	298,377		(10,945)		(4)
Trading-related assets:
Trading account securities	$	142,727			115,562		27,165			24			$	111,801		3,761		3
Reverse repurchase agreements/securities borrowed	96,470			63,614		32,856			52			55,407			8,207		15
Derivative assets	21,332			18,023		3,309			18			22,218			(4,195)		(19)
Total trading-related assets	$	260,529			197,199		63,330			32			$	189,426		7,773		4
Total assets	597,278			547,203		50,075			9			550,177			(2,974)		(1)
Total deposits	212,948			185,142		27,806			15			157,217			27,925		18

Full year 2024 vs. full year 2023

Total loans (average and period-end) decreased due to loan payoffs exceeding originations and draws on existing accounts.

Total trading-related assets (average and period-end) increased reflecting:

•higher trading account securities driven by growth across all asset classes; and

•an increased volume of reverse repurchase agreements.

Total deposits (average and period-end) increased driven by additions of deposits from new and existing customers.

Column 1	Column 2	Column 3
	Wells Fargo & Company	19

Earnings Performance (continued)

offices, consumer bank branches, independent offices, and digitally through WellsTrade® and Intuitive Investor®. Table 9g and Table 9h provide additional information for Wealth and Investment Management (WIM).

Table 9g: Wealth and Investment Management


($ in millions, unless otherwise noted)	2024		2023		$ Change 2024/ 2023	% Change 2024/ 2023		2022		$ Change 2023/ 2022		% Change 2023/ 2022
Income Statement
Net interest income	$	3,473			3,966		(493)			(12)	%		$	3,927		39		1	%
Noninterest income:
Investment advisory and other asset-based fees	9,534			8,446		1,088			13			8,847			(401)		(5)
Commissions and brokerage services fees	2,153			2,058		95			5			1,931			127		7
Other	276			221		55			25			117			104		89
Total noninterest income	11,963			10,725		1,238			12			10,895			(170)		(2)
Total revenue	15,436			14,691		745			5			14,822			(131)		(1)
Net charge-offs	(2)			(1)		(1)			(100)			(7)			6		86
Change in the allowance for credit losses	(20)			7		(27)			NM		(18)			25		139
Provision for credit losses	(22)			6		(28)			NM		(25)			31		124
Noninterest expense	12,884			12,064		820			7			11,613			451		4
Income before income tax expense	2,574			2,621		(47)			(2)			3,234			(613)		(19)
Income tax expense	672			657		15			2			812			(155)		(19)
Net income	$	1,902			1,964		(62)			(3)			$	2,422		(458)		(19)
Selected Metrics
Return on allocated capital	28.3	%		30.7						27.1	%
Efficiency ratio	83			82						78
Client assets ($ in billions, period-end):
Advisory assets	$	998			891		107			12			$	797		94		12
Other brokerage assets and deposits	1,295			1,193		102			9			1,064			129		12
Total client assets	$	2,293			2,084		209			10			$	1,861		223		12
Selected Balance Sheet Data (average)
Total loans	$	83,005			82,755		250			—			$	85,228		(2,473)		(3)
Total deposits	107,689			112,069		(4,380)			(4)			164,883			(52,814)		(32)
Allocated capital	6,500			6,250		250			4			8,750			(2,500)		(29)
Selected Balance Sheet Data (period-end)
Total loans	$	84,340			82,555		1,785			2			$	84,273		(1,718)		(2)
Total deposits	127,008			103,902		23,106			22			138,760			(34,858)		(25)

NM- Not meaningful

Full year 2024 vs. full year 2023

Revenue increased driven by:

•higher investment advisory and other asset-based fees driven by higher asset-based fees reflecting higher market valuations; and

•higher commissions and brokerage services fees driven by higher brokerage transaction activity, partially offset by lower other brokerage service fees;

partially offset by:

•lower net interest income driven by lower deposit balances, customers reallocating cash into higher yielding alternatives, and higher deposit costs reflecting the impact of increased pricing on sweep deposits in advisory brokerage accounts.

Noninterest expense increased reflecting higher personnel expense driven by higher revenue-related compensation, partially offset by the impact of efficiency initiatives.

Total deposits (period-end) increased driven by higher brokerage deposit balances.

Column 1	Column 2
20	Wells Fargo & Company

WIM also manages personal trust and other assets for high net worth clients, with fee income earned based on a percentage of the market value of these assets. Table 9h presents advisory assets activity by WIM line of business. Management believes that advisory assets is a useful metric because it allows management, investors, and others to assess how changes in asset amounts may impact the generation of certain asset-based fees.

For the years ended December 31, 2024, 2023, and 2022, the average fee rate by account type ranged from 50 to 120 basis points.

Table 9h: WIM Advisory Assets


(in billions)	Balance, beginningof period		Inflows (outflows), net (1)	Market impact (2)	Balance, end of period
December 31, 2024
Client-directed (3)	$	185.3			(2.5)		22.9		205.7
Financial advisor-directed (4)	264.6			1.4		43.2		309.2
Separate accounts (5)	198.4			2.6		24.7		225.7
Mutual fund advisory (6)	83.3			(5.3)		7.7		85.7
Total Wells Fargo Advisors	$	731.6			(3.8)		98.5		826.3
The Private Bank (7)	159.5			(2.8)		14.7		171.4
Total WIM advisory assets	$	891.1			(6.6)		113.2		997.7
December 31, 2023
Client-directed (3)	$	165.2			(1.7)		21.8		185.3
Financial advisor-directed (4)	222.9			2.0		39.7		264.6
Separate accounts (5)	176.5			(2.4)		24.3		198.4
Mutual fund advisory (6)	78.6			(5.4)		10.1		83.3
Total Wells Fargo Advisors	$	643.2			(7.5)		95.9		731.6
The Private Bank (7)	153.6			(9.5)		15.4		159.5
Total WIM advisory assets	$	796.8			(17.0)		111.3		891.1
December 31, 2022
Client-directed (3)	$	205.6			(7.2)		(33.2)		165.2
Financial advisor-directed (4)	255.5			(2.6)		(30.0)		222.9
Separate accounts (5)	203.3			(1.9)		(24.9)		176.5
Mutual fund advisory (6)	102.1			(6.3)		(17.2)		78.6
Total Wells Fargo Advisors	$	766.5			(18.0)		(105.3)		643.2
The Private Bank (7)	198.0			(19.7)		(24.7)		153.6
Total WIM advisory assets	$	964.5			(37.7)		(130.0)		796.8

(1)Inflows include new advisory account assets, contributions, dividends, and interest. Outflows include closed advisory account assets, withdrawals, and client management fees.

(2)Market impact reflects gains and losses on portfolio investments.

(4)Professionally managed portfolios with fees earned based on respective strategies and as a percentage of certain client assets.

(5)Professional advisory portfolios managed by third-party asset managers. Fees are earned based on a percentage of certain client assets.

(6)Program with portfolios constructed of load-waived, no-load, and institutional share class mutual funds. Fees are earned based on a percentage of certain client assets.

(7)Discretionary and non-discretionary portfolios held in personal trusts, investment agency, or custody accounts with fees earned based on a percentage of client assets.

Column 1	Column 2	Column 3
	Wells Fargo & Company	21

Earnings Performance (continued)

of business that management has determined are no longer consistent with the long-term strategic goals of the Company as well as results for previously divested businesses. Table 9i and Table 9j provide additional information for Corporate.

Table 9i: Corporate – Income Statement


($ in millions)	2024		2023		$ Change 2024/ 2023	% Change 2024/ 2023		2022		$ Change 2023/ 2022		% Change 2023/ 2022
Income Statement
Net interest income	$	(791)			(888)		97			11	%		$	(1,607)			719			45	%
Noninterest income	1,129			431		698			162			1,192			(761)			(64)
Total revenue	338			(457)		795			174		(415)			(42)			(10)
Net charge-offs	(27)			(10)		(17)			NM		(33)			23			70
Change in the allowance for credit losses	11			22		(11)			(50)			35			(13)			(37)
Provision for credit losses	(16)			12		(28)			NM		2			10			500
Noninterest expense	3,221			4,301		(1,080)			(25)			5,697			(1,396)			(25)
Loss before income tax benefit	(2,867)			(4,770)		1,903			40			(6,114)			1,344			22
Income tax benefit	(1,884)			(2,355)		471			20			(1,721)			(634)			(37)
Less: Net income (loss) from noncontrolling interests (1)	233			(124)		357			288			(311)			187			60
Net loss	$	(1,216)			(2,291)		1,075			47		$	(4,082)			1,791			44

NM – Not meaningful

(1)Reflects results attributable to noncontrolling interests associated with our venture capital investments.

Full year 2024 vs. full year 2023

Revenue increased driven by:

•higher net gains from equity securities reflecting higher realized and unrealized gains on equity securities from our venture capital investments and lower impairment of equity securities;

partially offset by:

•higher net losses from debt securities related to a repositioning of our investment portfolio.

Noninterest expense decreased reflecting:

•lower expense for the FDIC special assessment. For additional information on the FDIC special assessment, see Note 21 (Revenue and Expenses) to Financial Statements in this Report;

partially offset by:

•higher operating losses due to higher expense for customer remediation activities.

Corporate includes our rail car leasing business, which had long-lived operating lease assets, net of accumulated depreciation, of $4.5 billion and $4.6 billion at December 31, 2024 and 2023, respectively. The average age of our rail cars is 22 years and the rail cars are typically leased to customers under short-term leases of 3 to 5 years. Our four largest concentrations, which represented 66% of our rail car fleet as of December 31, 2024, were rail cars used for the transportation of cement/sand, agricultural grain, plastics, and coal products. We may incur impairment charges based on changing economic and market conditions affecting the long-term demand and utility of specific types of rail cars. Our assumptions for impairment are sensitive to estimated utilization and rental rates as well as the estimated economic life of the leased asset. For additional information, see Note 1 (Summary of Significant Accounting Policies) and Note 8 (Leasing Activity) to Financial Statements in this Report.

Column 1	Column 2
22	Wells Fargo & Company

Table 9j: Corporate – Balance Sheet


($ in millions)	2024		2023		$ Change 2024/ 2023	% Change 2024/ 2023		2022		$ Change 2023/ 2022		% Change 2023/ 2022
Selected Balance Sheet Data (average)
Available-for-sale debt securities	$	138,983			123,542		15,441			12	%		$	124,308		(766)		(1)	%
Held-to-maturity debt securities	246,577			267,672		(21,095)			(8)			290,087			(22,415)		(8)
Equity securities	15,441			15,635		(194)			(1)			15,695			(60)		—
Total assets	652,024			619,002		33,022			5			638,011			(19,009)		(3)
Total deposits	98,845			95,825		3,020			3			28,457			67,368		237
Selected Balance Sheet Data (period-end)
Available-for-sale debt securities	$	154,397			118,923		35,474			30			$	102,669		16,254		16
Held-to-maturity debt securities	231,892			259,748		(27,856)			(11)			294,141			(34,393)		(12)
Equity securities	15,437			15,810		(373)			(2)			15,508			302		2
Total assets	633,799			674,075		(40,276)			(6)			601,218			72,857		12
Total deposits	59,708			124,294		(64,586)			(52)			54,371			69,923		129

Full year 2024 vs. full year 2023

Total assets (average) increased reflecting an increase in interest-earning deposits with banks that are managed by corporate treasury.

Total assets (period-end) decreased reflecting a decrease in interest-earning deposits with banks that are managed by corporate treasury.

Total deposits (period-end) decreased driven by maturities of certificates of deposit (CDs) issued by corporate treasury.

Column 1	Column 2	Column 3
	Wells Fargo & Company	23

Balance Sheet Analysis

At December 31, 2024, our assets totaled $1.93 trillion, down $2.6 billion from December 31, 2023.

Available-for-Sale and Held-to-Maturity Debt Securities

Table 10: Available-for-Sale and Held-to-Maturity Debt Securities

	December 31, 2024		December 31, 2023
($ in millions)	Amortized cost, net (1)		Net unrealized gains (losses)		Fair value	Weighted average expected maturity (yrs)		Amortized cost, net (1)		Net unrealized gains (losses)	Fair value		Weighted average expected maturity (yrs)
Available-for-sale (2)	$	170,607			(7,629)		162,978			7.2		$	137,155			(6,707)			130,448			4.7
Held-to-maturity (3)	234,948			(41,169)		193,779			8.3		262,708			(35,392)			227,316			7.6
Total	$	405,555			(48,798)		356,757			n/a	$	399,863			(42,099)			357,764			n/a

(1)Represents amortized cost of the securities, net of the allowance for credit losses of $34 million and $1 million related to available-for-sale debt securities and $95 million and $93 million related to held-to-maturity debt securities at December 31, 2024 and 2023, respectively.

(2)Available-for-sale debt securities are carried on our consolidated balance sheet at fair value.

(3)Held-to-maturity debt securities are carried on our consolidated balance sheet at amortized cost, net of the allowance for credit losses.

Table 10 presents a summary of our portfolio of investments in available-for-sale (AFS) and held-to-maturity (HTM) debt securities. See Note 3 (Available-for-Sale and Held-to-Maturity Debt Securities) to Financial Statements in this Report for additional information on AFS and HTM debt securities, including a summary of debt securities by security type, contractual maturities and weighted average yields. The size and composition of our AFS and HTM debt securities is dependent upon the Company’s liquidity and interest rate risk management objectives. The AFS debt securities portfolio can be used to meet funding needs that arise in the normal course of business or due to market stress. Changes in our interest rate risk profile may occur due to changes in overall economic or market conditions, which could influence loan origination demand, prepayment rates, or deposit balances and mix. In response, the AFS debt securities portfolio can be rebalanced to meet the Company’s interest rate risk management objectives. In addition to meeting liquidity and interest rate risk management objectives, the AFS and HTM debt securities portfolios may provide yield enhancement over other short-term assets. See the “Risk Management – Asset/Liability Management” section in this Report for additional information on liquidity and interest rate risk.

The amortized cost, net of the allowance for credit losses, of the total AFS and HTM debt securities portfolio increased from December 31, 2023. Purchases of AFS debt securities were partially offset by paydowns and maturities of AFS and HTM debt securities, as well as sales of AFS debt securities.

The total net unrealized losses on AFS and HTM debt securities increased from December 31, 2023, due to changes in interest rates, partially offset by the realization of losses related to a repositioning of our AFS debt securities portfolio. The repositioning included the sale of approximately $28.4 billion of AFS debt securities and reinvestment of the proceeds into AFS debt securities with higher yields.

At December 31, 2024, 99% of the combined AFS and HTM debt securities portfolio was rated AA- or above. Ratings are based on external ratings where available and, where not available, based on internal credit grades.

Column 1	Column 2
24	Wells Fargo & Company

Loan Portfolios

Table 11 provides a summary of total outstanding loans by portfolio segment. Commercial loans decreased from December 31, 2023, due to a decline in the commercial real estate loan portfolio as paydowns exceeded originations and advances. Consumer loans decreased from December 31, 2023,

driven by decreases in the residential mortgage and auto loan portfolios as paydowns exceeded originations, partially offset by an increase in credit card loans due to higher point of sale volume and the impact of new product launches.

Table 11: Loan Portfolios

($ in millions)	Dec 31, 2024			$ Change	% Change
Commercial	$	534,159		547,427		(13,268)		(2)	%
Consumer	378,586		389,255		(10,669)		(3)
Total loans	$	912,745		936,682		(23,937)		(3)

Average loan balances and a comparative detail of average loan balances is included in Table 3 under “Earnings Performance – Net Interest Income” earlier in this Report. Additional information on total loans outstanding by portfolio segment and class of financing receivable is included in the “Risk Management – Credit Risk Management” section in this Report. Period-end balances and other loan related information are in Note 5 (Loans

and Related Allowance for Credit Losses) to Financial Statements in this Report.

Table 12: Loan Maturities

	December 31, 2024
	Loan maturities		Loans maturing after one year
(in millions)	Within one year		After one year through five years		After five years through fifteen years	After fifteen years		Total		Fixed interest rates	Floating/variable interest rates
Commercial and industrial	$	136,093			218,532		24,581			2,035		381,241		28,120		217,028
Commercial real estate	60,395			60,744		13,888			1,478		136,505		16,821		59,289
Lease financing	3,679			10,744		1,958			32		16,413		12,649		85
Total commercial	200,167			290,020		40,427			3,545		534,159		57,590		276,402
Residential mortgage	9,903			29,901		86,501			123,964		250,269		170,410		69,956
Credit card	56,542			—		—			—		56,542		—		—
Auto	11,458			29,316		1,593			—		42,367		30,909		—
Other consumer	24,913			4,404		73			18		29,408		3,899		596
Total consumer	102,816			63,621		88,167			123,982		378,586		205,218		70,552
Total loans	$	302,983			353,641		128,594			127,527		912,745		262,808		346,954

Column 1	Column 2	Column 3
	Wells Fargo & Company	25

Balance Sheet Analysis (continued)

Deposits

Deposits increased from December 31, 2023, reflecting:

•growth in commercial deposits driven by additions of deposits from new and existing customers; and

•growth in consumer deposits driven by higher brokerage deposits in WIM;

partially offset by:

•lower time deposits driven by maturities of CDs issued by corporate treasury.

Table 13 provides additional information regarding deposit balances. Certain deposit balances, including noninterest-bearing

and interest-bearing demand deposits, were impacted by efforts to align legacy products with current deposit product offerings. Information regarding the impact of deposits on net interest income and a comparison of average deposit balances is provided in the “Earnings Performance – Net Interest Income” section and Table 3 earlier in this Report. Our average deposit cost in fourth quarter 2024 increased to 1.73%, compared with 1.58% in fourth quarter 2023.

Table 13: Deposits

($ in millions)	Dec 31, 2024			Dec 31, 2023		% of total deposits		$ Change
Noninterest-bearing demand deposits	$	383,616		28	%		$	360,279		26	%	$	23,337	6	%
Interest-bearing demand deposits	473,738		35			436,908			32		36,830		8
Savings deposits	359,731		26			349,181			26		10,550		3
Time deposits	137,128		10			187,989			14		(50,861)		(27)
Interest-bearing deposits in non-U.S. offices	17,591		1			23,816			2		(6,225)		(26)
Total deposits	$	1,371,804		100	%		$	1,358,173		100	%	$	13,631	1

As of December 31, 2024 and 2023, total deposits that exceed FDIC insurance limits, or are otherwise uninsured, were estimated to be $550 billion and $505 billion, respectively. Estimated uninsured domestic deposits reflect amounts disclosed in the U.S. regulatory reports of our subsidiary banks, with adjustments for amounts related to consolidated

subsidiaries. All non-U.S. deposits are treated for these purposes as uninsured.

Table 14 presents the contractual maturities of estimated time deposits that exceed FDIC insurance limits, or are otherwise uninsured. All non-U.S. time deposits are uninsured.

Table 14: Uninsured Time Deposits by Maturity

(in millions)	Three months or less			After six months through twelve months	After twelve months
December 31, 2024
Domestic time deposits	$	13,114		3,213		1,069		526		17,922
Non-U.S. time deposits	1,967		530		253		—		2,750
Total	$	15,081		3,743		1,322		526		20,672

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26	Wells Fargo & Company

Off-Balance Sheet Arrangements

In the ordinary course of business, we engage in financial transactions that are not recorded on our consolidated balance sheet, or may be recorded on our consolidated balance sheet in amounts that are different from the full contract or notional amount of the transaction. Our off-balance sheet arrangements include unfunded credit commitments, transactions with unconsolidated entities, guarantees, derivatives, and other commitments. These transactions are designed to (1) meet the financial needs of customers, (2) manage our credit, market or liquidity risks, and/or (3) diversify our funding sources.

Unfunded Credit Commitments

Unfunded credit commitments are legally binding agreements to lend to customers with terms covering usage of funds, contractual interest rates, expiration dates, and any required collateral. The maximum credit risk for these commitments will generally be lower than the contractual amount because these commitments may expire without being used or may be cancelled at the customer’s request. Our credit risk monitoring activities include managing the amount of commitments, both to individual customers and in total, and the size and maturity structure of these commitments. For additional information, see Note 5 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.

Transactions with Unconsolidated Entities

In the normal course of business, we enter into various types of on- and off-balance sheet transactions with special purpose entities (SPEs), which are corporations, trusts, limited liability companies or partnerships that are established for a limited purpose. Generally, SPEs are formed in connection with securitization transactions and are considered variable interest entities (VIEs). For additional information, see Note 16 (Securitizations and Variable Interest Entities) to Financial Statements in this Report.

Guarantees and Other Commitments

Guarantees are contracts that contingently require us to make payments to a guaranteed party based on an event or a change in an underlying asset, liability, rate or index. Guarantees are generally in the form of standby and direct pay letters of credit, written options, recourse obligations, exchange and clearing house guarantees, indemnifications, and other types of similar arrangements. We also enter into other commitments such as commitments to purchase securities under resale agreements. For additional information, see Note 17 (Guarantees and Other Commitments) to Financial Statements in this Report.

Derivatives

We use derivatives to manage exposure to market risk, including interest rate risk, credit risk and foreign currency risk, and to assist customers with their risk management objectives. Derivatives are recorded on our consolidated balance sheet at fair value, and volume can be measured in terms of the notional amount, which is generally not exchanged, but is used only as the basis on which interest and other payments are determined. The notional amount is not recorded on our consolidated balance sheet and is not, when viewed in isolation, a meaningful measure of the risk profile of the instruments. For additional information, see Note 14 (Derivatives) to Financial Statements in this Report.

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	Wells Fargo & Company	27

Risk Management

Risk is Part of our Business Model. Risk is the possibility of an event occurring that could adversely affect the Company’s ability to achieve its strategic and business objectives. The Company routinely takes risks to achieve its business goals and to serve its customers. These risks include financial risks, such as interest rate, credit, liquidity, and market risks, and non-financial risks, such as operational (which includes compliance and model risks), strategic and reputation risks.

Risk and Climate Change. The Company continues to integrate climate considerations into its risk management program, consistent with regulatory expectations.

Wells Fargo’s top priority is to strengthen our company by building an appropriate risk and control infrastructure. We continue to enhance and mature our risk management programs.

Risk Governance

Role of the Board. The Board oversees the Company’s business, including its risk management. It assesses senior management’s performance and holds senior management accountable for maintaining and adhering to an effective risk management program.

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28	Wells Fargo & Company

Each management governance committee, in accordance with its charter, is expected to discuss, document, and make

decisions regarding high priority and significant risks, emerging risks, risk acceptances, and risks and issues escalated to it; review and monitor progress related to critical and high-risk issues and remediation efforts, including lessons learned; and report key challenges, decisions, escalations, other actions, and open issues as appropriate.

Table 15 presents the structure of the Company’s Board committees and escalation paths of relevant management governance committees reporting to a Board committee.

Table 15: Board and Relevant Management-level Governance Committee Structure


Audit Committee (1)	Finance Committee	RiskCommittee	Governance & Nominating Committee		Human Resources Committee
				Management Governance Committees
Disclosure Committee		Capital Management Committee	Allowance for Credit Losses Approval Governance Committee		Enterprise Risk & Control Committee		Incentive Compensation & Performance Management Committee
Regulatory Reporting Oversight Committee		Corporate Asset/Liability Committee				Risk & Control Committees
			Recovery & Resolution Committee					Risk Type Committees
									Risk Topic Committees

(1)The Audit Committee assists the Board in its oversight of the Company’s financial statements and disclosures to shareholders and regulatory agencies; oversees the internal audit function and external auditor independence, activities, and performance; and assists the Board and the Risk Committee in the oversight of the Company’s compliance with legal and regulatory requirements.

risks that the respective principal line of business or enterprise function generate and manage, and the controls the principal line of business or enterprise function are expected to have in place.

Risk Operating Model – Roles and Responsibilities

The Company has three lines of defense for managing risk: the Front Line, Independent Risk Management, and Internal Audit.

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	Wells Fargo & Company	29

Risk Management (continued)

•Internal Audit. Internal Audit is the third line of defense. It is responsible for acting as an independent assurance function.

Risk Type Classifications

Operational Risk Management

At the management level, Operational Risk Management, which is part of IRM, has oversight responsibility for operational risk. Operational Risk Management reports to the CRO and provides periodic reports related to operational risk to the Board’s Risk Committee. Operational Risk Management’s oversight responsibilities include change management risk, data management risk, fraud risk, human capital risk, information management risk, information security risk, technology risk, and third-party risk.

The Board’s Risk Committee has primary oversight responsibility for information security risk and approves the Company’s information security program, which includes information protection and cyber resiliency. The Risk Committee receives regular reports from the Company’s Head of Technology and Chief Information Security Officer (CISO), as well as from Operational Risk Management representatives, on information security risks and significant information security developments, including certain incidents involving third parties.

As described above, at the management level, Operational Risk Management has oversight responsibility for information security risk. As a second line of defense, Operational Risk Management reviews and provides guidance to the Front Line technology team, including with respect to the development and maintenance of risk management policies, governance documents, processes, and controls, and oversees and challenges the Front Line technology team’s risk assessment activities.

The Company has processes designed to prevent, detect, mitigate, escalate, and remediate cybersecurity incidents, including monitoring of the Company’s networks for actual or potential attacks or breaches. The Company’s incident response program includes notification, escalation, and remediation protocols for cybersecurity incidents, including to our Head of Technology and CISO as appropriate. In addition, to help monitor and assess our exposure to ongoing and evolving risks in these areas, the Company has a cyber and information security focused risk committee led by the CISO and a technology risk committee led by the Head of Technology.

Wells Fargo and other financial institutions, as well as our third-party service providers, continue to be the target of various evolving and adaptive information security threats, including cyberattacks, malware, ransomware, other malicious software intended to exploit hardware or software vulnerabilities, phishing, credential validation, and distributed denial-of-service, in an effort to disrupt the operations of financial institutions, test their cybersecurity capabilities, commit fraud, or obtain confidential, proprietary or other information. Cyberattacks have also focused on targeting online applications and services, such as online banking, as well as cloud-based and other products and services provided by third parties, and have targeted the infrastructure of the internet causing the widespread unavailability of websites and degrading website performance. As a result, information security and the continued development and enhancement of our controls, processes and systems designed to protect our networks, computers, software and data from attack, damage or unauthorized access remain a priority for Wells Fargo. Wells Fargo is also involved in industry cybersecurity efforts and working with other parties, including our third-party service providers and governmental agencies, to continue to enhance defenses and improve resiliency to information security

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30	Wells Fargo & Company

threats. See the “Risk Factors” section in this Report for additional information regarding the risks and potential impacts associated with a failure or breach of our operational or security systems or infrastructure, including as a result of cyberattacks or other information security incidents.

Compliance Risk Management

Conduct risk, a sub-category of compliance risk, is the risk that the behavior of an employee or third party acting on behalf of the Company involves, or a business practice produces, conduct that is unlawful, unethical, or conflicts with the Company's expectations for lawful and ethical behavior outlined in its Code of Conduct, which has the potential to adversely affect customers, employees, the Company, or its stakeholders. In connection with its oversight of conduct risk, the Board oversees the alignment of employee conduct to the Company’s risk appetite (which the Board approves annually). The Board’s Risk Committee has primary oversight responsibility for conduct risk and risk management components of the Company’s culture, while the responsibilities of the Board’s Human Resources Committee include oversight of the Company’s culture, Code of Conduct, human capital management (including talent management and succession planning), performance management program, and incentive compensation risk management program.

At the management level, the Compliance function, which is part of IRM, monitors the implementation of the Company’s compliance and conduct risk programs. The Compliance function reports to the CRO and provides periodic reports related to compliance risk to the Board's Risk Committee. Financial Crimes Risk Management, also part of IRM, oversees and monitors financial crimes risk, a sub-category of compliance risk. Financial Crimes Risk Management reports to the CRO and provides periodic reports related to financial crimes risk to the Board's Risk Committee.

Model Risk Management

Model risk (a type of operational risk) is the risk arising from the potential for adverse consequences of decisions made based on model output that may be incorrect or used inappropriately.

Strategic Risk Management

Reputation Risk Management

At the management level, the Reputation Risk Oversight function, which is part of IRM, has oversight responsibility for reputation risk. The Reputation Risk Oversight function reports into the CRO and supports periodic reports related to reputation risk provided to the Board’s Risk Committee.

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	Wells Fargo & Company	31

Credit Risk Management

The Board’s Risk Committee has primary oversight responsibility for credit risk. At the management level, Corporate Credit Risk, which is part of Independent Risk Management, has oversight responsibility for credit risk. Corporate Credit Risk reports to the Chief Risk Officer and supports periodic reports related to credit risk provided to the Board’s Risk Committee.

Table 16: Total Loans Outstanding by Portfolio Segment and Class of Financing Receivable

(in millions)	Dec 31, 2024
Commercial and industrial	$	381,241		380,388
Commercial real estate	136,505		150,616
Lease financing	16,413		16,423
Total commercial	534,159		547,427
Residential mortgage	250,269		260,724
Credit card	56,542		52,230
Auto	42,367		47,762
Other consumer	29,408		28,539
Total consumer	378,586		389,255
Total loans	$	912,745		936,682

•Loan concentrations and related credit quality;

•Counterparty credit risk;

•Economic and market conditions;

•Legislative or regulatory mandates;

•Changes in interest rates;

•Merger and acquisition activities; and

•Reputation risk.

Credit Quality Overview. Table 17 provides credit quality trends.

Table 17: Credit Quality Overview

($ in millions)	Dec 31, 2024
Nonaccrual loans
Commercial loans	$	4,618		4,914
Consumer loans	3,112		3,342
Total nonaccrual loans	$	7,730		8,256
Nonaccrual loans as a % of total loans	0.85	%	0.88
Allowance for credit losses (ACL) for loans	$	14,636		15,088
ACL for loans as a % of total loans	1.60	%	1.61
Net loan charge-offs as a % of:
Average commercial loans	0.29	%	0.17
Average consumer loans	0.85		0.65

Additional information on our loan portfolios and our credit quality trends follows.

Significant Loan Portfolio Reviews. Our credit risk monitoring process is designed to enable early identification of developing risk and to support our determination of an appropriate allowance for credit losses. The following discussion provides additional characteristics and analysis of our significant portfolios. See Note 5 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report for more analysis and credit metric information for each of the following portfolios.

COMMERCIAL AND INDUSTRIAL LOANS AND LEASE FINANCING.

For purposes of portfolio risk management, we aggregate commercial and industrial loans and lease financing according to market segmentation and standard industry codes. We generally subject commercial and industrial loans and lease financing to individual risk assessment using our internal borrower and collateral quality ratings. Our ratings are aligned to regulatory definitions of pass and criticized categories with criticized segmented among special mention, substandard, doubtful, and loss categories.

We had $16.5 billion of the commercial and industrial loans and lease financing portfolio internally classified as criticized in accordance with regulatory guidance at December 31, 2024, compared with $14.6 billion at December 31, 2023. The increase was primarily driven by the entertainment and recreation, and equipment, machinery, and parts manufacturing industries, partially offset by the retail industry.

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	Wells Fargo & Company	32

The portfolio increased at December 31, 2024, compared with December 31, 2023, as a result of increased originations and loan draws, partially offset by paydowns. Table 18 provides our

commercial and industrial loans and lease financing by industry. The industry categories are based on the North American Industry Classification System.

Table 18: Commercial and Industrial Loans and Lease Financing by Industry

	December 31, 2024		December 31, 2023
($ in millions)	Nonaccrual loans		Loans outstanding balance		% of total loans	Total commitments (1)		Nonaccrual loans	Loans outstanding balance		% of total loans	Total commitments (1)
Financials except banks	$	24			156,831		17	%	$	255,576		9	146,635		16	%	$	234,513
Technology, telecom and media	106			23,590		3		61,813		60		25,460	3	59,216
Real estate and construction	92			24,839		3		52,741		55		24,987	3	54,345
Equipment, machinery and parts manufacturing	35			25,135		3		51,150		37		24,785	3	48,265
Retail	91			17,709		2		43,374		72		19,596	2	48,829
Materials and commodities	100			13,624		1		37,365		112		14,235	2	37,758
Food and beverage manufacturing	9			16,665		2		35,079		15		16,047	2	33,957
Health care and pharmaceuticals	27			13,620		1		30,726		26		14,863	2	30,386
Auto related	8			16,507		2		30,537		8		15,203	2	28,795
Oil, gas and pipelines	3			10,503		1		30,486		2		10,730	1	32,544
Commercial services	78			11,152		1		26,968		37		11,095	1	26,025
Utilities	—			6,641		*		24,735		1		8,325	*	25,710
Diversified or miscellaneous	9			9,115		*		22,847		67		8,284	*	22,877
Entertainment and recreation	53			12,672		1		19,691		18		13,968	1	20,250
Transportation services	154			9,560		1		16,477		134		9,277	*	16,750
Insurance and fiduciaries	2			4,368		*		15,753		1		4,715	*	15,724
Government and education	29			5,897		*		11,711		26		5,603	*	11,552
Agribusiness	13			6,349		*		11,225		31		6,466	*	12,080
Banks	—			7,772		*		8,701		—		11,820	1	12,981
Other (2)	14			5,105		*		12,687		15		4,717	*	12,297
Total	$	847			397,654		44	%	$	799,642		726	396,811		42	%	$	784,854

*Less than 1%.

(1)Total commitments consist of loans outstanding plus unfunded credit commitments, excluding issued letters of credit and discretionary amounts where our approval or consent is required prior to any loan funding or commitment increase. For additional information on issued letters of credit, see Note 17 (Guarantees and Other Commitments) to Financial Statements in this Report.

(2)No other single industry had total loans in excess of $3.2 billion and $3.0 billion at December 31, 2024 and 2023, respectively.

Table 18a provides further loan segmentation for our largest industry category, financials except banks. This category includes loans to investment firms, financial vehicles, nonbank creditors, rental and leasing companies, securities firms, and investment banks. These loans are generally secured and have features to help manage credit risk, such as structural credit enhancements,

collateral eligibility requirements, contractual re-margining of collateral supporting the loans, and loan amounts limited to a percentage of the value of the underlying assets considering underlying credit risk, asset duration, and ongoing performance.

Table 18a: Financials Except Banks Industry Category

	December 31, 2024		December 31, 2023
($ in millions)	Nonaccrual loans		Loans outstanding balance		% of total loans	Total commitments (1)		Nonaccrual loans		Loans outstanding balance		% of total loans	Total commitments (1)
Asset managers and funds (2)	$	1			59,847		6	%		$	106,926		—		51,842		6	%	$	98,074
Commercial finance (3)	2			51,786		6			84,652			2		52,007		6		78,369
Consumer finance (4)	5			20,840		2			34,669			—		20,308		2		33,547
Real estate finance (5)	16			24,358		3			29,329			7		22,478		2		24,523
Total	$	24			156,831		17	%		$	255,576		9		146,635		16	%	$	234,513

(1)Total commitments consist of loans outstanding plus unfunded credit commitments, excluding issued letters of credit and discretionary amounts where our approval or consent is required prior to any loan funding or commitment increase. For additional information on issued letters of credit, see Note 17 (Guarantees and Other Commitments) to Financial Statements in this Report.

(2)Includes loans for subscription or capital calls and loans to prime brokerage customers and securities firms.

(3)Includes asset-based lending and leasing, including loans to special purpose entities, loans to commercial leasing entities, structured lending facilities to commercial loan managers, and also includes collateralized loan obligations (CLOs) in loan form, all of which were rated AA or above, of $3.7 billion and $7.6 billion at December 31, 2024 and 2023, respectively.

(4)Includes originators or servicers of financial assets collateralized by consumer loans such as auto loans and leases, and credit cards.

(5)Includes originators or servicers of financial assets collateralized by commercial or residential real estate loans.

Our commercial and industrial loans and lease financing portfolio included non-U.S. loans of $62.6 billion and $72.9 billion at December 31, 2024 and 2023, respectively. Significant industry concentrations of non-U.S. loans at December 31, 2024 and 2023, respectively, included:

•$36.3 billion and $40.5 billion in the financials except banks industry;

•$7.4 billion and $11.4 billion in the banks industry; and

•$2.3 billion and $2.0 billion in the oil, gas and pipelines industry.

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	Wells Fargo & Company	33

Risk Management – Credit Risk Management (continued)

COMMERCIAL REAL ESTATE (CRE). Our CRE loan portfolio is composed of CRE mortgage and CRE construction loans. The total CRE loan portfolio decreased $14.1 billion from December 31, 2023, as paydowns exceeded originations and advances. The portfolio is diversified both geographically and by property type. The largest geographic concentrations of CRE loans are in California, New York, Florida, and Texas, which represented a combined 48% of the total CRE portfolio. The largest property type concentrations are apartments at 29% and office at 20% of the portfolio. Unfunded credit commitments at December 31, 2024 and 2023, were $5.4 billion and $7.7 billion, respectively, for CRE mortgage loans and $7.1 billion and $13.2 billion, respectively, for CRE construction loans.

We generally subject CRE loans to individual risk assessment using our internal borrower and collateral quality ratings.

We had $17.8 billion of CRE mortgage loans classified as criticized at December 31, 2024, compared with $17.5 billion at December 31, 2023. We had $1.5 billion of CRE construction loans classified as criticized at December 31, 2024, compared with $830 million at December 31, 2023. The increase in criticized CRE loans was predominantly driven by the apartments property type, partially offset by the office property type.

We continue to closely monitor the credit quality of the office property type given weakened demand for office space. Loans in California and New York represented approximately 40% of the office property type at both December 31, 2024 and 2023.

Table 19 provides our CRE loans by state and property type.

Table 19: CRE Loans by State and Property Type

								December 31, 2024		December 31, 2023
		Real estate mortgage		Real estate construction		Total commercial real estate		Total commercial real estate
($ in millions)	Nonaccrual loans	Loans outstanding balance		Nonaccrual loans	Loans outstanding balance		Nonaccrual loans	Loans outstanding balance	Loans as % of total loans	Total commitments (1)	Loans outstanding balance	Total commitments (1)
By state:
California		$	1,119		25,141			10		2,858		1,129		27,999		3%	$	30,802		31,619		35,629
New York		587		13,174			—		2,307		587		15,481		2	16,225			16,575	17,930
Florida		94		8,491			—		2,587		94		11,078		1	12,081			12,492	14,577
Texas		193		9,514			—		1,453		193		10,967		1	11,808			12,033	14,224
Georgia		131		5,014			—		872		131		5,886		*	6,277			6,105	6,804
Arizona		10		4,671			—		652		10		5,323		*	6,129			5,182	5,806
North Carolina		58		3,732			—		1,052		58		4,784		*	5,223			5,397	6,408
Washington		155		4,173			—		515		155		4,688		*	5,148			5,247	5,994
New Jersey		60		2,736			—		1,441		60		4,177		*	4,545			4,364	5,130
Massachusetts		225		2,573			—		1,182		225		3,755		*	4,252			3,964	4,701
Other (2)		1,101		36,640			28		5,727		1,129		42,367		5	46,520			47,638	54,264
Total		$	3,733		115,859			38		20,646		3,771		136,505		15%	$	149,010		150,616		171,467
By property:
Apartments		$	85		28,359			—		11,399		85		39,758		4%	$	44,783		42,585		51,749
Office		3,100		24,818			36		2,562		3,136		27,380		3	28,768			31,526	34,295
Industrial/warehouse		74		20,987			—		3,051		74		24,038		3	26,178			25,413	28,493
Hotel/motel		190		10,853			—		653		190		11,506		1	12,015			12,725	13,612
Retail (excl shopping center)		160		11,260			1		85		161		11,345		1	11,951			11,670	12,338
Shopping center		93		7,860			—		253		93		8,113		*	8,571			8,745	9,356
Institutional		12		4,048			—		1,138		12		5,186		*	5,524			5,986	6,568
Mixed use properties		18		2,303			—		13		18		2,316		*	2,427			3,511	3,763
Mobile home park		—		2,273			—		—		—		2,273		*	2,376			2,119	2,332
Storage facility		—		2,040			—		48		—		2,088		*	2,240			2,782	3,002
Other		1		1,058			1		1,444		2		2,502		*	4,177			3,554	5,959
Total		$	3,733		115,859			38		20,646		3,771		136,505		15	%	$	149,010		150,616		171,467

* Less than 1%.

(1)Total commitments consist of loans outstanding plus unfunded credit commitments, excluding issued letters of credit. For additional information on issued letters of credit, see Note 17 (Guarantees and Other Commitments) to Financial Statements in this Report.

(2)Includes 40 states and non-U.S. loans. No state in Other had loans in excess of $3.8 billion and $4.4 billion at December 31, 2024 and 2023, respectively. Non-U.S. loans were $5.1 billion and $6.9 billion at December 31, 2024 and 2023, respectively.

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COMMERCIAL CREDIT RISK MITIGATION. Risk mitigation actions, including the restructuring of repayment terms, securing collateral or guarantees, and entering into extensions, are based on a re-underwriting of the loan and our assessment of the borrower’s ability to perform under the agreed-upon terms. Extension terms generally range from six to thirty-six months and may require that the borrower provide additional economic support, such as partial repayment, or additional collateral or guarantees. In cases where the value of collateral or financial condition of the borrower is insufficient to repay our loan, we may rely upon the support of an outside repayment guarantee in providing the extension.

Our ability to seek performance under a guarantee is directly related to the guarantor’s creditworthiness, capacity and willingness to perform, which is evaluated on an annual basis, or more frequently as warranted. Our evaluation is based on the most current financial information available and is focused on various key financial metrics, including net worth, leverage, and current and future liquidity. We consider the guarantor’s reputation, creditworthiness, and willingness to work with us based on our analysis, as well as other lenders’ experience with the guarantor. Our assessment of the guarantor’s credit strength is reflected in our loan risk ratings for such loans. The loan risk rating and accruing status are important factors in our allowance for credit losses methodology.

In considering the accrual status of the loan, we evaluate

the collateral and future cash flows, as well as the anticipated support of any repayment guarantor. In many cases, the

NON-U.S. LOANS. Our classification of non-U.S. loans is based on whether the borrower’s primary address is outside of the United States. At December 31, 2024, non-U.S. loans totaled $67.9 billion, representing approximately 7% of our total consolidated loans outstanding, compared with $80.0 billion, or approximately 9% of our total consolidated loans outstanding, at December 31, 2023. Non-U.S. loans were approximately 4% of our total consolidated assets at both December 31, 2024 and 2023.

which gives consideration for allowable transfers of risk, such as guarantees and collateral, and may be different from the reporting based on a borrower’s primary address.

Our largest single country exposure outside the U.S. at December 31, 2024, was the United Kingdom, which totaled $28.1 billion, or approximately 1% of our total assets, of which $4.3 billion were sovereign exposures and included deposits we have placed with the Bank of England pursuant to regulatory requirements in support of our London branch.

•Lending and deposits with banks exposure includes outstanding loans, unfunded credit commitments (excluding discretionary amounts where our approval or consent is required prior to any loan funding or commitment increase), and deposits with non-U.S. banks. These balances are presented prior to the deduction of the allowance for credit losses or collateral received under the terms of the credit agreements, if any.

•Securities exposure represents debt and equity securities of non-U.S. issuers. Long and short positions are netted, and net short positions are reflected as negative exposure.

•Derivatives and other exposure represents foreign exchange contracts, derivative contracts, securities resale agreements, and securities lending agreements.

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	Wells Fargo & Company	35

Risk Management – Credit Risk Management (continued)

Table 20: Select Country Exposures

	December 31, 2024		Dec 31, 2023
	Lending and deposits with banks (1)		Securities		Derivatives and other	Total exposure		Total exposure
(in millions)	Sovereign		Non-sovereign		Sovereign	Non-sovereign		Sovereign		Non-sovereign	Sovereign		Non-sovereign (2)		Total	Total (3)
Top 20 country exposures:
United Kingdom	$	4,300			20,707		—			28		19			3,025		4,319		23,760		28,079		27,782
Canada	6			14,716		634			810		147			658		787		16,184		16,971		17,542
Japan	14,388			608		667			232		—			132		15,055		972		16,027		9,260
Luxembourg	—			8,020		(5)			273		—			168		(5)		8,461		8,456		8,046
Cayman Islands	—			7,741		—			—		—			270		—		8,011		8,011		8,366
Ireland	—			5,387		—			133		—			77		—		5,597		5,597		5,282
France	5			3,960		40			92		—			86		45		4,138		4,183		4,793
Bermuda	—			3,629		—			27		—			74		—		3,730		3,730		3,855
Germany	—			3,093		(109)			258		—			95		(109)		3,446		3,337		3,405
Guernsey	—			2,855		—			—		—			—		—		2,855		2,855		2,484
Netherlands	—			2,290		—			94		—			81		—		2,465		2,465		2,598
Switzerland	—			1,277		28			15		2			520		30		1,812		1,842		1,536
China	—			1,199		(195)			532		136			10		(59)		1,741		1,682		2,761
South Korea	3			1,234		(13)			271		5			2		(5)		1,507		1,502		2,196
Chile	—			1,312		—			59		—			1		—		1,372		1,372		1,491
Hong Kong	—			361		17			843		2			3		19		1,207		1,226		681
Australia	—			769		—			226		—			196		—		1,191		1,191		2,029
Norway	—			964		—			62		—			31		—		1,057		1,057		1,537
India	—			920		(64)			174		—			—		(64)		1,094		1,030		1,052
Jersey	—			708		—			150		—			67		—		925		925		680
Total top 20 country exposures	$	18,702			81,750		1,000			4,279		311			5,496		20,013		91,525		111,538		107,376

(1)Includes sovereign and non-sovereign deposits with banks of $18.7 billion and $2.9 billion, respectively, at December 31, 2024.

(2)Total non-sovereign exposure consisted of $45.1 billion exposure to financial institutions and $46.4 billion to non-financial corporations at December 31, 2024.

(3)The 2023 exposures correspond to the ranking of the top 20 country exposures at December 31, 2024, and do not necessarily reflect our top 20 exposures at December 31, 2023.

RESIDENTIAL MORTGAGE LOANS. Our residential mortgage loan portfolio is composed of 1–4 family first and junior lien mortgage loans. Junior lien mortgage loans consist of residential mortgage lines of credit and loans that are subordinate in rights to an existing lien on the same property. Residential mortgage – first lien loans represented 96% of the total residential mortgage loan portfolio at both December 31, 2024 and 2023.

The residential mortgage loan portfolio includes loans with adjustable-rate features. We monitor the risk of default as a result of interest rate increases on adjustable-rate mortgage (ARM) loans, which may be mitigated by product features that limit the amount of the increase in the contractual interest rate. The default risk of these loans is considered in our ACL for loans. ARM loans were $66.3 billion, or 7% of total loans, at December 31, 2024, compared with $66.7 billion, or 7% of total loans, at December 31, 2023, with an initial reset date in 2026 or later for the majority of this portfolio at December 31, 2024. We do not offer option ARM products, nor do we offer variable-rate mortgage products with fixed payment amounts, commonly referred to within the financial services industry as negative amortizing mortgage loans.

The outstanding balance of residential mortgage lines of credit (both first and junior lien) was $12.4 billion at December 31, 2024, compared with $15.0 billion at December 31, 2023. The unfunded credit commitments for these lines of credit totaled $22.5 billion at December 31, 2024, compared with $28.6 billion at December 31, 2023. Our residential mortgage lines of credit generally have draw periods of 10, 15 or 20 years with variable interest rate and payment

options available during the draw period of (1) interest-only or (2) 1.5% of outstanding principal balance plus accrued interest. The lines that enter their amortization period may experience higher delinquencies and higher loss rates than the ones in their draw or term period. We have considered this increased risk in our ACL for loans estimate. Interest-only lines and loans were $18.7 billion, or 2% of total loans, at December 31, 2024, compared with $20.0 billion, or 2% of total loans, at December 31, 2023.

We monitor changes in real estate values and underlying economic or market conditions for the geographic areas of our residential mortgage loan portfolio as part of our credit risk management process. Our periodic review of this portfolio includes original appraisals adjusted for the change in Home Price Index (HPI) or estimates from automated valuation models (AVMs) to support property values. AVMs are computer-based tools used to estimate the market value of homes. We have processes to periodically validate AVMs and specific risk management guidelines addressing the circumstances when AVMs may be used. For additional information about our use of appraisals and AVMs, see Note 5 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.

Part of our credit monitoring includes tracking delinquency, current Fair Isaac Corporation (FICO) credit scores and loan to collateral values (LTV) on the entire residential mortgage loan portfolio. For junior lien mortgages, LTV uses the total combined loan balance of first and junior lien mortgages (including unused line of credit amounts). For additional information regarding credit quality indicators, see Note 5 (Loans and Related

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36	Wells Fargo & Company

Allowance for Credit Losses) to Financial Statements in this Report.

terms during this period, the loan is permanently modified. For additional information on loan modifications, see Note 5 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.

Our residential mortgage loan portfolio decreased $10.5 billion from December 31, 2023, due to loan paydowns, partially offset by originations. Table 21 shows the outstanding balances of our first and junior lien mortgage loan portfolios.

Table 21: Residential Mortgage Loans

	December 31, 2024		December 31, 2023
($ in millions)	Outstanding balance		% of total loans		Outstanding balance		% of total loans
California (1)	$	108,000			12	%		109,972		12
New York	30,777			3			31,322		3
Washington	10,621			1			10,672		1
New Jersey	9,841			1			10,161		1
Florida	9,368			1			10,065		1
Other (2)	65,336			7			69,893		8
Government insured/guaranteed loans (3)	7,097			1			7,568		1
Total first lien mortgage portfolio	$	241,040			26	%		249,653		27
Total junior lien mortgage portfolio (4)	9,229			1			11,071		1
Total residential mortgage loan portfolio	$	250,269			27	%		260,724		28	%

(2)Consists of 45 states; no state in Other had loans in excess of $6.9 billion and $7.4 billion at December 31, 2024 and 2023, respectively.

(4)Includes loans of $2.7 billion and $3.1 billion in California and no other state had loans in excess of $1.0 billion and $1.2 billion at December 31, 2024 and 2023, respectively.

CREDIT CARD, AUTO, AND OTHER CONSUMER LOANS. Table 22 shows the outstanding balance of our credit card, auto, and other consumer loan portfolios. For information regarding credit quality indicators for these portfolios, see Note 5 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.

Table 22: Credit Card, Auto, and Other Consumer Loans

	December 31, 2024		December 31, 2023
($ in millions)	Outstanding balance		% of total loans		Outstanding balance		% of total loans
Credit card	$	56,542			6	%		$	52,230		6	%
Auto	42,367			5			47,762			5
Other consumer (1)	29,408			3			28,539			3
Total	$	128,317			14	%		$	128,531		14	%

(1)Includes $21.4 billion and $18.3 billion at December 31, 2024 and 2023, respectively, of securities-based loans originated by the WIM operating segment.

Credit Card. The increase in the outstanding balance at December 31, 2024, compared with December 31, 2023, was due to higher point of sale volume and the impact of new product launches.

Auto. The decrease in the outstanding balance at December 31, 2024, compared with December 31, 2023, was due to paydowns exceeding originations reflecting our actions related to credit tightening.

Other Consumer. The increase in the outstanding balance at December 31, 2024, compared with December 31, 2023, was due to loan originations exceeding paydowns.

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	Wells Fargo & Company	37

Risk Management – Credit Risk Management (continued)

NONPERFORMING ASSETS (NONACCRUAL LOANS AND FORECLOSED ASSETS). We generally place loans on nonaccrual status when:

•they are 90 days (120 days with respect to residential mortgage loans) past due for interest or principal, unless the loan is both well-secured and in the process of collection;

•part of the principal balance has been charged off; or

•for junior lien mortgage loans, we have evidence that the related first lien mortgage may be 120 days past due or in the process of foreclosure regardless of the junior lien delinquency status.

Certain nonaccrual loans may be returned to accrual status after they perform for a period of time. Consumer credit card loans are not placed on nonaccrual status, but are generally fully charged off when the loan reaches 180 days past due.

Table 23 summarizes nonperforming assets.

Table 23: Nonperforming Assets (Nonaccrual Loans and Foreclosed Assets)

($ in millions)	Dec 31, 2024
Nonaccrual loans:
Commercial and industrial	$	763		662
Commercial real estate	3,771		4,188
Lease financing	84		64
Total commercial	4,618		4,914
Residential mortgage (1)	2,991		3,192
Auto	89		115
Other consumer	32		35
Total consumer	3,112		3,342
Total nonaccrual loans	$	7,730		8,256
As a percentage of total loans	0.85	%	0.88
Foreclosed assets:
Government insured/guaranteed (2)	$	3		12
Commercial	169		135
Consumer	34		40
Total foreclosed assets	206		187
Total nonperforming assets	$	7,936		8,443
As a percentage of total loans	0.87	%	0.90

(1)Residential mortgage loans are not placed on nonaccrual status when they are insured or guaranteed by U.S. government agencies, such as the FHA or the VA.

Total nonaccrual loans decreased $526 million from December 31, 2023, driven by decreases in commercial real estate and residential mortgage nonaccrual loans, partially offset by an increase in commercial and industrial nonaccrual loans.

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38	Wells Fargo & Company

Table 24: Analysis of Changes in Nonaccrual Loans


(in millions)	2024		2023
Commercial nonaccrual loans
Balance, beginning of period	$	4,914			1,823
Inflows	4,613			6,524
Outflows:
Returned to accruing	(966)			(474)
Foreclosures	(58)			(70)
Charge-offs	(1,635)			(1,054)
Payments, sales and other	(2,250)			(1,835)
Total outflows	(4,909)			(3,433)
Balance, end of period	4,618			4,914
Consumer nonaccrual loans
Balance, beginning of period	3,342			3,803
Inflows	1,283			1,314
Outflows:
Returned to accruing	(571)			(737)
Foreclosures	(88)			(101)
Charge-offs	(85)			(167)
Payments, sales and other	(769)			(770)
Total outflows	(1,513)			(1,775)
Balance, end of period	3,112			3,342
Total nonaccrual loans	$	7,730			8,256

•98% of total commercial nonaccrual loans were secured, predominantly by real estate.

•61% of total commercial nonaccrual loans were current on interest and 52% of commercial nonaccrual loans were current on both principal and interest, but were on nonaccrual status because the full or timely collection of interest or principal had become uncertain.

•99% of total consumer nonaccrual loans were secured, of which 96% were secured by real estate and 98% had an LTV ratio of 80% or less.

•$435 million of the $545 million of consumer loans in bankruptcy or discharged in bankruptcy, and classified as nonaccrual, were current.

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	Wells Fargo & Company	39

Risk Management – Credit Risk Management (continued)

NET CHARGE-OFFS. Table 25 presents net loan charge-offs.

Table 25: Net Loan Charge-offs

		Quarter ended December 31,		Year ended December 31,
		2024		2023		2024		2023
($ in millions)	Net loan charge- offs		% ofaverageloans (1)		Net loan charge- offs		% of average loans (1)		Net loan charge- offs		% ofaverageloans		Net loan charge- offs		% of average loans
Commercial and industrial	$	132			0.14	%		$	90			0.09	%		$	597		0.16	%		$	345		0.09	%
Commercial real estate	261			0.74			377			0.99			903			0.62		566			0.37
Lease financing	10			0.23			5			0.14			35			0.20		12			0.08
	Total commercial	403			0.30			472			0.34			1,535			0.29		923			0.17
Residential mortgage	(14)			(0.02)			3			—			(69)			(0.03)		(24)			(0.01)
Credit card	628			4.49			520			4.02			2,455			4.58		1,680			3.49
Auto	82			0.77			130			1.06			356			0.80		478			0.93
Other consumer	112			1.56			127			1.79			495			1.75		413			1.47
	Total consumer	808			0.85			780			0.79			3,237			0.85		2,547			0.65
	Total	$	1,211			0.53	%		$	1,252			0.53	%		$	4,772		0.52	%		$	3,470		0.37	%

(1)Net loan charge-offs (recoveries) as a percentage of average loans are annualized.

The increase in commercial net loan charge-offs in 2024, compared with 2023, was due to higher losses, primarily in our commercial real estate portfolio driven by the office property type.

The increase in consumer net loan charge-offs in 2024, compared with 2023, was due to higher losses in our credit card portfolio driven by higher loan balances, partially offset by lower losses in our auto portfolio.

The process for establishing the ACL for loans takes into consideration many factors, including historical and forecasted loss trends, loan-level credit quality ratings and loan grade-specific characteristics. The process involves subjective and complex judgments. In addition, we review a variety of credit metrics and trends. These credit metrics and trends, however, do not solely determine the amount of the allowance as we use several analytical tools. For additional information on our ACL, see the “Critical Accounting Policies – Allowance for Credit Losses” section and Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report. For additional information on our ACL for loans, see Note 5 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report, and for additional information on our ACL for debt securities, see Note 3 (Available-for-Sale and Held-to-Maturity Debt Securities) to Financial Statements in this Report.

Table 26 presents the allocation of the ACL for loans by loan portfolio segment and class.

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40	Wells Fargo & Company

Table 26: Allocation of the ACL for Loans

	Dec 31, 2024		Dec 31, 2023
($ in millions)	ACL		ACL as % of loan class		Loans as % of total loans		ACL		ACL as % of loan class		Loans as % of total loans
Commercial and industrial	$	4,151			1.09	%		42			$	4,272		1.12	%	40
Commercial real estate	3,583			2.62			15			3,939			2.62		16
Lease financing	212			1.29			2			201			1.22		2
Total commercial	7,946			1.49			59			8,412			1.54		58
Residential mortgage (1)	541			0.22			27			652			0.25		28
Credit card	4,869			8.61			6			4,223			8.09		6
Auto	636			1.50			5			1,042			2.18		5
Other consumer	644			2.19			3			759			2.66		3
Total consumer	6,690			1.77			41			6,676			1.72		42
Total	$	14,636			1.60	%		100			$	15,088		1.61	%	100
Components:
Allowance for loan losses					$	14,183						14,606
Allowance for unfunded credit commitments					453						482
Allowance for credit losses					$	14,636						15,088
Ratio of allowance for loan losses to total net loan charge-offs					2.97x						4.21
Ratio of allowance for loan losses to total nonaccrual loans					1.83							1.77
Allowance for loan losses as a percentage of total loans					1.55	%						1.56

(1)Includes negative allowance for expected recoveries of amounts previously charged off.

The ACL for loans decreased $452 million, or 3%, from December 31, 2023, reflecting decreases across most loan portfolios, partially offset by increases for credit card loans. The detail of the changes in the ACL for loans by portfolio segment (including charge-offs and recoveries by loan class) is included in Note 5 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.

We consider multiple economic scenarios to develop our estimate of the ACL for loans, which generally include a base scenario, along with an optimistic (upside) and one or more pessimistic (downside) scenarios. We weighted the base scenario and the downside scenarios in our estimate of the ACL for loans at December 31, 2024. The base scenario assumed slowing inflation with slowing economic growth and also reflected a significant decline in commercial real estate prices and increased unemployment rates from historically low levels. The downside scenarios assumed a more substantial economic contraction due to lower business and consumer confidence and declining property values.

The forecasted key economic variables used in our estimate of the ACL for loans at December 31 and September 30, 2024, are presented in Table 27.

Table 27: Forecasted Key Economic Variables

	2Q 2025
Weighted blend of economic scenarios:
U.S. unemployment rate (1):
December 31, 2024	4.7	%	5.3	5.7
September 30, 2024	4.9		5.7	6.0
U.S. real GDP (2):
December 31, 2024	(0.2)		(0.1)	1.1
September 30, 2024	(0.5)		0.3	1.7
Home price index (3):
December 31, 2024	(0.5)		(2.9)	(3.9)
September 30, 2024	(2.3)		(4.6)	(4.6)
Commercial real estate asset prices (3):
December 31, 2024	(7.2)		(9.6)	(7.4)
September 30, 2024	(8.8)		(10.6)	(7.4)

(1)Quarterly average.

(2)Percent change from the preceding period, seasonally adjusted annualized rate.

(3)Percent change year over year of national average; outlook differs by geography and property type.

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	Wells Fargo & Company	41

Risk Management – Credit Risk Management (continued)

We believe the ACL for loans of $14.6 billion at December 31, 2024, was appropriate to cover expected credit losses, including unfunded credit commitments, at that date. The entire allowance is available to absorb credit losses from the total loan portfolio. The ACL for loans is subject to change and reflects existing factors as of the date of determination, including economic or market conditions and ongoing internal and external examination processes. Due to the sensitivity of the ACL for loans to changes in the economic and business environment, it is possible that we will incur incremental credit losses not anticipated as of the balance sheet date. Our process for determining the ACL is discussed in the “Critical Accounting Policies – Allowance for Credit Losses” section and Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

MORTGAGE BANKING ACTIVITIES. We sell residential and commercial mortgage loans to various parties, including (1) government-sponsored enterprises (GSEs), Federal Home Loan Mortgage Corporation (FHLMC) and Federal National Mortgage Association (FNMA), who include the mortgage loans in GSE-guaranteed mortgage securitizations, (2) SPEs that issue private label MBS, and (3) other financial institutions that purchase mortgage loans for investment or private label securitization. In addition, we pool FHA-insured and VA-guaranteed residential mortgage loans that are then used to back securities guaranteed by the Government National Mortgage Association (GNMA). We may be required to repurchase these mortgage loans, indemnify the securitization trust, investor or insurer, or reimburse the securitization trust, investor or insurer for credit losses incurred on loans (collectively, repurchase) in the event of a breach of contractual representations or warranties that is not remedied within a period (usually 90 days or less) after we receive notice of the breach.

In connection with our sales and securitization of residential mortgage loans, we have established a mortgage repurchase liability, initially at fair value, related to various representations and warranties that reflect management’s estimate of losses for loans for which we could have a repurchase obligation, whether or not we currently service those loans, based on a combination of factors. See Note 16 (Securitizations and Variable Interest Entities) to Financial Statements in this Report for additional information about our liability for mortgage loan repurchase losses.

We provide recourse to GSEs for commercial mortgage loans sold under various programs and arrangements. The terms of certain programs require that we incur a pro-rata share of actual losses in the event of borrower default. See Note 17 (Guarantees and Other Commitments) to Financial Statements in this Report for additional information about our exposure to loss related to these programs.

In addition to servicing loans in our portfolio, we act as servicer and/or master servicer of residential and commercial mortgage loans included in GSE mortgage securitizations, GNMA-guaranteed mortgage securitizations of FHA-insured/VA-guaranteed mortgages and private label mortgage securitizations, as well as for unsecuritized loans owned by institutional investors.

taxes and insurance and administer escrow payments, and (5) foreclose on defaulted mortgage loans or, to the extent consistent with the related servicing agreement, consider alternatives to foreclosure, such as loan modifications or short sales, and for certain investors, manage the foreclosed property through liquidation. As master servicer, our primary duties are typically to (1) supervise, monitor and oversee the servicing of the mortgage loans by the servicer, and (2) advance delinquent amounts required by non-affiliated servicers who fail to perform their advancing obligations. The amount and timing of reimbursement for advances of delinquent payments vary by investor and the applicable servicing agreements. See Note 6 (Mortgage Banking Activities) to Financial Statements in this Report for additional information about residential and commercial servicing rights, servicer advances and servicing fees.

In accordance with applicable servicing guidelines, upon transfer as servicer, we have the option to repurchase loans from certain loan securitizations, which generally becomes exercisable based on delinquency status such as when three scheduled loan payments are past due. When we have the unilateral option to repurchase a loan, we recognize the loan and a corresponding liability on our balance sheet regardless of our intent to repurchase the loan. We may repurchase these loans for cash and as a result, our total consolidated assets do not change.

Loans repurchased from GNMA securitization pools that regain current status or are otherwise modified in accordance with applicable servicing guidelines may be included in future GNMA loan securitization pools. At December 31, 2024 and 2023, these loans, which we have repurchased or have the unilateral option to repurchase, were $7.5 billion and $7.8 billion, respectively, which included $7.1 billion and $7.4 billion, respectively, in loans held for investment, with the remainder in loans held for sale. See Note 16 (Securitizations and Variable Interest Entities) to Financial Statements in this Report for additional information about our involvement with mortgage loan securitizations.

Each agreement under which we act as servicer or master servicer generally specifies a standard of responsibility for actions we take in such capacity. We are required to indemnify the securitization trustee against any failure by us, as servicer or master servicer, to perform our servicing obligations. In addition, if we commit a breach of our obligations as servicer or master servicer, we may be subject to termination if the breach is not cured within a specified period. The standards governing servicing in GSE-guaranteed securitizations, and the possible remedies for violations of such standards, vary, and those standards and remedies are determined by servicing guides maintained by the GSEs, contracts between the GSEs and individual servicers and topical guides published by the GSEs from time to time. Such remedies could include indemnification or repurchase of an affected mortgage loan. In addition, in connection with our servicing activities, we could continue to become subject to consent orders and settlement agreements with federal and state regulators for alleged servicing issues and practices. In general, these can require us to provide customers with loan modification relief, refinancing relief, and foreclosure prevention and assistance, and can result in business restrictions or the imposition of certain monetary penalties on us.

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42	Wells Fargo & Company

Asset/Liability Management

Asset/liability management involves measuring, monitoring and managing interest rate risk, market risk, liquidity and funding. Primary oversight of interest rate risk and market risk resides with the Finance Committee of the Board, while primary oversight of liquidity and funding resides with the Risk Committee of the Board. These committees oversee the administration and effectiveness of financial risk management policies and processes used to assess and manage these risks.

At the management level, the Corporate Asset/Liability Committee, which consists of management from finance, risk and business groups, oversees these risks and supports periodic reports provided to the Board’s Finance Committee and Risk Committee as appropriate. As discussed in more detail for market risk activities below, we employ separate management level oversight specific to market risk.

INTEREST RATE RISK. Interest rate risk is the risk that market fluctuations in interest rates, credit spreads, or foreign exchange can cause a loss of the Company’s earnings and capital stemming from mismatches in the cash flows of the Company’s assets and liabilities generally arising from customer-related lending and deposit-taking activities. We are subject to interest rate risk because:

•assets and liabilities may mature or reprice at different times or by different amounts;

•short-term and long-term market interest rates may change independently or with different magnitudes;

•the remaining maturity for various assets or liabilities may shorten or lengthen as interest rates change; or

•interest rates may also have a direct or indirect effect on loan demand, collateral values, credit losses, loan origination volume, and the fair value of financial instruments and MSRs.

We assess interest rate risk by comparing the earnings outcomes from multiple interest rate scenarios relative to our base scenario. The base scenario is a reference point used by the Company for financial planning purposes. These scenarios may differ in the direction of interest rate changes, the degree and speed of interest rate changes over time, and the projected shape of the yield curve. They also require assumptions regarding drivers of earnings and balance sheet composition such as loan originations, prepayment rates on loans and debt securities, deposit flows and mix, as well as pricing strategies. We periodically assess and enhance our scenarios and assumptions.

•Scenarios are dynamic and reflect anticipated changes to our assets and liabilities over time.

•Mortgage prepayment and origination assumptions vary across scenarios and reflect only the impact of the higher or lower interest rates.

•Other macroeconomic variables that could be correlated with the changes in interest rates are held constant.

•The funding forecast in our base scenario incorporates deposit mix changes and market funding levels consistent

with the base interest rate trajectory. Our hypothetical scenarios incorporate deposit mix that is the same as in the base scenario. In higher interest rate scenarios, potential customer deposit activity that shifts balances into higher yielding products and/or requires additional market funding could reduce the expected benefit from higher rates. Conversely, in lower interest rate scenarios, a potential shift to a funding mix with lower yielding deposits and/or less market funding could reduce the impact of lower rates on earning assets in these scenarios.

Table 28: Net Interest Income Sensitivity Over the Next 12 Months Using Instantaneous Movements

($ in billions)	Dec 31, 2024
Parallel shift:
+100 bps shift in interest rates	$	1.1		1.8
-100 bps shift in interest rates	(1.9)		(2.0)
-200 bps shift in interest rates	(3.8)		(4.3)
Steeper yield curve:
+100 bps shift in long-term interest rates	1.3		1.1
-100 bps shift in short-term interest rates	(0.6)		(1.0)
Flatter yield curve:
+100 bps shift in short-term interest rates	(0.3)		0.7
-100 bps shift in long-term interest rates	(1.3)		(1.1)

The changes in our interest rate sensitivity from December 31, 2023, to December 31, 2024, reflected updates for our expected balance sheet composition. Our interest rate sensitivity indicates that we would expect to benefit from higher interest rates as our assets would reprice faster and to a greater degree than our liabilities, while in the case of lower interest rates, our assets would reprice downward and to a greater degree than our liabilities resulting in lower net interest income. The realized impact of interest rate changes may vary from our base and hypothetical scenarios for various reasons, including any deposit pricing lags.

We use interest rate derivatives and our debt securities portfolio to manage our interest rate exposures. We use derivatives for asset/liability management to (i) convert cash flows from selected assets and/or liabilities from floating-rate payments to fixed-rate payments, or vice versa, (ii) reduce accumulated other comprehensive income (AOCI) sensitivity of our AFS debt securities portfolio, and/or (iii) economically hedge our mortgage origination pipeline, funded mortgage loans, and MSRs. Derivatives used to hedge our interest rate risk exposures are presented in Note 14 (Derivatives) to Financial Statements in this Report. As interest rates increase, changes in the fair value of AFS debt securities may negatively affect AOCI, which lowers the amount of our regulatory capital. AOCI also includes unrealized gains or losses related to the transfer of debt securities from AFS to HTM, which are subsequently amortized into earnings over the life of the security with no further impact from interest rate changes. See Note 1 (Summary of Significant Accounting Policies) and Note 3 (Available-for-Sale and Held-to-Maturity Debt Securities) to Financial Statements in this Report for

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	Wells Fargo & Company	43

Risk Management – Asset/Liability Management (continued)

additional information on our debt securities portfolio.

Our interest rate sensitive noninterest income and expense are impacted by mortgage banking activities that may have sensitivity impacts that move in the opposite direction of our net interest income. See the “Risk Management – Asset/Liability Management – Mortgage Banking Interest Rate and Market Risk” section in this Report for additional information.

Interest rate sensitive noninterest income is also impacted by changes in earnings credit for noninterest-bearing deposits that reduce treasury management deposit-related service fees on commercial accounts, and by trading assets. In addition, the impact to net interest income does not include the fair value changes of trading securities, which, along with the effects of related economic hedges, are recorded in noninterest income. In addition to changes in interest rates, net interest income and noninterest income from trading securities may be impacted by the actual composition of the trading portfolio. For additional information on our trading assets and liabilities, see Note 2 (Trading Activities) to Financial Statements in this Report.

Changes in interest rates may impact mortgage banking noninterest income, including origination and servicing fees, and the fair value of our residential MSRs, LHFS, and derivative loan commitments (interest rate “locks”) extended to mortgage applicants. Interest rate changes will generally impact our mortgage banking noninterest income on a lagging basis due to the time it takes for the market to reflect a shift in customer demand, as well as the time required for processing a new application, providing the commitment, and securitizing and selling the loan. The amount and timing of the impact will depend on the magnitude, speed and duration of the changes in interest rates.

The valuation of our residential MSRs can be highly subjective and involve complex judgments by management about matters that are inherently unpredictable. Changes in interest rates influence a variety of significant assumptions captured in the periodic valuation of residential MSRs, including prepayment rates, expected returns and potential risks on the servicing asset portfolio, costs to service, the value of escrow deposit balances and other servicing valuation elements. See the “Critical Accounting Policies – Fair Value Measurements” section in this Report for additional information on the valuation of our residential MSRs.

To reduce our exposure to changes in interest rates, our residential MSRs are economically hedged with a combination of derivative instruments, including interest rate swaps, Eurodollar futures, highly liquid mortgage forward contracts and interest rate options. Hedging the various sources of interest rate risk in mortgage banking is a complex process that requires sophisticated modeling and constant monitoring. There are several potential risks to earnings from mortgage banking related to origination volumes and mix, valuation of MSRs and associated hedging results, the relationship and degree of volatility between short-term and long-term interest rates, and changes in servicing and foreclosures costs. While we attempt to balance our mortgage banking interest rate and market risks, the financial instruments we use may not perfectly correlate with the values and income being hedged.

For additional information on mortgage banking, including key assumptions and the sensitivity of the fair value of MSRs, see Note 6 (Mortgage Banking Activities), Note 14 (Derivatives), and Note 15 (Fair Value Measurements) to Financial Statements in this Report.

MARKET RISK. Market risk is the risk of possible economic loss from adverse changes in market risk factors such as interest rates, credit spreads, foreign exchange rates, equity and commodity prices, and the risk of possible loss due to counterparty exposure. This applies to implied volatility risk, basis risk, and market liquidity risk. It includes price risk in the trading book, mortgage servicing rights, the hedge effectiveness risk associated with the mortgage book held at fair value, and impairment on private equity investments.

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44	Wells Fargo & Company

MARKET RISK – TRADING ACTIVITIES. We engage in trading activities to accommodate the investment and risk management activities of our customers and to execute economic hedging to manage certain balance sheet risks. These trading activities predominantly occur within our CIB businesses. Debt and equity securities held for trading, trading loans, and trading derivatives are financial instruments used in our trading activities, and are measured at fair value through earnings. Income earned on the financial instruments used in our trading activities include net interest income, changes in fair value, and realized gains and losses. Net interest income earned from our trading activities is reflected in the interest income and interest expense components of our consolidated statement of income. Changes in fair value and realized gains and losses of the financial instruments used in our trading activities are reflected in net gains from trading activities. For additional information on the financial instruments used in our trading activities and the income from these trading activities, see Note 2 (Trading Activities) to Financial Statements in this Report.

Value-at-risk (VaR) is a statistical risk measure used to estimate the potential loss from adverse moves in the financial markets, and Trading VaR is a measure used to provide insight

into the market risk exhibited by the Company’s trading positions on our consolidated balance sheet. The Company uses these VaR metrics complemented with sensitivity analysis and stress testing in measuring and monitoring market risk. The Company calculates Trading VaR for risk management purposes to establish and monitor line of business and Company-wide risk limits. Trading VaR is calculated based on all trading positions on our consolidated balance sheet.

Table 29 shows the Company’s Trading General VaR by risk category. Our Trading General VaR uses a historical simulation model which assumes that historical changes in market values are representative of the potential future outcomes and measures the expected earnings loss of the Company over a

1-day time interval at a 99% confidence level. Our historical simulation model is based on equally weighted data from a

12-month historical look-back period. We believe using a

12-month look-back period helps ensure the Company’s VaR is responsive to current market conditions. The 99% confidence level equates to an expectation that the Company would incur single-day trading losses in excess of the VaR estimate on average once every 100 trading days.

Table 29: Trading 1-Day 99% General VaR by Risk Category

	Year ended December 31,
	2024				2023
(in millions)	Period end		Average		Low	High				Period end	Average		Low		High
Company Trading General VaR Risk Categories
Credit	$	43			35		23		58					30			35		20		52
Interest rate	34			32		13		68					16			33		9		65
Equity	25			20		15		27					23			21		13		31
Commodity	7			3		1		11					3			4		2		8
Foreign exchange	2			1		0		13					1			1		0		4
Diversification benefit (1)	(87)			(62)							(36)			(59)
Company Trading General VaR	$	24			29							37			35

(1)The period-end and average VaR was less than the sum of the VaR components described above due to portfolio diversification. The diversification effect arises because the risks are not perfectly correlated causing a portfolio of positions to usually be less risky than the sum of the risks of the positions alone. The diversification benefit is not meaningful for low and high metrics since they may occur on different days.

Stress Testing. While VaR captures the risk of loss due to adverse changes in markets using recent historical market data, stress testing is designed to capture the Company’s exposure to extreme but low probability market movements. Stress scenarios estimate the risk of losses based on management’s assumptions of abnormal but severe market movements such as severe credit spread widening or a large decline in equity prices. These scenarios assume that the market moves happen instantaneously and no repositioning or hedging activity takes place to mitigate losses as events unfold (a conservative approach since experience demonstrates otherwise).

An inventory of scenarios is maintained representing both historical and hypothetical stress events that affect a broad

range of market risk factors with varying degrees of correlation and differing time horizons. Hypothetical scenarios assess the impact of large movements in financial variables on portfolio values. Typical examples include a 1% (100 basis point) increase across the yield curve or a 10% decline in equity market indexes. Historical scenarios utilize an event-driven approach: the stress scenarios are based on plausible but rare events, and the analysis addresses how these events might affect the risk factors relevant to a portfolio.

MARKET RISK – EQUITY SECURITIES. We are directly and indirectly affected by changes in the equity markets. We make and manage equity investments in various businesses, such as start-up companies and emerging growth companies, some of which are made by our venture capital business. We also invest in funds that make similar private equity investments. Private equity investments are approved by management and/or the Board

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	Wells Fargo & Company	45

Risk Management – Asset/Liability Management (continued)

depending on investment size. Management reviews these investments at least quarterly to assess for impairment and identify observable price changes for investments accounted for using the measurement alternative, both of which may require us to make fair value measurements. Impairment assessments are based on facts and circumstances of each individual investment and the expectations for that investment’s cash flows and capital needs, the viability of its business model, and our exit strategy. Investments in nonmarketable equity securities include private equity investments accounted for under the equity method, fair value through net income, and the measurement alternative.

Additionally, as part of our business to support our customers, we trade public equities, listed/over-the-counter equity derivatives, and convertible bonds. We have parameters that govern these activities.

•“Unfunded Credit Commitments” section within Loans and Related Allowance for Credit Losses (Note 5)

•Leasing Activity (Note 8)

•Deposits (Note 9)

•Long-Term Debt (Note 10)

•Guarantees and Other Commitments (Note 17)

•Employee Benefits (Note 22)

•Income Taxes (Note 23)

Liquidity Stress Tests. Liquidity stress tests are performed to help the Company maintain sufficient liquidity to meet contractual and contingent outflows modeled under a variety of stress scenarios. Our scenarios utilize market-wide as well as idiosyncratic events, including a range of stress conditions and time horizons. Stress testing results facilitate evaluation of the Company’s projected liquidity position during stress and inform future needs in the Company’s funding plan.

Liquidity Standards. We are subject to a rule issued by the FRB, OCC and FDIC that establishes a quantitative minimum liquidity requirement, known as the liquidity coverage ratio (LCR). The rule requires a covered banking organization to hold high-quality liquid assets (HQLA) in an amount equal to or greater than its projected net cash outflows during a 30-day stress period. Our HQLA under the rule mainly consists of central bank deposits, government debt securities, and mortgage-backed securities of federal agencies. The LCR applies to the Company and to our insured depository institutions (IDIs) with total assets of $10 billion or more. In addition, rules issued by the FRB impose enhanced liquidity risk management standards on large bank holding companies (BHCs), such as Wells Fargo.

We are also subject to a rule issued by the FRB, OCC and FDIC that establishes a stable funding requirement, known as the net stable funding ratio (NSFR), which requires a covered banking organization, such as Wells Fargo, to maintain a minimum amount of stable funding, including common equity, long-term debt and most types of deposits, in relation to its assets, derivative exposures and commitments over a one-year horizon period. The NSFR applies to the Company and to our IDIs with total assets of $10 billion or more. As of December 31, 2024, we were compliant with the NSFR requirement.

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46	Wells Fargo & Company

Liquidity Coverage Ratio. As of December 31, 2024, the Company, Wells Fargo Bank, N.A., and Wells Fargo National Bank West exceeded the minimum LCR requirement of 100%. The LCR represents average HQLA divided by average projected net cash outflows, as each is defined under the LCR rule.

Table 30 presents the Company’s quarterly average values for the daily-calculated LCR and its components calculated pursuant to the LCR rule requirements.

Table 30: Liquidity Coverage Ratio

	Average for quarter ended
(in millions, except ratio)	Dec 31, 2024		Sep 30, 2024		Dec 31, 2023
HQLA (1):
Eligible cash	$	164,386		176,218			187,133
Eligible securities (2)	205,715		193,282			162,930
Total HQLA	370,101		369,500			350,063
Projected net cash outflows (3)	295,537		290,236			279,903
LCR	125	%		127			125

(1)HQLA excludes excess HQLA at certain subsidiaries that is not transferable to other Wells Fargo entities.

(2)Net of applicable haircuts required under the LCR rule.

Liquidity Sources. As of December 31, 2024, the Company had approximately $891.7 billion of total available liquidity sources. Table 31 presents the components of our available liquidity sources.

We maintain primary sources of liquidity in the form of central bank deposits and high-quality liquid debt securities, which collectively totaled $530.7 billion as of December 31, 2024. Our high-quality liquid debt securities presented in Table 31 are substantially the same in composition as HQLA eligible securities under the LCR rule; however, they will generally exceed HQLA eligible securities due to the applicable LCR haircuts and the exclusion of LCR adjustments for excess liquidity that is not transferable from certain subsidiaries.

We believe our high-quality liquid debt securities provide reliable sources of liquidity through sales or by pledging to obtain

financing, in both normal and stressed market conditions. High-quality liquid debt securities include AFS, HTM, and trading debt securities, as well as debt securities received through securities financing activities.

As of December 31, 2024, we had approximately $577.0 billion of borrowing capacity at the Federal Reserve Discount Window and Federal Home Loan Banks (FHLB). This borrowing capacity included $215.9 billion related to pledged high-quality liquid debt securities within our primary sources of liquidity and $361.1 billion related to pledged loans and other debt securities within our contingent sources of liquidity.

Table 31: Total Available Liquidity Sources

(in millions)	Dec 31, 2024			Dec 31, 2023
Primary sources of liquidity:
Central bank deposits	$	162,174		147,935		199,967
High-quality liquid debt securities (1)	368,508		393,687		306,797
Total	530,682		541,622		506,764
Contingent sources of liquidity (2):
Pledged loans and other	361,057		352,790		292,026
Total available liquidity	$	891,739		894,412		798,790

(1)Presented at fair value and includes unencumbered securities.

(2)Presented at borrowing capacity, net of haircuts.

Funding Sources. The Parent acts as a source of funding for the Company through the issuance of long-term debt and equity. WFC Holdings, LLC (the “IHC”) is an intermediate holding company and subsidiary of the Parent, which provides funding support for the ongoing operational requirements of the Parent and certain of its direct and indirect subsidiaries. For additional information on the IHC, see the “Regulation and Supervision – ‘Living Will’ Requirements and Related Matters” section in our 2024 Form 10-K. Additional subsidiary funding is provided by deposits, short-term borrowings and long-term debt.

Deposits have historically provided a sizable source of relatively low-cost funds. Loans were 67% and 69% of total deposits at December 31, 2024 and 2023, respectively.

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	Wells Fargo & Company	47

Risk Management – Asset/Liability Management (continued)

Table 32 presents a summary of our short-term borrowings, which generally mature in less than 30 days. The balances of federal funds purchased and securities sold under agreements to repurchase may vary over time due to client activity, our own demand for financing, and our overall mix of liabilities. For additional information on the classification of our short-term borrowings, see Note 1 (Summary of Significant Accounting

Policies) to Financial Statements in this Report. We pledge certain financial instruments that we own to collateralize repurchase agreements and other securities financings, as well as borrowings from the FHLB. For additional information, see the “Pledged Assets” section of Note 19 (Pledged Assets and Collateral) to Financial Statements in this Report.

Table 32: Short-Term Borrowings

(in millions)	Dec 31, 2024
Federal funds purchased and securities sold under agreements to repurchase	$	95,235		77,676
Other short-term borrowings (1)	13,571		11,883
Total	$	108,806		89,559

(1)Includes $1.0 billion and $0 of FHLB advances at December 31, 2024 and 2023, respectively.

repurchase, and subsequently retire, our outstanding debt securities in privately negotiated or open market transactions,

by tender offer, or otherwise. We issued $6.2 billion and had maturities of $5.9 billion of long-term debt in total during January and February 2025. Table 33 presents a summary of our long-term debt. For additional information on our long-term debt, including contractual maturities, see Note 10 (Long-Term Debt), and for information on the classification of our long-term debt, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

Table 33: Long-Term Debt

(in millions)	December 31, 2024
Wells Fargo & Company (Parent Only)	$	147,100		148,312
Wells Fargo Bank, N.A., and other bank entities (Bank) (1)(2)	24,709		58,466
Other consolidated subsidiaries	1,269		810
Total	$	173,078		207,588

(1)Includes $3.0 billion and $38.0 billion of FHLB advances at December 31, 2024 and 2023, respectively. For additional information, see Note 10 (Long-Term Debt) to Financial Statements in this Report.

(2)Effective January 1, 2024, we reclassified $4.9 billion of unfunded commitment liabilities for affordable housing investments to accrued expenses and other liabilities in connection with the adoption of ASU 2023-02. For additional information, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

Credit Ratings. Investors in the long-term capital markets, as well as other market participants, generally will consider, among other factors, a company’s debt rating in making investment decisions. Rating agencies base their ratings on many quantitative and qualitative factors, including capital adequacy, liquidity, asset quality, business mix, the level and quality of earnings, and rating agency assumptions regarding the probability and extent of federal financial assistance or support for certain large financial institutions. Adverse changes in these factors could result in a reduction of our credit rating; however, our debt securities do not contain credit rating covenants.

On November 20, 2024, Moody’s affirmed the Company’s ratings and maintained the stable outlook for Wells Fargo & Company and negative outlook for long-term bank deposits,

long-term issuer ratings, and senior unsecured debt. There were no other actions undertaken by the rating agencies with regard to our credit ratings during fourth quarter 2024.

See the “Risk Factors” section in this Report for additional information regarding our credit ratings and the potential impact a credit rating downgrade would have on our liquidity and operations as well as Note 14 (Derivatives) to Financial Statements in this Report for information regarding additional collateral and funding obligations required for certain derivative instruments in the event our credit ratings were to fall below investment grade.

The credit ratings of the Parent and Wells Fargo Bank, N.A., as of December 31, 2024, are presented in Table 34.

Table 34: Credit Ratings as of December 31, 2024

		Wells Fargo & Company	Wells Fargo Bank, N.A.
	Senior debt	Short-term borrowings	Long-term deposits	Short-term borrowings
Moody’s	A1	P-1	Aa1	P-1
S&P Global Ratings	BBB+	A-2	A+	A-1
Fitch Ratings	A+	F1	AA	F1+
DBRS Morningstar	AA (low)	R-1 (middle)	AA	R-1 (high)

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48	Wells Fargo & Company

Capital Management

Regulatory Capital Requirements

In July 2023, federal banking regulators issued a proposed rule to implement the final components of Basel III, which would impact risk-based capital requirements for certain banks. The proposed rule would eliminate the current Advanced Approach

and replace it with a new expanded risk-based approach for the measurement of risk-weighted assets, including more granular risk weights for credit risk, a new market risk framework, and a new standardized approach for measuring operational risk. Officials from federal banking regulators have since commented that there may be significant changes to the proposed rule.

Table 35 presents the risk-based capital requirements applicable to the Company under the Standardized Approach and Advanced Approach, respectively, as of December 31, 2024.

In addition to the risk-based capital requirements described in Table 35, if the FRB determines that a period of excessive credit growth is contributing to an increase in systemic risk, a countercyclical buffer of up to 2.50% could be added to the risk-based capital ratio requirements under federal banking regulations. The countercyclical buffer in effect at December 31, 2024, was 0.00%.

The stress capital buffer is calculated based on the decrease in a BHC’s risk-based capital ratios under the severely adverse scenario in the FRB’s annual supervisory stress test and related Comprehensive Capital Analysis and Review (CCAR), plus four quarters of planned common stock dividends. Because the stress capital buffer is calculated annually based on data that can differ over time, our stress capital buffer, and thus our risk-based capital ratio requirements under the Standardized Approach, are subject to change in future periods. Our stress capital buffer for the period October 1, 2024, through September 30, 2025, is 3.80%. The FRB announced that it intends to propose changes to the supervisory stress test process.

Table 35: Risk-Based Capital Requirements – Standardized and Advanced Approaches

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	Wells Fargo & Company	49

Capital Management (continued)

an increase to our G-SIB capital surcharge, the increase takes effect in two calendar years. Our G-SIB capital surcharge will continue to be 1.50% in 2025. On July 27, 2023, the FRB issued a proposed rule that would impact the methodology used to calculate the G-SIB capital surcharge.

Under the risk-based capital rules, on-balance sheet assets and credit equivalent amounts of derivatives and off-balance sheet items are assigned to one of several broad risk categories according to the obligor, or, if relevant, the guarantor or the nature of any collateral. The aggregate dollar amount in each risk category is then multiplied by the risk weight associated with that category. The resulting weighted values from each of the risk categories are aggregated for determining total risk-weighted assets (RWAs).

The tables that follow provide information about our risk-based capital and related ratios as calculated under Basel III capital rules. Table 36 summarizes our CET1, Tier 1 capital, Total capital, RWAs and capital ratios.

Table 36: Capital Components and Ratios

		Standardized Approach		Advanced Approach
($ in millions)		Required Capital Ratios (1)		Dec 31, 2024		Dec 31, 2023		Required Capital Ratios (1)	Dec 31, 2024		Dec 31, 2023
Common Equity Tier 1	(A)			$	134,588			140,783				134,588			140,783
Tier 1 capital	(B)			152,866			159,823				152,866			159,823
Total capital	(C)			184,638			193,061				174,446			182,726
Risk-weighted assets	(D)			1,216,146			1,231,668				1,085,017			1,114,281
Common Equity Tier 1 capital ratio	(A)/(D)	9.80	%		11.07		*	11.43		8.50			12.40			12.63
Tier 1 capital ratio	(B)/(D)	11.30			12.57		*	12.98		10.00			14.09			14.34
Total capital ratio	(C)/(D)	13.30			15.18		*	15.67		12.00			16.08			16.40

*Denotes the binding ratio under the Standardized and Advanced Approaches at December 31, 2024.

(1)Represents the minimum ratios required to avoid restrictions on capital distributions and discretionary bonus payments at December 31, 2024.

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50	Wells Fargo & Company

Table 37 provides information regarding the calculation and composition of our risk-based capital under the Standardized and Advanced Approaches.

Table 37: Risk-Based Capital Calculation and Components

(in millions)		Dec 31, 2024
Total equity		$	181,066		187,443
Adjustments:
Preferred stock		(18,608)		(19,448)
Additional paid-in capital on preferred stock		144		157
Noncontrolling interests		(1,946)		(1,708)
Total common stockholders’ equity		$	160,656		166,444
Adjustments:
Goodwill		(25,167)		(25,175)
Certain identifiable intangible assets (other than MSRs)		(73)		(118)
Goodwill and other intangibles on investments in consolidated portfolio companies (included in other assets)		(735)		(878)
Applicable deferred taxes related to goodwill and other intangible assets (1)		947		919
Other (2)		(1,040)		(409)
Common Equity Tier 1 under the Standardized and Advanced Approaches		$	134,588		140,783
Preferred stock		18,608		19,448
Additional paid-in capital on preferred stock		(144)		(157)
Other		(186)		(251)
Total Tier 1 capital under the Standardized and Advanced Approaches	(A)	$	152,866		159,823
Long-term debt and other instruments qualifying as Tier 2		17,644		19,020
Qualifying allowance for credit losses (3)		14,471		14,805
Other		(343)		(587)
Total Tier 2 capital under the Standardized Approach	(B)	$	31,772		33,238
Total qualifying capital under the Standardized Approach	(A)+(B)	$	184,638		193,061
Long-term debt and other instruments qualifying as Tier 2		17,644		19,020
Qualifying allowance for credit losses (3)		4,279		4,470
Other		(343)		(587)
Total Tier 2 capital under the Advanced Approach	(C)	$	21,580		22,903
Total qualifying capital under the Advanced Approach	(A)+(C)	$	174,446		182,726

(2)Includes a $60 million increase and $120 million increase at December 31, 2024 and 2023, respectively, related to a current expected credit loss accounting standard (CECL) transition provision. In second quarter 2020, the Company elected to apply a modified transition provision issued by federal banking regulators related to the impact of CECL on regulatory capital. The rule permits certain banking organizations to exclude from regulatory capital the initial adoption impact of CECL, plus 25% of the cumulative changes in the allowance for credit losses (ACL) under CECL for each period until December 31, 2021, followed by a three-year phase-out period in which the benefit is reduced by 25% in year one, 50% in year two and 75% in year three.

(3)Differences between the approaches are driven by the qualifying amounts of ACL includable in Tier 2 capital. Under the Advanced Approach, eligible credit reserves represented by the amount of qualifying ACL in excess of expected credit losses (using regulatory definitions) is limited to 0.60% of Advanced credit RWAs, whereas the Standardized Approach includes ACL in Tier 2 capital up to 1.25% of Standardized credit RWAs. Under both approaches, any excess ACL is deducted from the respective total RWAs.

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	Wells Fargo & Company	51

Capital Management (continued)

Table 38 provides the composition and net changes in the components of RWAs under the Standardized and Advanced Approaches.

Table 38: Risk-Weighted Assets

	Standardized Approach		Advanced Approach (1)
(in millions)	Dec 31, 2024		Dec 31, 2023		$ Change2024/2023	Dec 31, 2024		Dec 31, 2023		$ Change2024/2023
Risk-weighted assets (RWAs):
Credit risk	$	1,156,572			1,182,805		(26,233)			726,855		756,905		(30,050)
Market risk	59,574			48,863		10,711			59,574		48,863		10,711
Operational risk	N/A		N/A		N/A	298,588			308,513		(9,925)
Total RWAs	$	1,216,146			1,231,668		(15,522)			1,085,017		1,114,281		(29,264)

(1)RWAs calculated under the Advanced Approach utilize a risk-sensitive methodology, which relies upon the use of internal credit models based upon our experience with internal rating grades. The Advanced Approach also includes an operational risk component, which reflects the risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events.

Table 39 provides an analysis of changes in CET1.

Table 39: Analysis of Changes in Common Equity Tier 1

(in millions)
Common Equity Tier 1 at December 31, 2023	$	140,783
Cumulative effect from change in accounting policy (1)	(158)
Net income applicable to common stock	18,606
Common stock dividends	(5,140)
Common stock issued, repurchased, and stock compensation-related items	(18,496)
Changes in accumulated other comprehensive income (loss)	(596)
Goodwill	8
Certain identifiable intangible assets (other than MSRs)	45
Goodwill and other intangibles on investments in consolidated portfolio companies (included in other assets)	143
Applicable deferred taxes related to goodwill and other intangible assets (2)	28
Other (3)	(635)
Change in Common Equity Tier 1	(6,195)
Common Equity Tier 1 at December 31, 2024	$	134,588

(1)Effective January 1, 2024, we adopted ASU 2023-02. For additional information, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

(2)Determined by applying the combined federal statutory rate and composite state income tax rates to the difference between book and tax basis of the respective goodwill and intangible assets at period-end.

(3)Includes a $60 million decrease from December 31, 2023, related to a CECL transition provision. In second quarter 2020, the Company elected to apply a modified transition provision issued by federal banking regulators related to the impact of CECL on regulatory capital. The rule permits certain banking organizations to exclude from regulatory capital the initial adoption impact of CECL, plus 25% of the cumulative changes in the allowance for credit losses (ACL) under CECL for each period until December 31, 2021, followed by a three-year phase-out period in which the benefit is reduced by 25% in year one, 50% in year two and 75% in year three.

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52	Wells Fargo & Company

TANGIBLE COMMON EQUITY. We also evaluate our business based on certain ratios that utilize tangible common equity. Tangible common equity is a non-GAAP financial measure and represents total equity less preferred equity, noncontrolling interests, goodwill, certain identifiable intangible assets (other than MSRs) and goodwill and other intangibles on investments in consolidated portfolio companies, net of applicable deferred taxes. The ratios are (i) tangible book value per common share, which represents tangible common equity divided by common shares outstanding; and (ii) return on average tangible common

equity (ROTCE), which represents our annualized earnings as a percentage of tangible common equity. The methodology of determining tangible common equity may differ among companies. Management believes that tangible book value per common share and return on average tangible common equity, which utilize tangible common equity, are useful financial measures because they enable management, investors, and others to assess the Company’s use of equity.

Table 40 provides a reconciliation of these non-GAAP financial measures to GAAP financial measures.

Table 40: Tangible Common Equity

		Balance at period-end					Average balance
		Period ended				Year ended
(in millions, except ratios)		Dec 31, 2024		Dec 31, 2023	Dec 31, 2022						Dec 31, 2024	Dec 31, 2023	Dec 31, 2022
Total equity		$	181,066			$	187,443		$	182,213							183,879	184,860		183,167
Adjustments:
Preferred stock (1)		(18,608)			(19,448)		(19,448)							(18,581)		(19,698)		(19,930)
Additional paid-in capital on preferred stock (1)		144			157		173							147		168		143
Unearned ESOP shares (1)		—			—		—							—		—		512
Noncontrolling interests		(1,946)			(1,708)		(1,986)							(1,751)		(1,844)		(2,323)
Total common stockholders’ equity	(A)	160,656			166,444		160,952							163,694		163,486		161,569
Adjustments:
Goodwill		(25,167)			(25,175)		(25,173)							(25,172)		(25,173)		(25,177)
Certain identifiable intangible assets (other than MSRs)		(73)			(118)		(152)							(95)		(136)		(190)
Goodwill and other intangibles on investments in consolidated portfolio companies (included in other assets) (2)		(735)			(878)		(2,427)							(895)		(2,083)		(2,359)
Applicable deferred taxes related to goodwill and other intangible assets (3)		947			920		890							935		906		864
Tangible common equity	(B)	$	135,628			141,193		134,090							138,467		137,000		134,707
Common shares outstanding	(C)	3,288.9			3,598.9		3,833.8							N/A	N/A	N/A
Net income applicable to common stock	(D)	N/A		N/A	N/A						$	18,606		17,982		12,562
Book value per common share	(A)/(C)	$	48.85			46.25		41.98							N/A	N/A	N/A
Tangible book value per common share	(B)/(C)	41.24			39.23		34.98							N/A	N/A	N/A
Return on average common stockholders’ equity (ROE)	(D)/(A)	N/A		N/A	N/A						11.37	%	11.00		7.78
Return on average tangible common equity (ROTCE)	(D)/(B)	N/A		N/A	N/A						13.44		13.13		9.33

(1)In fourth quarter 2022, we redeemed all outstanding shares of our Employee Stock Ownership Plan (ESOP) Cumulative Convertible Preferred Stock in exchange for shares of the Company’s common stock.

(2)In third quarter 2023, we sold investments in certain private equity funds. As a result, we have removed the related goodwill and other intangible assets on private equity investments in consolidated portfolio companies.

(3)Determined by applying the combined federal statutory rate and composite state income tax rates to the difference between book and tax basis of the respective goodwill and intangible assets at period-end.

LEVERAGE REQUIREMENTS. As a BHC, we are required to maintain a supplementary leverage ratio (SLR) to avoid restrictions on capital distributions and discretionary bonus payments and maintain a minimum Tier 1 leverage ratio. Table 41 presents the leverage requirements applicable to the Company as of December 31, 2024.

Table 41: Leverage Requirements Applicable to the Company

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	Wells Fargo & Company	53

Capital Management (continued)

In addition, our IDIs are required to maintain an SLR of at least 6.00% to be considered well-capitalized under applicable regulatory capital adequacy rules and maintain a minimum Tier 1 leverage ratio of 4.00%.

Table 42 presents information regarding the calculation and components of the Company’s SLR and Tier 1 leverage ratio. At December 31, 2024, each of our IDIs exceeded their applicable SLR requirements.

Table 42: Leverage Ratios for the Company

($ in millions)		Quarter ended December 31, 2024
Tier 1 capital	(A)	$	152,866
Total consolidated assets		1,929,845
Adjustments:
Derivatives (1)		62,906
Repo-style transactions (2)		6,296
Credit equivalent amounts of other off-balance sheet exposures (3)		307,204
Other (4)		(38,610)
Total adjustments		337,796
Total leverage exposure	(B)	$	2,267,641
Supplementary leverage ratio	(A)/(B)	6.74	%
Total adjusted average assets (5)	(C)	$	1,891,333
Tier 1 leverage ratio	(A)/(C)	8.08	%

(1)Adjustment represents derivatives and collateral netting exposures as defined for supplementary leverage ratio determination purposes.

(2)Adjustment represents counterparty credit risk for repo-style transactions where Wells Fargo & Company is the principal counterparty facing the client.

(3)Adjustment represents credit equivalent amounts of other off-balance sheet exposures not already included as derivatives and repo-style transactions exposures.

(4)Adjustment represents other permitted Tier 1 capital deductions and certain other adjustments as determined under capital rule requirements.

(5)Represents total average assets less goodwill and other permitted Tier 1 capital deductions.

Table 43: Components Used to Calculate TLAC and Eligible Unsecured Long-Term Debt Requirements

TLAC requirement Greater of:
18.00% of RWAs		7.50% of total leverage exposure (the denominator of the SLR calculation)
+	+
TLAC buffer (equal to 2.50% of RWAs + method one G-SIB capital surcharge + any countercyclical buffer)	External TLAC leverage buffer (equal to 2.00% of total leverage exposure)
Minimum amount of eligible unsecured long-term debt Greater of:
6.00% of RWAs		4.50% of total leverage exposure
+
Greater of method one and method two G-SIB capital surcharge

In August 2023, the FRB proposed rules that would, among other things, modify the calculation of eligible long-term debt that counts towards the TLAC requirements, which would reduce our TLAC ratios.

Table 44 provides our TLAC and eligible unsecured long-term debt and related ratios.

Table 44: TLAC and Eligible Unsecured Long-Term Debt

December 31, 2024
($ in millions)	TLAC (1)		Regulatory Minimum (2)		Eligible Unsecured Long-term Debt		Regulatory Minimum
Total eligible amount	$	301,936				135,288
Percentage of RWAs (3)	24.83	%		21.50			11.12	7.50
Percentage of total leverage exposure	13.31			9.50			5.97	4.50

(1)TLAC ratios are calculated using the CECL transition provision issued by federal banking regulators.

(2)Represents the minimum required to avoid restrictions on capital distributions and discretionary bonus payments.

(3)Our minimum TLAC and eligible unsecured long-term debt requirements are calculated based on the greater of RWAs determined under the Standardized and Advanced Approaches.

OTHER REGULATORY CAPITAL AND LIQUIDITY MATTERS. For information regarding the U.S. implementation of the Basel III LCR and NSFR, see the “Risk Management – Asset/ Liability Management – Liquidity Risk and Funding – Liquidity Standards” section in this Report.

Our principal U.S. broker-dealer subsidiaries, Wells Fargo Securities, LLC, and Wells Fargo Clearing Services, LLC, are subject to regulations to maintain minimum net capital requirements. As of December 31, 2024, these broker-dealer subsidiaries were in compliance with their respective regulatory minimum net capital requirements.

Capital Planning and Stress Testing

Our planned long-term capital structure is designed to meet regulatory and market expectations. We believe that our long-term targeted capital structure enables us to invest in and grow our business, satisfy our customers’ financial needs in varying environments, access markets, and maintain flexibility to return capital to our shareholders. Our long-term targeted capital structure also considers capital levels sufficient to exceed capital requirements, including the G-SIB capital surcharge and the stress capital buffer, as well as potential changes to regulatory requirements for our capital ratios, planned capital actions, changes in our risk profile and other factors. Accordingly, our long-term target capital levels are set above their respective regulatory minimums plus buffers.

During 2024, we issued $993 million of common stock, substantially all of which was issued in connection with employee compensation and benefits, and we repurchased 333 million shares of common stock at a cost of $19.6 billion. We paid $6.2 billion of common and preferred stock dividends during 2024.

As part of the annual CCAR, the FRB generates a supervisory stress test. The FRB reviews the supervisory stress test results as required under the Dodd-Frank Act using a common set of

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capital actions for all large BHCs and also reviews the Company’s proposed capital actions.

Securities Repurchases

On July 25, 2023, we announced that our Board authorized a common stock repurchase program of up to $30 billion. Unless modified or revoked by the Board, this authorization does not expire and is our only common stock repurchase program in effect. At December 31, 2024, we had remaining Board authority to repurchase up to approximately $7.3 billion of common stock.

and long-term targeted capital structure, the results of supervisory stress tests, market conditions (including the trading price of our stock), and regulatory and legal considerations, including regulatory requirements under the FRB’s capital plan rule. Although we announce when the Board authorizes a share repurchase program, we typically do not give any public notice before we repurchase our shares. Due to the various factors that may impact the amount and timing of our share repurchases and the fact that we may be in the market throughout the year, our share repurchases occur at various prices. We may suspend share repurchase activity at any time.

For additional information about share repurchases during fourth quarter 2024, see Part II, Item 5 in our 2024 Form 10-K.

Regulation and Supervision

For a discussion of certain consent orders and other regulatory actions applicable to the Company, see the “Overview” section in this Report. For a discussion of other significant regulations and regulatory oversight initiatives that have affected or may affect our business, see the “Regulation and Supervision” section in our 2024 Form 10-K and the “Risk Factors” section in this Report.

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Critical Accounting Policies

Our significant accounting policies (see Note 1 (Summary of

Significant Accounting Policies) to Financial Statements in this

•the allowance for credit losses;

•fair value measurements;

•income taxes;

•liability for legal actions; and

•goodwill impairment.

Management has discussed these critical accounting policies and the related estimates and judgments with the Board’s Audit Committee.

Allowance for Credit Losses

We maintain an allowance for credit losses (ACL) for loans, which is management’s estimate of the expected credit losses in the loan portfolio and unfunded credit commitments, at the balance sheet date, excluding loans and unfunded credit commitments carried at fair value or held for sale. Additionally, we maintain an ACL for debt securities classified as either HTM or AFS, other financial assets measured at amortized cost, net investments in leases, and other off-balance sheet credit exposures. For additional information, see Note 1 (Summary of Significant Accounting Policies) and Note 5 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.

Judgment is specifically applied in:

•Economic assumptions and the length of the initial loss forecast period. We forecast a wide range of economic variables to estimate expected credit losses. Our key economic variables include gross domestic product (GDP), unemployment rate, and collateral asset prices. While many of these economic variables are evaluated at the macro-economy level, some

economic variables are forecasted at more granular levels, for example, using the metro statistical area (MSA) level for unemployment rates, home prices and commercial real estate prices. At least annually, we assess the length of the initial loss forecast period and have currently set the period to two years. For the initial loss forecast period, we forecast multiple economic scenarios that generally include a base scenario with an optimistic (upside) and one or more pessimistic (downside) scenarios. Management exercises judgment when assigning weight to the economic scenarios that are used to estimate future credit losses.

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estimating the application of future payments to the outstanding loan amount.

Our sensitivity analysis does not represent management’s view of expected credit losses at the balance sheet date. We applied a 100% weight to a more severe downside scenario in our sensitivity analysis to reflect the potential for further economic deterioration. The outcome of the scenario was influenced by the duration, severity, and timing of changes in economic variables within the scenario. The sensitivity analysis resulted in a hypothetical increase in the ACL for loans of approximately $5.4 billion at December 31, 2024. The hypothetical increase in our ACL for loans does not incorporate the impact of management judgment for qualitative factors applied in the current ACL for loans, which may have a positive or negative effect on the results. It is possible that others performing similar sensitivity analyses could reach different conclusions or results. Management believes that the estimate for the ACL for loans was appropriate at the balance sheet date.

The sensitivity analysis excludes the ACL for debt securities and other financial assets given its size relative to the overall ACL.

Fair Value Measurements

We use fair value measurements to comply with recognition and disclosure requirements. For example, assets and liabilities held for trading purposes, AFS debt securities, residential mortgage servicing rights (MSRs), derivatives, and marketable equity securities are recorded at fair value on our consolidated balance sheet each period. Other assets and liabilities, such as loans held for investment, commercial MSRs and certain nonmarketable equity securities are not recorded at fair value each period but may require nonrecurring fair value adjustments through the write-down of individual assets or the application of accounting methods such as lower of cost or fair value (LOCOM) and the measurement alternative.

Fair value measurements are made using a three-level hierarchy which is based on whether the significant inputs to the valuation methodology used for measurement are observable or unobservable. Observable inputs reflect market-derived or market-based information obtained from independent sources, while unobservable inputs reflect our estimates of assumptions that market participants would use to value the asset or liability.

When developing fair value measurements, we maximize the use of observable inputs and minimize the use of unobservable inputs. When available, we use quoted prices in active markets to measure fair value. Such measurements are classified as Level 1 within the fair value hierarchy. If quoted prices in active markets are not available, fair value measurement is based upon internal models that generally use market-based or independently sourced market parameters, including interest rate yield curves, prepayment rates, option volatilities and currency rates. However, when observable market data is limited or not available, fair value measurement is based upon internal models that use unobservable inputs. These models are independently validated in accordance with the Company’s policies. We also obtain pricing information from third-party vendors to record fair values and to corroborate internal prices. Validation procedures are performed over the reasonableness of prices received from third parties.

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Critical Accounting Policies (continued)

inputs and assumptions that market participants would use to value the asset. Certain significant inputs and assumptions, such as discount rates, prepayment rates (blend of prepayment speeds and expected defaults), and estimated costs to service residential mortgage loans, are generally not observable in the market and require judgment to determine. Both prepayment rate and discount rate assumptions can, and generally will, change quarterly as market conditions and mortgage interest rates change. We periodically benchmark our residential MSR fair value estimates to independent appraisals.

Table 45 presents our (i) assets and liabilities recorded at fair value on a recurring basis and (ii) Level 3 assets and liabilities recorded at fair value on a recurring basis, both presented as a percentage of our total assets and total liabilities.

Table 45: Fair Value Level 3 Summary

	December 31, 2024		December 31, 2023
($ in billions)	Total balance		Level 3 (1)		Total balance	Level 3 (1)
Assets recorded at fairvalue on a recurring basis	$	338.2			8.3		276.2		9.5
As a percentage oftotal assets	17.5	%		0.4		14.3		0.5
Liabilities recorded at fair value on a recurring basis	$	48.9			5.6		47.7		6.2
As a percentage of total liabilities	2.8	%		0.3		2.7		0.4

(1)Before derivative netting adjustments.

See Note 15 (Fair Value Measurements) to Financial Statements in this Report for a complete discussion on fair value measurements, our related measurement techniques and the impact to our financial statements, including MSRs. See Note 6 (Mortgage Banking Activities) to Financial Statements in this Report for key weighted-average assumptions used in the valuation of residential MSRs and sensitivity to immediate adverse changes in those assumptions.

Income Taxes

We file income tax returns in the jurisdictions in which we operate and evaluate income tax expense in two components: current and deferred income tax expense. Current income tax expense represents our estimated taxes to be paid or refunded for the current period and includes income tax expense related to uncertain tax positions. Uncertain tax positions that meet the more likely than not recognition threshold are measured to determine the amount of benefit to recognize. An uncertain tax position is measured at the largest amount of benefit that management believes has a greater than 50% likelihood of realization upon settlement. Tax benefits not meeting our realization criteria represent unrecognized tax benefits.

Deferred income taxes are based on the balance sheet method and deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Under the balance sheet method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax basis of assets and liabilities and recognizes enacted changes in income tax rates and laws in the period in which they occur. Deferred tax assets, including those related to net operating losses and tax credit carryforwards, are recognized subject to management’s judgment that realization is more likely than not. When necessary, valuation allowances are established to reduce deferred tax assets to the realizable amounts.

The income tax laws of the jurisdictions in which we operate are complex and subject to different interpretations by management and the relevant government taxing authorities. In establishing a provision for income tax expense, we must make judgments about the application of these inherently complex tax laws. We must also make estimates about when in the future certain items will affect taxable income in the various tax jurisdictions. Our interpretations may be subjected to review during examination by taxing authorities and disputes may arise over the respective tax positions. We attempt to resolve these disputes during the tax examination and audit process and ultimately through the court systems when applicable.

See Note 23 (Income Taxes) to Financial Statements in this Report for a further description of our provision for income taxes and related income tax assets and liabilities.

Liability for Legal Actions

The Company is involved in a number of judicial, regulatory, governmental, arbitration and other proceedings or investigations concerning matters arising from the conduct of its business activities, and many of those proceedings and investigations expose the Company to potential financial loss or other adverse consequences. We establish accruals for legal actions when potential losses associated with the actions become probable and the costs can be reasonably estimated. For such accruals, we record the amount we consider to be the best estimate within a range of potential losses that are both probable and estimable; however, if we cannot determine a best estimate, then we record the low end of the range of those potential losses. The actual costs of resolving legal actions may be substantially higher or lower than the amounts accrued for those actions.

We apply judgment when establishing an accrual for potential losses associated with legal actions and in establishing the range of reasonably possible losses in excess of the accrual. Our judgment in establishing accruals and the range of reasonably possible losses in excess of the Company’s accrual for probable and estimable losses is influenced by our understanding of information currently available related to the legal evaluation and potential outcome of actions, including input and advice on these matters from our external counsel. These matters may be in various stages of investigation, discovery or proceedings. They may also involve a wide variety of claims across our businesses, legal entities and jurisdictions. The eventual outcome may be a scenario that was not considered or was considered remote in anticipated occurrence. Accordingly, our estimate of potential losses will change over time and the actual losses may vary significantly.

The outcomes of legal actions are unpredictable and subject to significant uncertainties, and it is inherently difficult to determine whether any loss is probable or even possible. It is also inherently difficult to estimate the amount of any loss and there may be matters for which a loss is probable or reasonably possible but not currently estimable. Accordingly, actual losses may be in excess of the established accrual or the range of reasonably possible loss.

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See Note 13 (Legal Actions) to Financial Statements in this Report for additional information.

Goodwill Impairment

Our 2024 assessment indicated goodwill was not impaired as of December 31, 2024, based on the fair value of each reporting unit exceeding its carrying amount by a significant amount. The aggregate fair value of our reporting units exceeded our market capitalization, and we believe factors that contributed to this difference included an overall control premium and market volatility. Although the fair value of our Consumer Lending reporting unit exceeded its carrying amount by a significant amount, it was the most sensitive to changes in the estimated financial forecasts.

For additional information on goodwill and our reportable operating segments, see Note 1 (Summary of Significant Accounting Policies), Note 7 (Intangible Assets and Other Assets), and Note 20 (Operating Segments) to Financial Statements in this Report.

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Current Accounting Developments

Table 46 provides the significant accounting updates applicable to us that have been issued by the Financial Accounting Standards Board (FASB) but are not yet effective.

Table 46: Current Accounting Developments – Issued Standards

Description and Effective Date		Financial statement impact
ASU 2023-09 – Income Taxes (Topic 740): Improvements to Income Tax Disclosures
The Update, effective January 1, 2025 (with early adoption permitted), enhances annual income tax disclosures primarily to further disaggregate existing disclosures.		The Update impacts our annual income tax disclosures. We are currently evaluating the required changes to our income tax disclosures. Upon adoption, those disclosures may change as follows: •For the tabular effective income tax rate reconciliation, provide specific categories (where applicable) and further disaggregation of certain categories (where applicable) by nature and/or jurisdiction if the reconciling item is 5% or more of the statutory tax expense.•Description and disclosure of states and local jurisdictions that contribute the majority of the effect of the state and local income tax category of the effective income tax rate reconciliation.•Disaggregate the amount of income taxes paid (net of refunds) by federal, state, and non-U.S. taxes and further disaggregate by individual jurisdictions where income taxes paid (net of refunds) is 5% or more of total income taxes paid (net of refunds).•Disaggregate net income (or loss) before income tax expense (or benefit) between domestic and non-U.S.

Other Accounting Developments

The following Update is applicable to us. We are currently evaluating the Update but it is not expected to have a material impact on our consolidated financial statements:

•ASU 2024-03 – Income Statement– Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expense

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Forward-Looking Statements

This document contains forward-looking statements. In addition, we may make forward-looking statements in our other documents filed or furnished with the Securities and Exchange Commission, and our management may make forward-looking statements orally to analysts, investors, representatives of the media and others. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “target,” “projects,” “outlook,” “forecast,” “will,” “may,” “could,” “should,” “can” and similar references to future periods. In particular, forward-looking statements include, but are not limited to, statements we make about: (i) the future operating or financial performance of the Company or any of its businesses, including our outlook for future growth; (ii) our expectations regarding noninterest expense and our efficiency ratio; (iii) future credit quality and performance, including our expectations regarding future loan losses, our allowance for credit losses, and the economic scenarios considered to develop the allowance; (iv) our expectations regarding net interest income and net interest margin; (v) loan growth or the reduction or mitigation of risk in our loan portfolios; (vi) future capital or liquidity levels, ratios or targets; (vii) the expected outcome and impact of legal, regulatory and legislative developments, as well as our expectations regarding compliance therewith; (viii) future common stock dividends, common share repurchases and other uses of capital; (ix) our targeted range for return on assets, return on equity, and return on tangible common equity; (x) expectations regarding our effective income tax rate; (xi) the outcome of contingencies, such as legal actions; (xii) environmental, social and governance related goals or commitments; and (xiii) the Company’s plans, objectives and strategies.

•our ability to realize any efficiency ratio or expense target as part of our expense management initiatives, including as a

result of business and economic cyclicality, seasonality, changes in our business composition and operating environment, growth in our businesses and/or acquisitions, and unexpected expenses relating to, among other things, litigation and regulatory matters;

•the effect of the current interest rate environment or changes in interest rates or in the level or composition of our assets or liabilities on our net interest income and net interest margin;

•the effect of a fall in stock market prices on our investment banking business and our fee income from our brokerage and wealth management businesses;

•a failure in or breach of our operational or security systems or infrastructure, or those of our third-party vendors or other service providers, including as a result of cyberattacks;

•the effect of changes in the level of checking or savings account deposits on our funding costs and net interest margin;

•fiscal and monetary policies of the Federal Reserve Board;

•changes to tax laws, regulations, and guidance as well as the effect of discrete items on our effective income tax rate;

•our ability to develop and execute effective business plans and strategies; and

•the other risk factors and uncertainties described under “Risk Factors” in this Report.

For additional information about factors that could cause actual results to differ materially from our expectations, refer to our reports filed with the Securities and Exchange Commission, including the discussion under “Risk Factors” in this Report, as

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Forward-Looking Statements (continued)

filed with the Securities and Exchange Commission and available on its website at www.sec.gov.1

Forward-looking Non-GAAP Financial Measures. From time to time management may discuss forward-looking non-GAAP financial measures, such as forward-looking estimates or targets for return on average tangible common equity. We are unable to provide a reconciliation of forward-looking non-GAAP financial measures to their most directly comparable GAAP financial measures because we are unable to provide, without unreasonable effort, a meaningful or accurate calculation or estimation of amounts that would be necessary for the reconciliation due to the complexity and inherent difficulty in forecasting and quantifying future amounts or when they may occur. Such unavailable information could be significant to future results.

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FY 2023 10-K MD&A

SEC filing source: 0000072971-24-000064.

Extracted from a substantive MD&A body after the formal Item 7 span was a TOC or reference stub. Source document followed from filing index: wfc-20231231_d2.htm. Confidence: high. Filing date: 2024-02-20. Report date: 2023-12-31.

Overview

Wells Fargo & Company is a leading financial services company that has approximately $1.9 trillion in assets. We provide a diversified set of banking, investment and mortgage products and services, as well as consumer and commercial finance, through our four reportable operating segments: Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth and Investment Management. Wells Fargo ranked No. 47 on Fortune’s 2023 rankings of America’s largest corporations. We ranked fourth in assets and third in the market value of our common stock among all U.S. banks at December 31, 2023.

Wells Fargo’s top priority remains building a risk and control infrastructure appropriate for its size and complexity. The Company is subject to a number of consent orders and other regulatory actions, some of which are described below. These regulatory actions may require the Company, among other things, to undertake certain changes to its business, operations, products and services, and risk management practices. Addressing these regulatory actions is expected to take multiple years, and we are likely to continue to experience issues or delays along the way in satisfying their requirements. We are also likely to continue to identify more issues as we implement our risk and control infrastructure, which may result in additional regulatory actions. Regulators have indicated the potential for escalating consequences for banks that do not timely resolve open issues or have repeat issues. Furthermore, issues or delays with one regulatory action could affect our progress on others. Failure to satisfy the requirements of a regulatory action on a timely basis could result in additional fines, penalties, business restrictions, limitations on subsidiary capital distributions, increased capital or liquidity requirements, enforcement actions, and other adverse consequences, which could be significant. While we still have significant work to do and have not yet satisfied certain aspects of these regulatory actions, the Company is committed to devoting the resources necessary to operate with strong business practices and controls, maintain the highest level of integrity, and have an appropriate culture in place.

Federal Reserve Board Consent Order Regarding Governance Oversight and Compliance and Operational Risk Management

Company works to address the consent order provisions. The consent order also requires the Company, following the FRB’s acceptance and approval of the plans and the Company’s adoption and implementation of the plans, to complete an initial third-party review of the enhancements and improvements provided for in the plans. Until this third-party review is complete and the plans are adopted and implemented to the satisfaction of the FRB, the Company’s total consolidated assets as defined under the consent order will be limited to the level as of December 31, 2017. Compliance with this asset cap is measured on a two-quarter daily average basis to allow for management of temporary fluctuations. After removal of the asset cap, a second third-party review must also be conducted to assess the efficacy and sustainability of the enhancements and improvements.

Consent Orders with the Consumer Financial Protection Bureau and Office of the Comptroller of the Currency Regarding Compliance Risk Management Program, Automobile Collateral Protection Insurance Policies, and Mortgage Interest Rate Lock Extensions

On April 20, 2018, the Company entered into consent orders with the Consumer Financial Protection Bureau (CFPB) and the Office of the Comptroller of the Currency (OCC) to pay an aggregate of $1 billion in civil money penalties to resolve matters regarding the Company’s compliance risk management program and past practices involving certain automobile collateral protection insurance policies and certain mortgage interest rate lock extensions. As required by the consent orders, the Company submitted to the CFPB and OCC an enterprise-wide compliance risk management plan and a plan to enhance the Company’s internal audit program with respect to federal consumer financial law and the terms of the consent orders. In addition, as required by the consent orders, the Company submitted for non-objection plans to remediate customers affected by the automobile collateral protection insurance and mortgage interest rate lock matters, as well as a plan for the management of remediation activities conducted by the Company. The Company continues to work to address the provisions of the consent orders. On September 9, 2021, the OCC assessed a $250 million civil money penalty against the Company related to insufficient progress in addressing requirements under the OCC’s April 2018 consent order and loss mitigation activities in the Company’s Home Lending business. On December 20, 2022, the CFPB modified its consent order to clarify how it would terminate.

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Consent Order with the OCC Regarding Loss Mitigation Activities

On September 9, 2021, the Company entered into a consent order with the OCC requiring the Company to improve the execution, risk management, and oversight of loss mitigation activities in its Home Lending business. In addition, the consent order restricts the Company from acquiring certain third-party residential mortgage servicing and limits transfers of certain mortgage loans requiring customer remediation out of the Company’s mortgage servicing portfolio until remediation is provided.

Consent Order with the CFPB Regarding Automobile Lending, Consumer Deposit Accounts, and Mortgage Lending

On December 20, 2022, the Company entered into a consent order with the CFPB requiring the Company to provide customer remediation for multiple matters related to automobile lending, consumer deposit accounts, and mortgage lending; maintain practices designed to ensure auto lending customers receive refunds for the unused portion of certain guaranteed automobile protection agreements; comply with certain business practice requirements related to consumer deposit accounts; and pay a $1.7 billion civil penalty to the CFPB. The required actions related to many of these matters were already substantially complete at the time we entered into the consent order, and the consent order lays out a path to termination after the Company completes the remainder of the required actions.

Retail Sales Practices Matters

In September 2016, we announced settlements with the CFPB, the OCC, and the Office of the Los Angeles City Attorney, and entered into related consent orders with the CFPB and the OCC, in connection with allegations that some of our retail customers received products and services they did not request. As a result, it remains a priority to rebuild trust through a comprehensive action plan that includes making things right for our customers, employees, and other stakeholders, and building a better Company for the future. On September 8, 2021, the CFPB consent order regarding retail sales practices expired. On February 15, 2024, the OCC announced the termination of its consent order regarding retail sales practices.

Customer Remediation Activities

Our priority of rebuilding trust has included an effort to identify areas or instances where customers may have experienced financial harm, provide remediation as appropriate, and implement additional operational and control procedures. We are working with our regulatory agencies in this effort.

We have accrued for the probable and estimable costs related to our customer remediation activities, which amounts may change based on additional facts and information, as well as ongoing reviews and communications with our regulators. We had $819 million and $2.3 billion of accrued liabilities for customer remediation activities as of December 31, 2023 and 2022, respectively. As our ongoing reviews continue and as we continue to strengthen our risk and control infrastructure, we have identified and may in the future identify additional items or areas of potential concern. To the extent issues are identified, we will continue to assess any customer harm and provide remediation as appropriate.

Recent Developments

Federal Deposit Insurance Corporation Special Assessment

In November 2023, the Federal Deposit Insurance Corporation (FDIC) finalized a rule to recover losses to the FDIC deposit insurance fund as a result of bank failures in the first half of 2023. Under the rule, the FDIC will collect a special assessment based on a calculation using an insured depository institution’s (IDI) estimated amount of uninsured deposits. Upon the FDIC’s finalization of the rule, we expensed the entire estimated amount of our special assessment of $1.9 billion (pre-tax), which will be paid over eight quarters beginning in June 2024. The amount of our special assessment may change as the FDIC determines the actual losses to the deposit insurance fund and evaluates any amendments by IDIs to uninsured deposit amounts reported for December 31, 2022.

Overdraft Fees Proposal

On January 17, 2024, the CFPB issued a proposed rule that would limit overdraft fees charged by certain banks. We expect a significant reduction to our overdraft fees, which are included in deposit-related fees, if the rule is adopted as currently proposed.

Debit Card Interchange Fees Proposal

Capital Matters

On July 27, 2023, federal banking regulators issued a proposed rule to implement the final components of Basel III, which would impact risk-based capital requirements for certain banks. The proposed rule would eliminate the current Advanced Approach and replace it with a new expanded risk-based approach for the measurement of risk-weighted assets, including more granular risk weights for credit risk, a new market risk framework, and a new standardized approach for measuring operational risk. The new requirements would be phased in over a three-year period beginning July 1, 2025. The Company expects a significant increase in its risk-weighted assets and a net increase in its capital requirements based on an assessment of the proposed rule. The Company is considering a range of potential actions to address the impact of the proposed rule, including balance sheet and capital optimization strategies.

For additional information about capital planning, see the “Capital Management – Capital Planning and Stress Testing” section in this Report.

Column 1	Column 2	Column 3
	Wells Fargo & Company	5

Overview (continued)

Financial Performance

Adoption of Accounting Standards Update 2018-12

In first quarter 2023, we adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2018-12 – Financial Services – Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts.

We adopted this ASU with retrospective application, which required revision of prior period financial statements. Prior period risk-based capital and certain other regulatory related metrics were not revised. For additional information, including the financial statement line items impacted by the adoption of ASU 2018-12, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

In 2023, we generated $19.1 billion of net income and diluted earnings per common share (EPS) of $4.83, compared with $13.7 billion of net income and diluted EPS of $3.27 in 2022. Financial performance for 2023, compared with 2022, included the following:

•total revenue increased due to higher net interest income and higher noninterest income;

•provision for credit losses reflected increases for commercial real estate loans, primarily office loans, as well as for increases in credit card loan balances;

•noninterest expense decreased due to lower operating losses, partially offset by higher personnel expense and higher other expense driven by an FDIC special assessment;

•average loans increased driven by loan growth in both our commercial and consumer loan portfolios; and

•average deposits decreased driven by reductions in Consumer Banking and Lending, Commercial Banking, and Wealth and Investment Management, partially offset by growth in Corporate and Investment Banking and Corporate.

Capital and Liquidity

We maintained a strong capital position in 2023, with total equity of $187.4 billion at December 31, 2023, compared with $182.2 billion at December 31, 2022. In addition, capital and liquidity at December 31, 2023, included the following:

•our Common Equity Tier 1 (CET1) ratio was 11.43% under the Standardized Approach (our binding ratio), which continued to exceed the regulatory minimum and buffers of 8.90%;

•our total loss absorbing capacity (TLAC) as a percentage of total risk-weighted assets was 25.05%, compared with the regulatory minimum of 21.50%; and

•our liquidity coverage ratio (LCR) was 125%, which continued to exceed the regulatory minimum of 100%.

Credit Quality

Credit quality reflected the following:

•The allowance for credit losses (ACL) for loans of $15.1 billion at December 31, 2023, increased $1.5 billion from December 31, 2022.

•Our provision for credit losses for loans was $5.4 billion in 2023, compared with $1.5 billion in 2022. The ACL for loans and the provision for credit losses for loans reflected increases for commercial real estate loans, primarily office loans, as well as for increases in credit card loan balances.

•The allowance coverage for total loans was 1.61% at December 31, 2023, compared with 1.42% at December 31, 2022.

•Commercial portfolio net loan charge-offs were $923 million, or 17 basis points of average commercial loans, in 2023, compared with net loan charge-offs of $79 million in 2022, due to higher losses in all commercial portfolios, primarily in our commercial real estate portfolio driven by the office property type.

•Consumer portfolio net loan charge-offs were $2.5 billion, or 65 basis points of average consumer loans, in 2023, compared with net loan charge-offs of $1.5 billion, or 39 basis points, in 2022, due to higher losses in all consumer portfolios, primarily in our credit card portfolio.

•Nonperforming assets (NPAs) of $8.4 billion at December 31, 2023, increased $2.7 billion, or 47%, from December 31, 2022, driven by higher commercial real estate nonaccrual loans, predominantly within the office property type, partially offset by lower residential mortgage nonaccrual loans. NPAs represented 0.90% of total loans at December 31, 2023.

•Criticized loans in the commercial portfolio were $33.0 billion at December 31, 2023, compared with $25.1 billion at December 31, 2022, primarily driven by an increase in criticized commercial real estate loans in the office and apartments property types.

Column 1	Column 2
6	Wells Fargo & Company

Table 1 presents a three-year summary of selected financial data and Table 2 presents selected ratios and per common share data.

Table 1: Summary of Selected Financial Data

	Year ended December 31,
(in millions, except per share amounts)	2023		2022		$ Change 2023/ 2022	% Change 2023/ 2022		2021							$ Change 2022/ 2021	% Change 2022/ 2021
Income statement
Net interest income	$	52,375			44,950		7,425			17	%		$	35,779					9,171		26	%
Noninterest income (1)	30,222			29,418		804			3			43,387						(13,969)		(32)
Total revenue	82,597			74,368		8,229			11			79,166						(4,798)		(6)
Net charge-offs	3,450			1,609		1,841			114			1,582						27		2
Change in the allowance for credit losses	1,949			(75)		2,024			NM		(5,737)						5,662		(99)
Provision for credit losses (2)	5,399			1,534		3,865			252		(4,155)						5,689		NM
Noninterest expense (1)	55,562			57,205		(1,643)			(3)			53,758						3,447		6
Net income before noncontrolling interests	19,029			13,378		5,651			42			23,799						(10,421)		(44)
Less: Net income from noncontrolling interests	(113)			(299)		186			62		1,690						(1,989)		NM
Wells Fargo net income (1)	19,142			13,677		5,465			40			22,109						(8,432)		(38)
Earnings per common share	4.88			3.30		1.58			48		5.13						(1.83)		(36)
Diluted earnings per common share	4.83			3.27		1.56			48		5.08						(1.81)		(36)
Dividends declared per common share	1.30			1.10		0.20			18			0.60						0.50		83
Balance sheet (period-end)
Debt securities	490,458			496,808		(6,350)			(1)			537,531						(40,723)		(8)
Loans	936,682			955,871		(19,189)			(2)			895,394						60,477		7
Allowance for credit losses for loans	15,088			13,609		1,479			11			13,788						(179)		(1)
Equity securities	57,336			64,414		(7,078)			(11)			72,886						(8,472)		(12)
Assets (1)	1,932,468			1,881,020		51,448			3			1,948,073						(67,053)		(3)
Deposits	1,358,173			1,383,985		(25,812)			(2)			1,482,479						(98,494)		(7)
Long-term debt	207,588			174,870		32,718			19			160,689						14,181		9
Common stockholders’ equity (1)	166,444			160,952		5,492			3			168,111						(7,159)		(4)
Wells Fargo stockholders’ equity (1)	185,735			180,227		5,508			3			187,386						(7,159)		(4)
Total equity (1)	187,443			182,213		5,230			3			189,889						(7,676)		(4)

NM – Not meaningful

(1)In first quarter 2023, we adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2018-12 – Financial Services – Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts. We adopted ASU 2018-12 with retrospective application, which required revision of prior period financial statements. For additional information, including the financial statement line items impacted by the adoption of ASU 2018-12, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

(2)Includes provision for credit losses for loans, debt securities, and other financial assets.

Column 1	Column 2	Column 3
	Wells Fargo & Company	7

Overview (continued)

Table 2: Ratios and Per Common Share Data (1)

	Year ended December 31,
	2023		2022		2021
Performance ratios
Return on average assets (ROA) (2)	1.02	%		0.72		1.14
Return on average equity (ROE) (3)	11.0			7.8		12.3
Return on average tangible common equity (ROTCE) (4)	13.1			9.3		14.8
Efficiency ratio (5)	67			77		68
Capital and other metrics (6)
Wells Fargo common stockholders’ equity to assets	8.61			8.56		8.63
Total equity to assets	9.70			9.69		9.75
Risk-based capital ratios and components:
Standardized Approach:
Common Equity Tier 1 (CET1)	11.43			10.60		11.35
Tier 1 capital	12.98			12.11		12.89
Total capital	15.67			14.82		15.84
Risk-weighted assets (RWAs) (in billions)	$	1,231.7			1,259.9		1,239.0
Advanced Approach:
Common Equity Tier 1 (CET1)	12.63	%		12.00		12.60
Tier 1 capital	14.34			13.72		14.31
Total capital	16.40			15.94		16.72
Risk-weighted assets (RWAs) (in billions)	$	1,114.3			1,112.3		1,116.1
Tier 1 leverage ratio	8.50	%		8.26		8.34
Supplementary Leverage Ratio (SLR)	7.09			6.86		6.89
Total Loss Absorbing Capacity (TLAC) Ratio (7)	25.05			23.27		23.03
Liquidity Coverage Ratio (LCR) (8)	125			122		118
Average balances:
Average Wells Fargo common stockholders’ equity to average assets	8.67			8.53		8.69
Average total equity to average assets	9.80			9.67		9.81
Per common share data
Dividend payout ratio (9)	26.9			33.6		11.8
Book value (10)	$	46.25			41.98		43.26

(1)In first quarter 2023, we adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2018-12 – Financial Services – Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts. We adopted ASU 2018-12 with retrospective application, which required revision of prior period financial statements. Prior period risk-based capital and certain other regulatory related metrics were not revised. For additional information, including the financial statement line items impacted by the adoption of ASU 2018-12, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

(2)Represents Wells Fargo net income divided by average assets.

(3)Represents Wells Fargo net income applicable to common stock divided by average common stockholders’ equity.

(4)Tangible common equity is a non-GAAP financial measure and represents total equity less preferred equity, noncontrolling interests, goodwill, certain identifiable intangible assets (other than mortgage servicing rights) and goodwill and other intangibles on investments in consolidated portfolio companies, net of applicable deferred taxes. The methodology of determining tangible common equity may differ among companies. Management believes that return on average tangible common equity, which utilizes tangible common equity, is a useful financial measure because it enables management, investors, and others to assess the Company’s use of equity. For additional information, including a corresponding reconciliation to generally accepted accounting principles (GAAP) financial measures, see the “Capital Management – Tangible Common Equity” section in this Report.

(5)The efficiency ratio is noninterest expense divided by total revenue (net interest income and noninterest income).

(6)See the “Capital Management” section and Note 26 (Regulatory Capital Requirements and Other Restrictions) to Financial Statements in this Report for additional information.

(7)Represents TLAC divided by risk-weighted assets (RWAs), which is our binding TLAC ratio, determined by using the greater of RWAs under the Standardized and Advanced Approaches.

(8)Represents average high-quality liquid assets divided by average projected net cash outflows, as each is defined under the LCR rule.

(9)Dividend payout ratio is dividends declared per common share as a percentage of diluted earnings per common share.

(10)Book value per common share is common stockholders’ equity divided by common shares outstanding.

Column 1	Column 2
8	Wells Fargo & Company

Earnings Performance

Wells Fargo net income for 2023 was $19.1 billion ($4.83 diluted EPS), compared with $13.7 billion ($3.27 diluted EPS) in 2022. Net income increased in 2023, compared with 2022, predominantly due to a $7.4 billion increase in net interest income and a $1.6 billion decrease in noninterest expense, partially offset by a $3.9 billion increase in provision for credit losses.

For a discussion of our 2022 financial results, compared with 2021, see the “Earnings Performance” section of our Annual Report on Form 10-K for the year ended December 31, 2022.

Net Interest Income

Net interest income and net interest margin increased in 2023, compared with 2022, driven by the impact of higher interest rates, which resulted in both higher interest income on interest-earning assets and higher interest expense for interest-bearing deposits and long-term debt.

Table 3 presents the individual components of net interest income and net interest margin. Net interest income and net interest margin are presented on a taxable-equivalent basis in Table 3 to consistently reflect income from taxable and tax-exempt loans and debt and equity securities based on a 21% federal statutory tax rate for the periods ended December 31, 2023, 2022 and 2021.

Column 1	Column 2	Column 3
	Wells Fargo & Company	9

Earnings Performance (continued)

Table 3: Average Balances, Yields and Rates Paid (Taxable-Equivalent Basis) (1)

	Year ended December 31,
					2023						2022					2021
($ in millions)	Average balance		Interest income/ expense		Average interest rates		Average balance		Interest income/ expense		Average interest rates		Average balance	Interest income/ expense		Interest rates
Assets
Interest-earning deposits with banks	$	149,401			6,973			4.67	%		$	145,802		2,245			1.54	%		$	236,281	314		0.13	%
Federal funds sold and securities purchased under resale agreements	69,878			3,374			4.83			62,137			859		1.38			69,720			14	0.02
Debt securities:
Trading debt securities	104,588			3,805			3.64			91,515			2,490		2.72			88,282			2,107	2.39
Available-for-sale debt securities	142,743			5,365			3.76			141,404			3,167		2.24			189,237			2,924	1.55
Held-to-maturity debt securities	275,441			7,246			2.63			296,540			6,480		2.19			245,304			4,589	1.87
Total debt securities	522,772			16,416			3.14			529,459			12,137		2.29			522,823			9,620	1.84
Loans held for sale (2)	5,762			363			6.29			13,900			513		3.69			27,554			865	3.14
Loans:
Commercial and industrial – U.S.	307,953			20,941			6.80			291,996			11,293		3.87			252,025			6,526	2.59
Commercial and industrial – Non-U.S.	74,410			5,043			6.78			80,033			2,681		3.35			71,114			1,448	2.04
Commercial real estate mortgage	129,437			8,312			6.42			131,304			4,974		3.79			121,638			3,276	2.69
Commercial real estate construction	24,324			1,898			7.80			21,510			991		4.61			21,589			667	3.09
Lease financing	15,386			749			4.87			14,555			607		4.17			15,519			692	4.46
Total commercial loans	551,510			36,943			6.70			539,398			20,546		3.81			481,885			12,609	2.62
Residential mortgage – first lien	252,857			8,477			3.35			249,985			7,912		3.17			249,862			7,903	3.16
Residential mortgage – junior lien	12,074			836			6.92			14,703			729		4.95			19,710			818	4.15
Credit card	48,202			6,246			12.96			41,275			4,752		11.51			35,471			4,086	11.52
Auto	51,116			2,415			4.72			55,429			2,366		4.27			51,576			2,317	4.49
Other consumer	28,157			2,349			8.34			29,030			1,489		5.13			25,784			962	3.73
Total consumer loans	392,406			20,323			5.18			390,422			17,248		4.42			382,403			16,086	4.21
Total loans (2)	943,916			57,266			6.07			929,820			37,794		4.06			864,288			28,695	3.32
Equity securities	25,920			683			2.63			30,575			708		2.31			31,946			608	1.91
Other	9,638			463			4.80			13,275			204		1.54			10,052			6	0.06
Total interest-earning assets	$	1,727,287			85,538			4.95	%		$	1,724,968		54,460			3.16	%		$	1,762,664	40,122		2.28	%
Cash and due from banks	27,463			—					25,817			—				24,562			—
Goodwill	25,173			—					25,177			—				26,087			—
Other	105,552			—					118,341			—				128,750			—
Total noninterest-earning assets	$	158,188			—					169,335			—				179,399			—
Total assets	$	1,885,475			85,538					1,894,303			54,460				1,942,063			40,122
Liabilities
Deposits:
Demand deposits	$	418,542			6,947			1.66	%		$	432,745		1,356			0.31	%		$	450,131	127		0.03	%
Savings deposits	376,233			2,723			0.72			433,415			406		0.09			423,221			124	0.03
Time deposits	132,492			6,215			4.69			33,148			449		1.36			36,519			122	0.33
Deposits in non-U.S. offices	19,278			618			3.21			19,191			138		0.72			28,297			15	0.05
Total interest-bearing deposits	946,545			16,503			1.74			918,499			2,349		0.26			938,168			388	0.04
Short-term borrowings:
Federal funds purchased and securities sold under agreements to repurchase	65,696			3,313			5.04			24,553			407		1.66			35,245			8	0.02
Other short-term borrowings	15,337			535			3.49			15,257			175		1.15			12,020			(48)	(0.41)
Total short-term borrowings	81,033			3,848			4.75			39,810			582		1.46			47,265			(40)	(0.09)
Long-term debt	180,464			11,572			6.41			157,742			5,505		3.49			178,742			3,173	1.78
Other liabilities	32,950			820			2.49			34,126			638		1.87			28,809			395	1.37
Total interest-bearing liabilities	$	1,240,992			32,743			2.64	%		$	1,150,177		9,074			0.79	%		$	1,192,984	3,916		0.33	%
Noninterest-bearing demand deposits	399,737			—					505,770			—				499,644			—
Other noninterest-bearing liabilities	59,886			—					55,189			—				58,933			—
Total noninterest-bearing liabilities	$	459,623			—					560,959			—				558,577			—
Total liabilities	$	1,700,615			32,743					1,711,136			9,074				1,751,561			3,916
Total equity	184,860			—					183,167			—				190,502			—
Total liabilities and equity	$	1,885,475			32,743					1,894,303			9,074				1,942,063			3,916
Interest rate spread on a taxable-equivalent basis (3)					2.31	%						2.37	%					1.95	%
Net interest margin and net interest income on a taxable-equivalent basis (3)			$	52,795			3.06	%				$	45,386		2.63	%				$	36,206	2.05	%

(2)Nonaccrual loans and any related income are included in their respective loan categories.

(3)Includes taxable-equivalent adjustments of $420 million, $436 million, and $427 million for the years ended December 31, 2023, 2022 and 2021, respectively, predominantly related to tax-exempt income on certain loans and securities.

Column 1	Column 2
10	Wells Fargo & Company

Table 4: Analysis of Changes in Net Interest Income

	Year ended December 31,
	2023 vs. 2022		2022 vs. 2021
(in millions)	Volume		Rate		Total	Volume		Rate		Total
Increase (decrease) in interest income:
Interest-earning deposits with banks	$	56			4,672		4,728			(162)		2,093		1,931
Federal funds sold and securities purchased under resale agreements	120			2,395		2,515			(2)		847		845
Debt securities:
Trading debt securities	391			924		1,315			80		303		383
Available-for-sale debt securities	30			2,168		2,198			(858)		1,101		243
Held-to-maturity debt securities	(482)			1,248		766			1,039		852		1,891
Total debt securities	(61)			4,340		4,279			261		2,256		2,517
Loans held for sale	(396)			246		(150)			(484)		132		(352)
Loans:
Commercial and industrial – U.S.	650			8,998		9,648			1,158		3,609		4,767
Commercial and industrial – Non-U.S.	(200)			2,562		2,362			201		1,032		1,233
Commercial real estate mortgage	(72)			3,410		3,338			276		1,422		1,698
Commercial real estate construction	144			763		907			(2)		326		324
Lease financing	36			106		142			(42)		(43)		(85)
Total commercial loans	558			15,839		16,397			1,591		6,346		7,937
Residential mortgage – first lien	95			470		565			1		8		9
Residential mortgage – junior lien	(146)			253		107			(230)		141		(89)
Credit card	854			640		1,494			670		(4)		666
Auto	(191)			240		49			166		(117)		49
Other consumer	(46)			906		860			132		395		527
Total consumer loans	566			2,509		3,075			739		423		1,162
Total loans	1,124			18,348		19,472			2,330		6,769		9,099
Equity securities	(116)			91		(25)			(26)		126		100
Other	(70)			329		259			3		195		198
Total increase in interest income	$	657			30,421		31,078			1,920		12,418		14,338
Increase (decrease) in interest expense:
Deposits:
Demand deposits	$	(46)			5,637		5,591			(5)		1,234		1,229
Savings deposits	(58)			2,375		2,317			3		279		282
Time deposits	3,173			2,593		5,766			(12)		339		327
Deposits in non-U.S. offices	1			479		480			(7)		130		123
Total interest-bearing deposits	3,070			11,084		14,154			(21)		1,982		1,961
Short-term borrowings:
Federal funds purchased and securities sold under agreements to repurchase	1,312			1,594		2,906			(3)		402		399
Other short-term borrowings	1			359		360			(10)		233		223
Total short-term borrowings	1,313			1,953		3,266			(13)		635		622
Long-term debt	891			5,176		6,067			(412)		2,744		2,332
Other liabilities	(23)			205		182			82		161		243
Total increase (decrease) in interest expense	5,251			18,418		23,669			(364)		5,522		5,158
Increase (decrease) in net interest income on a taxable-equivalent basis	$	(4,594)			12,003		7,409			2,284		6,896		9,180

Column 1	Column 2	Column 3
	Wells Fargo & Company	11

Earnings Performance (continued)

Noninterest Income

Table 5: Noninterest Income

	Year ended December 31,
($ in millions)	2023		2022		$ Change 2023/ 2022	% Change 2023/ 2022		2021		$ Change 2022/ 2021		% Change 2022/ 2021
Deposit-related fees	$	4,694			5,316		(622)			(12)	%		$	5,475		(159)		(3)	%
Lending-related fees	1,446			1,397		49			4			1,445			(48)		(3)
Investment advisory and other asset-based fees	8,670			9,004		(334)			(4)			11,011			(2,007)		(18)
Commissions and brokerage services fees	2,375			2,242		133			6			2,299			(57)		(2)
Investment banking fees	1,649			1,439		210			15			2,354			(915)		(39)
Card fees	4,256			4,355		(99)			(2)			4,175			180		4
Net servicing income	436			533		(97)			(18)			194			339		175
Net gains on mortgage loan originations/sales	393			850		(457)			(54)			4,762			(3,912)		(82)
Mortgage banking	829			1,383		(554)			(40)			4,956			(3,573)		(72)
Net gains from trading activities	4,799			2,116		2,683			127			284			1,832		645
Net gains from debt securities	10			151		(141)			(93)			553			(402)		(73)
Net gains (losses) from equity securities	(441)			(806)		365			45		6,427			(7,233)		NM
Lease income	1,237			1,269		(32)			(3)			996			273		27
Other	698			1,552		(854)			(55)			3,412			(1,860)		(55)
Total	$	30,222			29,418		804			3			$	43,387		(13,969)		(32)

NM – Not meaningful

Full year 2023 vs. full year 2022

Deposit-related fees decreased reflecting:

•our efforts to help customers avoid overdraft fees; and

•lower fees on commercial accounts driven by higher earnings credits due to an increase in interest rates.

Investment advisory and other asset-based fees decreased reflecting net outflows of advisory assets and lower market valuations.

Commissions and brokerage services fees increased due to higher service fee rates and higher transactional revenue.

Investment banking fees increased due to increased activity across all products, as well as a write-down on unfunded leveraged finance commitments in 2022.

Net servicing income decreased driven by:

•lower servicing fees due to a lower balance of mortgage loans serviced for others, including the impact of MSR sales;

partially offset by:

•higher income from net hedge results related to MSR valuations.

Net gains on mortgage loan originations/sales decreased

due to lower residential mortgage origination volumes related to higher interest rates and our more focused strategy for Home Lending, including our exit from the correspondent business.

For additional information on net servicing income and net gains on mortgage loan originations/sales, see Note 6 (Mortgage Banking Activities) to Financial Statements in this Report.

Net gains from trading activities increased driven by improved trading results across all asset classes.

Net gains from debt securities decreased due to lower gains on sales of asset-based securities and municipal bonds in our investment portfolio as a result of decreased sales volumes.

Net losses from equity securities decreased reflecting:

•lower impairment of equity securities; and

•higher unrealized gains on marketable equity securities;

partially offset by:

•lower unrealized and realized gains on nonmarketable equity securities driven by our venture capital and private equity investments.

Other income decreased driven by the change in fair value of liabilities associated with our reinsurance business, which was recognized as a result of our adoption of ASU 2018-12 in first quarter 2023. For additional information on our adoption of ASU 2018-12, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

Column 1	Column 2
12	Wells Fargo & Company

Noninterest Expense

Table 6: Noninterest Expense

	Year ended December 31,
($ in millions)	2023		2022		$ Change 2023/ 2022	% Change 2023/ 2022		2021		$ Change 2022/ 2021		% Change 2022/ 2021
Personnel	$	35,829			34,340		1,489			4	%		$	35,541		(1,201)		(3)	%
Technology, telecommunications and equipment	3,920			3,375		545			16			3,227			148		5
Occupancy	2,884			2,881		3			—			2,968			(87)		(3)
Operating losses (1)	1,183			6,984		(5,801)			(83)			1,568			5,416		345
Professional and outside services	5,085			5,188		(103)			(2)			5,723			(535)		(9)
Leases (2)	697			750		(53)			(7)			867			(117)		(13)
Advertising and promotion	812			505		307			61			600			(95)		(16)
Other	5,152			3,182		1,970			62			3,264			(82)		(3)
Total	$	55,562			57,205		(1,643)			(3)			$	53,758		3,447		6

(1)Includes expenses for legal actions of $179 million, $3.3 billion, and $341 million for the years ended December 31, 2023, 2022 and 2021, respectively, and expenses for customer remediation activities of $207 million, $2.7 billion, and $536 million for the years ended December 31, 2023, 2022 and 2021, respectively.

(2)Represents expenses for assets we lease to customers.

Full year 2023 vs. full year 2022

Personnel expense increased due to:

•higher severance expense for planned actions; and

•higher incentive compensation expense;

partially offset by:

•lower revenue-related compensation expense driven by lower origination volumes in Home Lending.

For additional information on personnel expense, see

Note 21 (Revenue and Expenses) to Financial Statements in this Report.

Technology, telecommunications and equipment expense increased due to higher expense for software maintenance and licenses and for the amortization of internally developed software.

Operating losses decreased driven by:

•lower expense for legal actions, compared with higher expense in 2022 that included amounts related to the December 2022 CFPB consent order. For additional information on legal actions, see Note 13 (Legal Actions) to Financial Statements in this Report; and

•lower expense for customer remediation activities, compared with higher expense in 2022 that included amounts related to the further refinement of the scope of remediation for historical mortgage lending, automobile lending, and consumer deposit accounts matters. Expenses for customer remediation activities in 2023 were lower related to matters that had lower estimated costs and complexity than historical matters. For additional information on customer remediation activities, see the “Overview” section above.

As previously disclosed, we have outstanding legal actions and customer remediation activities that could impact operating losses in the coming quarters.

For additional information on operating losses, see Note 21 (Revenue and Expenses) to Financial Statements in this Report.

Advertising and promotion expense increased due to higher marketing volume.

Other expense increased reflecting a $1.9 billion FDIC special assessment. For additional information on the FDIC’s special assessment, see Note 21 (Revenue and Expenses) to Financial Statements in this Report.

Income Tax Expense

Table 7: Income Tax Expense

	Year ended December 31,
($ in millions)	2023		2022		$ Change 2023/ 2022	% Change 2023/ 2022			2021		$ Change 2022/ 2021	% Change 2022/ 2021
Income before income tax expense	$	21,636			15,629		6,007		38	%			29,563		(13,934)		(47	%)
Income tax expense	2,607			2,251		356		16				5,764		(3,513)		(61)
Effective income tax rate (1)	12.0	%		14.1							20.7

(1)Represents (i) Income tax expense (benefit) divided by (ii) Income (loss) before income tax expense (benefit) less Net income (loss) from noncontrolling interests.

Income tax expense for 2023, compared with 2022, increased due to higher pre-tax income, partially offset by the impact of discrete tax benefits related to the resolution of prior period tax matters. The effective income tax rate for 2023, compared with 2022, decreased primarily due to the impact of discrete tax benefits related to the resolution of prior period tax matters.

For additional information on income taxes, see Note 23 (Income Taxes) to Financial Statements in this Report.

Column 1	Column 2	Column 3
	Wells Fargo & Company	13

Earnings Performance (continued)

Operating Segment Results

Our management reporting is organized into four reportable operating segments: Consumer Banking and Lending; Commercial Banking; Corporate and Investment Banking; and Wealth and Investment Management. All other business activities that are not included in the reportable operating segments have been included in Corporate. For additional information, see Table 8. We define our reportable operating segments by type of product and customer segment, and their results are based on our management reporting process. The management reporting process measures the performance of the reportable operating segments based on the Company’s management structure, and the results are regularly reviewed with our Chief Executive Officer and relevant senior management. The management reporting process is based on U.S. GAAP and includes specific adjustments, such as funds transfer pricing for asset/liability management, shared revenue and expenses, and taxable-equivalent adjustments to consistently reflect income from taxable and tax-exempt sources, which allows management to assess performance consistently across the operating segments.

Funds Transfer Pricing Corporate treasury manages a funds transfer pricing methodology that considers interest rate risk, liquidity risk, and other product characteristics. Operating segments pay a funding charge for their assets and receive a funding credit for their deposits, both of which are included in net interest income. The net impact of the funding charges or credits is recognized in corporate treasury.

Revenue and Expense Sharing When lines of business jointly serve customers, the line of business that is responsible for providing the product or service recognizes revenue or expense with a referral fee paid or an allocation of cost to the other line of business based on established internal revenue-sharing agreements.

When a line of business uses a service provided by another line of business or enterprise function (included in Corporate), expense is generally allocated based on the cost and use of the service provided. We periodically assess and update our revenue and expense allocation methodologies.

Taxable-Equivalent Adjustments Taxable-equivalent adjustments related to tax-exempt income on certain loans and debt securities are included in net interest income, while taxable-equivalent adjustments related to income tax credits for low-income housing and renewable energy investments are included in noninterest income, in each case with corresponding impacts to income tax expense (benefit). Adjustments are included in Corporate, Commercial Banking, and Corporate and Investment Banking and are eliminated to reconcile to the Company’s consolidated financial results.

Allocated Capital Reportable operating segments are allocated capital under a risk-sensitive framework that is primarily based on aspects of our regulatory capital requirements, and the assumptions and methodologies used to allocate capital are periodically assessed and updated. Effective January 1, 2023, management modified its capital allocation methodology to improve alignment of allocated capital with the binding regulatory constraints of the Company. Management believes that return on allocated capital is a useful financial measure because it enables management, investors, and others to assess a reportable operating segment’s use of capital.

Selected Metrics We present certain financial and nonfinancial metrics that management uses when evaluating reportable operating segment results. Management believes that these metrics are useful to investors and others to assess the performance, customer growth, and trends of reportable operating segments or lines of business.

Table 8: Management Reporting Structure

	Wells Fargo & Company
			Consumer Banking and Lending				Commercial Banking				Corporate and Investment Banking				Wealth and Investment Management			Corporate
			• Consumer, Small and Business Banking • Home Lending • Credit Card • Auto • Personal Lending				• Middle Market Banking • Asset-Based Lending and Leasing				• Banking • Commercial Real Estate • Markets				• Wells Fargo Advisors • The Private Bank				• Corporate Treasury • Enterprise Functions • Investment Portfolio • Venture capital and private equity investments • Non-strategic businesses

Column 1	Column 2
14	Wells Fargo & Company

Table 9 and the following discussion present our results by reportable operating segment. For additional information, see Note 20 (Operating Segments) to Financial Statements in this Report.

Table 9: Operating Segment Results – Highlights

(in millions)	Consumer Banking and Lending			Corporate and Investment Banking	Wealth and Investment Management			Reconciling Items (2)	Consolidated Company
Year ended December 31, 2023
Net interest income	$	30,185		10,034		9,498		3,966		(888)		(420)		52,375
Noninterest income	7,734		3,415		9,693		10,725		431		(1,776)		30,222
Total revenue	37,919		13,449		19,191		14,691		(457)		(2,196)		82,597
Provision for credit losses	3,299		75		2,007		6		12		—		5,399
Noninterest expense	24,024		6,555		8,618		12,064		4,301		—		55,562
Income (loss) before income tax expense (benefit)	10,596		6,819		8,566		2,621		(4,770)		(2,196)		21,636
Income tax expense (benefit)	2,657		1,704		2,140		657		(2,355)		(2,196)		2,607
Net income (loss) before noncontrolling interests	7,939		5,115		6,426		1,964		(2,415)		—		19,029
Less: Net income (loss) from noncontrolling interests	—		11		—		—		(124)		—		(113)
Net income (loss)	$	7,939		5,104		6,426		1,964		(2,291)		—		19,142
Year ended December 31, 2022
Net interest income	$	27,044		7,289		8,733		3,927		(1,607)		(436)		44,950
Noninterest income	8,766		3,631		6,509		10,895		1,192		(1,575)		29,418
Total revenue	35,810		10,920		15,242		14,822		(415)		(2,011)		74,368
Provision for credit losses	2,276		(534)		(185)		(25)		2		—		1,534
Noninterest expense	26,277		6,058		7,560		11,613		5,697		—		57,205
Income (loss) before income tax expense (benefit)	7,257		5,396		7,867		3,234		(6,114)		(2,011)		15,629
Income tax expense (benefit)	1,816		1,366		1,989		812		(1,721)		(2,011)		2,251
Net income (loss) before noncontrolling interests	5,441		4,030		5,878		2,422		(4,393)		—		13,378
Less: Net income (loss) from noncontrolling interests	—		12		—		—		(311)		—		(299)
Net income (loss)	$	5,441		4,018		5,878		2,422		(4,082)		—		13,677
Year ended December 31, 2021
Net interest income	$	22,807		4,960		7,410		2,570		(1,541)		(427)		35,779
Noninterest income	12,070		3,589		6,429		11,776		10,710		(1,187)		43,387
Total revenue	34,877		8,549		13,839		14,346		9,169		(1,614)		79,166
Provision for credit losses	(1,178)		(1,500)		(1,439)		(95)		57		—		(4,155)
Noninterest expense	24,648		5,862		7,200		11,734		4,314		—		53,758
Income (loss) before income tax expense (benefit)	11,407		4,187		8,078		2,707		4,798		(1,614)		29,563
Income tax expense (benefit)	2,852		1,045		2,019		680		782		(1,614)		5,764
Net income before noncontrolling interests	8,555		3,142		6,059		2,027		4,016		—		23,799
Less: Net income (loss) from noncontrollinginterests	—		8		(3)		—		1,685		—		1,690
Net income	$	8,555		3,134		6,062		2,027		2,331		—		22,109

(1)All other business activities that are not included in the reportable operating segments have been included in Corporate. For additional information, see the “Corporate” section below.

(2)Taxable-equivalent adjustments related to tax-exempt income on certain loans and debt securities are included in net interest income, while taxable-equivalent adjustments related to income tax credits for low-income housing and renewable energy investments are included in noninterest income, in each case with corresponding impacts to income tax expense (benefit). Adjustments are included in Corporate, Commercial Banking, and Corporate and Investment Banking and are eliminated to reconcile to the Company’s consolidated financial results.

Column 1	Column 2	Column 3
	Wells Fargo & Company	15

Earnings Performance (continued)

debit cards, as well as home, auto, personal, and small business lending. Table 9a and Table 9b provide additional information for Consumer Banking and Lending.

Table 9a: Consumer Banking and Lending – Income Statement and Selected Metrics


($ in millions, unless otherwise noted)	2023		2022		$ Change 2023/ 2022	% Change 2023/ 2022		2021		$ Change 2022/ 2021		% Change 2022/ 2021
Income Statement
Net interest income	$	30,185			27,044		3,141			12	%		$	22,807			4,237		19	%
Noninterest income:
Deposit-related fees	2,702			3,093		(391)			(13)			3,045			48			2
Card fees	3,967			4,067		(100)			(2)			3,930			137			3
Mortgage banking	512			1,100		(588)			(53)			4,490			(3,390)			(76)
Other	553			506		47			9			605			(99)			(16)
Total noninterest income	7,734			8,766		(1,032)			(12)			12,070			(3,304)			(27)
Total revenue	37,919			35,810		2,109			6			34,877			933			3
Net charge-offs	2,784			1,693		1,091			64			1,439			254			18
Change in the allowance for credit losses	515			583		(68)			(12)			(2,617)			3,200			122
Provision for credit losses	3,299			2,276		1,023			45			(1,178)			3,454			293
Noninterest expense	24,024			26,277		(2,253)			(9)			24,648			1,629			7
Income before income tax expense	10,596			7,257		3,339			46			11,407			(4,150)			(36)
Income tax expense	2,657			1,816		841			46			2,852			(1,036)			(36)
Net income	$	7,939			5,441		2,498			46			$	8,555			(3,114)		(36)
Revenue by Line of Business
Consumer, Small and Business Banking	$	26,384			23,421		2,963			13			$	18,958			4,463		24
Consumer Lending:
Home Lending	3,389			4,221		(832)			(20)			8,154			(3,933)			(48)
Credit Card	5,347			5,271		76			1			4,928			343			7
Auto	1,464			1,716		(252)			(15)			1,733			(17)			(1)
Personal Lending	1,335			1,181		154			13			1,104			77			7
Total revenue	$	37,919			35,810		2,109			6			$	34,877			933		3
Selected Metrics
Consumer Banking and Lending:
Return on allocated capital (1)	17.5	%		10.8						17.2	%
Efficiency ratio (2)	63			73						71
Retail bank branches (#, period-end)	4,311			4,598				(6)			4,777					(4)
Digital active customers (# in millions, period-end) (3)	34.8			33.5				4			33.0					2
Mobile active customers (# in millions, period-end) (3)	29.9			28.3				6			27.3					4
Consumer, Small and Business Banking:
Deposit spread (4)	2.6	%		2.0						1.5	%
Debit card purchase volume ($ in billions) (5)	$	492.8			486.6		6.2			1			$	471.5			15.1		3
Debit card purchase transactions (# in millions) (5)	10,000			9,852				2			9,808					—

(continued on following page)

Column 1	Column 2
16	Wells Fargo & Company

(continued from previous page)

	Year ended December 31,
($ in millions, unless otherwise noted)	2023		2022		$ Change 2023/ 2022	% Change 2023/ 2022		2021		$ Change 2022/ 2021		% Change 2022/ 2021
Home Lending:
Mortgage banking:
Net servicing income	$	300			368		(68)			(18)	%		$	35			333		951	%
Net gains on mortgage loan originations/sales	212			732		(520)			(71)			4,455			(3,723)			(84)
Total mortgage banking	$	512			1,100		(588)			(53)			$	4,490			(3,390)		(76)
Originations ($ in billions):
Retail	$	24.2			64.3		(40.1)			(62)			$	138.5			(74.2)		(54)
Correspondent	1.1			43.8		(42.7)			(97)			66.5			(22.7)			(34)
Total originations	$	25.3			108.1		(82.8)			(77)			$	205.0			(96.9)		(47)
% of originations held for sale (HFS)	44.6	%		52.5						64.6	%
Third-party mortgage loans serviced ($ in billions, period-end) (6)	$	559.7			679.2		(119.5)			(18)			$	716.8			(37.6)		(5)
Mortgage servicing rights (MSR) carrying value (period-end)	7,468			9,310		(1,842)			(20)			6,920			2,390			35
Ratio of MSR carrying value (period-end) to third-party mortgage loans serviced (period-end) (6)	1.33	%		1.37						0.97	%
Home lending loans 30+ days delinquency rate (period-end) (7)(8)(9)	0.32			0.31						0.39
Credit Card:
Point of sale (POS) volume ($ in billions)	$	136.4			119.1		17.3			15			$	95.3			23.8		25
New accounts (# in thousands)	2,547			2,153				18			1,640					31
Credit card loans 30+ days delinquency rate (period-end) (8)	2.89	%		2.08						1.52	%
Credit card loans 90+ days delinquency rate (period-end) (8)	1.48			1.01						0.72
Auto:
Auto originations ($ in billions)	$	17.2			23.1		(5.9)			(26)			$	33.9			(10.8)		(32)
Auto loans 30+ days delinquency rate (period-end) (8)(9)	2.80	%		2.64						1.84	%
Personal Lending:
New volume ($ in billions)	$	11.9			12.6		(0.7)			(6)			$	9.8			2.8		29

(2)Efficiency ratio is segment noninterest expense divided by segment total revenue (net interest income and noninterest income).

(4)Deposit spread is (i) the internal funds transfer pricing credit on segment deposits minus interest paid to customers for segment deposits, divided by (ii) average segment deposits.

(5)Debit card purchase volume and transactions reflect combined activity for both consumer and business debit card purchases.

(6)Excludes residential mortgage loans subserviced for others.

(7)Excludes residential mortgage loans insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA).

(8)Excludes loans held for sale.

(9)Excludes nonaccrual loans.

Full year 2023 vs. full year 2022

Revenue increased driven by:

•higher net interest income driven by higher interest rates and deposit spreads, partially offset by lower deposit balances;

partially offset by:

•lower mortgage banking noninterest income due to lower residential mortgage origination volumes related to higher interest rates and our more focused strategy for Home Lending, including our exit from the correspondent business, as well as lower servicing income, including the impact of MSR sales; and

•lower deposit-related fees reflecting our efforts to help customers avoid overdraft fees.

Provision for credit losses increased driven by credit card loan growth.

Noninterest expense decreased due to:

•lower operating losses driven by lower expense for legal actions and customer remediation activities; and

•lower personnel expense driven by the impact of efficiency initiatives, as well as lower revenue-related compensation expense due to lower origination volumes in Home Lending;

partially offset by:

•higher advertising costs due to higher marketing volume.

Column 1	Column 2	Column 3
	Wells Fargo & Company	17

Earnings Performance (continued)

Table 9b: Consumer Banking and Lending – Balance Sheet


($ in millions)	2023		2022		$ Change 2023/ 2022	% Change 2023/ 2022		2021		$ Change 2022/ 2021		% Change 2022/ 2021
Selected Balance Sheet Data (average)
Loans by Line of Business:
Consumer, Small and Business Banking	$	9,104			10,132		(1,028)			(10)	%		$	16,625		(6,493)		(39)	%
Consumer Lending:
Home Lending	219,601			219,157		444			—			224,446			(5,289)		(2)
Credit Card	40,530			34,151		6,379			19			29,052			5,099		18
Auto	51,689			55,994		(4,305)			(8)			52,293			3,701		7
Personal Lending	14,996			12,999		1,997			15			11,469			1,530		13
Total loans	$	335,920			332,433		3,487			1			$	333,885		(1,452)		—
Total deposits	811,091			883,130		(72,039)			(8)			834,739			48,391		6
Allocated capital	44,000			48,000		(4,000)			(8)			48,000			—		—
Selected Balance Sheet Data (period-end)
Loans by Line of Business:
Consumer, Small and Business Banking	$	9,042			9,704		(662)			(7)			$	11,270		(1,566)		(14)
Consumer Lending:
Home Lending	215,823			223,525		(7,702)			(3)			214,407			9,118		4
Credit Card	44,428			38,475		5,953			15			31,671			6,804		21
Auto	48,283			54,281		(5,998)			(11)			57,260			(2,979)		(5)
Personal Lending	15,291			14,544		747			5			11,966			2,578		22
Total loans	$	332,867			340,529		(7,662)			(2)			$	326,574		13,955		4
Total deposits	782,309			859,695		(77,386)			(9)			883,674			(23,979)		(3)

Full year 2023 vs. full year 2022

Total loans (average) increased due to:

•higher loan balances in our Credit Card business driven by higher point of sale volume and the impact of new product launches; and

•higher loan balances in our Personal Lending business;

partially offset by:

•a decline in loan balances in our Auto business due to lower origination volumes reflecting credit tightening actions; and

•a decline in Paycheck Protection Program loans in Consumer, Small and Business Banking.

Total loans (period-end) decreased driven by:

•a decline in loan balances in our Home Lending business driven by a decrease in residential mortgage origination volumes related to higher interest rates and our more focused strategy for Home Lending, including our exit from the correspondent business; and

•a decline in loan balances in our Auto business due to lower origination volumes reflecting credit tightening actions;

partially offset by:

•higher loan balances in our Credit Card business driven by higher point of sale volume and the impact of new product launches.

Total deposits (average and period-end) decreased due to consumer deposit outflows on consumer spending, as well as customer migration to higher yielding alternatives.

Column 1	Column 2
18	Wells Fargo & Company

Commercial Banking provides financial solutions to private, family owned and certain public companies. Products and services include banking and credit products across multiple

industry sectors and municipalities, secured lending and lease products, and treasury management. Table 9c and Table 9d provide additional information for Commercial Banking.

Table 9c: Commercial Banking – Income Statement and Selected Metrics


($ in millions)	2023		2022		$ Change 2023/ 2022	% Change 2023/ 2022		2021		$ Change 2022/ 2021		% Change 2022/ 2021
Income Statement
Net interest income	$	10,034			7,289		2,745			38	%		$	4,960		2,329		47	%
Noninterest income:
Deposit-related fees	998			1,131		(133)			(12)			1,285			(154)		(12)
Lending-related fees	531			491		40			8			532			(41)		(8)
Lease income	644			710		(66)			(9)			682			28		4
Other	1,242			1,299		(57)			(4)			1,090			209		19
Total noninterest income	3,415			3,631		(216)			(6)			3,589			42		1
Total revenue	13,449			10,920		2,529			23			8,549			2,371		28
Net charge-offs	96			4		92			NM		101			(97)		(96)
Change in the allowance for credit losses	(21)			(538)		517			96			(1,601)			1,063		66
Provision for credit losses	75			(534)		609			114			(1,500)			966		64
Noninterest expense	6,555			6,058		497			8			5,862			196		3
Income before income tax expense	6,819			5,396		1,423			26			4,187			1,209		29
Income tax expense	1,704			1,366		338			25			1,045			321		31
Less: Net income from noncontrolling interests	11			12		(1)			(8)			8			4		50
Net income	$	5,104			4,018		1,086			27			$	3,134		884		28
Revenue by Line of Business
Middle Market Banking	$	8,762			6,574		2,188			33			$	4,642		1,932		42
Asset-Based Lending and Leasing	4,687			4,346		341			8			3,907			439		11
Total revenue	$	13,449			10,920		2,529			23			$	8,549		2,371		28
Revenue by Product
Lending and leasing	$	5,314			5,253		61			1			$	4,835		418		9
Treasury management and payments	6,214			4,483		1,731			39			2,825			1,658		59
Other	1,921			1,184		737			62			889			295		33
Total revenue	$	13,449			10,920		2,529			23			$	8,549		2,371		28
Selected Metrics
Return on allocated capital	19.1	%		19.7						15.1	%
Efficiency ratio	49			55						69

NM – Not meaningful

Full year 2023 vs. full year 2022

Revenue increased driven by:

•higher net interest income reflecting higher interest rates and higher loan balances, partially offset by lower deposit balances;

partially offset by:

•lower deposit-related fees driven by the impact of higher earnings credits, which resulted in lower fees for commercial customers; and

•lower other noninterest income due to lower net gains from equity securities, partially offset by higher revenue from renewable energy investments.

Provision for credit losses reflected loan growth.

Noninterest expense increased due to higher operating costs and personnel expense, including severance expense, partially offset by the impact of efficiency initiatives.

Column 1	Column 2	Column 3
	Wells Fargo & Company	19

Earnings Performance (continued)

Table 9d: Commercial Banking – Balance Sheet


($ in millions)	2023		2022		$ Change 2023/ 2022		% Change 2023/ 2022		2021		$ Change 2022/ 2021		% Change 2022/ 2021
Selected Balance Sheet Data (average)
Loans:
Commercial and industrial	$	164,062			147,379			16,683			11	%		$	120,396			26,983		22	%
Commercial real estate	45,705			45,130			575			1			47,018			(1,888)			(4)
Lease financing and other	14,335			13,523			812			6			13,823			(300)			(2)
Total loans	$	224,102			206,032			18,070			9			$	181,237			24,795		14
Loans by Line of Business:
Middle Market Banking	$	120,819			114,634			6,185			5			$	102,882			11,752		11
Asset-Based Lending and Leasing	103,283			91,398			11,885			13			78,355			13,043			17
Total loans	$	224,102			206,032			18,070			9			$	181,237			24,795		14
Total deposits	165,235			186,079			(20,844)			(11)			197,269			(11,190)			(6)
Allocated capital	25,500			19,500		6,000			31			19,500		—			—
Selected Balance Sheet Data (period-end)
Loans:
Commercial and industrial	$	163,797			163,797			—			—			$	131,078			32,719		25
Commercial real estate	45,534			45,816			(282)			(1)			45,467			349			1
Lease financing and other	15,443			13,916			1,527			11			13,803			113			1
Total loans	$	224,774			223,529			1,245			1			$	190,348			33,181		17
Loans by Line of Business:
Middle Market Banking	$	118,482			121,192			(2,710)			(2)			$	106,834			14,358		13
Asset-Based Lending and Leasing	106,292			102,337			3,955			4			83,514			18,823			23
Total loans	$	224,774			223,529			1,245			1			$	190,348			33,181		17
Total deposits	162,526			173,942			(11,416)			(7)			205,428			(31,486)			(15)

Full year 2023 vs. full year 2022

Total loans (average) increased driven by loan growth and higher average line utilization in Asset-Based Lending and Leasing.

Total loans (period-end) increased driven by loan growth in Asset-Based Lending and Leasing due to an increase in client working capital needs, partially offset by lower line utilization for commercial and industrial loans in Middle Market Banking.

Total deposits (average and period-end) decreased due to customer migration to higher yielding alternatives, partially offset by additions of deposits from new and existing customers.

Column 1	Column 2
20	Wells Fargo & Company

estate lending and servicing, equity and fixed income solutions as well as sales, trading, and research capabilities. Table 9e and Table 9f provide additional information for Corporate and Investment Banking.

Table 9e: Corporate and Investment Banking – Income Statement and Selected Metrics

	Year ended December 31,
($ in millions)	2023		2022		$ Change 2023/ 2022	% Change 2023/ 2022		2021		$ Change 2022/ 2021		% Change 2022/ 2021
Income Statement
Net interest income	$	9,498			8,733		765			9	%		$	7,410		1,323		18	%
Noninterest income:
Deposit-related fees	976			1,068		(92)			(9)			1,112			(44)		(4)
Lending-related fees	790			769		21			3			761			8		1
Investment banking fees	1,738			1,492		246			16			2,405			(913)		(38)
Net gains from trading activities	4,553			1,886		2,667			141			272			1,614		593
Other	1,636			1,294		342			26			1,879			(585)		(31)
Total noninterest income	9,693			6,509		3,184			49			6,429			80		1
Total revenue	19,191			15,242		3,949			26			13,839			1,403		10
Net charge-offs	581			(48)		629			NM		(22)			(26)		NM
Change in the allowance for credit losses	1,426			(137)		1,563			NM		(1,417)			1,280		90
Provision for credit losses	2,007			(185)		2,192			NM		(1,439)			1,254		87
Noninterest expense	8,618			7,560		1,058			14			7,200			360		5
Income before income tax expense	8,566			7,867		699			9			8,078			(211)		(3)
Income tax expense	2,140			1,989		151			8			2,019			(30)		(1)
Less: Net loss from noncontrolling interests	—			—		—			—			(3)			3		100
Net income	$	6,426			5,878		548			9			$	6,062		(184)		(3)
Revenue by Line of Business
Banking:
Lending	$	2,872			2,222		650			29			$	1,948		274		14
Treasury Management and Payments	3,036			2,369		667			28			1,468			901		61
Investment Banking	1,404			1,206		198			16			1,654			(448)		(27)
Total Banking	7,312			5,797		1,515			26			5,070			727		14
Commercial Real Estate	5,311			4,534		777			17			3,963			571		14
Markets:
Fixed Income, Currencies, and Commodities (FICC)	4,688			3,660		1,028			28			3,710			(50)		(1)
Equities	1,809			1,115		694			62			897			218		24
Credit Adjustment (CVA/DVA) and Other	65			20		45			225			91			(71)		(78)
Total Markets	6,562			4,795		1,767			37			4,698			97		2
Other	6			116		(110)			(95)			108			8		7
Total revenue	$	19,191			15,242		3,949			26			$	13,839		1,403		10
Selected Metrics
Return on allocated capital	13.8	%		15.3						16.9	%
Efficiency ratio	45			50						52

NM – Not meaningful

Full year 2023 vs. full year 2022

Revenue increased driven by:

•higher net gains from trading activities driven by improved trading results across all asset classes;

•higher net interest income reflecting higher interest rates; and

•higher investment banking fees due to increased activity across all products, as well as a write-down on unfunded leveraged finance commitments in 2022.

Provision for credit losses increased reflecting a $1.6 billion increase in the allowance for credit losses driven by commercial real estate office loans.

Noninterest expense increased driven by higher operating costs and personnel expense, including severance expense, partially offset by the impact of efficiency initiatives.

Column 1	Column 2	Column 3
	Wells Fargo & Company	21

Earnings Performance (continued)

Table 9f: Corporate and Investment Banking – Balance Sheet


($ in millions)	2023		2022		$ Change 2023/ 2022	% Change 2023/ 2022		2021		$ Change 2022/ 2021		% Change 2022/ 2021
Selected Balance Sheet Data (average)
Loans:
Commercial and industrial	$	191,602			198,424		(6,822)			(3)	%		$	170,713		27,711		16	%
Commercial real estate	100,373			98,560		1,813			2			86,323			12,237		14
Total loans	$	291,975			296,984		(5,009)			(2)			$	257,036		39,948		16
Loans by Line of Business:
Banking	$	95,783			106,440		(10,657)			(10)			$	93,766		12,674		14
Commercial Real Estate	135,702			133,719		1,983			1			110,978			22,741		20
Markets	60,490			56,825		3,665			6			52,292			4,533		9
Total loans	$	291,975			296,984		(5,009)			(2)			$	257,036		39,948		16
Trading-related assets:
Trading account securities	$	118,130			112,213		5,917			5			$	110,386		1,827		2
Reverse repurchase agreements/securities borrowed	61,510			50,491		11,019			22			59,044			(8,553)		(14)
Derivative assets	18,636			27,421		(8,785)			(32)			25,315			2,106		8
Total trading-related assets	$	198,276			190,125		8,151			4			$	194,745		(4,620)		(2)
Total assets	553,722			557,396		(3,674)			(1)			523,344			34,052		7
Total deposits	162,062			161,720		342			—			189,176			(27,456)		(15)
Allocated capital	44,000			36,000		8,000			22			34,000			2,000		6
Selected Balance Sheet Data (period-end)
Loans:
Commercial and industrial	$	189,379			196,529		(7,150)			(4)			$	191,391		5,138		3
Commercial real estate	98,053			101,848		(3,795)			(4)			92,983			8,865		10
Total loans	$	287,432			298,377		(10,945)			(4)			$	284,374		14,003		5
Loans by Line of Business:
Banking	$	93,987			101,183		(7,196)			(7)			$	101,926		(743)		(1)
Commercial Real Estate	131,968			137,495		(5,527)			(4)			125,926			11,569		9
Markets	61,477			59,699		1,778			3			56,522			3,177		6
Total loans	$	287,432			298,377		(10,945)			(4)			$	284,374		14,003		5
Trading-related assets:
Trading account securities	$	115,562			111,801		3,761			3			$	108,697		3,104		3
Reverse repurchase agreements/securities borrowed	63,614			55,407		8,207			15			55,973			(566)		(1)
Derivative assets	18,023			22,218		(4,195)			(19)			21,398			820		4
Total trading-related assets	$	197,199			189,426		7,773			4			$	186,068		3,358		2
Total assets	547,203			550,177		(2,974)			(1)			546,549			3,628		1
Total deposits	185,142			157,217		27,925			18			168,609			(11,392)		(7)

Full year 2023 vs. full year 2022

Total loans (average and period-end) decreased driven by lower originations.

Total trading-related assets (average and period-end) increased reflecting:

•increased volume of reverse repurchase agreements; and

•higher trading account securities driven by higher mortgage-backed securities;

partially offset by:

•lower trading-related derivative assets due to declines in derivative balances for commodities and equities.

Total deposits (average and period-end) increased driven by additions of deposits from new and existing customers.

Column 1	Column 2
22	Wells Fargo & Company

Table 9g: Wealth and Investment Management


($ in millions, unless otherwise noted)	2023		2022		$ Change 2023/ 2022	% Change 2023/ 2022		2021		$ Change 2022/ 2021		% Change 2022/ 2021
Income Statement
Net interest income	$	3,966			3,927		39			1	%		$	2,570		1,357		53	%
Noninterest income:
Investment advisory and other asset-based fees	8,446			8,847		(401)			(5)			9,574			(727)		(8)
Commissions and brokerage services fees	2,058			1,931		127			7			2,010			(79)		(4)
Other	221			117		104			89			192			(75)		(39)
Total noninterest income	10,725			10,895		(170)			(2)			11,776			(881)		(7)
Total revenue	14,691			14,822		(131)			(1)			14,346			476		3
Net charge-offs	(1)			(7)		6			86			10			(17)		NM
Change in the allowance for credit losses	7			(18)		25			139			(105)			87		83
Provision for credit losses	6			(25)		31			124			(95)			70		74
Noninterest expense	12,064			11,613		451			4			11,734			(121)		(1)
Income before income tax expense	2,621			3,234		(613)			(19)			2,707			527		19
Income tax expense	657			812		(155)			(19)			680			132		19
Net income	$	1,964			2,422		(458)			(19)			$	2,027		395		19
Selected Metrics
Return on allocated capital	30.7	%		27.1						22.6	%
Efficiency ratio	82			78						82
Client assets ($ in billions, period-end):
Advisory assets	$	891			797		94			12			$	964		(167)		(17)
Other brokerage assets and deposits	1,193			1,064		129			12			1,219			(155)		(13)
Total client assets	$	2,084			1,861		223			12			$	2,183		(322)		(15)
Selected Balance Sheet Data (average)
Total loans	$	82,755			85,228		(2,473)			(3)			$	82,364		2,864		3
Total deposits	112,069			164,883		(52,814)			(32)			176,562			(11,679)		(7)
Allocated capital	6,250			8,750		(2,500)			(29)			8,750			—		—
Selected Balance Sheet Data (period-end)
Total loans	$	82,555			84,273		(1,718)			(2)			$	84,101		172		—
Total deposits	103,902			138,760		(34,858)			(25)			192,548			(53,788)		(28)

NM- Not meaningful

Full year 2023 vs. full year 2022

Revenue decreased driven by:

•lower investment advisory and other asset-based fees due to net outflows of advisory assets and lower market valuations;

partially offset by:

•higher commissions and brokerage services fees due to higher service fee rates and higher transactional revenue.

Noninterest expense increased driven by:

•higher personnel expense driven by higher revenue-related compensation and severance expense; and

•higher operating costs;

partially offset by:

•the impact of efficiency initiatives.

Total deposits (average and period-end) decreased due to customer migration to higher yielding alternatives.

Column 1	Column 2	Column 3
	Wells Fargo & Company	23

Earnings Performance (continued)

WIM Advisory Assets In addition to transactional accounts, WIM offers advisory account relationships to brokerage customers. Fees from advisory accounts are based on a percentage of the market value of the assets as of the beginning of the quarter, which vary across the account types based on the distinct services provided, and are affected by investment performance as well as asset inflows and outflows. Advisory accounts include assets that are financial advisor-directed and separately managed by third-party managers as well as certain client-directed brokerage assets where we earn a fee for advisory and other services, but do not have investment discretion.

For the years ended December 31, 2023, 2022 and 2021, the average fee rate by account type ranged from 50 to 120 basis points.

Table 9h: WIM Advisory Assets


(in billions)	Balance, beginning of period	Inflows (1)	Outflows (2)	Market impact (3)	Balance, endof period
December 31, 2023
Client-directed (4)	$	165.2		33.0		(34.7)		21.8		185.3
Financial advisor-directed (5)	222.9		40.3		(38.3)		39.7		264.6
Separate accounts (6)	176.5		24.1		(26.5)		24.3		198.4
Mutual fund advisory (7)	78.6		7.4		(12.8)		10.1		83.3
Total Wells Fargo Advisors	$	643.2		104.8		(112.3)		95.9		731.6
The Private Bank (8)	153.6		25.0		(34.5)		15.4		159.5
Total WIM advisory assets	$	796.8		129.8		(146.8)		111.3		891.1
December 31, 2022
Client-directed (4)	$	205.6		31.8		(39.0)		(33.2)		165.2
Financial advisor-directed (5)	255.5		41.6		(44.2)		(30.0)		222.9
Separate accounts (6)	203.3		24.6		(26.5)		(24.9)		176.5
Mutual fund advisory (7)	102.1		8.7		(15.0)		(17.2)		78.6
Total Wells Fargo Advisors	$	766.5		106.7		(124.7)		(105.3)		643.2
The Private Bank (8)	198.0		27.4		(47.1)		(24.7)		153.6
Total WIM advisory assets	$	964.5		134.1		(171.8)		(130.0)		796.8
December 31, 2021
Client directed (4)	$	186.3		41.5		(45.0)		22.8		205.6
Financial advisor directed (5)	211.0		48.7		(41.1)		36.9		255.5
Separate accounts (6)	174.6		31.8		(30.7)		27.6		203.3
Mutual fund advisory (7)	91.4		15.6		(15.0)		10.1		102.1
Total Wells Fargo Advisors	$	663.3		137.6		(131.8)		97.4		766.5
The Private Bank (8)	189.4		40.0		(51.1)		19.7		198.0
Total WIM advisory assets	$	852.7		177.6		(182.9)		117.1		964.5

(1)Inflows include new advisory account assets, contributions, dividends, and interest.

(2)Outflows include closed advisory account assets, withdrawals, and client management fees.

(3)Market impact reflects gains and losses on portfolio investments.

(4)Investment advice and other services are provided to the client, but decisions are made by the client and the fees earned are based on a percentage of the advisory account assets, not the number and size of transactions executed by the client.

(5)Professionally managed portfolios with fees earned based on respective strategies and as a percentage of certain client assets.

(6)Professional advisory portfolios managed by third-party asset managers. Fees are earned based on a percentage of certain client assets.

(7)Program with portfolios constructed of load-waived, no-load, and institutional share class mutual funds. Fees are earned based on a percentage of certain client assets.

(8)Discretionary and non-discretionary portfolios held in personal trusts, investment agency, or custody accounts with fees earned based on a percentage of client assets.

Column 1	Column 2
24	Wells Fargo & Company

determined are no longer consistent with the long-term strategic goals of the Company as well as results for previously divested businesses. In third quarter 2023, we sold investments in certain private equity funds, which had a minimal impact to net income. Table 9i and Table 9j provide additional information for Corporate.

Table 9i: Corporate – Income Statement


($ in millions)	2023		2022		$ Change 2023/ 2022	% Change 2023/ 2022		2021		$ Change 2022/ 2021		% Change 2022/ 2021
Income Statement
Net interest income	$	(888)			(1,607)		719			45	%		$	(1,541)		(66)		(4)	%
Noninterest income	431			1,192		(761)			(64)			10,710			(9,518)		(89)
Total revenue	(457)			(415)		(42)			(10)			9,169			(9,584)		NM
Net charge-offs	(10)			(33)		23			70			54			(87)		NM
Change in the allowance for credit losses	22			35		(13)			(37)			3			32		NM
Provision for credit losses	12			2		10			500			57			(55)		(96)
Noninterest expense	4,301			5,697		(1,396)			(25)			4,314			1,383		32
Income (loss) before income tax expense (benefit)	(4,770)			(6,114)		1,344			22			4,798			(10,912)		NM
Income tax expense (benefit)	(2,355)			(1,721)		(634)			(37)			782			(2,503)		NM
Less: Net income (loss) from noncontrolling interests (1)	(124)			(311)		187			60			1,685			(1,996)		NM
Net income (loss)	$	(2,291)			(4,082)		1,791			44			$	2,331		(6,413)		NM

NM – Not meaningful

(1)Reflects results attributable to noncontrolling interests predominantly associated with the Company’s consolidated venture capital investments.

Full year 2023 vs. full year 2022

Revenue decreased driven by:

•lower other noninterest income reflecting the change in fair value of liabilities associated with our reinsurance business, which was recognized as a result of our adoption of ASU 2018-12 in first quarter 2023. For additional information on our adoption of ASU 2018-12, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report; and

•lower net gains from debt securities due to lower gains on sales of asset-based securities and municipal bonds in our investment portfolio as a result of decreased sales volumes;

partially offset by:

•higher net interest income reflecting higher interest rates; and

•higher net gains on equity securities driven by lower impairment of equity securities and higher unrealized gains on marketable equity securities, partially offset by lower unrealized and realized gains on nonmarketable equity securities from our venture capital and private equity investments.

Noninterest expense decreased driven by:

•lower operating losses due to lower expense for legal actions;

partially offset by:

•a $1.9 billion FDIC special assessment; and

•higher personnel expense driven by higher severance expense.

Corporate includes our rail car leasing business, which had long-lived operating lease assets, net of accumulated depreciation, of $4.6 billion and $4.7 billion as of December 31, 2023 and 2022, respectively. The average age of our rail cars is 22 years and the rail cars are typically leased to customers under short-term leases of 3 to 5 years. Our four largest concentrations, which represented 66% of our rail car fleet as of December 31, 2023, were rail cars used for the transportation of cement/sand, agricultural grain, plastics, and coal products. We may incur impairment charges in the future based on changing economic and market conditions affecting the long-term demand and utility of specific types of rail cars. Our assumptions for impairment are sensitive to estimated utilization and rental rates as well as the estimated economic life of the leased asset. For additional information on the accounting for impairment of operating lease assets, see Note 1 (Summary of Significant Accounting Policies) and Note 8 (Leasing Activity) to Financial Statements in this Report.

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	Wells Fargo & Company	25

Earnings Performance (continued)

Table 9j: Corporate – Balance Sheet


($ in millions)	2023		2022		$ Change 2023/ 2022	% Change 2023/ 2022		2021		$ Change 2022/ 2021		% Change 2022/ 2021
Selected Balance Sheet Data (average)
Cash and due from banks, and interest-earning deposits with banks	$	153,538			147,192		6,346			4	%		$	236,124		(88,932)		(38)	%
Available-for-sale debt securities (1)	123,542			124,308		(766)			(1)			181,841			(57,533)		(32)
Held-to-maturity debt securities (1)	267,672			290,087		(22,415)			(8)			244,735			45,352		19
Equity securities	15,635			15,695		(60)			—			12,720			2,975		23
Total loans	9,164			9,143		21			—			9,766			(623)		(6)
Total assets	619,002			638,011		(19,009)			(3)			743,247			(105,236)		(14)
Total deposits	95,825			28,457		67,368			237			40,066			(11,609)		(29)
Selected Balance Sheet Data (period-end)
Cash and due from banks, and interest-earning deposits with banks	$	211,420			127,106		84,314			66			$	209,696		(82,590)		(39)
Available-for-sale debt securities (1)	118,923			102,669		16,254			16			165,926			(63,257)		(38)
Held-to-maturity debt securities (1)	259,748			294,141		(34,393)			(12)			269,285			24,856		9
Equity securities	15,810			15,508		302			2			16,549			(1,041)		(6)
Total loans	9,054			9,163		(109)			(1)			9,997			(834)		(8)
Total assets	674,075			601,218		72,857			12			721,340			(120,122)		(17)
Total deposits	124,294			54,371		69,923			129			32,220			22,151		69

(1)In first quarter 2023, we reclassified HTM debt securities with a fair value of $23.2 billion to AFS debt securities in connection with the adoption of ASU 2022-01 – Derivatives and Hedging (Topic 815): Fair Value Hedging – Portfolio Layer Method. For additional information, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

Full year 2023 vs. full year 2022

Total assets (period-end) increased driven by:

•an increase in cash and due from banks, and interest-earning deposits with banks that are managed by corporate treasury as a result of an increase in issuances of certificates of deposits (CDs) and long-term debt, partially offset by a reduction in deposits held by our operating segments; and

•sales of and net unrealized losses on AFS debt securities.

Total deposits (average and period-end) increased driven by issuances of CDs.

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26	Wells Fargo & Company

Balance Sheet Analysis

At December 31, 2023, our assets totaled $1.93 trillion, up $51.4 billion from December 31, 2022.

Available-for-Sale and Held-to-Maturity Debt Securities

Table 10: Available-for-Sale and Held-to-Maturity Debt Securities

	December 31, 2023		December 31, 2022
($ in millions)	Amortized cost, net (1)		Net unrealized gains (losses)		Fair value	Weighted average expected maturity (yrs)		Amortized cost, net (1)		Net unrealized gains (losses)	Fair value		Weighted average expected maturity (yrs)
Available-for-sale (2)	$	137,155			(6,707)		130,448			4.7		$	121,725			(8,131)			113,594			5.4
Held-to-maturity (3)	262,708			(35,392)		227,316			7.6		297,059			(41,538)			255,521			8.1
Total	$	399,863			(42,099)		357,764			n/a	$	418,784			(49,669)			369,115			n/a

(1)Represents amortized cost of the securities, net of the allowance for credit losses of $1 million and $6 million related to available-for-sale debt securities and $93 million and $85 million related to held-to-maturity debt securities at December 31, 2023 and 2022, respectively.

(2)Available-for-sale debt securities are carried on our consolidated balance sheet at fair value.

(3)Held-to-maturity debt securities are carried on our consolidated balance sheet at amortized cost, net of the allowance for credit losses.

Table 10 presents a summary of our portfolio of investments in available-for-sale (AFS) and held-to-maturity (HTM) debt securities. The size and composition of our AFS and HTM debt securities is dependent upon the Company’s liquidity and interest rate risk management objectives. The AFS debt securities portfolio can be used to meet funding needs that arise in the normal course of business or due to market stress. Changes in our interest rate risk profile may occur due to changes in overall economic or market conditions, which could influence loan origination demand, prepayment rates, or deposit balances and mix. In response, the AFS debt securities portfolio can be rebalanced to meet the Company’s interest rate risk management objectives. In addition to meeting liquidity and interest rate risk management objectives, the AFS and HTM debt securities portfolios may provide yield enhancement over other short-term assets. See the “Risk Management – Asset/Liability Management” section in this Report for additional information on liquidity and interest rate risk.

The AFS debt securities portfolio predominantly consists of liquid, high-quality U.S. Treasury and federal agency debt, and agency mortgage-backed securities (MBS). The portfolio also includes securities issued by U.S. states and political subdivisions and highly rated collateralized loan obligations (CLOs).

The HTM debt securities portfolio predominantly consists of liquid, high-quality U.S. Treasury and federal agency debt, and agency MBS. The portfolio also includes securities issued by U.S. states and political subdivisions and highly rated CLOs. Debt securities are classified as HTM at the time of purchase or when transferred from the AFS debt securities portfolio. Our intent is to hold these securities to maturity and collect the contractual cash flows. In first quarter 2023, we changed our intent with respect to certain HTM debt securities and reclassified them to AFS debt securities in connection with the adoption of ASU 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging – Portfolio Layer Method. For additional information on our adoption of ASU 2022-01, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

The amortized cost, net of the allowance for credit losses, of AFS and HTM debt securities decreased from December 31, 2022. Purchases of AFS and HTM debt securities were more than offset by paydowns and maturities, as well as sales of AFS debt securities. We reclassified HTM debt securities with an aggregate fair value of $23.2 billion and amortized cost of $23.9 billion to AFS debt securities in 2023 in connection with the adoption of ASU 2022-01. In addition, we transferred AFS debt securities with a fair value of $3.7 billion to HTM debt securities in 2023 due to actions taken to reposition the overall portfolio for capital management purposes. Debt securities transferred from AFS to HTM in 2023 had $320 million of pre-tax unrealized losses at the time of the transfers.

The total net unrealized losses on AFS and HTM debt securities decreased from December 31, 2022, due to changes in interest rates.

At December 31, 2023, 99% of the combined AFS and HTM debt securities portfolio was rated AA- or above. Ratings are based on external ratings where available and, where not available, based on internal credit grades. See Note 3 (Available-for-Sale and Held-to-Maturity Debt Securities) to Financial Statements in this Report for additional information on AFS and HTM debt securities, including a summary of debt securities by security type.

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	Wells Fargo & Company	27

Balance Sheet Analysis (continued)

Loan Portfolios

Table 11 provides a summary of total outstanding loans by portfolio segment. Commercial loans decreased from December 31, 2022, due to decreases in both the commercial and industrial and commercial real estate loan portfolios

as paydowns exceeded originations and advances. Consumer loans decreased from December 31, 2022, as increases in the credit card portfolio were more than offset by decreases in the residential mortgage loan portfolio as well as the auto loan portfolio.

Table 11: Loan Portfolios

($ in millions)	Dec 31, 2023			$ Change	% Change
Commercial	$	547,427		557,516		(10,089)		(2)	%
Consumer	389,255		398,355		(9,100)		(2)
Total loans	$	936,682		955,871		(19,189)		(2)

and Related Allowance for Credit Losses) to Financial Statements in this Report.

Table 12: Loan Maturities

	December 31, 2023
	Loan maturities		Loans maturing after one year
(in millions)	Within one year		After one year through five years		After five years through fifteen years	After fifteen years		Total		Fixed interest rates	Floating/variable interest rates
Commercial and industrial	$	134,720			224,669		19,883			1,116		380,388		23,899		221,769
Commercial real estate	51,726			80,164		17,265			1,461		150,616		18,428		80,462
Lease financing	3,697			10,782		1,892			52		16,423		12,649		77
Total commercial	190,143			315,615		39,040			2,629		547,427		54,976		302,308
Residential mortgage	10,085			30,044		87,401			133,194		260,724		176,485		74,154
Credit card	52,230			—		—			—		52,230		—		—
Auto	12,205			34,132		1,425			—		47,762		35,557		—
Other consumer	23,421			4,582		516			20		28,539		4,498		620
Total consumer	97,941			68,758		89,342			133,214		389,255		216,540		74,774
Total loans	$	288,084			384,373		128,382			135,843		936,682		271,516		377,082

Deposits

Deposits decreased from December 31, 2022, reflecting:

•customer migration to higher yielding alternatives; and

•consumer deposit outflows on consumer spending;

partially offset by:

•higher time deposits driven by issuances of CDs.

Table 13 provides additional information regarding deposit balances. Information regarding the impact of deposits on net interest income and a comparison of average deposit balances is provided in the “Earnings Performance – Net Interest Income” section and Table 3 earlier in this Report. Our average deposit cost in fourth quarter 2023 increased to 1.58%, compared with 0.46% in fourth quarter 2022, as a result of higher interest rates and shifts in deposit mix.

Table 13: Deposits

($ in millions)	Dec 31, 2023			Dec 31, 2022		% of total deposits		$ Change
Noninterest-bearing demand deposits	$	360,279		26	%		$	458,010		33	%	$	(97,731)	(21)	%
Interest-bearing demand deposits	436,908		32			428,877			31		8,031		2
Savings deposits	349,181		26			410,139			30		(60,958)		(15)
Time deposits	187,989		14			66,197			5		121,792		184
Interest-bearing deposits in non-U.S. offices	23,816		2			20,762			1		3,054		15
Total deposits	$	1,358,173		100	%		$	1,383,985		100	%	$	(25,812)	(2)

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28	Wells Fargo & Company

As of December 31, 2023 and 2022, total deposits that exceed FDIC insurance limits, or are otherwise uninsured, were estimated to be $505 billion and $510 billion, respectively. Estimated uninsured domestic deposits reflect amounts disclosed in the U.S. regulatory reports of our subsidiary banks, with adjustments for amounts related to consolidated

subsidiaries. All non-U.S. deposits are treated for these purposes as uninsured.

Table 14 presents the contractual maturities of estimated time deposits that exceed FDIC insurance limits, or are otherwise uninsured. All non-U.S. time deposits are uninsured.

Table 14: Uninsured Time Deposits by Maturity

(in millions)	Three months or less			After six months through twelve months	After twelve months
December 31, 2023
Domestic time deposits	$	12,625		11,016		21,000		644		45,285
Non-U.S. time deposits	1,675		692		1,911		—		4,278
Total	$	14,300		11,708		22,911		644		49,563

Off-Balance Sheet Arrangements

In the ordinary course of business, we engage in financial transactions that are not recorded on our consolidated balance sheet, or may be recorded on our consolidated balance sheet in amounts that are different from the full contract or notional amount of the transaction. Our off-balance sheet arrangements include unfunded credit commitments, transactions with unconsolidated entities, guarantees, commitments to purchase debt and equity securities, derivatives, and other commitments. These transactions are designed to (1) meet the financial needs of customers, (2) manage our credit, market or liquidity risks, and/or (3) diversify our funding sources.

Unfunded Credit Commitments

Unfunded credit commitments are legally binding agreements to lend to customers with terms covering usage of funds, contractual interest rates, expiration dates, and any required collateral. The maximum credit risk for these commitments will generally be lower than the contractual amount because these commitments may expire without being used or may be cancelled at the customer’s request. Our credit risk monitoring activities include managing the amount of commitments, both to individual customers and in total, and the size and maturity structure of these commitments. For additional information, see Note 5 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.

Transactions with Unconsolidated Entities

In the normal course of business, we enter into various types of on- and off-balance sheet transactions with special purpose entities (SPEs), which are corporations, trusts, limited liability companies or partnerships that are established for a limited purpose. Generally, SPEs are formed in connection with securitization transactions and are considered variable interest entities (VIEs). For additional information, see Note 16 (Securitizations and Variable Interest Entities) to Financial Statements in this Report.

Guarantees and Other Arrangements

Guarantees are contracts that contingently require us to make payments to a guaranteed party based on an event or a change in an underlying asset, liability, rate or index. Guarantees are generally in the form of standby and direct pay letters of credit, written options, recourse obligations, exchange and clearing house guarantees, indemnifications, and other types of similar arrangements. For additional information, see Note 17 (Guarantees and Other Commitments) to Financial Statements in this Report.

Commitments to Purchase Debt and Equity Securities

We enter into commitments to purchase securities under resale agreements. We also may enter into commitments to purchase debt and equity securities to provide capital for customers’ funding, liquidity or other future needs. For additional information, see Note 17 (Guarantees and Other Commitments) to Financial Statements in this Report.

Derivatives

We use derivatives to manage exposure to market risk, including interest rate risk, credit risk and foreign currency risk, and to assist customers with their risk management objectives. Derivatives are recorded on our consolidated balance sheet at fair value, and volume can be measured in terms of the notional amount, which is generally not exchanged, but is used only as the basis on which interest and other payments are determined. The notional amount is not recorded on our consolidated balance sheet and is not, when viewed in isolation, a meaningful measure of the risk profile of the instruments. For additional information, see Note 14 (Derivatives) to Financial Statements in this Report.

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	Wells Fargo & Company	29

Risk Management

Risk is Part of our Business Model. Risk is the possibility of an event occurring that could adversely affect the Company’s ability to achieve its strategic and business objectives. The Company routinely takes risks to achieve its business goals and to serve its customers. These risks include financial risks, such as interest rate, credit, liquidity, and market risks, and non-financial risks, such as operational (which includes compliance and model risks), strategic and reputation risks.

Risk and Climate Change. The Company views climate change as a global challenge that presents significant impacts for businesses and communities around the world. The Company expects that climate change will increasingly impact the risk types it manages, and the Company continues to integrate climate considerations into its risk management framework as its understanding of climate change and risks driven by it evolve.

or reputation. Because risk management is everyone’s responsibility, all employees are empowered to and expected to challenge risk decisions when appropriate and to escalate their concerns when they have not been addressed. The Company’s performance management and incentive compensation programs are designed to establish a balanced framework for risk and reward under core principles that employees are expected to know and practice. The Board, through its Human Resources Committee, plays an important role in overseeing and providing credible challenge to the Company’s performance management and incentive compensation programs. Effective risk management is a central component of employee performance evaluations.

Wells Fargo’s top priority is to strengthen our company by building an appropriate risk and control infrastructure. We continue to enhance and mature our risk management programs, including operational and compliance risk management programs as required by the FRB’s February 2, 2018, and the CFPB/OCC’s April 20, 2018, consent orders.

Risk Governance

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Each management governance committee, in accordance with its charter, is expected to discuss, document, and make decisions regarding high priority and significant risks, emerging

risks, risk acceptances, and risks and issues escalated to it; review and monitor progress related to critical and high-risk issues and remediation efforts, including lessons learned; and report key challenges, decisions, escalations, other actions, and open issues as appropriate.

Table 15 presents, as of December 31, 2023, the structure of the Company’s Board committees and escalation paths of relevant management governance committees reporting to a Board committee.

Table 15: Board and Relevant Management-level Governance Committee Structure


Audit Committee (1)	Finance Committee		Corporate Responsibility Committee		RiskCommittee			Governance & Nominating Committee		Human Resources Committee
							Management Governance Committees
Disclosure Committee		Capital Management Committee				Allowance for Credit Losses Approval Governance Committee			Enterprise Risk & Control Committee			Incentive Compensation & Performance Management Committee
Regulatory Reporting Oversight Committee		Corporate Asset/Liability Committee									Risk & Control Committees
				Recovery & Resolution Committee									Risk Type Committees
														Risk Topic Committees

enterprise function. These committees focus on and consider risks that the respective principal line of business or enterprise function generate and manage, and the controls the principal line of business or enterprise function are expected to have in place.

Risk Operating Model – Roles and Responsibilities

The Company has three lines of defense for managing risk: the Front Line, Independent Risk Management, and Internal Audit.

•Front Line The Front Line, which comprises principal line of business and certain enterprise function activities, is the first line of defense. The Front Line is responsible for understanding the risks generated by its activities, applying adequate controls, and managing risk in the course of its business activities. The Front Line identifies, measures and assesses, controls, monitors, and reports on risk generated by or associated with its business activities and balances risk and reward in decision making while operating within the Company’s risk appetite.

•Independent Risk Management IRM is the second line of defense. It establishes and maintains the Company’s risk management program and provides oversight, including challenge to and independent assessment and monitoring

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	Wells Fargo & Company	31

Risk Management (continued)

of, the Front Line’s execution of its risk management responsibilities.

•Internal Audit Internal Audit is the third line of defense. It is responsible for acting as an independent assurance function and validates that the risk management program is adequately designed and functioning effectively.

Risk Type Classifications

Operational Risk Management

The Board’s Risk Committee has primary oversight responsibility for information security risk and approves the Company’s information security program, which includes information protection and cyber resiliency. The Risk Committee receives regular reports from the Company’s Head of Technology, as well as from Operational Risk Management representatives, on information security risks, and the Board receives a report from the Head of Technology on Wells Fargo’s information security program and receives reports from management on significant information security developments, including certain incidents involving third parties.

The Company’s cybersecurity team, which is part of the broader technology team, provides Front Line information

security risk assessment and management and is responsible for protecting the Company’s information systems, networks, and data, including customer and employee data, through the design, execution, and oversight of our information security program.

The technology team is led by the Company’s Head of Technology, who reports to the CEO and leads our efforts to manage information security and related risks across the enterprise, including overseeing the Company’s Chief Information Security Officer (CISO). Our Head of Technology has nearly 20 years of technology and information security risk management experience in the financial services industry, including prior roles with Wells Fargo as Chief Information Officer for the Consumer Technology group and the Enterprise Functions Technology group. Prior to joining Wells Fargo, our Head of Technology served as Chief Operations and Technology Officer at a financing and investment solutions company, and prior to that served in several technology leadership roles at large financial institutions.

The Company has processes designed to prevent, detect, mitigate, escalate, and remediate cybersecurity incidents, including monitoring of the Company’s networks for actual or potential attacks or breaches. The Company’s incident response program includes notification, escalation, and remediation protocols for cybersecurity incidents, including to our Head of Technology and CISO. In addition, to help monitor and assess our exposure to ongoing and evolving risks in these areas, the Company has a cyber and information security focused risk committee led by the CISO and a technology risk committee led by the Head of Technology.

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32	Wells Fargo & Company

and services provided by third parties, and have targeted the infrastructure of the internet causing the widespread unavailability of websites and degrading website performance. As a result, information security and the continued development and enhancement of our controls, processes and systems designed to protect our networks, computers, software and data from attack, damage or unauthorized access remain a priority for Wells Fargo. Wells Fargo is also involved in industry cybersecurity efforts and working with other parties, including our third-party service providers and governmental agencies, to continue to enhance defenses and improve resiliency to information security threats. See the “Risk Factors” section in this Report for additional information regarding the risks and potential impacts associated with a failure or breach of our operational or security systems or infrastructure, including as a result of cyber attacks or other information security incidents.

Compliance Risk Management

Conduct risk, a sub-category of compliance risk, is the risk of inappropriate, unethical, or unlawful behavior on the part of employees or individuals acting on behalf of the Company, caused by deliberate or unintentional actions or business practices. In connection with its oversight of conduct risk, the Board oversees the alignment of employee conduct to the Company’s risk appetite (which the Board approves annually). The Board’s Risk Committee has primary oversight responsibility for conduct risk and risk management components of the Company’s culture, while the responsibilities of the Board’s Human Resources Committee include oversight of the Company’s culture, Code of Ethics and Business Conduct,

human capital management (including talent management and succession planning), performance management program, and incentive compensation risk management program.

At the management level, the Compliance function, which is part of IRM, monitors the implementation of the Company’s compliance and conduct risk programs. Financial Crimes Risk Management, which is part of the Compliance function, oversees and monitors financial crimes risk. The Compliance function reports to the CRO and provides periodic reports related to compliance risk to the Board’s Risk Committee.

Model Risk Management

Model risk (a type of operational risk) is the risk arising from the potential for adverse consequences of decisions made based on model output that may be incorrect or used inappropriately.

Strategic Risk Management

Reputation Risk Management

Reputation risk is the risk arising from the potential that negative stakeholder opinion or negative publicity regarding the Company’s business practices, whether true or not, will adversely impact current or projected financial conditions and resilience, cause a decline in the customer base, or result in costly litigation. Key stakeholders include customers, employees, communities, shareholders, regulators, elected officials, advocacy groups, and media organizations.

The Board’s Risk Committee has primary oversight responsibility for reputation risk, while each Board committee has reputation risk oversight responsibilities related to their primary oversight responsibilities. As part of its oversight responsibilities, the Board’s Risk Committee receives reports from management that help it monitor how effectively the Company is managing reputation risk. As part of its oversight responsibilities for social and public responsibility matters, the Board’s Corporate Responsibility Committee receives reports from management relating to stakeholder perceptions of the Company.

Credit Risk Management

The Board’s Risk Committee has primary oversight responsibility for credit risk. A Credit Subcommittee of the Risk

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	Wells Fargo & Company	33

Risk Management – Credit Risk Management (continued)

Committee assists the Risk Committee in providing oversight of credit risk. At the management level, Corporate Credit Risk, which is part of Independent Risk Management, has oversight responsibility for credit risk. Corporate Credit Risk reports to the CRO and supports periodic reports related to credit risk provided to the Board’s Risk Committee or its Credit Subcommittee.

Loan Portfolio Our loan portfolios represent the largest component of assets on our consolidated balance sheet for which we have credit risk. Table 16 presents our total loans outstanding by portfolio segment and class of financing receivable.

Table 16: Total Loans Outstanding by Portfolio Segment and Class of Financing Receivable

(in millions)	Dec 31, 2023
Commercial and industrial	$	380,388		386,806
Commercial real estate	150,616		155,802
Lease financing	16,423		14,908
Total commercial	547,427		557,516
Residential mortgage	260,724		269,117
Credit card	52,230		46,293
Auto	47,762		53,669
Other consumer	28,539		29,276
Total consumer	389,255		398,355
Total loans	$	936,682		955,871

•Loan concentrations and related credit quality;

•Counterparty credit risk;

•Economic and market conditions;

•Legislative or regulatory mandates;

•Changes in interest rates;

•Merger and acquisition activities; and

•Reputation risk.

In addition, the Company will continue to integrate climate considerations into its credit risk management activities.

Credit Quality Overview Table 17 provides credit quality trends.

Table 17: Credit Quality Overview

($ in millions)	Dec 31, 2023
Nonaccrual loans
Commercial loans	$	4,914		1,823
Consumer loans	3,342		3,803
Total nonaccrual loans	$	8,256		5,626
Nonaccrual loans as a % of total loans	0.88	%	0.59
Allowance for credit losses (ACL) for loans	$	15,088		13,609
ACL for loans as a % of total loans	1.61	%	1.42
Net loan charge-offs as a % of:
Average commercial loans	0.17	%	0.01
Average consumer loans	0.65		0.39

Additional information on our loan portfolios and our credit quality trends follows.

Significant Loan Portfolio Reviews Our credit risk monitoring process is designed to enable early identification of developing risk and to support our determination of an appropriate allowance for credit losses. The following discussion provides additional characteristics and analysis of our significant portfolios. See Note 5 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report for more analysis and credit metric information for each of the following portfolios.

COMMERCIAL AND INDUSTRIAL LOANS AND LEASE FINANCING

We had $14.6 billion of the commercial and industrial loans and lease financing portfolio internally classified as criticized in accordance with regulatory guidance at December 31, 2023, compared with $12.6 billion at December 31, 2022. The increase was driven by the technology, telecom and media, and retail industries.

The majority of our commercial and industrial loans and lease financing portfolio is secured by short-term assets, such as accounts receivable, inventory and debt securities, as well as long-lived assets, such as equipment and other business assets. Generally, the primary source of repayment for this portfolio is the operating cash flows of customers, with the collateral securing this portfolio representing a secondary source of repayment.

The portfolio decreased at December 31, 2023, compared with December 31, 2022, as a result of paydowns and decreased loan draws. Table 18 provides our commercial and industrial loans and lease financing by industry. The industry categories are based on the North American Industry Classification System.

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34	Wells Fargo & Company

Table 18: Commercial and Industrial Loans and Lease Financing by Industry

	December 31, 2023		December 31, 2022
($ in millions)	Nonaccrual loans		Loans outstanding balance		% of total loans	Total commitments (1)		Nonaccrual loans	Loans outstanding balance		% of total loans	Total commitments (1)
Financials except banks	$	9			146,635		16	%	$	234,513		44	147,171		15	%	$	229,822
Technology, telecom and media	60			25,460		3		59,216		31		27,767	3	66,340
Real estate and construction	55			24,987		3		54,345		73		24,478	3	56,393
Retail	72			19,596		2		48,829		47		19,487	2	49,334
Equipment, machinery and parts manufacturing	37			24,785		3		48,265		83		23,675	2	47,507
Materials and commodities	112			14,235		2		37,758		86		16,610	2	39,667
Food and beverage manufacturing	15			16,047		2		33,957		17		17,393	2	33,951
Oil, gas and pipelines	2			10,730		1		32,544		55		9,991	1	31,077
Health care and pharmaceuticals	26			14,863		2		30,386		21		14,861	2	30,294
Auto related	8			15,203		2		28,795		10		13,168	1	27,451
Commercial services	37			11,095		1		26,025		50		11,418	1	26,693
Utilities	1			8,325		*		25,710		18		9,457	*	26,899
Diversified or miscellaneous	67			8,284		*		22,877		2		8,161	*	21,498
Entertainment and recreation	18			13,968		1		20,250		28		13,085	1	18,741
Transportation services	134			9,277		*		16,750		237		8,389	*	16,064
Insurance and fiduciaries	1			4,715		*		15,724		1		4,691	*	15,592
Banks	—			11,820		1		12,981		—		14,403	2	16,537
Agribusiness	31			6,466		*		12,080		24		6,180	*	11,457
Government and education	26			5,603		*		11,552		25		6,482	*	12,590
Other (2)	15			4,717		*		12,297		13		4,847	*	12,301
Total	$	726			396,811		42	%	$	784,854		865	401,714		42	%	$	790,208

*Less than 1%.

(1)Total commitments consist of loans outstanding plus unfunded credit commitments, excluding issued letters of credit. Effective first quarter 2023, unfunded credit commitments exclude discretionary amounts where our approval or consent is required prior to any loan funding or commitment increase. Prior period balances have been revised to conform with the current period presentation. For additional information on issued letters of credit, see Note 17 (Guarantees and Other Commitments) to Financial Statements in this Report.

(2)No other single industry had total loans in excess of $3.0 billion and $3.4 billion at December 31, 2023 and 2022, respectively.

help manage credit risk, such as structural credit enhancements, collateral eligibility requirements, contractual re-margining of collateral supporting the loans, and loan amounts limited to a percentage of the value of the underlying assets considering underlying credit risk, asset duration, and ongoing performance.

Table 18a: Financials Except Banks Industry Category

	December 31, 2023		December 31, 2022
($ in millions)	Nonaccrual loans		Loans outstanding balance		% of total loans	Total commitments (1)		Nonaccrual loans		Loans outstanding balance		% of total loans	Total commitments (1)
Asset managers and funds (2)	$	—			51,842		6	%		$	98,074		1		52,254		5	%	$	97,998
Commercial finance (3)	2			52,007		6			78,369			31		53,269		5		76,016
Consumer finance (4)	—			20,308		2			33,547			4		17,028		2		29,047
Real estate finance (5)	7			22,478		2			24,523			8		24,620		3		26,761
Total	$	9			146,635		16	%		$	234,513		44		147,171		15	%	$	229,822

(1)Total commitments consist of loans outstanding plus unfunded credit commitments. Effective first quarter 2023, unfunded credit commitments exclude discretionary amounts where our approval or consent is required prior to any loan funding or commitment increase. Prior period balances have been revised to conform with the current period presentation. For additional information on issued letters of credit, see Note 17 (Guarantees and Other Commitments) to Financial Statements in this Report.

(2)Includes loans for subscription or capital calls and loans to prime brokerage customers and securities firms.

(3)Includes asset-based lending and leasing, including loans to special purpose entities, loans to commercial leasing entities, structured lending facilities to commercial loan managers, and also includes collateralized loan obligations (CLOs) in loan form, all of which were rated AA or above, of $7.6 billion and $7.8 billion at December 31, 2023 and 2022, respectively.

(4)Includes originators or servicers of financial assets collateralized by consumer loans such as auto loans and leases, and credit cards.

(5)Includes originators or servicers of financial assets collateralized by commercial or residential real estate loans.

Our commercial and industrial loans and lease financing portfolio included non-U.S. loans of $72.9 billion and $79.7 billion at December 31, 2023 and 2022, respectively. Significant industry concentrations of non-U.S. loans at December 31, 2023 and 2022, respectively, included:

•$40.5 billion and $45.7 billion in the financials except banks industry;

•$11.4 billion and $14.1 billion in the banks industry; and

•$2.0 billion and $1.2 billion in the oil, gas and pipelines industry.

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Risk Management – Credit Risk Management (continued)

additional economic support in the form of partial repayment, or additional collateral or guarantees. In cases where the value of collateral or financial condition of the borrower is insufficient to repay our loan, we may rely upon the support of an outside repayment guarantee in providing the extension.

Our ability to seek performance under a guarantee is directly related to the guarantor’s creditworthiness, capacity and willingness to perform, which is evaluated on an annual basis, or more frequently as warranted. Our evaluation is based on the most current financial information available and is focused on various key financial metrics, including net worth, leverage, and current and future liquidity. We consider the guarantor’s reputation, creditworthiness, and willingness to work with us based on our analysis, as well as other lenders’ experience with the guarantor. Our assessment of the guarantor’s credit strength is reflected in our loan risk ratings for such loans. The loan risk rating and accruing status are important factors in our allowance for credit losses methodology.

In considering the accrual status of the loan, we evaluate

the collateral and future cash flows, as well as the anticipated support of any repayment guarantor. In many cases, the

COMMERCIAL REAL ESTATE (CRE) Our CRE loan portfolio is composed of CRE mortgage and CRE construction loans. The total CRE loan portfolio decreased $5.2 billion from December 31, 2022, as paydowns exceeded originations and advances. The portfolio is diversified both geographically and by property type. The largest geographic concentrations of CRE loans are in California, New York, Florida, and Texas, which represented a combined 48% of the total CRE portfolio. The largest property type concentrations are apartments at 28% and office at 21% of the portfolio. Unfunded credit commitments at December 31, 2023 and 2022 were $7.7 billion and $8.8 billion, respectively, for CRE mortgage loans and $13.2 billion and $20.7 billion, respectively, for CRE construction loans.

We generally subject CRE loans to individual risk assessment using our internal borrower and collateral quality ratings. We had $17.5 billion of CRE mortgage loans classified as criticized at December 31, 2023, compared with $11.3 billion at December 31, 2022, and $830 million of CRE construction loans classified as criticized at December 31, 2023, compared with $1.1 billion at December 31, 2022. The increase in criticized CRE mortgage loans was predominantly driven by the office and apartments property types. The credit quality of the office property type continued to be adversely affected as weakened demand for office space continued to drive higher vacancy rates and deteriorating operating performance. Loans in California and New York represented approximately 40% of the office property type at December 31, 2023. We continue to closely monitor this portfolio.

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Table 19 provides our CRE loans by state and property type.

Table 19: CRE Loans by State and Property Type

								December 31, 2023		December 31, 2022
		Real estate mortgage		Real estate construction		Total commercial real estate		Total commercial real estate
($ in millions)	Nonaccrual loans	Loans outstanding balance		Nonaccrual loans	Loans outstanding balance		Nonaccrual loans	Loans outstanding balance	Loans as % of total loans	Total commitments (1)	Loans outstanding balance	Total commitments (1)
By state:
California		$	1,138		27,565			—		4,054		1,138		31,619		3%	$	35,629		34,285		39,594
New York		922		14,229			—		2,346		922		16,575		2	17,930			17,294	19,360
Florida		114		10,324			—		2,168		114		12,492		1	14,577			11,418	14,690
Texas		19		10,562			—		1,471		19		12,033		1	14,224			12,807	14,941
Georgia		165		5,111			—		994		165		6,105		*	6,804			5,428	6,651
North Carolina		45		4,239			—		1,158		45		5,397		*	6,408			5,227	6,650
Washington		287		4,076			—		1,171		287		5,247		*	5,994			5,603	6,868
Arizona		12		4,579			—		603		12		5,182		*	5,806			5,302	6,288
New Jersey		8		2,599			—		1,765		8		4,364		*	5,130			4,119	5,660
Illinois		313		4,125			24		279		337		4,404		*	4,985			4,591	5,394
Other (2)		1,140		39,466			1		7,732		1,141		47,198		5	53,979			49,728	59,224
Total		$	4,163		126,875			25		23,741		4,188		150,616		16%	$	171,466		155,802		185,320
By property:
Apartments		$	56		31,467			—		11,118		56		42,585		5%	$	51,749		39,743		51,567
Office (3)		3,357		28,504			—		3,022		3,357		31,526		3	34,295			36,144	40,827
Industrial/warehouse		28		20,994			—		4,419		28		25,413		3	28,493			20,634	24,546
Hotel/motel		171		11,847			—		878		171		12,725		1	13,612			12,751	13,758
Retail (excl shopping center)		271		11,591			1		79		272		11,670		1	12,338			11,753	12,486
Shopping center		183		8,401			—		344		183		8,745		*	9,356			9,534	10,131
Institutional		57		4,431			24		1,555		81		5,986		*	6,568			7,725	9,178
Mixed use properties		32		3,172			—		339		32		3,511		*	3,763			5,887	7,139
Storage facility		—		2,614			—		168		—		2,782		*	3,002			2,929	3,201
1-4 family structure		—		7			—		1,188		—		1,195		*	2,691			1,324	3,589
Other		8		3,847			—		631		8		4,478		*	5,600			7,378	8,898
Total		$	4,163		126,875			25		23,741		4,188		150,616		16	%	$	171,467		155,802		185,320

* Less than 1%.

(1)Total commitments consist of loans outstanding plus unfunded credit commitments, excluding issued letters of credit. For additional information on issued letters of credit, see Note 17 (Guarantees and Other Commitments) to Financial Statements in this Report.

(2)Includes 40 states and non-U.S. loans. No state in Other had loans in excess of $4.4 billion and $4.1 billion at December 31, 2023 and 2022, respectively. Non-U.S. loans were $6.9 billion and $7.6 billion at December 31, 2023 and 2022, respectively.

(3)In second quarter 2023, we reclassified certain CRE loans to better align with regulatory reporting guidance, which resulted in a decrease in loans outstanding of approximately $2.0 billion to the office property type.

NON-U.S. LOANS Our classification of non-U.S. loans is based on whether the borrower’s primary address is outside of the United States. At December 31, 2023, non-U.S. loans totaled $80.0 billion, representing approximately 9% of our total consolidated loans outstanding, compared with $87.5 billion, or approximately 9% of our total consolidated loans outstanding, at December 31, 2022. Non-U.S. loans were approximately 4% and 5% of our total consolidated assets at December 31, 2023 and 2022, respectively.

COUNTRY RISK EXPOSURE Our country risk monitoring process incorporates centralized monitoring of economic, political, social, legal, and transfer risks in countries where we do or plan to do business, along with frequent dialogue with our customers, counterparties and regulatory agencies. We establish exposure limits for each country through a centralized oversight process based on customer needs, and through consideration of the relevant and distinct risk of each country. We monitor exposures closely and adjust our country limits in response to changing conditions. We evaluate our individual country risk exposure based on our assessment of a borrower’s ability to repay,

which gives consideration for allowable transfers of risk, such as guarantees and collateral, and may be different from the reporting based on a borrower’s primary address.

Our largest single country exposure outside the U.S. at December 31, 2023, was the United Kingdom, which totaled $27.8 billion, or approximately 1% of our total assets, and included $4.1 billion of sovereign claims. Our United Kingdom sovereign claims arise from deposits we have placed with the Bank of England pursuant to regulatory requirements in support of our London branch.

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Risk Management – Credit Risk Management (continued)

losses or collateral received under the terms of the credit agreements, if any.

•Securities exposure represents debt and equity securities of non-U.S. issuers. Long and short positions are netted, and net short positions are reflected as negative exposure.

•Derivatives and other exposure represents foreign exchange contracts, derivative contracts, securities resale agreements, and securities lending agreements.

Table 20: Select Country Exposures

	December 31, 2023
	Lending and deposits with banks (1)		Securities		Derivatives and other	Total exposure
(in millions)	Sovereign		Non-sovereign		Sovereign	Non-sovereign		Sovereign		Non-sovereign	Sovereign		Non-sovereign (2)		Total
Top 20 country exposures:
United Kingdom	$	4,096			22,249		10			213		2			1,212		4,108		23,674		27,782
Canada	8			16,547		(11)			352		133			513		130		17,412		17,542
Japan	8,513			595		—			66		—			86		8,513		747		9,260
Cayman Islands	—			8,173		—			—		—			193		—		8,366		8,366
Luxembourg	—			7,526		—			232		—			288		—		8,046		8,046
Ireland	5			4,898		—			163		1			215		6		5,276		5,282
France	34			4,278		—			358		19			104		53		4,740		4,793
Bermuda	—			3,786		—			12		—			57		—		3,855		3,855
Germany	—			2,990		(138)			377		9			167		(129)		3,534		3,405
China	13			1,351		(88)			1,456		21			8		(54)		2,815		2,761
Netherlands	—			2,350		—			110		—			138		—		2,598		2,598
Guernsey	—			2,482		—			—		—			2		—		2,484		2,484
South Korea	—			1,899		(55)			348		—			4		(55)		2,251		2,196
Australia	—			1,588		—			412		—			29		—		2,029		2,029
Norway	—			1,427		—			109		—			1		—		1,537		1,537
Switzerland	—			1,222		—			25		—			289		—		1,536		1,536
Chile	—			1,475		—			15		—			1		—		1,491		1,491
Brazil	—			1,246		—			(13)		—			—		—		1,233		1,233
Spain	—			819		—			52		—			223		—		1,094		1,094
India	—			980		(68)			139		—			1		(68)		1,120		1,052
Total top 20 country exposures	$	12,669			87,881		(350)			4,426		185			3,531		12,504		95,838		108,342

(1)Includes sovereign and non-sovereign deposits with banks of $12.6 billion and $2.3 billion, respectively.

(2)Total non-sovereign exposure consisted of $45.3 billion exposure to financial institutions and $50.6 billion to non-financial corporations at December 31, 2023.

RESIDENTIAL MORTGAGE LOANS Our residential mortgage loan portfolio is composed of 1–4 family first and junior lien mortgage loans. Residential mortgage – first lien loans represented 96% of the total residential mortgage loan portfolio at December 31, 2023, compared with 95% at December 31, 2022.

The residential mortgage loan portfolio includes loans with adjustable-rate features. We monitor the risk of default as a result of interest rate increases on adjustable-rate mortgage (ARM) loans, which may be mitigated by product features that limit the amount of the increase in the contractual interest rate. The default risk of these loans is considered in our ACL for loans. ARM loans were 7% of total loans at both December 31, 2023 and 2022, with an initial reset date in 2025 or later for the majority of this portfolio at December 31, 2023. We do not offer option ARM products, nor do we offer variable-rate mortgage products with fixed payment amounts, commonly referred to within the financial services industry as negative amortizing mortgage loans.

performance of our residential mortgage – junior lien portfolio for trends and factors that influence the frequency and severity of losses, such as junior lien performance when the first lien loan is delinquent.

The outstanding balance of residential mortgage lines of credit was $15.0 billion at December 31, 2023, compared with $18.3 billion at December 31, 2022. The unfunded credit commitments for these lines of credit totaled $28.6 billion at December 31, 2023, compared with $35.5 billion at December 31, 2022. Our residential mortgage lines of credit (both first and junior lien) generally have draw periods of 10, 15 or 20 years with variable interest rate and payment options available during the draw period of (1) interest-only or (2) 1.5% of outstanding principal balance plus accrued interest. The lines that enter their amortization period may experience higher delinquencies and higher loss rates than the ones in their draw or term period. We have considered this increased risk in our ACL for loans estimate. Interest-only lines and loans were approximately 2% of total loans at both December 31, 2023 and 2022.

During the draw period, the borrower has the option of converting all or a portion of the line from a variable interest rate to a fixed rate. At the end of the draw period, a line of credit generally converts to an amortizing payment schedule with repayment terms of up to 30 years based on the balance at time of conversion. Certain lines and loans have been structured with a

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38	Wells Fargo & Company

balloon payment, which requires full repayment of the outstanding balance at the end of the term period. The conversion of lines or loans to fully amortizing or balloon payoff may result in a significant payment increase, which can affect some borrowers’ ability to repay the outstanding balance. As borrowers near the end of their draw period, we work with them to transition from interest-only to fully-amortizing payments or full repayment.

We monitor changes in real estate values and underlying economic or market conditions for the geographic areas of our residential mortgage portfolio as part of our credit risk management process. Our periodic review of this portfolio includes original appraisals adjusted for the change in Home Price Index (HPI) or estimates from automated valuation models (AVMs) to support property values. AVMs are computer-based tools used to estimate the market value of homes. We have processes to periodically validate AVMs and specific risk management guidelines addressing the circumstances when AVMs may be used. For additional information about our use of appraisals and AVMs, see Note 5 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.

loan balance of first and junior lien mortgages (including unused line of credit amounts). For additional information regarding credit quality indicators, see Note 5 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.

We continue to modify residential mortgage loans to assist homeowners and other borrowers experiencing financial difficulties. Under these programs, we may provide concessions such as interest rate reductions, term extensions, forbearance of principal, and in some cases, principal forgiveness. These programs generally include a trial payment period of three months, and after successful completion and compliance with terms during this period, the loan is permanently modified. For additional information on loan modifications, see Note 5 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.

Residential Mortgage – First Lien Portfolio Our residential mortgage – first lien portfolio decreased $6.2 billion from

December 31, 2022, due to loan paydowns, partially offset by originations.

Table 21 shows certain delinquency and loss information for the residential mortgage – first lien portfolio and lists the top five states by outstanding balance.

Table 21: Residential Mortgage – First Lien Portfolio Performance

	Outstanding balance		% of total loans		% of loans 30 days or more past due	Net loan charge-off rate
	December 31,		December 31,		December 31,	Year ended December 31,
($ in millions)	2023		2022		2023	2022		2023		2022	2023		2022
California (1)	$	109,972			110,877		11.74	%		11.60		0.36			0.45		0.01		—
New York	31,322			31,753		3.34			3.32		0.79			0.80		—		(0.02)
Washington	10,672			10,523		1.14			1.10		0.29			0.30		(0.02)		—
New Jersey	10,161			10,416		1.08			1.09		1.13			1.24		0.01		0.01
Florida	10,065			10,535		1.07			1.10		1.11			1.13		(0.07)		(0.08)
Other (2)	69,893			72,843		7.46			7.62		0.82			0.93		0.01		0.01
Total	242,085			246,947		25.83			25.83		0.61			0.69		—		—
Government insured/guaranteed loans (3)	7,568			8,860		0.81			0.93
Total first lien mortgage portfolio	$	249,653			255,807		26.64	%		26.76

(1)Our residential mortgage loans to borrowers in California are located predominantly within the larger metropolitan areas, with no single California metropolitan area consisting of more than 4% of total loans.

(2)Consists of 45 states; no state in Other had loans in excess of $7.4 billion and $7.7 billion at December 31, 2023 and 2022, respectively.

(3)Represents loans, substantially all of which were purchased from Government National Mortgage Association (GNMA) loan securitization pools, where the repayment of the loans is predominantly insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA). For additional information on GNMA loan securitization pools, see the “Risk Management – Credit Risk Management – Mortgage Banking Activities” section in this Report.

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Risk Management – Credit Risk Management (continued)

Residential Mortgage – Junior Lien Portfolio Our residential mortgage – junior lien portfolio decreased $2.2 billion from December 31, 2022, driven by loan paydowns.

Table 22 shows certain delinquency and loss information for the residential mortgage – junior lien portfolio and lists the top five states by outstanding balance.

Table 22: Residential Mortgage – Junior Lien Portfolio Performance

	Outstanding balance		% of total loans		% of loans 30 daysor more past due	Net loan charge-off rate
	December 31,		December 31,		December 31,	Year ended December 31,
($ in millions)	2023		2022		2023	2022		2023		2022	2023		2022
California	$	3,101			3,550		0.33	%		0.37		1.65			2.02		(0.10)		(0.26)
New Jersey	1,114			1,383		0.12			0.14		2.81			2.76		(0.13)		0.10
Florida	924			1,165		0.10			0.12		2.42			2.69		(0.37)		(0.71)
Pennsylvania	673			832		0.07			0.09		2.70			2.76		(0.01)		(0.17)
New York	661			794		0.07			0.08		3.26			2.86		0.07		(0.09)
Other (1)	4,598			5,586		0.49			0.58		2.05			2.05		(0.38)		(0.53)
Total junior lien mortgage portfolio	$	11,071			13,310		1.18	%		1.38		2.16			2.27		(0.23)		(0.36)

(1)Consists of 45 states; no state in Other had loans in excess of $640 million and $790 million at December 31, 2023 and 2022, respectively.

CREDIT CARD, AUTO, AND OTHER CONSUMER LOANS Table 23 shows the outstanding balance of our credit card, auto, and other consumer loan portfolios. For information regarding credit quality indicators for these portfolios, see Note 5 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.

Table 23: Credit Card, Auto, and Other Consumer Loans

	December 31, 2023		December 31, 2022
($ in millions)	Outstanding balance		% of total loans		Outstanding balance		% of total loans
Credit card	$	52,230			5.58	%		$	46,293		4.84	%
Auto	47,762			5.10			53,669			5.61
Other consumer (1)	28,539			3.05			29,276			3.06
Total	$	128,531			13.73	%		$	129,238		13.51	%

(1)Includes $18.3 billion and $19.4 billion at December 31, 2023 and 2022, respectively, of securities-based loans originated by the WIM operating segment.

Credit Card The increase in the outstanding balance at December 31, 2023, compared with December 31, 2022, was primarily due to higher purchase volume and new account growth.

Auto The decrease in the outstanding balance at December 31, 2023, compared with December 31, 2022, was due to lower origination volumes reflecting credit tightening actions.

Other Consumer The decrease in the outstanding balance at December 31, 2023, compared with December 31, 2022, was due to a decline in securities-based lending.

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40	Wells Fargo & Company

NONPERFORMING ASSETS (NONACCRUAL LOANS AND FORECLOSED ASSETS) We generally place loans on nonaccrual status when:

•they are 90 days (120 days with respect to residential mortgage loans) past due for interest or principal, unless the loan is both well-secured and in the process of collection;

•part of the principal balance has been charged off; or

•for junior lien mortgage loans, we have evidence that the related first lien mortgage may be 120 days past due or in the process of foreclosure regardless of the junior lien delinquency status.

Table 24 summarizes nonperforming assets (NPAs).

Table 24: Nonperforming Assets (Nonaccrual Loans and Foreclosed Assets)

($ in millions)	Dec 31, 2023
Nonaccrual loans:
Commercial and industrial	$	662		746
Commercial real estate	4,188		958
Lease financing	64		119
Total commercial	4,914		1,823
Residential mortgage (1)	3,192		3,611
Auto	115		153
Other consumer	35		39
Total consumer	3,342		3,803
Total nonaccrual loans	$	8,256		5,626
As a percentage of total loans	0.88	%	0.59
Foreclosed assets:
Government insured/guaranteed (2)	$	12		22
Non-government insured/guaranteed	175		115
Total foreclosed assets	187		137
Total nonperforming assets	$	8,443		5,763
As a percentage of total loans	0.90	%	0.60

(1)Residential mortgage loans predominantly insured by the FHA or guaranteed by the VA are not placed on nonaccrual status because they are insured or guaranteed.

(2)Consistent with regulatory reporting requirements, foreclosed real estate resulting from government insured/guaranteed loans are classified as nonperforming. Both principal and interest related to these foreclosed real estate assets are collectible because the loans were predominantly insured by the FHA or guaranteed by the VA. Receivables related to the foreclosure of certain government guaranteed real estate mortgage loans are excluded from this table and included in accounts receivable in other assets. For additional information on the classification of certain government-guaranteed mortgage loans upon foreclosure, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

Commercial nonaccrual loans increased $3.1 billion from December 31, 2022, driven by an increase in commercial real estate nonaccrual loans, predominantly within the office property type. For additional information on commercial nonaccrual loans, see the “Risk Management – Credit Risk Management – Commercial and Industrial Loans and Lease Financing” and “Risk Management – Credit Risk Management – Commercial Real Estate” sections in this Report.

Consumer nonaccrual loans decreased $461 million from December 31, 2022, due to lower residential mortgage nonaccrual loans.

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	Wells Fargo & Company	41

Risk Management – Credit Risk Management (continued)

Table 25 provides an analysis of the changes in nonaccrual loans. Typically, changes to nonaccrual loans period-over-period represent inflows for loans that are placed on nonaccrual status in accordance with our policies, offset by reductions for loans

Table 25: Analysis of Changes in Nonaccrual Loans


(in millions)	2023		2022
Commercial nonaccrual loans
Balance, beginning of period	$	1,823			2,376
Inflows	6,524			1,391
Outflows:
Returned to accruing	(474)			(451)
Foreclosures	(70)			(20)
Charge-offs	(1,054)			(247)
Payments, sales and other	(1,835)			(1,226)
Total outflows	(3,433)			(1,944)
Balance, end of period	4,914			1,823
Consumer nonaccrual loans
Balance, beginning of period	3,803			4,836
Inflows	1,314			1,728
Outflows:
Returned to accruing	(737)			(1,599)
Foreclosures	(101)			(85)
Charge-offs	(167)			(245)
Payments, sales and other	(770)			(832)
Total outflows	(1,775)			(2,761)
Balance, end of period	3,342			3,803
Total nonaccrual loans	$	8,256			5,626

•99% of total commercial nonaccrual loans are secured, predominantly by real estate.

•76% of commercial nonaccrual loans were current on interest and 66% of commercial nonaccrual loans were current on both principal and interest, but were on nonaccrual status because the full or timely collection of interest or principal had become uncertain.

•99% of total consumer nonaccrual loans are secured, of which 96% are secured by real estate and 98% have a LTV ratio of 80% or less.

•$489 million of the $629 million of consumer loans in bankruptcy or discharged in bankruptcy, and classified as nonaccrual, were current.

Table 26 provides a summary of foreclosed assets and an analysis of changes in foreclosed assets.

Table 26: Foreclosed Assets

(in millions)		December 31,
	2023		2022
Summary by loan segment
Government insured/guaranteed	$	12			22
Commercial	135			65
Consumer	40			50
Total foreclosed assets	$	187			137
(in millions)		Year ended December 31,
	2023		2022
Analysis of changes in foreclosed assets
Balance, beginning of period					$	137		112
Net change in government insured/guaranteed (1)					(10)		6
Additions to foreclosed assets (2)					576		420
Reductions from sales and write-downs					(516)		(401)
Balance, end of period					$	187		137

(1)Foreclosed government insured/guaranteed loans are temporarily transferred to and held by us as servicer, until reimbursement is received from the FHA or the VA.

(2)Includes loans moved into foreclosed assets from nonaccrual status and repossessed autos.

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42	Wells Fargo & Company

NET CHARGE-OFFS Table 27 presents net loan charge-offs.

Table 27: Net Loan Charge-offs

		Quarter ended December 31,		Year ended December 31,
		2023		2022		2023		2022
($ in millions)	Net loan charge- offs		% of avg. loans (1)		Net loan charge- offs		% of avg. loans (1)		Net loan charge- offs		% ofavg.loans		Net loan charge- offs		% ofavg.loans
Commercial and industrial	$	90			0.09	%		$	66			0.07	%		$	345		0.09	%		$	83		0.02	%
Commercial real estate	377			0.99			10			0.03			566			0.37		(11)			(0.01)
Lease financing	5			0.14			3			0.06			12			0.08		7			0.04
	Total commercial	472			0.34			79			0.06			923			0.17		79			0.01
Residential mortgage	3			—			(12)			(0.02)			(24)			(0.01)		(63)			(0.02)
Credit card	520			4.02			274			2.42			1,680			3.49		851			2.06
Auto	130			1.06			137			1.00			478			0.93		422			0.76
Other consumer	127			1.79			82			1.13			413			1.47		319			1.11
	Total consumer	780			0.79			481			0.48			2,547			0.65		1,529			0.39
	Total	$	1,252			0.53	%		$	560			0.23	%		$	3,470		0.37	%		$	1,608		0.17	%

(1)Net loan charge-offs (recoveries) as a percentage of average loans are annualized.

The increase in commercial net loan charge-offs in 2023, compared with 2022, was due to higher losses in all commercial portfolios, primarily in our commercial real estate portfolio driven by the office property type.

The increase in consumer net loan charge-offs in 2023, compared with 2022, was due to higher losses in all consumer portfolios, primarily in our credit card portfolio.

ALLOWANCE FOR CREDIT LOSSES We maintain an allowance for credit losses (ACL) for loans, which is management’s estimate of the expected lifetime credit losses in the loan portfolio and unfunded credit commitments, at the balance sheet date, excluding loans and unfunded credit commitments carried at fair value or held for sale. Additionally, we maintain an ACL for debt securities classified as either AFS or HTM, other financial assets measured at amortized cost, including deposits with banks, net investments in leases, and other off-balance sheet credit exposures.

The process for establishing the ACL for loans takes into consideration many factors, including historical and forecasted loss trends, loan-level credit quality ratings and loan grade-specific characteristics. The process involves subjective and complex judgments. In addition, we review a variety of credit metrics and trends. These credit metrics and trends, however, do not solely determine the amount of the allowance as we use several analytical tools. For additional information on our ACL, see the “Critical Accounting Policies – Allowance for Credit Losses” section and Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report. For additional information on our ACL for loans, see Note 5 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report, and for additional information on our ACL for debt securities, see Note 3 (Available-for-Sale and Held-to-Maturity Debt Securities) to Financial Statements in this Report.

Table 28 presents the allocation of the ACL for loans by loan portfolio segment and class.

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	Wells Fargo & Company	43

Risk Management – Credit Risk Management (continued)

Table 28: Allocation of the ACL for Loans

	Dec 31, 2023		Dec 31, 2022
($ in millions)	ACL		ACL as % of loan class		Loans as % of total loans		ACL		ACL as % of loan class		Loans as % of total loans
Commercial and industrial	$	4,272			1.12	%		40			$	4,507		1.17	%	40
Commercial real estate	3,939			2.62			16			2,231			1.43		16
Lease financing	201			1.22			2			218			1.46		2
Total commercial	8,412			1.54			58			6,956			1.25		58
Residential mortgage (1)	652			0.25			28			1,096			0.41		28
Credit card	4,223			8.09			6			3,567			7.71		5
Auto	1,042			2.18			5			1,380			2.57		6
Other consumer	759			2.66			3			610			2.08		3
Total consumer	6,676			1.72			42			6,653			1.67		42
Total	$	15,088			1.61	%		100			$	13,609		1.42	%	100
Components:
Allowance for loan losses					$	14,606						12,985
Allowance for unfunded credit commitments					482						624
Allowance for credit losses					$	15,088						13,609
Ratio of allowance for loan losses to total net loan charge-offs					4.21x						8.08
Ratio of allowance for loan losses to total nonaccrual loans					1.77							2.31
Allowance for loan losses as a percentage of total loans					1.56	%						1.36

(1)Includes negative allowance for expected recoveries of amounts previously charged off.

The ratios for the allowance for loan losses and the ACL for loans presented in Table 28 may fluctuate from period to period due to such factors as the mix of loan types in the portfolio, borrower credit strength, and the value and marketability of collateral.

The ACL for loans increased $1.5 billion, or 11%, from December 31, 2022, reflecting increases for commercial real estate loans, primarily office loans, as well as for increases in credit card loan balances, partially offset by a decrease for residential mortgage loans related to the adoption of ASU 2022-02. For additional information on ASU 2022-02, see

Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report. The detail of the changes in the ACL for loans by portfolio segment (including charge-offs and recoveries by loan class) is included in Note 5 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.

We consider multiple economic scenarios to develop our estimate of the ACL for loans, which generally include a base scenario, along with an optimistic (upside) and one or more pessimistic (downside) scenarios. We weighted the base scenario and the downside scenarios in our estimate of the ACL for loans at December 31, 2023. The base scenario assumed elevated inflation and economic contraction in the near term, reflecting declining property values and increased unemployment rates from historically low levels. The downside scenarios assumed a more substantial economic contraction due to declining property values, high inflation, and lower business and consumer confidence.

Additionally, we consider qualitative factors that represent the risk of limitations inherent in our processes and assumptions such as economic environmental factors, modeling assumptions and performance, and other subjective factors, including industry trends and emerging risk assessments.

The forecasted key economic variables used in our estimate of the ACL for loans at December 31 and September 30, 2023, are presented in Table 29.

Table 29: Forecasted Key Economic Variables

	2Q 2024
Weighted blend of economic scenarios:
U.S. unemployment rate (1):
December 31, 2023	4.4	%	5.3	5.9
September 30, 2023	4.6		5.6	6.0
U.S. real GDP (2):
December 31, 2023	(1.2)		(0.5)	0.8
September 30, 2023	(1.5)		0.3	1.6
Home price index (3):
December 31, 2023	(2.3)		(6.7)	(6.6)
September 30, 2023	(6.1)		(6.8)	(5.8)
Commercial real estate asset prices (3):
December 31, 2023	(6.6)		(14.0)	(10.4)
September 30, 2023	(13.8)		(10.3)	(4.5)

(1)Quarterly average.

(2)Percent change from the preceding period, seasonally adjusted annualized rate.

(3)Percent change year over year of national average; outlook differs by geography and property type.

We believe the ACL for loans of $15.1 billion at December 31, 2023, was appropriate to cover expected credit losses, including unfunded credit commitments, at that date. The entire allowance is available to absorb credit losses from the total loan portfolio. The ACL for loans is subject to change and reflects existing factors as of the date of determination, including economic or market conditions and ongoing internal and external examination processes. Due to the sensitivity of the ACL for loans to changes in the economic and business environment, it is possible that we will incur incremental credit losses not anticipated as of the balance sheet date. Our process for

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determining the ACL is discussed in the “Critical Accounting Policies – Allowance for Credit Losses” section and Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

MORTGAGE BANKING ACTIVITIES We sell residential and commercial mortgage loans to various parties, including (1) government-sponsored entities (GSEs), Federal Home Loan Mortgage Corporation (FHLMC) and Federal National Mortgage Association (FNMA), who include the mortgage loans in GSE-guaranteed mortgage securitizations, (2) SPEs that issue private label MBS, and (3) other financial institutions that purchase mortgage loans for investment or private label securitization. In addition, we pool FHA-insured and VA-guaranteed residential mortgage loans that are then used to back securities guaranteed by the Government National Mortgage Association (GNMA). We may be required to repurchase these mortgage loans, indemnify the securitization trust, investor or insurer, or reimburse the securitization trust, investor or insurer for credit losses incurred on loans (collectively, repurchase) in the event of a breach of contractual representations or warranties that is not remedied within a period (usually 90 days or less) after we receive notice of the breach.

In connection with our sales and securitization of residential mortgage loans, we have established a mortgage repurchase liability, initially at fair value, related to various representations and warranties that reflect management’s estimate of losses for loans for which we could have a repurchase obligation, whether or not we currently service those loans, based on a combination of factors. See Note 16 (Securitizations and Variable Interest Entities) to Financial Statements in this Report for additional information about our liability for mortgage loan repurchase losses.

We provide recourse to GSEs for commercial mortgage loans sold under various programs and arrangements. The terms of certain programs require that we incur a pro-rata share of actual losses in the event of borrower default. See Note 17 (Guarantees and Other Commitments) to Financial Statements in this Report for additional information about our exposure to loss related to these programs.

The loans we service were originated by us or by other mortgage loan originators. As servicer, our primary duties are typically to (1) collect payments due from borrowers, (2) advance certain delinquent payments of principal and interest on the mortgage loans, (3) maintain and administer any hazard, title or primary mortgage insurance policies relating to the mortgage loans, (4) maintain any required escrow accounts for payment of taxes and insurance and administer escrow payments, and (5) foreclose on defaulted mortgage loans or, to the extent consistent with the related servicing agreement, consider alternatives to foreclosure, such as loan modifications or short sales, and for certain investors, manage the foreclosed property through liquidation. As master servicer, our primary duties are typically to (1) supervise, monitor and oversee the servicing of the mortgage loans by the servicer, and (2) advance delinquent amounts required by non-affiliated servicers who fail to perform their advancing obligations. The amount and timing of reimbursement for advances of delinquent payments vary by

investor and the applicable servicing agreements. See Note 6 (Mortgage Banking Activities) to Financial Statements in this Report for additional information about residential and commercial servicing rights, servicer advances and servicing fees.

Loans repurchased from GNMA securitization pools that regain current status or are otherwise modified in accordance with applicable servicing guidelines may be included in future GNMA loan securitization pools. At December 31, 2023 and 2022, these loans, which we have repurchased or have the unilateral option to repurchase, were $7.8 billion and $9.8 billion, respectively, which included $7.4 billion and $8.6 billion, respectively, in loans held for investment, with the remainder in loans held for sale. See Note 16 (Securitizations and Variable Interest Entities) to Financial Statements in this Report for additional information about our involvement with mortgage loan securitizations.

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	Wells Fargo & Company	45

Asset/Liability Management

At the management level, the Corporate Asset/Liability Committee (Corporate ALCO), which consists of management from finance, risk and business groups, oversees these risks and supports periodic reports provided to the Board’s Finance Committee and Risk Committee as appropriate. As discussed in more detail for market risk activities below, we employ separate management level oversight specific to market risk.

INTEREST RATE RISK Interest rate risk is the risk that market fluctuations in interest rates, credit spreads, or foreign exchange can cause a loss of the Company’s earnings and capital stemming from mismatches in the cash flows of the Company’s assets and liabilities generally arising from customer-related lending and deposit-taking activities. We are subject to interest rate risk because:

•assets and liabilities may mature or reprice at different times or by different amounts;

•short-term and long-term market interest rates may change independently or with different magnitudes;

•the remaining maturity for various assets or liabilities may shorten or lengthen as interest rates change; or

•interest rates may also have a direct or indirect effect on loan demand, collateral values, credit losses, loan origination volume, and the fair value of financial instruments and MSRs.

We assess interest rate risk by comparing the earnings outcomes from multiple interest rate scenarios that differ in the direction of interest rate changes, the degree and speed of interest rate changes over time, and the projected shape of the yield curve. These scenarios require assumptions regarding drivers of earnings and balance sheet composition such as loan originations, prepayment rates on loans and debt securities, deposit flows and mix, as well as pricing strategies. We periodically assess and enhance our scenarios and assumptions. Our scenario assumptions reflected the following:

•Scenarios are dynamic and reflect anticipated changes to our assets and liabilities over time.

•Mortgage prepayment and origination assumptions vary across scenarios and reflect only the impact of the higher or lower interest rates.

•Other macroeconomic variables that could be correlated with the changes in interest rates are held constant.

expectations due to the lag or acceleration of deposit repricing, changes in consumer behavior, and other factors.

Table 30 presents the results of the estimated net interest income sensitivity over the next 12 months from the multiple scenarios compared with our base scenario. The base scenario is a reference point used by the Company for financial planning purposes. These hypothetical scenarios include instantaneous movements across the yield curve with both lower and higher interest rates under a parallel shift, as well as steeper and flatter non-parallel changes in the yield curve. Long-term interest rates are defined as all tenors three years and longer, and short-term interest rates are defined as all tenors less than three years.

Table 30: Net Interest Income Sensitivity Over the Next 12 Months Using Instantaneous Movements

($ in billions)	Dec 31, 2023
Parallel shift:
+100 bps shift in interest rates	$	1.8		2.3
-100 bps shift in interest rates	(2.0)		(1.7)
Steeper yield curve:
+100 bps shift in long-term interest rates	1.1		0.8
-100 bps shift in short-term interest rates	(1.0)		(1.0)
Flatter yield curve:
+100 bps shift in short-term interest rates	0.7		1.5
-100 bps shift in long-term interest rates	(1.1)		(0.7)

Our interest rate sensitivity indicates that we would expect to benefit from higher interest rates as our assets would reprice faster and to a greater degree than our liabilities, while in the case of lower interest rates, our assets would reprice downward and to a greater degree than our liabilities resulting in lower net interest income. The changes in our interest rate sensitivity from December 31, 2022, to December 31, 2023, reflected updates for our expected balance sheet composition, including a shift to higher cost deposits. The magnitude of the benefit, if any, from higher interest rates may vary from our scenarios, including because future deposit pricing and balances may be different from our current expectations. The realized impact of interest rate changes may also vary from our base and hypothetical scenarios for various reasons, including any deposit pricing lags.

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46	Wells Fargo & Company

MORTGAGE BANKING INTEREST RATE AND MARKET RISK We originate and service mortgage loans, which subjects us to various risks, including market, interest rate, credit, and liquidity risks that can be substantial. Based on market conditions and other factors, we reduce credit and liquidity risks by selling or securitizing mortgage loans. We determine whether mortgage loans will be held for investment or held for sale at the time of commitment, but may change our intent to hold loans for investment or sale as part of our corporate asset/liability management activities. We may also retain securities in our investment portfolio at the time we securitize mortgage loans.

The valuation of our residential MSRs can be highly subjective and involve complex judgments by management about matters that are inherently unpredictable. Changes in interest rates influence a variety of significant assumptions captured in the periodic valuation of residential MSRs, including prepayment rates, expected returns and potential risks on the servicing asset portfolio, costs to service, the value of escrow balances and other servicing valuation elements. See the “Critical Accounting Policies – Valuation of Residential Mortgage Servicing Rights” section in this Report for additional information on the valuation of our residential MSRs.

An increase in interest rates generally reduces the propensity for refinancing, extends the expected duration of the servicing portfolio, and therefore increases the estimated fair

value of the MSRs. However, an increase in interest rates can also reduce mortgage loan demand, including refinancing activity, which reduces noninterest income from origination activities. A decline in interest rates would generally have an opposite impact.

To reduce our exposure to changes in interest rates, our residential MSRs are economically hedged with a combination of derivative instruments, including interest rate swaps, Eurodollar futures, highly liquid mortgage forward contracts and interest rate options. Hedging the various sources of interest rate risk in mortgage banking is a complex process that requires sophisticated modeling and constant monitoring. There are several potential risks to earnings from mortgage banking related to origination volumes and mix, valuation of MSRs and associated hedging results, the relationship and degree of volatility between short-term and long-term interest rates, and changes in servicing and foreclosures costs. While we attempt to balance our mortgage banking interest rate and market risks, the financial instruments we use may not perfectly correlate with the values and income being hedged.

The size of the hedge and the particular combination of hedging instruments at any point in time is designed to reduce the volatility of our earnings over various time frames within a range of mortgage interest rates. Market factors, the composition of the mortgage servicing portfolio, and the relationship between the origination and servicing sides of our mortgage businesses change continually, and therefore the types of instruments used in our hedging are reviewed daily and rebalanced based on our evaluation of current market factors and the interest rate risk inherent in our portfolio.

For additional information on mortgage banking, including key assumptions and the sensitivity of the fair value of MSRs, see Note 6 (Mortgage Banking Activities), Note 14 (Derivatives), and Note 15 (Fair Values of Assets and Liabilities) to Financial Statements in this Report.

MARKET RISK Market risk is the risk of possible economic loss from adverse changes in market risk factors such as interest rates, credit spreads, foreign exchange rates, equity and commodity prices, and the risk of possible loss due to counterparty exposure. This applies to implied volatility risk, basis risk, and market liquidity risk. It includes price risk in the trading book, mortgage servicing rights, the hedge effectiveness risk associated with the mortgage book held at fair value, and impairment on private equity investments.

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	Wells Fargo & Company	47

Risk Management – Asset/Liability Management (continued)

for trading, equity securities held for trading, trading loans, and trading derivatives are financial instruments used in our trading activities, and all are carried at fair value. Income earned on the financial instruments used in our trading activities include net interest income, changes in fair value, and realized gains and losses. Net interest income earned from our trading activities is reflected in the interest income and interest expense components of our consolidated statement of income. Changes in fair value of the financial instruments used in our trading activities are reflected in net gains from trading activities. For additional information on the financial instruments used in our trading activities and the income from these trading activities, see Note 2 (Trading Activities) to Financial Statements in this Report.

Value-at-risk (VaR) is a statistical risk measure used to estimate the potential loss from adverse moves in the financial markets. The Company uses VaR metrics complemented with sensitivity analysis and stress testing in measuring and monitoring market risk. These market risk measures are monitored at both the business unit level and at aggregated levels on a daily basis. Our corporate market risk management function aggregates and monitors exposures against our established risk appetite. Changes to the market risk profile are

analyzed and reported on a daily basis. The Company monitors various market risk exposure measures from a variety of perspectives, including line of business, product, risk type, and legal entity.

Trading VaR is the measure used to provide insight into the market risk exhibited by the Company’s trading positions. The Company calculates Trading VaR for risk management purposes to establish and monitor line of business and Company-wide risk limits. Trading VaR is calculated based on all trading positions on our consolidated balance sheet.

Table 31 shows the Company’s Trading General VaR by risk category. Our Trading General VaR uses a historical simulation model which assumes that historical changes in market values are representative of the potential future outcomes and measures the expected earnings loss of the Company over a

1-day time interval at a 99% confidence level. Our historical simulation model is based on equally weighted data from a

12-month historical look-back period. We believe using a

Table 31: Trading 1-Day 99% General VaR by Risk Category

	Year ended December 31,
	2023				2022
(in millions)	Period end		Average		Low	High				Period end	Average		Low		High
Company Trading General VaR Risk Categories
Credit	$	30			35		20		52					29			32		19		85
Interest rate	16			33		9		65					25			25		9		88
Equity	23			21		13		31					27			23		13		38
Commodity	3			4		2		8					4			6		2		20
Foreign exchange	1			1		0		4					1			1		0		2
Diversification benefit (1)	(36)			(59)							(47)			(52)
Company Trading General VaR	$	37			35							39			35

(1)The period-end VaR was less than the sum of the VaR components described above due to portfolio diversification. The diversification effect arises because the risks are not perfectly correlated causing a portfolio of positions to usually be less risky than the sum of the risks of the positions alone. The diversification benefit is not meaningful for low and high metrics since they may occur on different days.

Sensitivity Analysis Given the inherent limitations of the VaR models, the Company uses other measures, including sensitivity analysis, to measure and monitor risk. Sensitivity analysis is the measure of exposure to a single risk factor, such as a 0.01% increase in interest rates or a 1% increase in equity prices. We conduct and monitor sensitivity on interest rates, credit spreads, volatility, equity, commodity, and foreign exchange exposure. Sensitivity analysis complements VaR as it provides an indication of risk relative to each factor irrespective of historical market moves.

Stress Testing While VaR captures the risk of loss due to adverse changes in markets using recent historical market data, stress testing is designed to capture the Company’s exposure to extreme but low probability market movements. Stress scenarios estimate the risk of losses based on management’s assumptions of abnormal but severe market movements such as severe credit spread widening or a large decline in equity prices. These scenarios assume that the market moves happen instantaneously and no repositioning or hedging activity takes place to mitigate losses as events unfold (a conservative approach since experience demonstrates otherwise).

An inventory of scenarios is maintained representing both historical and hypothetical stress events that affect a broad range of market risk factors with varying degrees of correlation and differing time horizons. Hypothetical scenarios assess the impact of large movements in financial variables on portfolio values. Typical examples include a 1% (100 basis point) increase across the yield curve or a 10% decline in equity market indexes. Historical scenarios utilize an event-driven approach: the stress scenarios are based on plausible but rare events, and the analysis addresses how these events might affect the risk factors relevant to a portfolio.

MARKET RISK – EQUITY SECURITIES We are directly and indirectly affected by changes in the equity markets. We make and manage equity investments in various businesses, such as start-up companies and emerging growth companies. We also invest in

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funds that make similar private equity investments. These private equity investments are made within capital allocations approved by management and the Board. The Board reviews business developments, key risks and historical returns for the private equity investment portfolio at least annually. Management reviews these investments at least quarterly to assess them for impairment and observable price changes. For nonmarketable equity securities, the analysis is based on facts and circumstances of each individual investment and the expectations for that investment’s cash flows, capital needs, the viability of its business model, our exit strategy, and observable price changes that are similar to the investments held. Investments in nonmarketable equity securities include private equity investments accounted for under the equity method, fair value through net income, and the measurement alternative.

As part of our business to support our customers, we trade public equities, listed/over-the-counter equity derivatives, and convertible bonds. We have parameters that govern these activities. We also have marketable equity securities that include investments relating to our venture capital activities. We manage these marketable equity securities within capital risk limits approved by management and the Board and monitored by Corporate ALCO and the Market Risk Committee. The fair value changes in these marketable equity securities are recognized in net income. For additional information, see Note 4 (Equity Securities) to Financial Statements in this Report.

LIQUIDITY RISK AND FUNDING Liquidity risk is the risk arising from the inability of the Company to meet obligations when they come due, or roll over funds at a reasonable cost, without incurring heightened costs. In the ordinary course of business, we enter into contractual obligations that may require future cash payments, including funding for customer loan requests, customer deposit maturities and withdrawals, debt service, leases for premises and equipment, and other cash commitments. Liquidity risk also considers the stability of deposits, including the risk of losing uninsured or non-operational deposits. The objective of effective liquidity management is to be able to meet our contractual obligations and other cash commitments efficiently under both normal operating conditions and under periods of Wells Fargo-specific and/or market stress. For additional information on these obligations, see the following sections and Notes to Financial Statements in this Report:

•“Unfunded Credit Commitments” section within Loans and Related Allowance for Credit Losses (Note 5)

•Leasing Activity (Note 8)

•Deposits (Note 9)

•Long-Term Debt (Note 10)

•Guarantees and Other Commitments (Note 17)

•Employee Benefits (Note 22)

•Income Taxes (Note 23)

Liquidity Stress Tests Liquidity stress tests are performed to help the Company maintain sufficient liquidity to meet contractual and contingent outflows modeled under a variety of stress scenarios. Our scenarios utilize market-wide as well as idiosyncratic events, including a range of stress conditions and time horizons. Stress testing results facilitate evaluation of the Company’s projected liquidity position during stress and inform future needs in the Company’s funding plan.

Contingency Funding Plan Our contingency funding plan (CFP), which is approved by the Corporate Asset/Liability Committee and the Board’s Risk Committee, sets out the Company’s strategies and action plans to address potential liquidity needs during market-wide or idiosyncratic liquidity events. The CFP establishes measures for monitoring emerging liquidity events and describes the processes for communicating and managing stress events should they occur. The CFP also identifies alternate funding and liquidity strategies available to the Company in a period of stress.

Liquidity Standards We are subject to a rule issued by the FRB, OCC and FDIC that establishes a quantitative minimum liquidity requirement consistent with the liquidity coverage ratio (LCR) established by the Basel Committee on Banking Supervision (BCBS). The rule requires a covered banking organization to hold high-quality liquid assets (HQLA) in an amount equal to or greater than its projected net cash outflows during a 30-day stress period. Our HQLA under the rule predominantly consists of central bank deposits, government debt securities, and mortgage-backed securities of federal agencies. The LCR applies to the Company and to our insured depository institutions (IDIs) with total assets of $10 billion or more. In addition, rules issued by the FRB impose enhanced liquidity risk management standards on large bank holding companies (BHCs), such as Wells Fargo.

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Risk Management – Asset/Liability Management (continued)

Liquidity Coverage Ratio As of December 31, 2023, the Company, Wells Fargo Bank, N.A., and Wells Fargo National Bank West exceeded the minimum LCR requirement of 100%.

Table 32 presents the Company’s quarterly average values for the daily-calculated LCR and its components calculated pursuant

to the LCR rule requirements. The LCR represents average HQLA divided by average projected net cash outflows, as each is defined under the LCR rule.

Table 32: Liquidity Coverage Ratio

	Average for quarter ended
(in millions, except ratio)	Dec 31, 2023		Sep 30, 2023		Dec 31, 2022
HQLA (1):
Eligible cash	$	187,133		154,258			123,446
Eligible securities (2)	162,930		191,606			231,337
Total HQLA	350,063		345,864			354,783
Projected net cash outflows (3)	279,903		280,468			292,001
LCR	125	%		123			122

(1)Excludes excess HQLA at certain subsidiaries that are not transferable to other Wells Fargo entities.

(2)Net of applicable haircuts required under the LCR rule.

exceed HQLA calculated under the LCR rule due to the applicable haircuts to HQLA and the exclusion of excess HQLA at our subsidiary IDIs required under the LCR rule. Our primary sources of liquidity are presented in Table 33 at fair value, which also includes encumbered securities that are not included as available HQLA in the calculation of the LCR.

Table 33: Primary Sources of Liquidity

	December 31, 2023		December 31, 2022
(in millions)	Total		Encumbered		Unencumbered	Total		Encumbered		Unencumbered
Interest-earning deposits with banks (1)	$	203,026			—		203,026			124,561		—		124,561
Debt securities of U.S. Treasury and federal agencies	47,754			9,351		38,403			59,570		12,080		47,490
Federal agency mortgage-backed securities (2)	237,966			28,471		209,495			230,881		34,151		196,730
Total	$	488,746			37,822		450,924			415,012		46,231		368,781

(1)Excludes time deposits, which are included in interest-earning deposits with banks in our consolidated balance sheet.

(2)Encumbered securities at December 31, 2023, included securities with a fair value of $545 million which were purchased in December 2023, but settled in January 2024.

Our interest-earning deposits with banks are mainly on deposit with the Federal Reserve. We believe the debt securities included in Table 33 provide quick and reliable sources of liquidity through sales or by pledging to obtain financing, regardless of market conditions. Debt securities within our HTM portfolio are not intended for sale but may be pledged to obtain financing.

As of December 31, 2023, we had approximately $485.8 billion of available borrowing capacity at various Federal Home Loan Banks and the Federal Reserve Discount Window, based on collateral pledged. Although available, we do not view this borrowing capacity as a primary source of liquidity.

In addition, liquidity is also available through the sale or financing of other debt securities, including trading and/or AFS debt securities, as well as through the sale, securitization, or financing of loans, to the extent such debt securities and loans are not encumbered.

and certain of its direct and indirect subsidiaries. For additional information on the IHC, see the “Regulatory Matters – ‘Living Will’ Requirements and Related Matters” section in this Report. Additional subsidiary funding is provided by deposits, short-term borrowings and long-term debt.

Deposits have historically provided a sizable source of relatively low-cost funds. Loans were 69% of total deposits at both December 31, 2023 and 2022.

Table 34 presents a summary of our short-term borrowings, which generally mature in less than 30 days. The balances of federal funds purchased and securities sold under agreements to repurchase may vary over time due to client activity, our own demand for financing, and our overall mix of liabilities. For additional information on the classification of our short-term borrowings, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report. We pledge certain financial instruments that we own to collateralize repurchase agreements and other securities financings. For additional information, see the “Pledged Assets” section of

Note 19 (Pledged Assets and Collateral) to Financial Statements in this Report.

Column 1	Column 2
50	Wells Fargo & Company

Table 34: Short-Term Borrowings

(in millions)	Dec 31, 2023
Federal funds purchased and securities sold under agreements to repurchase	$	77,676		30,623
Other short-term borrowings (1)	11,883		20,522
Total	$	89,559		51,145

(1)Includes $0 and $7.0 billion of Federal Home Loan Bank (FHLB) advances at December 31, 2023 and 2022, respectively.

We access domestic and international capital markets for long-term funding through issuances of registered debt securities, private placements and asset-backed secured funding. We issue long-term debt in a variety of maturities and currencies to achieve cost-efficient funding and to maintain an appropriate maturity profile. Proceeds from securities issued were used for general corporate purposes unless otherwise specified in the applicable prospectus or prospectus supplement, and we expect the proceeds from securities issued in the future will be used for the same purposes. Depending on market conditions and our

liquidity position, we may redeem or repurchase, and subsequently retire, our outstanding debt securities in privately negotiated or open market transactions, by tender offer, or otherwise.

Table 35 presents a summary of our long-term debt. For additional information on our long-term debt, including contractual maturities, see Note 10 (Long-Term Debt), and for information on the classification of our long-term debt, see

Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

Table 35: Long-Term Debt

(in millions)	December 31, 2023
Wells Fargo & Company (Parent Only)	$	148,312		134,401
Wells Fargo Bank, N.A., and other bank entities (Bank) (1)	58,466		39,189
Other consolidated subsidiaries	810		1,280
Total	$	207,588		174,870

(1)Includes $38.0 billion and $27.0 billion of FHLB advances at December 31, 2023 and 2022, respectively. For additional information, see Note 10 (Long-Term Debt) to Financial Statements in this Report.

Credit Ratings Investors in the long-term capital markets, as well as other market participants, generally will consider, among other factors, a company’s debt rating in making investment decisions. Rating agencies base their ratings on many quantitative and qualitative factors, including capital adequacy, liquidity, asset quality, business mix, the level and quality of earnings, and rating agency assumptions regarding the probability and extent of federal financial assistance or support for certain large financial institutions. Adverse changes in these factors could result in a reduction of our credit rating; however, our debt securities do not contain credit rating covenants.

On October 2, 2023, S&P Global Ratings affirmed the Company’s ratings and maintained the stable outlook. On October 23, 2023, Moody’s affirmed the Company’s ratings and retained the stable outlook. On November 13, 2023, Moody’s affirmed the ratings for Wells Fargo Bank, N.A. but changed the outlook to negative from stable for long-term bank deposits, long-term issuer ratings, and senior unsecured debt.

Moody’s indicated that the outlook change reflected their view of the potentially weaker capacity of the U.S government to support systemically important banks in the U.S., as reflected in Moody’s recent change in the outlook on the U.S. government to negative from stable. There were no other actions undertaken by the rating agencies with regard to our credit ratings during fourth quarter 2023.

See the “Risk Factors” section in this Report for additional information regarding our credit ratings and the potential impact a credit rating downgrade would have on our liquidity and operations as well as Note 14 (Derivatives) to Financial Statements in this Report for information regarding additional collateral and funding obligations required for certain derivative instruments in the event our credit ratings were to fall below investment grade.

The credit ratings of the Parent and Wells Fargo Bank, N.A., as of December 31, 2023, are presented in Table 36.

Table 36: Credit Ratings as of December 31, 2023

		Wells Fargo & Company	Wells Fargo Bank, N.A.
	Senior debt	Short-term borrowings	Long-term deposits	Short-term borrowings
Moody’s	A1	P-1	Aa1	P-1
S&P Global Ratings	BBB+	A-2	A+	A-1
Fitch Ratings	A+	F1	AA	F1+
DBRS Morningstar	AA (low)	R-1 (middle)	AA	R-1 (high)

Column 1	Column 2	Column 3
	Wells Fargo & Company	51

Capital Management

We have an active program for managing capital through a comprehensive process for assessing the Company’s overall capital adequacy. Our objective is to maintain capital at an amount commensurate with our risk profile and risk tolerance objectives, and to meet both regulatory and market expectations. We primarily fund our capital needs through the retention of earnings net of both dividends and share repurchases, as well as through the issuance of preferred stock and long- and short-term debt. Retained earnings at December 31, 2023, increased $13.2 billion from December 31, 2022, predominantly as a result of $19.1 billion of Wells Fargo net income, partially offset by $6.0 billion of common and preferred stock dividends. During 2023, we issued $1.6 billion of common stock, substantially all of which was issued in connection with employee compensation and benefits. In 2023, we repurchased 272 million shares of common stock at a cost of $12.0 billion. For additional information about capital planning, see the “Capital Planning and Stress Testing” section below.

In 2023, we issued $1.725 billion of our Preferred Stock, Series EE, and redeemed all of our Preferred Stock, Series Q.

Regulatory Capital Requirements

RISK-BASED CAPITAL AND RISK-WEIGHTED ASSETS The Company is subject to rules issued by federal banking regulators to implement Basel III capital requirements for U.S. banking organizations. The rules contain two frameworks for calculating capital requirements, a Standardized Approach and an Advanced Approach applicable to certain institutions, including Wells Fargo, and we must calculate our risk-based capital ratios under both approaches. The Company is required to satisfy the risk-based capital ratio requirements to avoid restrictions on capital distributions and discretionary bonus payments.

Table 37 and Table 38 present the risk-based capital requirements applicable to the Company under the Standardized Approach and Advanced Approach, respectively, as of December 31, 2023.

Table 37: Risk-Based Capital Requirements – Standardized Approach

Table 38: Risk-Based Capital Requirements – Advanced Approach

In addition to the risk-based capital requirements described in Table 37 and Table 38, if the FRB determines that a period of excessive credit growth is contributing to an increase in systemic risk, a countercyclical buffer of up to 2.50% could be added to the risk-based capital ratio requirements under federal banking regulations. The countercyclical buffer in effect at December 31, 2023, was 0.00%.

Column 1	Column 2
52	Wells Fargo & Company

of the two surcharges. The first method (method one) considers our size, interconnectedness, cross-jurisdictional activity, substitutability, and complexity, consistent with the methodology developed by the BCBS and the Financial Stability Board (FSB). The second method (method two) uses similar inputs, but replaces substitutability with use of short-term wholesale funding and will generally result in higher surcharges than under method one. Because the G-SIB capital surcharge is calculated annually based on data that can differ over time, the amount of the surcharge is subject to change in future years. If our annual calculation results in a decrease to our G-SIB capital surcharge, the decrease takes effect the next calendar year. If our annual calculation results in an increase to our G-SIB capital

surcharge, the increase takes effect in two calendar years. Our

G-SIB capital surcharge will continue to be 1.50% in 2024. On July 27, 2023, the FRB issued a proposed rule that would impact the methodology used to calculate the G-SIB capital surcharge.

The tables that follow provide information about our risk-based capital and related ratios as calculated under Basel III capital rules. Table 39 summarizes our CET1, Tier 1 capital, total capital, RWAs and capital ratios.

Table 39: Capital Components and Ratios

		Standardized Approach		Advanced Approach
($ in millions)		Required Capital Ratios (1)		Dec 31, 2023		Dec 31, 2022		Required Capital Ratios (1)	Dec 31, 2023		Dec 31, 2022
Common Equity Tier 1	(A)			$	140,783			133,527				140,783			133,527
Tier 1 capital	(B)			159,823			152,567				159,823			152,567
Total capital	(C)			193,061			186,747				182,726			177,258
Risk-weighted assets	(D)			1,231,668			1,259,889				1,114,281			1,112,307
Common Equity Tier 1 capital ratio	(A)/(D)	8.90	%		11.43		*	10.60		8.50			12.63			12.00
Tier 1 capital ratio	(B)/(D)	10.40			12.98		*	12.11		10.00			14.34			13.72
Total capital ratio	(C)/(D)	12.40			15.67		*	14.82		12.00			16.40			15.94

*Denotes the binding ratio under the Standardized and Advanced Approaches at December 31, 2023.

(1)Represents the minimum ratios required to avoid restrictions on capital distributions and discretionary bonus payments at December 31, 2023.

Column 1	Column 2	Column 3
	Wells Fargo & Company	53

Capital Management (continued)

Table 40 provides information regarding the calculation and composition of our risk-based capital under the Standardized and Advanced Approaches.

Table 40: Risk-Based Capital Calculation and Components

(in millions)		Dec 31, 2023
Total equity (1)		$	187,443		182,213
Effect of accounting policy change (1)		—		338
Total equity (as reported)		187,443		181,875
Adjustments:
Preferred stock		(19,448)		(19,448)
Additional paid-in capital on preferred stock		157		173
Noncontrolling interests		(1,708)		(1,986)
Total common stockholders’ equity		$	166,444		160,614
Adjustments:
Goodwill		(25,175)		(25,173)
Certain identifiable intangible assets (other than MSRs)		(118)		(152)
Goodwill and other intangibles on investments in consolidated portfolio companies (included in other assets) (2)		(878)		(2,427)
Applicable deferred taxes related to goodwill and other intangible assets (3)		919		890
CECL transition provision (4)		120		180
Other		(529)		(405)
Common Equity Tier 1 under the Standardized and Advanced Approaches		$	140,783		133,527
Preferred stock		19,448		19,448
Additional paid-in capital on preferred stock		(157)		(173)
Other		(251)		(235)
Total Tier 1 capital under the Standardized and Advanced Approaches	(A)	$	159,823		152,567
Long-term debt and other instruments qualifying as Tier 2		19,020		20,503
Qualifying allowance for credit losses (5)		14,805		13,959
Other		(587)		(282)
Total Tier 2 capital under the Standardized Approach	(B)	$	33,238		34,180
Total qualifying capital under the Standardized Approach	(A)+(B)	$	193,061		186,747
Long-term debt and other instruments qualifying as Tier 2		19,020		20,503
Qualifying allowance for credit losses (5)		4,470		4,470
Other		(587)		(282)
Total Tier 2 capital under the Advanced Approach	(C)	$	22,903		24,691
Total qualifying capital under the Advanced Approach	(A)+(C)	$	182,726		177,258

(1)In first quarter 2023, we adopted ASU 2018-12. We adopted this ASU with retrospective application, which required revision of prior period financial statements. Prior period risk-based capital and certain other regulatory related metrics were not revised. For additional information, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

(2)In third quarter 2023, we sold investments in certain private equity funds. As a result, we have removed the related goodwill and other intangible assets on investments in consolidated portfolio companies.

(4)In second quarter 2020, the Company elected to apply a modified transition provision issued by federal banking regulators related to the impact of the current expected credit loss accounting standard (CECL) on regulatory capital. The rule permits certain banking organizations to exclude from regulatory capital the initial adoption impact of CECL, plus 25% of the cumulative changes in the allowance for credit losses (ACL) under CECL for each period until December 31, 2021, followed by a three-year phase-out period in which the benefit is reduced by 25% in year one, 50% in year two and 75% in year three.

(5)Differences between the approaches are driven by the qualifying amounts of ACL includable in Tier 2 capital. Under the Advanced Approach, eligible credit reserves represented by the amount of qualifying ACL in excess of expected credit losses (using regulatory definitions) is limited to 0.60% of Advanced credit RWAs, whereas the Standardized Approach includes ACL in Tier 2 capital up to 1.25% of Standardized credit RWAs. Under both approaches, any excess ACL is deducted from the respective total RWAs.

Column 1	Column 2
54	Wells Fargo & Company

Table 41 provides the composition and net changes in the components of RWAs under the Standardized and Advanced Approaches.

Table 41: Risk-Weighted Assets

	Standardized Approach		Advanced Approach (1)
(in millions)	Dec 31, 2023		Dec 31, 2022		$ Change 2023/ 2022	Dec 31, 2023		Dec 31, 2022		$ Change 2023/ 2022
Risk-weighted assets (RWAs):
Credit risk	$	1,182,805			1,218,006		(35,201)			756,905		757,436		(531)
Market risk	48,863			41,883		6,980			48,863		41,883		6,980
Operational risk	N/A		N/A		N/A	308,513			312,988		(4,475)
Total RWAs	$	1,231,668			1,259,889		(28,221)			1,114,281		1,112,307		1,974

Table 42 provides an analysis of changes in CET1.

Table 42: Analysis of Changes in Common Equity Tier 1

(in millions)
Common Equity Tier 1 at December 31, 2022	$	133,527
Cumulative effect from change in accounting policy (1)	323
Net income applicable to common stock	17,982
Common stock dividends	(4,796)
Common stock issued, repurchased, and stock compensation-related items	(9,799)
Changes in accumulated other comprehensive income (loss)	1,784
Goodwill	(2)
Certain identifiable intangible assets (other than MSRs)	34
Goodwill and other intangibles on investments in consolidated portfolio companies (included in other assets) (2)	1,549
Applicable deferred taxes related to goodwill and other intangible assets (3)	29
CECL transition provision (4)	(60)
Other (5)	212
Change in Common Equity Tier 1	7,256
Common Equity Tier 1 at December 31, 2023	$	140,783

(1)Effective January 1, 2023, we adopted ASU 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. For additional information, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

(4)In second quarter 2020, the Company elected to apply a modified transition provision issued by federal banking regulators related to the impact of CECL on regulatory capital. The rule permits certain banking organizations to exclude from regulatory capital the initial adoption impact of CECL, plus 25% of the cumulative changes in the allowance for credit losses (ACL) under CECL for each period until December 31, 2021, followed by a three-year phase-out period in which the benefit is reduced by 25% in year one, 50% in year two and 75% in year three.

(5)Includes $338 million related to our first quarter 2023 adoption of ASU 2018-12. For additional information, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

Column 1	Column 2	Column 3
	Wells Fargo & Company	55

Capital Management (continued)

TANGIBLE COMMON EQUITY We also evaluate our business based on certain ratios that utilize tangible common equity. Tangible common equity is a non-GAAP financial measure and represents total equity less preferred equity, noncontrolling interests, goodwill, certain identifiable intangible assets (other than MSRs) and goodwill and other intangibles on investments in consolidated portfolio companies, net of applicable deferred taxes. The ratios are (i) tangible book value per common share, which represents tangible common equity divided by common shares outstanding; and (ii) return on average tangible common

Table 43 provides a reconciliation of these non-GAAP financial measures to GAAP financial measures.

Table 43: Tangible Common Equity

		Balance at period-end						Average balance
		Period ended				Year ended
(in millions, except ratios)		Dec 31, 2023		Dec 31, 2022	Dec 31, 2021				Dec 31, 2023	Dec 31, 2022	Dec 31, 2021
Total equity		$	187,443			182,213		189,889					184,860	183,167		190,502
Adjustments:
Preferred stock (1)		(19,448)			(19,448)		(20,057)					(19,698)		(19,930)		(21,151)
Additional paid-in capital on preferred stock (1)		157			173		136					168		143		137
Unearned ESOP shares (1)		—			—		646					—		512		874
Noncontrolling interests		(1,708)			(1,986)		(2,503)					(1,844)		(2,323)		(1,601)
Total common stockholders’ equity	(A)	166,444			160,952		168,111					163,486		161,569		168,761
Adjustments:
Goodwill		(25,175)			(25,173)		(25,180)					(25,173)		(25,177)		(26,087)
Certain identifiable intangible assets (other than MSRs)		(118)			(152)		(225)					(136)		(190)		(294)
Goodwill and other intangibles on investments in consolidated portfolio companies (included in other assets) (2)		(878)			(2,427)		(2,437)					(2,083)		(2,359)		(2,226)
Applicable deferred taxes related to goodwill and other intangible assets (3)		920			890		765					906		864		867
Tangible common equity	(B)	$	141,193			134,090		141,034					137,000		134,707		141,021
Common shares outstanding	(C)	3,598.9			3,833.8		3,885.8					N/A	N/A	N/A
Net income applicable to common stock	(D)	N/A		N/A	N/A				$	17,982		12,562		20,818
Book value per common share	(A)/(C)	$	46.25			41.98		43.26					N/A	N/A	N/A
Tangible book value per common share	(B)/(C)	39.23			34.98		36.29					N/A	N/A	N/A
Return on average common stockholders’ equity (ROE)	(D)/(A)	N/A		N/A	N/A				11.00	%	7.78		12.34
Return on average tangible common equity (ROTCE)	(D)/(B)	N/A		N/A	N/A				13.13		9.33		14.76

(1)In fourth quarter 2022, we redeemed all outstanding shares of our Employee Stock Ownership Plan (ESOP) Cumulative Convertible Preferred Stock in exchange for shares of the Company's common stock.

LEVERAGE REQUIREMENTS As a BHC, we are required to maintain a supplementary leverage ratio (SLR) to avoid restrictions on capital distributions and discretionary bonus payments and maintain a minimum Tier 1 leverage ratio. Table 44 presents the leverage requirements applicable to the Company as of December 31, 2023.

Table 44: Leverage Requirements Applicable to the Company

Column 1	Column 2
56	Wells Fargo & Company

In addition, our IDIs are required to maintain an SLR of at least 6.00% to be considered well capitalized under applicable regulatory capital adequacy rules and maintain a minimum Tier 1 leverage ratio of 4.00%.

Table 45 presents information regarding the calculation and components of the Company’s SLR and Tier 1 leverage ratio. At December 31, 2023, each of our IDIs exceeded their applicable SLR requirements.

Table 45: Leverage Ratios for the Company

($ in millions)		Quarter ended December 31, 2023
Tier 1 capital	(A)	$	159,823
Total average assets		1,907,654
Less: Goodwill and other permitted Tier 1 capital deductions (net of deferred tax liabilities)		26,673
Total adjusted average assets		1,880,981
Plus adjustments for off-balance sheet exposures:
Derivatives (1)		56,377
Repo-style transactions (2)		4,264
Other (3)		312,311
Total off-balance sheet exposures		372,952
Total leverage exposure	(B)	$	2,253,933
Supplementary leverage ratio	(A)/(B)	7.09	%
Tier 1 leverage ratio (4)		8.50	%

(1)Adjustment represents derivatives and collateral netting exposures as defined for supplementary leverage ratio determination purposes.

(2)Adjustment represents counterparty credit risk for repo-style transactions where Wells Fargo & Company is the principal counterparty facing the client.

(3)Adjustment represents credit equivalent amounts of other off-balance sheet exposures not already included as derivatives and repo-style transactions exposures.

(4)The Tier 1 leverage ratio consists of Tier 1 capital divided by total average assets, excluding goodwill and certain other items as determined under the rule.

TOTAL LOSS ABSORBING CAPACITY As a G-SIB, we are required to have a minimum amount of equity and unsecured long-term debt for purposes of resolvability and resiliency, often referred to as Total Loss Absorbing Capacity (TLAC). U.S. G-SIBs are required to have a minimum amount of TLAC (consisting of CET1 capital and additional Tier 1 capital issued directly by the top-tier or covered BHC plus eligible external long-term debt) to avoid restrictions on capital distributions and discretionary bonus payments as well as a minimum amount of eligible unsecured long-term debt. The components used to calculate our minimum TLAC and eligible unsecured long-term debt requirements as of December 31, 2023, are presented in Table 46.

Table 46: Components Used to Calculate TLAC and Eligible Unsecured Long-Term Debt Requirements

TLAC requirement Greater of:
18.00% of RWAs		7.50% of total leverage exposure (the denominator of the SLR calculation)
+	+
TLAC buffer (equal to 2.50% of RWAs + method one G-SIB capital surcharge + any countercyclical buffer)	External TLAC leverage buffer (equal to 2.00% of total leverage exposure)
Minimum amount of eligible unsecured long-term debt Greater of:
6.00% of RWAs		4.50% of total leverage exposure
+
Greater of method one and method two G-SIB capital surcharge

In August 2023, the FRB proposed rules that would, among other things, modify the calculation of eligible long-term debt that counts towards the TLAC requirements, which would reduce our TLAC ratios.

Table 47 provides our TLAC and eligible unsecured long-term debt and related ratios.

Table 47: TLAC and Eligible Unsecured Long-Term Debt

December 31, 2023
($ in millions)	TLAC (1)		Regulatory Minimum (2)		Eligible Unsecured Long-term Debt		Regulatory Minimum
Total eligible amount	$	308,489				140,760
Percentage of RWAs (3)	25.05	%		21.50			11.43	7.50
Percentage of total leverage exposure	13.69			9.50			6.25	4.50

(1)TLAC ratios are calculated using the CECL transition provision issued by federal banking regulators.

(2)Represents the minimum required to avoid restrictions on capital distributions and discretionary bonus payments.

(3)Our minimum TLAC and eligible unsecured long-term debt requirements are calculated based on the greater of RWAs determined under the Standardized and Advanced Approaches.

OTHER REGULATORY CAPITAL AND LIQUIDITY MATTERS For information regarding the U.S. implementation of the Basel III LCR and NSFR, see the “Risk Management – Asset/ Liability Management – Liquidity Risk and Funding – Liquidity Standards” section in this Report.

Our principal U.S. broker-dealer subsidiaries, Wells Fargo Securities, LLC, and Wells Fargo Clearing Services, LLC, are subject to regulations to maintain minimum net capital requirements. As of December 31, 2023, these broker-dealer subsidiaries were in compliance with their respective regulatory minimum net capital requirements.

Capital Planning and Stress Testing

Our planned long-term capital structure is designed to meet regulatory and market expectations. We believe that our long-term targeted capital structure enables us to invest in and grow our business, satisfy our customers’ financial needs in varying environments, access markets, and maintain flexibility to return capital to our shareholders. Our long-term targeted capital structure also considers capital levels sufficient to exceed capital requirements, including the G-SIB capital surcharge and the stress capital buffer, as well as potential changes to regulatory requirements for our capital ratios, planned capital actions, changes in our risk profile and other factors. Accordingly, our long-term target capital levels are set above their respective regulatory minimums plus buffers.

Column 1	Column 2	Column 3
	Wells Fargo & Company	57

Capital Management (continued)

Securities Repurchases

On July 25, 2023 we announced that our Board authorized a common stock repurchase program of up to $30 billion. Unless modified or revoked by the Board, this authorization does not expire and is our only common stock repurchase program in effect. At December 31, 2023, we had remaining Board authority to repurchase up to approximately $26.7 billion of common stock.

including regulatory requirements under the FRB’s capital plan rule. Although we announce when the Board authorizes a share repurchase program, we typically do not give any public notice before we repurchase our shares. Due to the various factors that may impact the amount and timing of our share repurchases and the fact that we may be in the market throughout the year, our share repurchases occur at various prices. We may suspend share repurchase activity at any time.

For additional information about share repurchases during fourth quarter 2023, see Part II, Item 5 in our 2023 Form 10-K.

Regulatory Matters

The U.S. financial services industry is subject to significant regulation and regulatory oversight initiatives. This regulation and oversight may continue to impact how U.S. financial services companies conduct business and may continue to result in increased regulatory compliance costs. The following highlights the more significant regulations and regulatory oversight initiatives that have affected or may affect our business. For additional information about the regulatory matters discussed below and other regulations and regulatory oversight matters, see Part I, Item 1 “Regulation and Supervision” of our 2023 Form 10-K, and the “Overview,” “Capital Management,” “Forward-Looking Statements” and “Risk Factors” sections and Note 26 (Regulatory Capital Requirements and Other Restrictions) to Financial Statements in this Report.

Dodd-Frank Act

The Dodd-Frank Act is the most significant financial reform legislation since the 1930s. The following provides additional information on the Dodd-Frank Act, including certain of its rulemaking initiatives.

•Enhanced supervision and regulation of systemically important firms. The Dodd-Frank Act grants broad authority to federal banking regulators to establish enhanced supervisory and regulatory requirements for systemically important firms. The FRB has finalized a number of regulations implementing enhanced prudential requirements for large bank holding companies (BHCs) like Wells Fargo regarding risk-based capital and leverage, risk and liquidity management, single counterparty credit limits, and imposing debt-to-equity limits on any BHC that regulators determine poses a grave threat to the financial stability of the United States. The FRB and OCC have also finalized rules implementing stress testing requirements for large BHCs and national banks. Furthermore, to promote a BHC’s safety and soundness and the financial and operational resilience of its operations, the FRB has finalized guidance regarding effective boards of directors of large BHCs. The OCC, under separate authority, has finalized guidelines establishing heightened governance and risk management standards for large national banks such as Wells Fargo Bank, N.A. The OCC guidelines require covered banks to establish and adhere to a written risk governance framework to manage and control their risk-taking activities. The guidelines also formalize roles and responsibilities for risk management practices within covered banks and create certain risk oversight responsibilities for their boards of directors. In addition to

the authorization of enhanced supervisory and regulatory requirements for systemically important firms, the Dodd-Frank Act also established the Financial Stability Oversight Council and the Office of Financial Research, which may recommend new systemic risk management requirements and require new reporting of systemic risks.

•Regulation of consumer financial products. The Dodd-Frank Act established the Consumer Financial Protection Bureau (CFPB) to ensure that consumers receive clear and accurate disclosures regarding financial products and are protected from unfair, deceptive or abusive practices. The CFPB has issued and proposed a number of rules impacting consumer financial products, including rules impacting residential mortgage lending, credit cards, and other financial products and banking related activities, as well as the fees that may be charged for certain banking products and services. In addition to these rulemaking activities, the CFPB is continuing its ongoing supervisory examination activities of the financial services industry with respect to a number of consumer businesses and products, including mortgage lending and servicing, fair lending requirements, and auto finance.

•Regulation of swaps and other derivatives activities. The Dodd-Frank Act established a comprehensive framework for regulating over-the-counter derivatives, and, pursuant to authority granted by the Dodd-Frank Act, the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) have adopted comprehensive sets of rules regulating swaps and security-based swaps, respectively, and the OCC and other federal regulatory agencies have adopted margin requirements for uncleared swaps and security-based swaps. As a registered swap dealer and a conditionally-registered security-based swap dealer, Wells Fargo Bank, N.A., is subject to these rules. These rules, as well as others adopted or under consideration by regulators in the United States and other jurisdictions, may negatively impact customer demand for over-the-counter derivatives, impact our ability to offer customers new derivatives or amendments to existing derivatives, and may increase our costs for engaging in swaps, security-based swaps, and other derivatives activities.

Regulatory Capital, Leverage, and Liquidity Requirements

The Company and each of our IDIs are subject to various regulatory capital adequacy requirements administered by the FRB and the OCC. For example, the Company is subject to rules

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issued by federal banking regulators to implement Basel III risk-based capital requirements for U.S. banking organizations. The Company and its IDIs are also required to maintain specified leverage and supplementary leverage ratios. In addition, the Company is required to have a minimum amount of total loss absorbing capacity for purposes of resolvability and resiliency. Federal banking regulators have also issued final rules requiring a liquidity coverage ratio and a net stable funding ratio. For additional information on the final risk-based capital, leverage and liquidity rules, and additional capital requirements applicable to us, see the “Capital Management” and “Risk Management – Asset/Liability Management – Liquidity Risk and Funding – Liquidity Standards” sections in this Report.

“Living Will” Requirements and Related Matters

Rules adopted by the FRB and the FDIC under the Dodd-Frank Act require large financial institutions, including Wells Fargo, to prepare and periodically submit resolution plans, also known as “living wills,” designed to facilitate their rapid and orderly resolution in the event of material financial distress or failure. Under the rules, rapid and orderly resolution means a reorganization or liquidation of the covered company under the U.S. Bankruptcy Code that can be accomplished in a reasonable period of time and in a manner that substantially mitigates the risk that failure would have serious adverse effects on the financial stability of the United States. In addition to the Company’s resolution plan, our national bank subsidiary, Wells Fargo Bank, N.A. (the “Bank”), is also required to prepare and periodically submit a resolution plan. If the FRB and/or FDIC determine that our resolution plan has deficiencies, they may impose more stringent capital, leverage or liquidity requirements on us or restrict our growth, activities or operations until we adequately remedy the deficiencies. If the FRB and/or FDIC ultimately determine that we have been unable to remedy any deficiencies, they could require us to divest certain assets or operations. On June 27, 2023, we submitted our most recent resolution plan to the FRB and FDIC.

If Wells Fargo were to fail, it may be resolved in a bankruptcy proceeding or, if certain conditions are met, under the resolution regime created by the Dodd-Frank Act known as the “orderly liquidation authority.” The orderly liquidation authority allows for the appointment of the FDIC as receiver for a systemically important financial institution that is in default or in danger of default if, among other things, the resolution of the institution under the U.S. Bankruptcy Code would have serious adverse effects on financial stability in the United States. If the FDIC is appointed as receiver for the Parent, then the orderly liquidation authority, rather than the U.S. Bankruptcy Code, would determine the powers of the receiver and the rights and obligations of our security holders. The FDIC’s orderly liquidation authority requires that security holders of a company in receivership bear all losses before U.S. taxpayers are exposed to any losses. There are substantial differences in the rights of creditors between the orderly liquidation authority and the U.S. Bankruptcy Code, including the right of the FDIC to disregard the strict priority of creditor claims under the U.S. Bankruptcy Code in certain circumstances and the use of an administrative claims procedure instead of a judicial procedure to determine creditors’ claims.

The strategy described in our most recent resolution plan is a single point of entry strategy, in which the Parent would be the only material legal entity to enter resolution proceedings. However, the strategy described in our resolution plan is not binding in the event of an actual resolution of Wells Fargo, whether conducted under the U.S. Bankruptcy Code or by the

FDIC under the orderly liquidation authority. The FDIC has announced that a single point of entry strategy may be a desirable strategy under its implementation of the orderly liquidation authority, but not all aspects of how the FDIC might exercise this authority are known and additional rulemaking is possible.

To facilitate the orderly resolution of systemically important financial institutions in case of material distress or failure, federal banking regulations require that institutions, such as Wells Fargo, maintain a minimum amount of equity and unsecured debt to absorb losses and recapitalize operating subsidiaries. Federal banking regulators have also required measures to facilitate the continued operation of operating subsidiaries notwithstanding the failure of their parent companies, such as limitations on parent guarantees, and have issued guidance encouraging institutions to take legally binding measures to provide capital and liquidity resources to certain subsidiaries to facilitate an orderly resolution. In response to the regulators’ guidance and to facilitate the orderly resolution of the Company, on June 28, 2017, the Parent entered into a support agreement, as amended and restated on June 26, 2019 (the “Support Agreement”), with WFC Holdings, LLC, an intermediate holding company and subsidiary of the Parent (the “IHC”), the Bank, Wells Fargo Securities, LLC (“WFS”), Wells Fargo Clearing Services, LLC (“WFCS”), and certain other subsidiaries of the Parent designated from time to time as material entities for resolution planning purposes (the “Covered Entities”) or identified from time to time as related support entities in our resolution plan (the “Related Support Entities”). Pursuant to the Support Agreement, the Parent transferred a significant amount of its assets, including the majority of its cash, deposits, liquid securities and intercompany loans (but excluding its equity interests in its subsidiaries and certain other assets), to the IHC and will continue to transfer those types of assets to the IHC from time to time. In the event of our material financial distress or failure, the IHC will be obligated to use the transferred assets to provide capital and/or liquidity to the Bank, WFS, WFCS, and the Covered Entities pursuant to the Support Agreement. Under the Support Agreement, the IHC will also provide funding and liquidity to the Parent through subordinated notes and a committed line of credit, which, together with the issuance of dividends, is expected to provide the Parent, during business as usual operating conditions, with the same access to cash necessary to service its debts, pay dividends, repurchase its shares, and perform its other obligations as it would have had if it had not entered into these arrangements and transferred any assets. If certain liquidity and/or capital metrics fall below defined triggers, or if the Parent’s board of directors authorizes it to file a case under the U.S. Bankruptcy Code, the subordinated notes would be forgiven, the committed line of credit would terminate, and the IHC’s ability to pay dividends to the Parent would be restricted, any of which could materially and adversely impact the Parent’s liquidity and its ability to satisfy its debts and other obligations, and could result in the commencement of bankruptcy proceedings by the Parent at an earlier time than might have otherwise occurred if the Support Agreement were not implemented. The respective obligations under the Support Agreement of the Parent, the IHC, the Bank, and the Related Support Entities are secured pursuant to a related security agreement.

In addition to our resolution plans, we must also prepare and periodically submit to the FRB a recovery plan that identifies a range of options that we may consider during times of idiosyncratic or systemic economic stress to remedy any financial weaknesses and restore market confidence without extraordinary government support. Recovery options include the

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Regulatory Matters (continued)

possible sale, transfer or disposal of assets, securities, loan portfolios or businesses. The Bank must also prepare and periodically submit to the OCC a recovery plan that sets forth the Bank’s plan to remain a going concern when the Bank is experiencing considerable financial or operational stress, but has not yet deteriorated to the point where liquidation or resolution is imminent. If either the FRB or the OCC determines that our recovery plan is deficient, they may impose fines, restrictions on our business or ultimately require us to divest assets.

Other Regulatory Related Matters

•Regulatory actions. The Company is subject to a number of consent orders and other regulatory actions, which may require the Company, among other things, to undertake certain changes to its business, operations, products and services, and risk management practices, and include the following:

◦Consent Orders Discussed in the “Overview” Section in this Report. For a discussion of certain consent orders applicable to the Company, see the “Overview” section in this Report.

◦OCC approval of director and senior executive officer appointments and certain post-termination payments. Under the April 2018 consent order with the OCC, Wells Fargo Bank, N.A., remains subject to requirements that were originally imposed in November 2016 to provide prior written notice to, and obtain non-objection from, the OCC with respect to changes in directors and senior executive officers, and remains subject to certain regulatory limitations on post-termination payments to certain individuals and employees.

•Regulatory Developments in Response to Climate Change. Federal, state, and non-U.S. governments and government agencies have demonstrated increased attention to the impacts and potential risks associated with climate change. For example, federal banking regulators are reviewing the implications of climate change on the financial stability of the United States and have issued guidance on the identification and management by large banks of climate-related financial risks. In addition, the SEC has proposed rules that would require public companies to disclose certain climate-related information, including greenhouse gas emissions, climate-related targets and goals, and governance of climate-related risks and relevant risk management processes. Similarly, California’s state legislature finalized climate-related disclosure laws, while the European Union finalized its Corporate Sustainability Reporting Directive. The approaches taken by various governments and government agencies can vary significantly, evolve over time, and sometimes conflict. Any current or future rules, regulations, and guidance related to climate change and its impacts could require us to change certain of our business practices, reduce our revenue and earnings, impose additional costs on us, subject us to legal or regulatory proceedings, or otherwise adversely affect our business operations and/or competitive position.

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Critical Accounting Policies

Our significant accounting policies (see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report) are fundamental to understanding our results of operations and financial condition because they require that we use estimates and assumptions that may affect the value of our assets or liabilities and financial results. Six of these policies are critical because they require management to make difficult, subjective and complex judgments about matters that are inherently uncertain and because it is likely that materially different amounts would be reported under different conditions or using different assumptions. These policies govern:

•the allowance for credit losses;

•the valuation of residential MSRs;

•the fair value of financial instruments;

•income taxes;

•liability for legal actions; and

•goodwill impairment.

Management has discussed these critical accounting policies and the related estimates and judgments with the Board’s Audit Committee.

Allowance for Credit Losses

We maintain an allowance for credit losses (ACL) for loans, which is management’s estimate of the expected credit losses in the loan portfolio and unfunded credit commitments, at the balance sheet date, excluding loans and unfunded credit commitments carried at fair value or held for sale. Additionally, we maintain an ACL for debt securities classified as either HTM or AFS, other financial assets measured at amortized cost, net investments in leases, and other off-balance sheet credit exposures. For additional information, see Note 1 (Summary of Significant Accounting Policies) and Note 5 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.

Judgment is specifically applied in:

variables are evaluated at the macro-economy level, some economic variables are forecasted at more granular levels, for example, using the metro statistical area (MSA) level for unemployment rates, home prices and commercial real estate prices. At least annually, we assess the length of the initial loss forecast period and have currently set the period to two years. For the initial loss forecast period, we forecast multiple economic scenarios that generally include a base scenario with an optimistic (upside) and one or more pessimistic (downside) scenarios. Management exercises judgment when assigning weight to the economic scenarios that are used to estimate future credit losses.

•Usage of credit loss estimation models. We use internally developed models that incorporate credit attributes and economic variables to generate credit loss estimates. Management uses judgment and quantitative analytics in the determination of segmentation, modeling approach, and variables that are leveraged in the models. These models are independently validated in accordance with the Company’s policies. We routinely assess our model performance and apply adjustments when necessary to improve the accuracy of loss estimation. We also assess our models for limitations against the company-wide risk inventory to help appropriately capture known and emerging risks in our estimate of expected credit losses and apply overlays as needed.

•Valuation of collateral. The current fair value of collateral is utilized to assess the expected credit losses when a financial asset is considered to be collateral dependent. We apply judgment when valuing the collateral either through appraisals, evaluation of the cash flows of the property, or other quantitative techniques. Decreases in collateral valuations support incremental ACL or charge-downs and increases in collateral valuation are included in the ACL as a negative allowance when the financial asset has been previously written-down below current recovery value.

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Critical Accounting Policies (continued)

which requires that we determine a contractual life by estimating the application of future payments to the outstanding loan amount.

•Qualitative factors which may not be adequately captured in the loss models. These amounts represent management’s judgment of risks inherent in the processes and assumptions used in establishing the ACL. We also consider economic environmental factors, modeling assumptions and performance, process risk, and other subjective factors, including industry trends and emerging risk assessments.

Sensitivity The ACL for loans is sensitive to changes in key assumptions which requires significant management judgment. Future amounts of the ACL for loans will be based on a variety of factors, including loan balance changes, portfolio credit quality, and general forecasted economic conditions. The forecasted economic variables used could have varying impacts on different financial assets or portfolios. Additionally, throughout numerous credit cycles, there are observed changes in economic variables such as the unemployment rate, GDP and real estate prices which may not move in a correlated manner as variables may move in opposite directions or differ across portfolios or geography.

Our sensitivity analysis does not represent management’s view of expected credit losses at the balance sheet date. We applied a 100% weight to a more severe downside scenario in our sensitivity analysis to reflect the potential for further economic deterioration. The outcome of the scenario was influenced by the duration, severity, and timing of changes in economic variables within the scenario. The sensitivity analysis resulted in a hypothetical increase in the ACL for loans of approximately $6.2 billion at December 31, 2023. The hypothetical increase in our ACL for loans does not incorporate the impact of management judgment for qualitative factors applied in the current ACL for loans, which may have a positive or negative effect on the results. It is possible that others performing similar sensitivity analyses could reach different conclusions or results.

The sensitivity analysis excludes the ACL for debt securities and other financial assets given its size relative to the overall ACL. Management believes that the estimate for the ACL for loans was appropriate at the balance sheet date.

Valuation of Residential Mortgage Servicing Rights (MSRs)

MSRs are assets that represent the rights to service mortgage loans for others. We generally recognize MSRs when we retain servicing rights in connection with the sale or securitization of loans we originate. We carry our MSRs related to residential mortgage loans at fair value. Periodic changes in our residential MSRs and the economic hedges used to hedge our residential MSRs are reflected in earnings.

We use models to estimate the fair value of our residential MSRs. The models are independently validated in accordance with Company policies. Collectively, the models are used to calculate the present value of estimated future net servicing income and incorporate inputs and assumptions that market participants use in estimating fair value. Certain significant inputs and assumptions generally are not observable in the market and require judgment to determine. If observable market indications do become available, these are factored into the estimates as appropriate. Significant inputs and assumptions requiring management judgement include:

defaults. We use models to estimate prepayment rate and borrower defaults which are influenced by changes in mortgage interest rates and borrower behavior.

•The discount rate used to present value estimated future net servicing income. The discount rate is the required rate of return investors in the market would expect for an asset with similar risk and is estimated using a dynamic methodology for market curves and volatility. To determine the discount rate, we consider the risk premium for uncertainties in the cash flow estimates such as from servicing operations (e.g., possible changes in future servicing costs and earnings on escrow accounts).

•The expected cost to service loans used to estimate future net servicing income. The cost to service loans includes estimates for unreimbursed expenses, such as delinquency and foreclosure costs, which considers the number of defaulted loans as well as the incremental cost to service loans in default and foreclosure. We use a market participant’s view for our estimated cost to service and our actual costs may vary from that estimate.

Both prepayment rate and discount rate assumptions can, and generally will, change quarterly as market conditions and mortgage interest rates change. For example, an increase in either the prepayment rate or discount rate assumption results in a decrease in the fair value of the MSRs, while a decrease in either assumption would result in an increase in the fair value of the MSRs. In recent years, there have been significant market-driven fluctuations in loan prepayment rate and the discount rate. These fluctuations can be rapid and may be significant in the future. Additionally, future regulatory or investor changes in servicing standards as well as changes in individual state foreclosure legislation or changes in market participant information regarding servicing cost assumptions, may have an impact on our servicing cost assumption and our MSR valuation in future periods. We periodically benchmark our MSR fair value estimate to independent appraisals.

For a description of our valuation and sensitivity of MSRs, see Note 1 (Summary of Significant Accounting Policies), Note 6 (Mortgage Banking Activities), Note 15 (Fair Values of Assets and Liabilities) and Note 16 (Securitizations and Variable Interest Entities) to Financial Statements in this Report.

Fair Value of Financial Instruments

We use fair value measurements to comply with both recognition and disclosure requirements. For example, assets and liabilities held for trading purposes, marketable equity securities, AFS debt securities, and derivatives are recorded at fair value on our consolidated balance sheet each period. Other financial instruments, such as loans held for investment and substantially all nonmarketable equity securities are not recorded at fair value each period but may require nonrecurring fair value adjustments through the application of an accounting method such as lower of cost or fair value (LOCOM), write-downs of individual assets, or application of the measurement alternative for certain nonmarketable equity securities. We also disclose our estimate of fair value for financial instruments not recorded at fair value, such as HTM debt securities, loans held for investment, and long-term debt.

Disclosure of fair value measurements for assets and liabilities are made using a three-level hierarchy. The

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classification of assets and liabilities within the hierarchy is based on whether the inputs to the valuation methodology used for measurement are observable or unobservable. Observable inputs reflect market-derived or market-based information obtained from independent sources, while unobservable inputs reflect our estimates about market data.

When developing fair value measurements, we maximize the use of observable inputs and minimize the use of unobservable inputs. When available, we use quoted prices in active markets to measure fair value. If quoted prices in active markets are not available, fair value measurement is based upon models that generally use market-based or independently sourced market parameters, including interest rate yield curves, prepayment rates, option volatilities and currency rates. However, when observable market data is limited or not available, fair value estimates are typically determined using internal models based on unobservable inputs. These models are independently validated in accordance with the Company’s policies. Additionally, we obtain pricing information from third-party vendors to record fair values and to corroborate internal prices. Third-party validation procedures are performed over the reasonableness of prices received.

When using internal models based on unobservable inputs, management judgment is necessary as we make judgments about significant assumptions that market participants would use to estimate fair value. Determination of these assumptions includes consideration of many factors, including market conditions and liquidity levels. Changes in the market conditions, such as reduced liquidity in the capital markets or changes in secondary market activities, may reduce the availability and reliability of quoted prices or observable data used to determine fair value. In such cases, adjustments to available quoted prices or observable market data may be required. For example, we may adjust a price received from a third-party pricing service using internal models based on discounted cash flows when the impact of illiquid markets has not already been incorporated in the fair value measurement.

We continually assess the level and volume of market activity in our debt and equity security classes in determining adjustments, if any, to quoted prices. Given market conditions can change over time, our determination of which securities markets are considered active or inactive can change. If we determine a market to be inactive, the degree to which quoted prices require adjustment may also change.

Significant judgment is also applied in the determination of whether certain assets measured at fair value are classified as Level 2 or Level 3 of the fair value hierarchy. When making this judgment, we consider available information, including observable market data, indications of market liquidity and orderliness, and our understanding of the valuation techniques and significant inputs used to estimate fair value. The classification as Level 2 or Level 3 is based upon the specific facts and circumstances of each instrument or instrument category and judgments are made regarding the significance of unobservable inputs to each instrument’s fair value measurement in its entirety. If unobservable inputs are considered significant to the fair value measurement, the instrument is classified as Level 3.

Table 48 presents our (i) assets and liabilities recorded at fair value on a recurring basis and (ii) Level 3 assets and liabilities recorded at fair value on a recurring basis, both presented as a percentage of our total assets and total liabilities.

Table 48: Fair Value Level 3 Summary

	December 31, 2023		December 31, 2022
($ in billions)	Total balance		Level 3 (1)		Total balance		Level 3 (1)
Assets recorded at fairvalue on a recurring basis	$	276.2			9.5			264.4		11.5
As a percentage of total assets	14	%		*		14			*
Liabilities recorded at fair value on a recurring basis	$	47.7			6.2			41.9		4.9
As a percentage of total liabilities	3	%		*		2			*

*Less than 1%.

(1)Before derivative netting adjustments.

See Note 15 (Fair Values of Assets and Liabilities) to Financial Statements in this Report for a complete discussion on our fair value of financial instruments, our related measurement techniques and the impact to our financial statements.

Income Taxes

We file income tax returns in the jurisdictions in which we operate and evaluate income tax expense in two components: current and deferred income tax expense. Current income tax expense represents our estimated taxes to be paid or refunded for the current period and includes income tax expense related to uncertain tax positions. Uncertain tax positions that meet the more likely than not recognition threshold are measured to determine the amount of benefit to recognize. An uncertain tax position is measured at the largest amount of benefit that management believes has a greater than 50% likelihood of realization upon settlement. Tax benefits not meeting our realization criteria represent unrecognized tax benefits.

Deferred income taxes are based on the balance sheet method and deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Under the balance sheet method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax basis of assets and liabilities and recognizes enacted changes in income tax rates and laws in the period in which they occur. Deferred tax assets, including those related to net operating losses and tax credit carryforwards, are recognized subject to management’s judgment that realization is more likely than not. When necessary, valuation allowances are established to reduce deferred tax assets to the realizable amounts.

The income tax laws of the jurisdictions in which we operate are complex and subject to different interpretations by management and the relevant government taxing authorities. In establishing a provision for income tax expense, we must make judgments about the application of these inherently complex tax laws. We must also make estimates about when in the future certain items will affect taxable income in the various tax jurisdictions. Our interpretations may be subjected to review during examination by taxing authorities and disputes may arise over the respective tax positions. We attempt to resolve these disputes during the tax examination and audit process and ultimately through the court systems when applicable.

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Critical Accounting Policies (continued)

See Note 23 (Income Taxes) to Financial Statements in this Report for a further description of our provision for income taxes and related income tax assets and liabilities.

Liability for Legal Actions

We apply judgment when establishing an accrual for potential losses associated with legal actions and in establishing the range of reasonably possible losses in excess of the accrual. Our judgment in establishing accruals and the range of reasonably possible losses in excess of the Company’s accrual for probable and estimable losses is influenced by our understanding of information currently available related to the legal evaluation and potential outcome of actions, including input and advice on these matters from our internal counsel, external counsel and senior management. These matters may be in various stages of investigation, discovery or proceedings. They may also involve a wide variety of claims across our businesses, legal entities and jurisdictions. The eventual outcome may be a scenario that was not considered or was considered remote in anticipated occurrence. Accordingly, our estimate of potential losses will change over time and the actual losses may vary significantly.

See Note 13 (Legal Actions) to Financial Statements in this Report for additional information.

Goodwill Impairment

We test goodwill for impairment annually in the fourth quarter or more frequently as macroeconomic and other business factors warrant. These factors may include trends in short-term or long-term interest rates, negative trends from reduced revenue generating activities or increased costs, adverse actions by regulators, or company specific factors such as a decline in market capitalization.

based on a balanced weighting of fair values estimated using both an income approach and a market approach which are intended to reflect Company performance and expectations as well as external market conditions. The methodologies for calculating carrying amounts and estimating fair values are periodically assessed by senior management and updated as necessary.

The income approach is a discounted cash flow (DCF) analysis, which estimates the present value of future cash flows associated with each reporting unit. A DCF analysis requires significant judgment to model financial forecasts for our reporting units, which includes future expectations of economic conditions and balance sheet changes, as well as considerations related to future business activities. The forecasts are reviewed by senior management. For periods after our financial forecasts, we incorporate a terminal value estimate. We discount these forecasted cash flows using a consistent rate derived from the capital asset pricing model which produces an estimated cost of equity for our reporting units, reflecting risks and uncertainties in the financial markets and in our internally generated business projections.

The market approach utilizes observable market data from comparable publicly traded companies, such as price-to-earnings or price-to-tangible book value ratios, to estimate a reporting unit’s fair value. The results of the market approach include a control premium to represent our expectation of a hypothetical acquisition of the reporting unit. Management uses judgment in the selection of comparable companies and includes those with the most similar business activities.

The aggregate fair value of our reporting units exceeded our market capitalization for our fourth quarter 2023 assessment. Factors that we believe contributed to this difference included an overall premium that would be paid to gain control of the operating and financial decisions of the Company, as well as short-term market volatility and other factors that may not be reflected consistently between the Company’s market capitalization and the fair value of individual reporting units.

Based on our fourth quarter 2023 assessment, there was no impairment of goodwill at December 31, 2023. The fair values of each reporting unit exceeded their carrying amounts by substantial amounts, with the exception of our Consumer Lending reporting unit. Although the fair value of our Consumer Lending reporting unit exceeded its carrying amount by more than 10%, it was the most sensitive to changes in valuation assumptions. We plan to continue the execution of our more focused strategy for the home lending business in the near-term. The credit card business has forecasted higher loan balances driven by growth from new products and services. Significant changes to these plans or forecasts or a significant increase in the discount rate could result in an impairment for the Consumer Lending reporting unit. The amount of goodwill assigned to the Consumer Lending reporting unit was $7.1 billion at December 31, 2023.

Declines in our ability to generate revenue, significant increases in credit losses or other expenses, or adverse actions from regulators are factors that could result in material goodwill impairment of any reporting unit in a future period.

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Current Accounting Developments

Table 49 provides the significant accounting updates applicable to us that have been issued by the Financial Accounting Standards Board (FASB) but are not yet effective.

Table 49: Current Accounting Developments – Issued Standards

Description and Effective Date		Financial statement impact
Accounting Standards Update (ASU) 2023-02 – Investments – Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method
The Update, effective January 1, 2024, expands the use of the proportional amortization method of accounting for tax credit investments. Upon adoption, the Update permits entities to elect to account for equity investments that generate income tax credits and benefits using the proportional amortization method if certain eligibility criteria are met.		We adopted the Update on January 1, 2024, on a modified retrospective basis with a cumulative effect adjustment to retained earnings. Upon adoption, we elected to account for eligible investments in our renewable energy tax credit portfolio using the proportional amortization method. These investments were previously accounted for using the equity method. We also elected to continue use of the proportional amortization method to account for our low-income housing tax credit investments. Under the proportional amortization method, the cost of a tax credit investment is amortized in proportion to the income tax credits and benefits received by the investor, with both amortization and the related income tax credits and benefits recorded on a net basis within income tax expense. We recorded the impact of this accounting change to the opening balance sheet as of January 1, 2024, as an increase to total assets and total liabilities of approximately $2 billion. The adoption impact on retained earnings was insignificant. Prior periods were not impacted.
ASU 2023-07 – Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures
The Update, effective December 31, 2024 (with early adoption permitted), enhances reportable segment disclosure requirements, primarily through enhanced disclosures related to significant segment expenses and additional interim disclosure requirements.		The Update impacts disclosure only, and therefore does not have an impact on our consolidated financial statements. We are currently evaluating the impact of the Update to our operating segment disclosures. The following aspects of the Update may result in disclosure changes: •Requirement to disclose significant segment expenses by reportable segment if they are regularly provided to the chief operating decision maker (CODM) and included in the reported measure of segment profit or loss.•Requirement to disclose an amount for “other segment items” by reportable segment and provide a description of its composition; other segment items is measured as the difference between reported segment revenues less the significant segment expenses disclosed in accordance with the principle described above and reported segment profit or loss.•Requirement to disclose the CODM’s title and position and explain how the CODM uses the reported segment profit or loss measure in assessing segment performance and deciding how to allocate resources.
ASU 2023-09 - Income Taxes (Topic 740): Improvements to Income Tax Disclosures
The Update, effective January 1, 2025 (with early adoption permitted), enhances annual income tax disclosures primarily to further disaggregate existing disclosures related to the effective income tax rate reconciliation and income taxes paid.		The impact of the Update is limited to our annual income tax disclosures. We are currently evaluating the impact of the Update to our income tax disclosures. Upon adoption, those disclosures may change as follows: •For the tabular effective income tax rate reconciliation, alignment to specific categories (where applicable) and further disaggregation of certain categories (where applicable) by nature and/or jurisdiction if the reconciling item is 5% or more of the statutory tax expense.•Description of states and local jurisdictions that contribute the majority of the effect of the state and local income tax category of the effective income tax rate reconciliation.•Disaggregate the amount of income taxes paid (net of refunds) by federal, state, and non-U.S. taxes and further disaggregate by individual jurisdictions where income taxes paid (net of refunds) is 5% or more of total income taxes paid (net of refunds).•Disaggregate net income (or loss) before income tax expense (or benefit) between domestic and non-U.S.

Other Accounting Developments

The following Updates are applicable to us but are not expected to have a material impact on our consolidated financial statements:

•ASU 2022-03 – Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions

•ASU 2023-08 - Intangibles - Goodwill and Other - Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets

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Forward-Looking Statements

This document contains forward-looking statements. In addition, we may make forward-looking statements in our other documents filed or furnished with the Securities and Exchange Commission, and our management may make forward-looking statements orally to analysts, investors, representatives of the media and others. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “target,” “projects,” “outlook,” “forecast,” “will,” “may,” “could,” “should,” “can” and similar references to future periods. In particular, forward-looking statements include, but are not limited to, statements we make about: (i) the future operating or financial performance of the Company, including our outlook for future growth; (ii) our expectations regarding noninterest expense and our efficiency ratio; (iii) future credit quality and performance, including our expectations regarding future loan losses, our allowance for credit losses, and the economic scenarios considered to develop the allowance; (iv) our expectations regarding net interest income and net interest margin; (v) loan growth or the reduction or mitigation of risk in our loan portfolios; (vi) future capital or liquidity levels, ratios or targets; (vii) our expectations regarding our mortgage business and any related commitments or exposures; (viii) the expected outcome and impact of legal, regulatory and legislative developments, as well as our expectations regarding compliance therewith; (ix) future common stock dividends, common share repurchases and other uses of capital; (x) our targeted range for return on assets, return on equity, and return on tangible common equity; (xi) expectations regarding our effective income tax rate; (xii) the outcome of contingencies, such as legal actions; (xiii) environmental, social and governance related goals or commitments; and (xiv) the Company’s plans, objectives and strategies.

•the effect of the current interest rate environment or changes in interest rates or in the level or composition of our assets or liabilities on our net interest income, net interest margin and our mortgage originations, mortgage servicing rights and mortgage loans held for sale;

•significant turbulence or a disruption in the capital or financial markets, which could result in, among other things, reduced investor demand for mortgage loans, a reduction in the availability of funding or increased funding costs, and declines in asset values and/or recognition of impairment of securities held in our debt securities and equity securities portfolios;

•the effect of a fall in stock market prices on our investment banking business and our fee income from our brokerage and wealth management businesses;

•developments in our mortgage banking business, including any negative effects relating to our mortgage servicing, loan modification or foreclosure practices, and any changes in industry standards, regulatory or judicial requirements, or our strategic plans for the business;

•a failure in or breach of our operational or security systems or infrastructure, or those of our third-party vendors or other service providers, including as a result of cyber attacks;

•the effect of changes in the level of checking or savings account deposits on our funding costs and net interest margin;

•fiscal and monetary policies of the Federal Reserve Board;

•changes to tax laws, regulations, and guidance as well as the effect of discrete items on our effective income tax rate;

•our ability to develop and execute effective business plans and strategies; and

•the other risk factors and uncertainties described under “Risk Factors” in this Report.

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66	Wells Fargo & Company

regulatory requirements under the Federal Reserve Board’s capital plan rule, and other factors deemed relevant by the Company, and may be subject to regulatory approval or conditions.

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	Wells Fargo & Company	67

FY 2022 10-K MD&A

SEC filing source: 0000072971-23-000071.

Extracted from a substantive MD&A body after the formal Item 7 span was a TOC or reference stub. Source document followed from filing index: wfc-20221231_d2.htm. Confidence: high. Filing date: 2023-02-21. Report date: 2022-12-31.

Overview

Wells Fargo & Company is a leading financial services company that has approximately $1.9 trillion in assets, proudly serves one in three U.S. households and more than 10% of small businesses in the U.S., and is a leading middle market banking provider in the U.S. We provide a diversified set of banking, investment and mortgage products and services, as well as consumer and commercial finance, through our four reportable operating segments: Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth and Investment Management. Wells Fargo ranked No. 41 on Fortune’s 2022 rankings of America’s largest corporations. We ranked fourth in assets and third in the market value of our common stock among all U.S. banks at December 31, 2022.

Wells Fargo’s top priority remains building a risk and control infrastructure appropriate for its size and complexity. The Company is subject to a number of consent orders and other regulatory actions, which may require the Company, among other things, to undertake certain changes to its business, operations, products and services, and risk management practices. Addressing these regulatory actions is expected to take multiple years, and we are likely to experience issues or delays along the way in satisfying their requirements. Issues or delays with one regulatory action could affect our progress on others, and failure to satisfy the requirements of a regulatory action on a timely basis could result in additional penalties, business restrictions, enforcement actions, and other negative consequences, which could be significant. While we still have significant work to do and have not yet satisfied certain aspects of these regulatory actions, the Company is committed to devoting the resources necessary to operate with strong business practices and controls, maintain the highest level of integrity, and have an appropriate culture in place.

Federal Reserve Board Consent Order Regarding Governance Oversight and Compliance and Operational Risk Management

provided for in the plans. Until this third-party review is complete and the plans are approved and implemented to the satisfaction of the FRB, the Company’s total consolidated assets as defined under the consent order will be limited to the level as of December 31, 2017. Compliance with this asset cap is measured on a two-quarter daily average basis to allow for management of temporary fluctuations. After removal of the asset cap, a second third-party review must also be conducted to assess the efficacy and sustainability of the enhancements and improvements.

On April 20, 2018, the Company entered into consent orders with the Consumer Financial Protection Bureau (CFPB) and the Office of the Comptroller of the Currency (OCC) to pay an aggregate of $1 billion in civil money penalties to resolve matters regarding the Company’s compliance risk management program and past practices involving certain automobile collateral protection insurance (CPI) policies and certain mortgage interest rate lock extensions. As required by the consent orders, the Company submitted to the CFPB and OCC an enterprise-wide compliance risk management plan and a plan to enhance the Company’s internal audit program with respect to federal consumer financial law and the terms of the consent orders. In addition, as required by the consent orders, the Company submitted for non-objection plans to remediate customers affected by the automobile collateral protection insurance and mortgage interest rate lock matters, as well as a plan for the management of remediation activities conducted by the Company. The Company continues to work to address the provisions of the consent orders. On September 9, 2021, the OCC assessed a $250 million civil money penalty against the Company related to insufficient progress in addressing requirements under the OCC’s April 2018 consent order and loss mitigation activities in the Company’s Home Lending business. On December 20, 2022, the CFPB modified its consent order to clarify how it would terminate.

Consent Order with the OCC Regarding Loss Mitigation Activities

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2	Wells Fargo & Company

residential mortgage servicing and limits transfers of certain mortgage loans requiring customer remediation out of the Company’s mortgage servicing portfolio until remediation is provided.

Consent Order with the CFPB Regarding Automobile Lending, Consumer Deposit Accounts, and Mortgage Lending

Retail Sales Practices Matters

For additional information regarding retail sales practices matters, including related legal and regulatory risk, see the “Risk Factors” section and Note 13 (Legal Actions) to Financial Statements in this Report.

Customer Remediation Activities

We have accrued for the probable and estimable costs related to our customer remediation activities, which amounts may change based on additional facts and information, as well as ongoing reviews and communications with our regulators. As our ongoing reviews continue and as we continue to strengthen our risk and control infrastructure, we have identified and may in the future identify additional items or areas of potential concern. To the extent issues are identified, we will continue to assess any customer harm and provide remediation as appropriate. We have previously disclosed key areas of focus as part of these activities.

For additional information regarding accruals for customer remediation, see the “Expenses” section in Note 20 (Revenue and Expenses) to Financial Statements in this Report, and for additional information regarding these activities, including related legal and regulatory risk, see the “Risk Factors” section and Note 13 (Legal Actions) to Financial Statements in this Report.

Recent Developments

LIBOR Transition

The London Interbank Offered Rate (LIBOR) is a widely referenced benchmark rate that seeks to estimate the cost at which banks can borrow on an unsecured basis from other banks. On March 5, 2021, the United Kingdom’s Financial Conduct Authority and ICE Benchmark Administration, the administrator of LIBOR, announced that certain settings of LIBOR would no longer be published on a representative basis after December 31, 2021, and the most commonly used U.S. dollar (USD) LIBOR settings would no longer be published on a representative basis after June 30, 2023. Central banks in various jurisdictions convened committees to identify replacement rates to facilitate the transition away from LIBOR. The committee convened by the Federal Reserve in the United States, the Alternative Reference Rates Committee (ARRC), recommended the Secured Overnight Financing Rate (SOFR) as the replacement rate for USD LIBOR.

In first quarter 2022, the Adjustable Interest Rate (LIBOR) Act (the LIBOR Act) was enacted into U.S. federal law to provide a statutory framework to replace LIBOR with a benchmark rate based on SOFR in U.S. law contracts that do not have fallback provisions or that have fallback provisions resulting in a replacement rate based on LIBOR. The FRB adopted a final rule implementing the LIBOR Act on December 16, 2022, which will become effective on February 27, 2023. We expect that the LIBOR Act will transition certain of our legacy USD LIBOR contracts that do not have appropriate fallback provisions to the applicable SOFR-based replacement rates specified in the FRB’s final rule.

We no longer offer new contracts referencing LIBOR, subject to limited exceptions based on regulatory guidance. During 2022, we executed certain LIBOR transition activities to enhance our operational readiness such as the development of new alternative reference rate products, model and system updates, and employee training.

For certain contracts, including commercial credit facilities and related derivatives, we continue to proactively engage with our clients and contract parties to replace LIBOR with SOFR-based rates or other alternative reference rates in advance of the June 30, 2023 cessation date.

Following June 30, 2023, we expect substantially all of our consumer loans, commercial credit facilities, debt securities, derivatives, and long-term debt indexed to USD LIBOR to transition to SOFR-based or other alternative reference rates in accordance with existing fallback provisions or the LIBOR Act.

For additional information regarding the risks and potential impact of LIBOR or any other referenced financial metric being significantly changed, replaced or discontinued, see the “Risk Factors” section in this Report.

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	Wells Fargo & Company	3

Overview (continued)

Financial Performance

In 2022, we generated $13.2 billion of net income and diluted earnings per common share (EPS) of $3.14, compared with $21.5 billion of net income and diluted EPS of $4.95 in 2021. Financial performance for 2022, compared with 2021, included the following:

•total revenue decreased due to lower net gains from equity securities, mortgage banking, and investment advisory and other asset-based fee income, partially offset by higher net interest income;

•provision for credit losses increased reflecting loan growth and a less favorable economic environment;

•noninterest expense increased due to higher operating losses, partially offset by lower personnel expense, and professional and outside services expense;

•average loans increased driven by loan growth across both our commercial and consumer loan portfolios; and

•average deposits decreased driven by reductions in Corporate and Investment Banking, Commercial Banking, Wealth and Investment Management, and Corporate, partially offset by growth in Consumer Banking and Lending.

Capital and Liquidity

We maintained a strong capital position in 2022. Total equity of $181.9 billion at December 31, 2022, decreased compared with $190.1 billion at December 31, 2021, driven by a decrease in accumulated other comprehensive income due to net unrealized losses on available-for-sale (AFS) debt securities. Our liquidity and regulatory capital ratios remained strong at December 31, 2022, including:

•our Common Equity Tier 1 (CET1) ratio was 10.60% under the Standardized Approach (our binding ratio), which continued to exceed the regulatory minimum and buffers of 9.20%;

•our total loss absorbing capacity (TLAC) as a percentage of total risk-weighted assets was 23.27%, compared with the regulatory minimum of 21.50%; and

•our liquidity coverage ratio (LCR) was 122%, which continued to exceed the regulatory minimum of 100%.

Credit Quality

Credit quality reflected the following:

•The allowance for credit losses (ACL) for loans of $13.6 billion at December 31, 2022, decreased $179 million from December 31, 2021, reflecting reduced uncertainty around the economic impact of the COVID-19 pandemic on our loan portfolio. This decrease was partially offset by loan growth and a less favorable economic environment.

•Our provision for credit losses for loans was $1.5 billion in 2022, compared with $(4.2) billion in 2021, reflecting loan growth and a less favorable economic environment.

•The allowance coverage for total loans was 1.42% at December 31, 2022, compared with 1.54% at December 31, 2021.

•Commercial portfolio net loan charge-offs were $79 million, or 1 basis point of average commercial loans, in 2022, compared with net loan charge-offs of $295 million, or 6 basis points, in 2021, driven by lower losses in our commercial and industrial and commercial real estate mortgage portfolios.

•Consumer portfolio net loan charge-offs were $1.5 billion, or 39 basis points of average consumer loans, in 2022, compared with net loan charge-offs of $1.3 billion, or 33 basis points, in 2021, predominantly due to higher losses in our auto portfolio.

•Nonperforming assets (NPAs) of $5.8 billion at December 31, 2022, decreased $1.6 billion, or 21%, from December 31, 2021, driven by improved credit quality across our commercial loan portfolios, and a decrease in residential mortgage nonaccrual loans primarily due to sustained payment performance of borrowers after exiting COVID-19-related accommodation programs. NPAs represented 0.60% of total loans at December 31, 2022.

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4	Wells Fargo & Company

Table 1 presents a three-year summary of selected financial data and Table 2 presents selected ratios and per common share data.

Table 1: Summary of Selected Financial Data

	Year ended December 31,
(in millions, except per share amounts)	2022		2021		$ Change 2022/ 2021	% Change 2022/ 2021		2020							$ Change 2021/ 2020	% Change 2021/ 2020
Income statement
Net interest income	$	44,950			35,779		9,171			26	%		$	39,956					(4,177)		(10)	%
Noninterest income	28,835			42,713		(13,878)			(32)			34,308						8,405		24
Total revenue	73,785			78,492		(4,707)			(6)			74,264						4,228		6
Net charge-offs	1,609			1,582		27			2			3,370						(1,788)		(53)
Change in the allowance for credit losses	(75)			(5,737)		5,662			99		10,759						(16,496)		NM
Provision for credit losses	1,534			(4,155)		5,689			137		14,129						(18,284)		NM
Noninterest expense	57,282			53,831		3,451			6			57,630						(3,799)		(7)
Net income before noncontrolling interests	12,882			23,238		(10,356)			(45)			3,662						19,576		535
Less: Net income from noncontrolling interests	(300)			1,690		(1,990)			NM		285						1,405		493
Wells Fargo net income	13,182			21,548		(8,366)			(39)			3,377						18,171		538
Earnings per common share	3.17			4.99		(1.82)			(36)		0.43						4.56		NM
Diluted earnings per common share	3.14			4.95		(1.81)			(37)		0.43						4.52		NM
Dividends declared per common share	1.10			0.60		0.50			83			1.22						(0.62)		(51)
Balance sheet (at year end)
Debt securities	496,808			537,531		(40,723)			(8)			501,207						36,324		7
Loans	955,871			895,394		60,477			7			887,637						7,757		1
Allowance for loan losses	12,985			12,490		495			4			18,516						(6,026)		(33)
Equity securities	64,414			72,886		(8,472)			(12)			60,008						12,878		21
Assets	1,881,016			1,948,068		(67,052)			(3)			1,952,911						(4,843)		—
Deposits	1,383,985			1,482,479		(98,494)			(7)			1,404,381						78,098		6
Long-term debt	174,870			160,689		14,181			9			212,950						(52,261)		(25)
Common stockholders’ equity	160,614			168,331		(7,717)			(5)			164,570						3,761		2
Wells Fargo stockholders’ equity	179,889			187,606		(7,717)			(4)			184,680						2,926		2
Total equity	181,875			190,110		(8,235)			(4)			185,712						4,398		2

NM – Not meaningful

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	Wells Fargo & Company	5

Overview (continued)

Table 2: Ratios and Per Common Share Data

	Year ended December 31,
	2022		2021		2020
Performance ratios
Return on average assets (ROA) (1)	0.70	%		1.11		0.17
Return on average equity (ROE) (2)	7.5			12.0		1.1
Return on average tangible common equity (ROTCE) (3)	9.0			14.3		1.3
Efficiency ratio (4)	78			69		78
Capital and other metrics (5)
At year end:
Wells Fargo common stockholders’ equity to assets	8.54			8.64		8.43
Total equity to assets	9.67			9.76		9.51
Risk-based capital ratios and components:
Standardized Approach:
Common Equity Tier 1 (CET1)	10.60			11.35		11.59
Tier 1 capital	12.11			12.89		13.25
Total capital	14.82			15.84		16.47
Risk-weighted assets (RWAs) (in billions)	$	1,259.9			1,239.0		1,193.7
Advanced Approach:
Common Equity Tier 1 (CET1)	12.00	%		12.60		11.94
Tier 1 capital	13.72			14.31		13.66
Total capital	15.94			16.72		16.14
Risk-weighted assets (RWAs) (in billions)	$	1,112.3			1,116.1		1,158.4
Tier 1 leverage ratio	8.26	%		8.34		8.32
Supplementary Leverage Ratio (SLR)	6.86			6.89		8.05
Total Loss Absorbing Capacity (TLAC) Ratio (6)	23.27			23.03		25.74
Liquidity Coverage Ratio (LCR) (7)	122			118		133
Average balances:
Average Wells Fargo common stockholders’ equity to average assets	8.51			8.73		8.43
Average total equity to average assets	9.67			9.85		9.51
Per common share data
Dividend payout ratio (8)	35.0			12.1		283.7
Book value (9)	$	41.89			43.32		39.71

(1)Represents Wells Fargo net income divided by average assets.

(2)Represents Wells Fargo net income applicable to common stock divided by average common stockholders’ equity.

(4)The efficiency ratio is noninterest expense divided by total revenue (net interest income and noninterest income).

(5)See the “Capital Management” section and Note 25 (Regulatory Capital Requirements and Other Restrictions) to Financial Statements in this Report for additional information.

(6)Represents TLAC divided by risk-weighted assets (RWAs), which is our binding TLAC ratio, determined by using the greater of RWAs under the Standardized and Advanced Approaches.

(7)Represents average high-quality liquid assets divided by average projected net cash outflows, as each is defined under the LCR rule.

(8)Dividend payout ratio is dividends declared per common share as a percentage of diluted earnings per common share.

(9)Book value per common share is common stockholders’ equity divided by common shares outstanding.

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6	Wells Fargo & Company

Earnings Performance

Wells Fargo net income for 2022 was $13.2 billion ($3.14 diluted EPS), compared with $21.5 billion ($4.95 diluted EPS) in 2021. Net income decreased in 2022, compared with 2021, due to a $13.9 billion decrease in noninterest income, a $5.7 billion increase in provision for credit losses, and a $3.5 billion increase in noninterest expense, partially offset by a $9.2 billion increase in net interest income, a $3.5 billion decrease in income tax expense, and a $2.0 billion decrease in net income from noncontrolling interests.

For a discussion of our 2021 financial results, compared with 2020, see the “Earnings Performance” section of our Annual Report on Form 10-K for the year ended December 31, 2021.

Net Interest Income

Net interest income and net interest margin increased in 2022, compared with 2021, due to the impact of higher interest rates on earning assets, higher loan balances, and lower mortgage-backed securities (MBS) premium amortization, partially offset by lower interest income from Paycheck Protection Program (PPP) loans and loans purchased from Government National Mortgage Association (GNMA) loan securitization pools, and higher expenses for interest-bearing deposits and long-term debt.

Table 3 presents the individual components of net interest income and net interest margin. Net interest income and net interest margin are presented on a taxable-equivalent basis in Table 3 to consistently reflect income from taxable and tax-exempt loans and debt and equity securities based on a 21% federal statutory tax rate for the periods ended December 31, 2022, 2021 and 2020.

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	Wells Fargo & Company	7

Earnings Performance (continued)

Table 3: Average Balances, Yields and Rates Paid (Taxable-Equivalent Basis) (1)

	Year ended December 31,
					2022						2021					2020
(in millions)	Average balance		Interest income/ expense		Interest rates		Average balance		Interest income/ expense		Interest rates		Average balance	Interest income/ expense		Interest rates
Assets
Interest-earning deposits with banks	$	145,802			2,245			1.54	%		$	236,281		314			0.13	%		$	186,386	547		0.29	%
Federal funds sold and securities purchased under resale agreements	62,137			859			1.38			69,720			14		0.02			82,798			393	0.47
Debt securities:
Trading debt securities	91,515			2,490			2.72			88,282			2,107		2.39			94,731			2,544	2.69
Available-for-sale debt securities	141,404			3,167			2.24			189,237			2,924		1.55			229,077			5,248	2.29
Held-to-maturity debt securities	296,540			6,480			2.19			245,304			4,589		1.87			173,505			3,841	2.21
Total debt securities	529,459			12,137			2.29			522,823			9,620		1.84			497,313			11,633	2.34
Loans held for sale (2)	13,900			513			3.69			27,554			865		3.14			27,493			947	3.45
Loans:
Commercial and industrial – U.S.	291,996			11,293			3.87			252,025			6,526		2.59			281,080			7,912	2.82
Commercial and industrial – Non-U.S.	80,033			2,681			3.35			71,114			1,448		2.04			66,915			1,673	2.50
Commercial real estate mortgage	131,304			4,974			3.79			121,638			3,276		2.69			122,482			3,842	3.14
Commercial real estate construction	21,510			991			4.61			21,589			667		3.09			21,608			760	3.52
Lease financing	14,555			607			4.17			15,519			692		4.46			17,801			877	4.93
Total commercial loans	539,398			20,546			3.81			481,885			12,609		2.62			509,886			15,064	2.95
Residential mortgage – first lien	249,985			7,912			3.17			249,862			7,903		3.16			288,105			9,661	3.35
Residential mortgage – junior lien	14,703			729			4.95			19,710			818		4.15			26,700			1,185	4.44
Credit card	41,275			4,752			11.51			35,471			4,086		11.52			37,093			4,315	11.63
Auto	55,429			2,366			4.27			51,576			2,317		4.49			48,362			2,379	4.92
Other consumer	29,030			1,489			5.13			25,784			962		3.73			31,642			1,719	5.43
Total consumer loans	390,422			17,248			4.42			382,403			16,086		4.21			431,902			19,259	4.46
Total loans (2)	929,820			37,794			4.06			864,288			28,695		3.32			941,788			34,323	3.64
Equity securities	30,575			708			2.31			31,946			608		1.91			28,950			557	1.92
Other	13,275			204			1.54			10,052			6		0.06			7,505			14	0.18
Total interest-earning assets	$	1,724,968			54,460			3.16	%		$	1,762,664		40,122			2.28	%		$	1,772,233	48,414		2.73	%
Cash and due from banks	25,817			—					24,562			—				21,676			—
Goodwill	25,177			—					26,087			—				26,387			—
Other	118,347			—					128,592			—				121,413			—
Total noninterest-earning assets	$	169,341			—					179,241			—				169,476			—
Total assets	$	1,894,309			54,460					1,941,905			40,122				1,941,709			48,414
Liabilities
Deposits:
Demand deposits	$	432,745			1,356			0.31	%		$	450,131		127			0.03	%		$	98,182	184		0.19	%
Savings deposits	433,415			406			0.09			423,221			124		0.03			744,226			1,492	0.20
Time deposits	33,148			449			1.36			36,519			122		0.33			81,674			892	1.09
Deposits in non-U.S. offices	19,191			138			0.72			28,297			15		0.05			39,260			236	0.60
Total interest-bearing deposits	918,499			2,349			0.26			938,168			388		0.04			963,342			2,804	0.29
Short-term borrowings:
Federal funds purchased and securities sold under agreements to repurchase	24,553			407			1.66			35,245			8		0.02			58,971			276	0.47
Other short-term borrowings	15,257			175			1.15			12,020			(48)		(0.41)			11,235			(25)	(0.22)
Total short-term borrowings	39,810			582			1.46			47,265			(40)		(0.09)			70,206			251	0.36
Long-term debt	157,742			5,505			3.49			178,742			3,173		1.78			224,587			4,471	1.99
Other liabilities	34,126			638			1.87			28,809			395		1.37			28,435			438	1.54
Total interest-bearing liabilities	$	1,150,177			9,074			0.79	%		$	1,192,984		3,916			0.33	%		$	1,286,570	7,964		0.62	%
Noninterest-bearing demand deposits	505,770			—					499,644			—				412,669			—
Other noninterest-bearing liabilities	55,138			—					58,058			—				57,781			—
Total noninterest-bearing liabilities	$	560,908			—					557,702			—				470,450			—
Total liabilities	$	1,711,085			9,074					1,750,686			3,916				1,757,020			7,964
Total equity	183,224			—					191,219			—				184,689			—
Total liabilities and equity	$	1,894,309			9,074					1,941,905			3,916				1,941,709			7,964
Interest rate spread on a taxable-equivalent basis (3)					2.37	%						1.95	%					2.11	%
Net interest margin and net interest income on a taxable-equivalent basis (3)			$	45,386			2.63	%				$	36,206		2.05	%				$	40,450	2.28	%

(1)The average balance amounts represent amortized costs, except for certain held-to-maturity debt securities, which exclude unamortized basis adjustments related to the transfer of those securities from available-for-sale debt securities. The interest rates are based on interest income or expense amounts for the period and are annualized. Interest rates and amounts include the effects of hedge and risk management activities associated with the respective asset and liability categories.

(2)Nonaccrual loans and any related income are included in their respective loan categories.

(3)Includes taxable-equivalent adjustments of $436 million, $427 million and $494 million for the years ended December 31, 2022, 2021 and 2020, respectively, predominantly related to tax-exempt income on certain loans and securities.

Column 1	Column 2
8	Wells Fargo & Company

Table 4: Analysis of Changes in Net Interest Income

	Year ended December 31,
	2022 vs. 2021		2021 vs. 2020
(in millions)	Volume		Rate		Total	Volume		Rate		Total
Increase (decrease) in interest income:
Interest-earning deposits with banks	$	(162)			2,093		1,931			119		(352)		(233)
Federal funds sold and securities purchased under resale agreements	(2)			847		845			(53)		(326)		(379)
Debt securities:
Trading debt securities	80			303		383			(165)		(272)		(437)
Available-for-sale debt securities	(858)			1,101		243			(813)		(1,511)		(2,324)
Held-to-maturity debt securities	1,039			852		1,891			1,405		(657)		748
Total debt securities	261			2,256		2,517			427		(2,440)		(2,013)
Loans held for sale	(484)			132		(352)			2		(84)		(82)
Loans:
Commercial and industrial – U.S.	1,158			3,609		4,767			(775)		(611)		(1,386)
Commercial and industrial – Non-U.S.	201			1,032		1,233			99		(324)		(225)
Commercial real estate mortgage	276			1,422		1,698			(26)		(540)		(566)
Commercial real estate construction	(2)			326		324			(1)		(92)		(93)
Lease financing	(42)			(43)		(85)			(106)		(79)		(185)
Total commercial loans	1,591			6,346		7,937			(809)		(1,646)		(2,455)
Residential mortgage – first lien	1			8		9			(1,232)		(526)		(1,758)
Residential mortgage – junior lien	(230)			141		(89)			(294)		(73)		(367)
Credit card	670			(4)		666			(188)		(41)		(229)
Auto	166			(117)		49			153		(215)		(62)
Other consumer	132			395		527			(281)		(476)		(757)
Total consumer loans	739			423		1,162			(1,842)		(1,331)		(3,173)
Total loans	2,330			6,769		9,099			(2,651)		(2,977)		(5,628)
Equity securities	(26)			126		100			54		(3)		51
Other	3			195		198			4		(12)		(8)
Total increase (decrease) in interest income	1,920			12,418		14,338			(2,098)		(6,194)		(8,292)
Increase (decrease) in interest expense:
Deposits:
Demand deposits	$	(5)			1,234		1,229			208		(265)		(57)
Savings deposits	3			279		282			(461)		(907)		(1,368)
Time deposits	(12)			339		327			(340)		(430)		(770)
Deposits in non-U.S. offices	(7)			130		123			(52)		(169)		(221)
Total interest-bearing deposits	(21)			1,982		1,961			(645)		(1,771)		(2,416)
Short-term borrowings:
Federal funds purchased and securities sold under agreements to repurchase	(3)			402		399			(80)		(188)		(268)
Other short-term borrowings	(10)			233		223			(2)		(21)		(23)
Total short-term borrowings	(13)			635		622			(82)		(209)		(291)
Long-term debt	(412)			2,744		2,332			(855)		(443)		(1,298)
Other liabilities	82			161		243			6		(49)		(43)
Total increase (decrease) in interest expense	(364)			5,522		5,158			(1,576)		(2,472)		(4,048)
Increase (decrease) in net interest income on a taxable-equivalent basis	$	2,284			6,896		9,180			(522)		(3,722)		(4,244)

Column 1	Column 2	Column 3
	Wells Fargo & Company	9

Earnings Performance (continued)

Noninterest Income

Table 5: Noninterest Income

	Year ended December 31,
(in millions)	2022		2021		$ Change 2022/ 2021	% Change 2022/ 2021		2020		$ Change 2021/ 2020		% Change 2021/ 2020
Deposit-related fees	$	5,316			5,475		(159)			(3)	%		$	5,221		254		5	%
Lending-related fees	1,397			1,445		(48)			(3)			1,381			64		5
Investment advisory and other asset-based fees	9,004			11,011		(2,007)			(18)			9,863			1,148		12
Commissions and brokerage services fees	2,242			2,299		(57)			(2)			2,384			(85)		(4)
Investment banking fees	1,439			2,354		(915)			(39)			1,865			489		26
Card fees	4,355			4,175		180			4			3,544			631		18
Net servicing income	533			194		339			175			(139)			333		240
Net gains on mortgage loan originations/sales	850			4,762		(3,912)			(82)			3,632			1,130		31
Mortgage banking	1,383			4,956		(3,573)			(72)			3,493			1,463		42
Net gains from trading activities	2,116			284		1,832			645			1,172			(888)		(76)
Net gains from debt securities	151			553		(402)			(73)			873			(320)		(37)
Net gains (losses) from equity securities	(806)			6,427		(7,233)			NM		665			5,762		866
Lease income	1,269			996		273			27			1,245			(249)		(20)
Other	969			2,738		(1,769)			(65)			2,602			136		5
Total	$	28,835			42,713		(13,878)			(32)			$	34,308		8,405		24

NM – Not meaningful

Full year 2022 vs. full year 2021

Deposit-related fees decreased reflecting:

•lower treasury management fees on commercial accounts driven by a higher earnings credit rate due to an increase in interest rates; and

•the elimination of non-sufficient funds and other fees as well as efforts to help customers avoid overdraft fees;

partially offset by:

•lower fee waivers as 2021 included additional accommodations to support customers.

Lending-related fees decreased reflecting lower commercial loan commitment fees.

Investment advisory and other asset-based fees decreased reflecting:

•lower asset-based and trust fees due to divestitures in 2021; and

•lower average market valuations.

Commissions and brokerage services fees decreased driven by lower transactional revenue.

Investment banking fees decreased due to lower market activity.

Card fees increased reflecting higher network revenue as well as higher interchange fees, net of rewards, driven by increased purchase and transaction volumes.

Net servicing income increased driven by a lower decline in residential mortgage servicing rights (MSRs) as a result of reduced prepayment rates, partially offset by net unfavorable hedge results due to interest rate volatility.

Net gains on mortgage loan originations/sales decreased

driven by:

•lower residential mortgage origination volumes and lower gain on sale margins; and

•lower gains related to the resecuritization of loans we purchased from GNMA loan securitization pools.

For additional information on servicing income and net gains on mortgage loan originations/sales, see Note 6 (Mortgage Banking Activities) to Financial Statements in this Report.

Net gains from trading activities increased driven by higher commodities, foreign exchange, rates, and equities trading revenue.

Net gains from debt securities decreased due to lower gains on sales of corporate debt securities and agency MBS.

Net gains (losses) from equity securities decreased reflecting:

•lower unrealized gains on nonmarketable equity securities driven by our affiliated venture capital and private equity businesses;

•a $2.5 billion impairment of equity securities (before the impact of noncontrolling interests) in 2022 predominantly in our affiliated venture capital business driven by market conditions; and

•lower realized gains on the sales of equity securities.

Lease income increased driven by a $268 million impairment in 2021 of certain rail cars in our rail car leasing business that are used for the transportation of coal products.

Column 1	Column 2
10	Wells Fargo & Company

Other income decreased driven by:

•gains in 2021 on the sales of our Corporate Trust Services business, our student loan portfolio, and Wells Fargo Asset Management (WFAM); and

•higher amortization due to growth in wind energy investments (offset by benefits and credits in income tax expense);

partially offset by:

•lower valuation losses related to the retained litigation risk associated with shares of Visa Class B common stock that we sold.

Noninterest Expense

Table 6: Noninterest Expense

	Year ended December 31,
(in millions)	2022		2021		$ Change 2022/ 2021	% Change 2022/ 2021		2020		$ Change 2021/ 2020		% Change 2021/ 2020
Personnel	$	34,340			35,541		(1,201)			(3)	%		$	34,811		730		2	%
Technology, telecommunications and equipment	3,375			3,227		148			5			3,099			128		4
Occupancy	2,881			2,968		(87)			(3)			3,263			(295)		(9)
Operating losses	6,984			1,568		5,416			345			3,523			(1,955)		(55)
Professional and outside services	5,188			5,723		(535)			(9)			6,706			(983)		(15)
Leases (1)	750			867		(117)			(13)			1,022			(155)		(15)
Advertising and promotion	505			600		(95)			(16)			600			—		—
Restructuring charges	5			76		(71)			(93)			1,499			(1,423)		(95)
Other	3,254			3,261		(7)			—			3,107			154		5
Total	$	57,282			53,831		3,451			6			$	57,630		(3,799)		(7)

(1)Represents expenses for assets we lease to customers.

Full year 2022 vs. full year 2021

Personnel expense decreased driven by:

•lower revenue-related compensation expense; and

•the impact of divestitures and efficiency initiatives;

partially offset by:

•higher severance expense primarily in Home Lending.

Technology, telecommunications and equipment expense increased due to higher expense for technology contracts.

Occupancy expense decreased driven by lower cleaning fees, supplies, and equipment expense.

Operating losses increased reflecting a $5.1 billion increase in expenses for litigation, regulatory, and customer remediation matters primarily related to a variety of historical matters.

As previously disclosed, we have outstanding litigation, regulatory, and customer remediation matters that could impact operating losses in the coming quarters.

Professional and outside services expense decreased driven by efficiency initiatives to reduce our spending on consultants and contractors.

Leases expense decreased driven by lower depreciation expense from a reduction in the size of our operating lease asset portfolio.

Advertising and promotion expense decreased due to lower marketing and brand campaign volumes.

Income Tax Expense

Table 7: Income Tax Expense

	Year ended December 31,
(in millions)	2022		2021		$ Change 2022/ 2021	% Change 2022/ 2021		2020		$ Change 2021/ 2020		% Change 2021/ 2020
Income before income tax expense (benefit)	$	14,969			28,816		(13,847)			(48)	%		$	2,505		26,311			NM
Income tax expense (benefit)	2,087			5,578		(3,491)			(63)			(1,157)			6,735		582	%
Effective Income tax rate	13.7	%		20.6						(52.1)	%

NM – Not meaningful

Income tax expense for 2022, compared with 2021, decreased primarily due to lower pre-tax income. The effective income tax rate for 2022, compared with 2021, decreased reflecting the impact of income tax benefits, including tax credits, on lower pre-tax income and discrete tax benefits related to interest on overpayments in prior years.

For additional information on income taxes, see Note 22 (Income Taxes) to Financial Statements in this Report.

Column 1	Column 2	Column 3
	Wells Fargo & Company	11

Earnings Performance (continued)

Operating Segment Results

Our management reporting is organized into four reportable operating segments: Consumer Banking and Lending; Commercial Banking; Corporate and Investment Banking; and Wealth and Investment Management. All other business activities that are not included in the reportable operating segments have been included in Corporate. For additional information, see Table 8. We define our reportable operating segments by type of product and customer segment, and their results are based on our management reporting process. The management reporting process measures the performance of the reportable operating segments based on the Company’s management structure, and the results are regularly reviewed with our Chief Executive Officer and relevant senior management. The management reporting process is based on U.S. GAAP and includes specific adjustments, such as funds transfer pricing for asset/liability management, shared revenue and expenses, and taxable-equivalent adjustments to consistently reflect income from taxable and tax-exempt sources, which allows management to assess performance consistently across the operating segments.

business based on established internal revenue-sharing agreements.

Allocated Capital Reportable operating segments are allocated capital under a risk-sensitive framework that is primarily based on aspects of our regulatory capital requirements, and the assumptions and methodologies used to allocate capital are periodically assessed and revised. Management believes that return on allocated capital is a useful financial measure because it enables management, investors, and others to assess a reportable operating segment’s use of capital.

Table 8: Management Reporting Structure

	Wells Fargo & Company
			Consumer Banking and Lending				Commercial Banking				Corporate and Investment Banking				Wealth and Investment Management			Corporate
			• Consumer and Small Business Banking • Home Lending • Credit Card • Auto • Personal Lending				• Middle Market Banking • Asset-Based Lending and Leasing				• Banking • Commercial Real Estate • Markets				• Wells Fargo Advisors • The Private Bank				• Corporate Treasury • Enterprise Functions • Investment Portfolio • Affiliated venture capital and private equity businesses • Non-strategic businesses

Column 1	Column 2
12	Wells Fargo & Company

Table 9 and the following discussion present our results by reportable operating segment. For additional information, see Note 19 (Operating Segments) to Financial Statements in this Report.

Table 9: Operating Segment Results – Highlights

(in millions)	Consumer Banking and Lending			Corporate and Investment Banking	Wealth and Investment Management			Reconciling Items (2)	Consolidated Company
Year ended December 31, 2022
Net interest income	$	27,044		7,289		8,733		3,927		(1,607)		(436)		44,950
Noninterest income	8,766		3,631		6,509		10,895		609		(1,575)		28,835
Total revenue	35,810		10,920		15,242		14,822		(998)		(2,011)		73,785
Provision for credit losses	2,276		(534)		(185)		(25)		2		—		1,534
Noninterest expense	26,277		6,058		7,560		11,613		5,774		—		57,282
Income (loss) before income tax expense (benefit)	7,257		5,396		7,867		3,234		(6,774)		(2,011)		14,969
Income tax expense (benefit)	1,816		1,366		1,989		812		(1,885)		(2,011)		2,087
Net income (loss) before noncontrolling interests	5,441		4,030		5,878		2,422		(4,889)		—		12,882
Less: Net income (loss) from noncontrolling interests	—		12		—		—		(312)		—		(300)
Net income (loss)	$	5,441		4,018		5,878		2,422		(4,577)		—		13,182
Year ended December 31, 2021
Net interest income	$	22,807		4,960		7,410		2,570		(1,541)		(427)		35,779
Noninterest income	12,070		3,589		6,429		11,776		10,036		(1,187)		42,713
Total revenue	34,877		8,549		13,839		14,346		8,495		(1,614)		78,492
Provision for credit losses	(1,178)		(1,500)		(1,439)		(95)		57		—		(4,155)
Noninterest expense	24,648		5,862		7,200		11,734		4,387		—		53,831
Income (loss) before income tax expense (benefit)	11,407		4,187		8,078		2,707		4,051		(1,614)		28,816
Income tax expense (benefit)	2,852		1,045		2,019		680		596		(1,614)		5,578
Net income before noncontrolling interests	8,555		3,142		6,059		2,027		3,455		—		23,238
Less: Net income (loss) from noncontrolling interests	—		8		(3)		—		1,685		—		1,690
Net income	$	8,555		3,134		6,062		2,027		1,770		—		21,548
Year ended December 31, 2020
Net interest income	$	23,378		6,134		7,509		2,988		441		(494)		39,956
Noninterest income	10,638		3,041		6,419		10,225		4,916		(931)		34,308
Total revenue	34,016		9,175		13,928		13,213		5,357		(1,425)		74,264
Provision for credit losses	5,662		3,744		4,946		249		(472)		—		14,129
Noninterest expense	26,976		6,323		7,703		10,912		5,716		—		57,630
Income (loss) before income tax expense (benefit)	1,378		(892)		1,279		2,052		113		(1,425)		2,505
Income tax expense (benefit)	302		(208)		330		514		(670)		(1,425)		(1,157)
Net income (loss) before noncontrolling interests	1,076		(684)		949		1,538		783		—		3,662
Less: Net income (loss) from noncontrollinginterests	—		5		(1)		—		281		—		285
Net income (loss)	$	1,076		(689)		950		1,538		502		—		3,377

(1)All other business activities that are not included in the reportable operating segments have been included in Corporate. For additional information, see the “Corporate” section below.

(2)Taxable-equivalent adjustments related to tax-exempt income on certain loans and debt securities are included in net interest income, while taxable-equivalent adjustments related to income tax credits for low-income housing and renewable energy investments are included in noninterest income, in each case with corresponding impacts to income tax expense (benefit). Adjustments are included in Corporate, Commercial Banking, and Corporate and Investment Banking and are eliminated to reconcile to the Company’s consolidated financial results.

Column 1	Column 2	Column 3
	Wells Fargo & Company	13

Earnings Performance (continued)

debit cards as well as home, auto, personal, and small business lending. Table 9a and Table 9b provide additional information for Consumer Banking and Lending.

Table 9a: Consumer Banking and Lending – Income Statement and Selected Metrics


($ in millions, unless otherwise noted)	2022		2021		$ Change 2022/ 2021	% Change 2022/ 2021		2020		$ Change 2021/ 2020		% Change 2021/ 2020
Income Statement
Net interest income	$	27,044			22,807		4,237			19	%		$	23,378			(571)		(2)	%
Noninterest income:
Deposit-related fees	3,093			3,045		48			2			2,904			141			5
Card fees	4,067			3,930		137			3			3,318			612			18
Mortgage banking	1,100			4,490		(3,390)			(76)			3,224			1,266			39
Other	506			605		(99)			(16)			1,192			(587)			(49)
Total noninterest income	8,766			12,070		(3,304)			(27)			10,638			1,432			13
Total revenue	35,810			34,877		933			3			34,016			861			3
Net charge-offs	1,693			1,439		254			18			1,875			(436)			(23)
Change in the allowance for credit losses	583			(2,617)		3,200			122			3,787			(6,404)			NM
Provision for credit losses	2,276			(1,178)		3,454			293			5,662			(6,840)			NM
Noninterest expense	26,277			24,648		1,629			7			26,976			(2,328)			(9)
Income before income tax expense	7,257			11,407		(4,150)			(36)			1,378			10,029			728
Income tax expense	1,816			2,852		(1,036)			(36)			302			2,550			844
Net income	$	5,441			8,555		(3,114)			(36)			$	1,076			7,479		695
Revenue by Line of Business
Consumer and Small Business Banking	$	23,421			18,958		4,463			24			$	18,684			274		1
Consumer Lending:
Home Lending	4,221			8,154		(3,933)			(48)			7,875			279			4
Credit Card	5,271			4,928		343			7			4,685			243			5
Auto	1,716			1,733		(17)			(1)			1,575			158			10
Personal Lending	1,181			1,104		77			7			1,197			(93)			(8)
Total revenue	$	35,810			34,877		933			3			$	34,016			861		3
Selected Metrics
Consumer Banking and Lending:
Return on allocated capital (1)	10.8	%		17.2						1.6	%
Efficiency ratio (2)	73			71						79
Retail bank branches (#)	4,598			4,777				(4)			5,032					(5)
Digital active customers (# in millions) (3)	33.5			33.0				2			32.0					3
Mobile active customers (# in millions) (3)	28.3			27.3				4			26.0					5
Consumer and Small Business Banking:
Deposit spread (4)	2.0	%		1.5						1.8	%
Debit card purchase volume ($ in billions) (5)	$	486.6			471.5		15.1			3			$	391.9			79.6		20
Debit card purchase transactions (# in millions) (5)	9,852			9,808				—			8,792					12

(continued on following page)

Column 1	Column 2
14	Wells Fargo & Company

(continued from previous page)


($ in millions, unless otherwise noted)	2022		2021		$ Change 2022/ 2021	% Change 2022/ 2021		2020		$ Change 2021/ 2020		% Change 2021/ 2020
Home Lending:
Mortgage banking:
Net servicing income	$	368			35		333			951	%		$	(160)			195		122	%
Net gains on mortgage loan originations/sales	732			4,455		(3,723)			(84)			3,384			1,071			32
Total mortgage banking	$	1,100			4,490		(3,390)			(76)			$	3,224			1,266		39
Originations ($ in billions):
Retail	$	64.3			138.5		(74.2)			(54)			$	118.7			19.8		17
Correspondent	43.8			66.5		(22.7)			(34)			104.0			(37.5)			(36)
Total originations	$	108.1			205.0		(96.9)			(47)			$	222.7			(17.7)		(8)
% of originations held for sale (HFS)	52.5	%		64.6						73.9	%
Third-party mortgage loans serviced (period-end) ($ in billions) (6)	$	679.2			716.8		(37.6)			(5)			$	856.7			(139.9)		(16)
Mortgage servicing rights (MSR) carrying value (period-end)	9,310			6,920		2,390			35			6,125			795			13
Ratio of MSR carrying value (period-end) to third-party mortgage loans serviced (period-end) (6)	1.37	%		0.97						0.71	%
Home lending loans 30+ days delinquency rate (7)(8)(9)	0.31			0.39						0.64
Credit Card:
Point of sale (POS) volume ($ in billions)	$	119.1			95.3		23.8			25			$	75.3			20.0		27
New accounts (# in thousands)	2,153			1,640				31			1,022					60
Credit card loans 30+ days delinquency rate	2.08	%		1.52						2.26	%
Credit card loans 90+ days delinquency rate	1.01			0.72						1.04
Auto:
Auto originations ($ in billions)	$	23.1			33.9		(10.8)			(32)			$	22.8			11.1		49
Auto loans 30+ days delinquency rate (8)	2.64	%		1.84						1.77	%
Personal Lending:
New volume ($ in billions)	$	12.6			9.8		2.8			29			$	7.9			1.9		24

NM – Not meaningful

(2)Efficiency ratio is segment noninterest expense divided by segment total revenue (net interest income and noninterest income).

(3)Digital and mobile active customers is the number of consumer and small business customers who have logged on via a digital or mobile device, respectively, in the prior 90 days. Digital active customers includes both online and mobile customers.

(4)Deposit spread is (i) the internal funds transfer pricing credit on segment deposits minus interest paid to customers for segment deposits, divided by (ii) average segment deposits.

(5)Debit card purchase volume and transactions reflect combined activity for both consumer and business debit card purchases.

(6)Excludes residential mortgage loans subserviced for others.

(7)Excludes residential mortgage loans insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA) and loans held for sale.

(8)Excludes nonaccrual loans.

(9)Beginning in second quarter 2020, customer payment deferral activities instituted in response to the COVID-19 pandemic may have delayed the recognition of delinquencies for those customers who would have otherwise moved into past due or nonaccrual status.

Full year 2022 vs. full year 2021

Revenue increased driven by:

•higher net interest income reflecting higher interest rates and higher average deposit balances and deposit spreads;

•higher card fees reflecting higher network revenue as well as higher interchange fees, net of rewards, driven by increased purchase and transaction volumes; and

•higher deposit-related fees reflecting lower fee waivers as 2021 included additional accommodations to support customers, and a higher volume of monthly account service fees in 2022, partially offset by the elimination of non-sufficient funds and other fees in 2022 as well as initiatives to help customers avoid overdraft fees;

partially offset by:

•lower mortgage banking noninterest income due to lower origination volumes and gain on sale margins, and lower

revenue related to the resecuritization of loans we purchased from GNMA loan securitization pools.

Provision for credit losses increased reflecting loan growth, a less favorable economic environment, and higher net charge-offs.

Noninterest expense increased driven by:

•higher operating losses reflecting higher expenses primarily related to a variety of historical matters, including litigation, regulatory, and customer remediation matters; and

•higher operating costs;

partially offset by:

•lower personnel expense driven by lower revenue-related incentive compensation in Home Lending due to lower production and the impact of efficiency initiatives, partially offset by higher severance expense;

Column 1	Column 2	Column 3
	Wells Fargo & Company	15

Earnings Performance (continued)

•lower occupancy expense as well as lower professional and outside services expense related to efficiency initiatives; and

•lower donation expense due to higher donations of PPP processing fees in 2021.

Table 9b: Consumer Banking and Lending – Balance Sheet


(in millions)	2022		2021		$ Change 2022/ 2021	% Change 2022/ 2021		2020		$ Change 2021/ 2020		% Change 2021/ 2020
Selected Balance Sheet Data (average)
Loans by Line of Business:
Consumer and Small Business Banking	$	10,132			16,625		(6,493)			(39)	%		$	15,173		1,452		10	%
Consumer Lending:
Home Lending	219,157			224,446		(5,289)			(2)			268,586			(44,140)		(16)
Credit Card	34,151			29,052		5,099			18			30,861			(1,809)		(6)
Auto	55,994			52,293		3,701			7			49,460			2,833		6
Personal Lending	12,999			11,469		1,530			13			12,383			(914)		(7)
Total loans	$	332,433			333,885		(1,452)			—			$	376,463		(42,578)		(11)
Total deposits	883,130			834,739		48,391			6			722,085			112,654		16
Allocated capital	48,000			48,000		—			—			48,000			—		—
Selected Balance Sheet Data (period-end)
Loans by Line of Business:
Consumer and Small Business Banking	$	9,704			11,270		(1,566)			(14)			$	17,743		(6,473)		(36)
Consumer Lending:
Home Lending	223,525			214,407		9,118			4			253,942			(39,535)		(16)
Credit Card	38,475			31,671		6,804			21			30,178			1,493		5
Auto	54,281			57,260		(2,979)			(5)			49,072			8,188		17
Personal Lending	14,544			11,966		2,578			22			11,861			105		1
Total loans	$	340,529			326,574		13,955			4			$	362,796		(36,222)		(10)
Total deposits	859,695			883,674		(23,979)			(3)			784,565			99,109		13

Full year 2022 vs. full year 2021

Total loans (average) decreased driven by:

•a decline in PPP loans in Consumer and Small Business Banking; and

•a decline in Home Lending loan balances due to the resecuritization of loans we purchased from GNMA loan securitization pools and the continued pause in originating home equity loans;

partially offset by:

•higher customer purchase volume and the impact of new products in our Credit Card business; and

•higher loan balances in our Auto business.

Total loans (period-end) increased driven by:

•originations exceeding paydowns in Home Lending;

•higher customer purchase volume and the impact of new products in our Credit Card business; and

•growth in our Personal Lending business;

partially offset by:

•a decline in our Auto business due to lower origination volumes reflecting credit tightening actions and rising interest rates; and

•a decline in PPP loans in Consumer and Small Business Banking.

Total deposits (average) increased driven by higher levels of customer liquidity and savings in the first half of 2022, partially offset by increased consumer spending in the second half of 2022, customers continuing to allocate more cash into higher yielding liquid alternatives, and lower servicing escrow deposits.

Total deposits (period-end) decreased driven by increased consumer spending, customers continuing to allocate more cash into higher yielding liquid alternatives, and lower servicing escrow deposits.

Column 1	Column 2
16	Wells Fargo & Company

Commercial Banking provides financial solutions to private, family owned and certain public companies. Products and services include banking and credit products across multiple

industry sectors and municipalities, secured lending and lease products, and treasury management. Table 9c and Table 9d provide additional information for Commercial Banking.

Table 9c: Commercial Banking – Income Statement and Selected Metrics


($ in millions)	2022		2021		$ Change 2022/ 2021	% Change 2022/ 2021		2020		$ Change 2021/ 2020		% Change 2021/ 2020
Income Statement
Net interest income	$	7,289			4,960		2,329			47	%		$	6,134		(1,174)		(19)	%
Noninterest income:
Deposit-related fees	1,131			1,285		(154)			(12)			1,219			66		5
Lending-related fees	491			532		(41)			(8)			531			1		—
Lease income	710			682		28			4			646			36		6
Other	1,299			1,090		209			19			645			445		69
Total noninterest income	3,631			3,589		42			1			3,041			548		18
Total revenue	10,920			8,549		2,371			28			9,175			(626)		(7)
Net charge-offs	4			101		(97)			(96)			590			(489)		(83)
Change in the allowance for credit losses	(538)			(1,601)		1,063			66			3,154			(4,755)		NM
Provision for credit losses	(534)			(1,500)		966			64			3,744			(5,244)		NM
Noninterest expense	6,058			5,862		196			3			6,323			(461)		(7)
Income (loss) before income tax expense (benefit)	5,396			4,187		1,209			29			(892)			5,079		569
Income tax expense (benefit)	1,366			1,045		321			31			(208)			1,253		602
Less: Net income from noncontrolling interests	12			8		4			50			5			3		60
Net income (loss)	$	4,018			3,134		884			28			$	(689)		3,823		555
Revenue by Line of Business
Middle Market Banking	$	6,574			4,642		1,932			42			$	5,067		(425)		(8)
Asset-Based Lending and Leasing	4,346			3,907		439			11			4,108			(201)		(5)
Total revenue	$	10,920			8,549		2,371			28			$	9,175		(626)		(7)
Revenue by Product
Lending and leasing	$	5,253			4,835		418			9			$	5,432		(597)		(11)
Treasury management and payments	4,483			2,825		1,658			59			3,205			(380)		(12)
Other	1,184			889		295			33			538			351		65
Total revenue	$	10,920			8,549		2,371			28			$	9,175		(626)		(7)
Selected Metrics
Return on allocated capital	19.7	%		15.1						(4.5)	%
Efficiency ratio	55			69						69

NM – Not meaningful

Full year 2022 vs. full year 2021

Revenue increased driven by:

•higher net interest income reflecting higher interest rates and deposit spreads as well as higher loan balances; and

•higher other noninterest income driven by higher net gains from equity securities and higher income from renewable energy investments;

partially offset by:

•lower deposit-related fees driven by the impact of higher earnings credit rates, which result in lower fees for commercial customers.

Provision for credit losses reflected loan growth and a less favorable economic environment, partially offset by lower net charge-offs.

Noninterest expense increased driven by higher operating costs and operating losses, partially offset by the impact of efficiency initiatives.

Column 1	Column 2	Column 3
	Wells Fargo & Company	17

Earnings Performance (continued)

Table 9d: Commercial Banking – Balance Sheet


(in millions)	2022		2021		$ Change 2022/ 2021		% Change 2022/ 2021		2020		$ Change 2021/ 2020		% Change 2021/ 2020
Selected Balance Sheet Data (average)
Loans:
Commercial and industrial	$	147,379			120,396			26,983			22	%		$	143,263			(22,867)		(16)	%
Commercial real estate	45,130			47,018			(1,888)			(4)			52,220			(5,202)			(10)
Lease financing and other	13,523			13,823			(300)			(2)			15,953			(2,130)			(13)
Total loans	$	206,032			181,237			24,795			14			$	211,436			(30,199)		(14)
Loans by Line of Business:
Middle Market Banking	$	114,634			102,882			11,752			11			$	112,848			(9,966)		(9)
Asset-Based Lending and Leasing	91,398			78,355			13,043			17			98,588			(20,233)			(21)
Total loans	$	206,032			181,237			24,795			14			$	211,436			(30,199)		(14)
Total deposits	186,079			197,269			(11,190)			(6)			178,946			18,323			10
Allocated capital	19,500			19,500		—			—			19,500		—			—
Selected Balance Sheet Data (period-end)
Loans:
Commercial and industrial	$	163,797			131,078			32,719			25			$	124,253			6,825		5
Commercial real estate	45,816			45,467			349			1			49,903			(4,436)			(9)
Lease financing and other	13,916			13,803			113			1			14,821			(1,018)			(7)
Total loans	$	223,529			190,348			33,181			17			$	188,977			1,371		1
Loans by Line of Business:
Middle Market Banking	$	121,192			106,834			14,358			13			$	101,193			5,641		6
Asset-Based Lending and Leasing	102,337			83,514			18,823			23			87,784			(4,270)			(5)
Total loans	$	223,529			190,348			33,181			17			$	188,977			1,371		1
Total deposits	173,942			205,428			(31,486)			(15)			188,292			17,136			9

Full year 2022 vs. full year 2021

Total loans (average and period-end) increased driven by growth in new commitments with existing and new customers as well as higher line utilization and increased originations.

Total deposits (average and period-end) decreased reflecting:

•customers continuing to allocate more cash into higher yielding liquid alternatives;

•the transfer of certain customer accounts to the Consumer Banking and Lending operating segment in first quarter 2022; and

•actions taken in 2021 and early 2022 to manage under the asset cap.

Column 1	Column 2
18	Wells Fargo & Company

Table 9e: Corporate and Investment Banking – Income Statement and Selected Metrics


($ in millions)	2022		2021		$ Change 2022/ 2021	% Change 2022/ 2021		2020		$ Change 2021/ 2020		% Change 2021/ 2020
Income Statement
Net interest income	$	8,733			7,410		1,323			18	%		$	7,509		(99)		(1)	%
Noninterest income:
Deposit-related fees	1,068			1,112		(44)			(4)			1,062			50		5
Lending-related fees	769			761		8			1			684			77		11
Investment banking fees	1,492			2,405		(913)			(38)			1,952			453		23
Net gains from trading activities	1,886			272		1,614			593			1,190			(918)		(77)
Other	1,294			1,879		(585)			(31)			1,531			348		23
Total noninterest income	6,509			6,429		80			1			6,419			10		—
Total revenue	15,242			13,839		1,403			10			13,928			(89)		(1)
Net charge-offs	(48)			(22)		(26)			NM		742			(764)		NM
Change in the allowance for credit losses	(137)			(1,417)		1,280			90			4,204			(5,621)		NM
Provision for credit losses	(185)			(1,439)		1,254			87			4,946			(6,385)		NM
Noninterest expense	7,560			7,200		360			5			7,703			(503)		(7)
Income before income tax expense	7,867			8,078		(211)			(3)			1,279			6,799		532
Income tax expense	1,989			2,019		(30)			(1)			330			1,689		512
Less: Net loss from noncontrolling interests	—			(3)		3			100			(1)			(2)		NM
Net income	$	5,878			6,062		(184)			(3)			$	950		5,112		538
Revenue by Line of Business
Banking:
Lending	$	2,222			1,948		274			14			$	1,767		181		10
Treasury Management and Payments	2,369			1,468		901			61			1,680			(212)		(13)
Investment Banking	1,206			1,654		(448)			(27)			1,448			206		14
Total Banking	5,797			5,070		727			14			4,895			175		4
Commercial Real Estate	4,534			3,963		571			14			3,607			356		10
Markets:
Fixed Income, Currencies, and Commodities (FICC)	3,660			3,710		(50)			(1)			4,314			(604)		(14)
Equities	1,115			897		218			24			1,204			(307)		(25)
Credit Adjustment (CVA/DVA) and Other	20			91		(71)			(78)			26			65		250
Total Markets	4,795			4,698		97			2			5,544			(846)		(15)
Other	116			108		8			7			(118)			226		192
Total revenue	$	15,242			13,839		1,403			10			$	13,928		(89)		(1)
Selected Metrics
Return on allocated capital	15.3	%		16.9						1.8	%
Efficiency ratio	50			52						55

NM – Not meaningful

Full year 2022 vs. full year 2021

Revenue increased driven by:

•higher net interest income reflecting higher interest rates as well as higher loan balances; and

•higher net gains from trading activities driven by higher commodities, foreign exchange, rates, and equities trading revenue;

partially offset by:

•lower investment banking fees due to lower market activity; and

•lower other noninterest income driven by lower mortgage banking income due to lower commercial MBS gain on sale margins and volumes.

Provision for credit losses reflected loan growth and a less favorable economic environment.

Noninterest expense increased driven by higher operating costs and operating losses, partially offset by the impact of efficiency initiatives.

Column 1	Column 2	Column 3
	Wells Fargo & Company	19

Earnings Performance (continued)

Table 9f: Corporate and Investment Banking – Balance Sheet


(in millions)	2022		2021		$ Change 2022/ 2021	% Change 2022/ 2021		2020		$ Change 2021/ 2020		% Change 2021/ 2020
Selected Balance Sheet Data (average)
Loans:
Commercial and industrial	$	198,424			170,713		27,711			16	%		$	172,492		(1,779)		(1)	%
Commercial real estate	98,560			86,323		12,237			14			82,832			3,491		4
Total loans	$	296,984			257,036		39,948			16			$	255,324		1,712		1
Loans by Line of Business:
Banking	$	106,440			93,766		12,674			14			$	93,501		265		—
Commercial Real Estate	133,719			110,978		22,741			20			108,279			2,699		2
Markets	56,825			52,292		4,533			9			53,544			(1,252)		(2)
Total loans	$	296,984			257,036		39,948			16			$	255,324		1,712		1
Trading-related assets:
Trading account securities	$	112,213			110,386		1,827			2			$	109,803		583		1
Reverse repurchase agreements/securities borrowed	50,491			59,044		(8,553)			(14)			71,485			(12,441)		(17)
Derivative assets	27,421			25,315		2,106			8			21,986			3,329		15
Total trading-related assets	$	190,125			194,745		(4,620)			(2)			$	203,274		(8,529)		(4)
Total assets	557,396			523,344		34,052			7			521,514			1,830		—
Total deposits	161,720			189,176		(27,456)			(15)			234,332			(45,156)		(19)
Allocated capital	36,000			34,000		2,000			6			34,000			—		—
Selected Balance Sheet Data (period-end)
Loans:
Commercial and industrial	$	196,529			191,391		5,138			3			$	160,000		31,391		20
Commercial real estate	101,848			92,983		8,865			10			84,456			8,527		10
Total loans	$	298,377			284,374		14,003			5			$	244,456		39,918		16
Loans by Line of Business:
Banking	$	101,183			101,926		(743)			(1)			$	84,640		17,286		20
Commercial Real Estate	137,495			125,926		11,569			9			107,207			18,719		17
Markets	59,699			56,522		3,177			6			52,609			3,913		7
Total loans	$	298,377			284,374		14,003			5			$	244,456		39,918		16
Trading-related assets:
Trading account securities	$	111,801			108,697		3,104			3			$	109,311		(614)		(1)
Reverse repurchase agreements/securities borrowed	55,407			55,973		(566)			(1)			57,248			(1,275)		(2)
Derivative assets	22,218			21,398		820			4			25,916			(4,518)		(17)
Total trading-related assets	$	189,426			186,068		3,358			2			$	192,475		(6,407)		(3)
Total assets	550,177			546,549		3,628			1			508,518			38,031		7
Total deposits	157,217			168,609		(11,392)			(7)			203,004			(34,395)		(17)

Full year 2022 vs. full year 2021

Total assets (average and period-end) increased driven by higher loan balances reflecting broad-based loan demand driven by a modest increase in utilization rates due to increased client working capital needs.

Total deposits (average) decreased driven by customers continuing to allocate more cash into higher yielding liquid alternatives as well as actions taken in 2021 and early 2022 to manage under the asset cap.

Total deposits (period-end) decreased driven by customers continuing to allocate more cash into higher yielding liquid alternatives.

Column 1	Column 2
20	Wells Fargo & Company

Table 9g: Wealth and Investment Management


($ in millions, unless otherwise noted)	2022		2021		$ Change 2022/ 2021	% Change 2022/ 2021		2020		$ Change 2021/ 2020		% Change 2021/ 2020
Income Statement
Net interest income	$	3,927			2,570		1,357			53	%		$	2,988			(418)		(14)	%
Noninterest income:
Investment advisory and other asset-based fees	8,847			9,574		(727)			(8)			8,085			1,489			18
Commissions and brokerage services fees	1,931			2,010		(79)			(4)			2,078			(68)			(3)
Other	117			192		(75)			(39)			62			130			210
Total noninterest income	10,895			11,776		(881)			(7)			10,225			1,551			15
Total revenue	14,822			14,346		476			3			13,213			1,133			9
Net charge-offs	(7)			10		(17)			NM		(3)			13			433
Change in the allowance for credit losses	(18)			(105)		87			83			252			(357)			NM
Provision for credit losses	(25)			(95)		70			74			249			(344)			NM
Noninterest expense	11,613			11,734		(121)			(1)			10,912			822			8
Income before income tax expense	3,234			2,707		527			19			2,052			655			32
Income tax expense	812			680		132			19			514			166			32
Net income	$	2,422			2,027		395			19			$	1,538			489		32
Selected Metrics
Return on allocated capital	27.1	%		22.6						17.0	%
Efficiency ratio	78			82						83
Advisory assets ($ in billions)	$	797			964		(167)			(17)			$	853			111		13
Other brokerage assets and deposits ($ in billions)	1,064			1,219		(155)			(13)			1,152			67			6
Total client assets ($ in billions)	$	1,861			2,183		(322)			(15)			$	2,005			178		9
Annualized revenue per advisor ($ in thousands) (1)	1,219			1,114		105			9			939			175			19
Total financial and wealth advisors (#) (period-end)	12,027			12,367				(3)			13,513					(8)
Selected Balance Sheet Data (average)
Total loans	$	85,228			82,364		2,864			3			$	78,775			3,589		5
Total deposits	164,883			176,562		(11,679)			(7)			162,476			14,086			9
Allocated capital	8,750			8,750		—			—			8,750			—			—
Selected Balance Sheet Data (period-end)
Total loans	$	84,273			84,101		172			—			$	80,785			3,316		4
Total deposits	138,760			192,548		(53,788)			(28)			175,483			17,065			10

NM – Not meaningful

(1)Represents annualized segment total revenue divided by average total financial and wealth advisors for the period.

Full year 2022 vs. full year 2021

Revenue increased driven by:

•higher net interest income driven by higher interest rates, partially offset by lower deposit balances;

partially offset by:

•lower investment advisory and other asset-based fees due to lower average market valuations and net outflows of advisory assets; and

•lower commissions and brokerage services fees driven by lower transactional revenue.

Provision for credit losses reflected loan growth and a less favorable economic environment.

Noninterest expense decreased driven by:

•lower personnel expense driven by lower revenue-related compensation; and

•the impact of efficiency initiatives.

Total deposits (period-end) decreased as customers continued to allocate more cash into higher yielding liquid alternatives.

Column 1	Column 2	Column 3
	Wells Fargo & Company	21

Earnings Performance (continued)

For the years ended December 31, 2022, 2021 and 2020, the average fee rate by account type ranged from 50 to 120 basis points.

Table 9h: WIM Advisory Assets


(in billions)	Balance, beginning of period	Inflows (1)	Outflows (2)	Market impact (3)	Balance, end of period
December 31, 2022
Client-directed (4)	$	205.6		31.8		(39.0)		(33.2)		165.2
Financial advisor-directed (5)	255.5		41.6		(44.2)		(30.0)		222.9
Separate accounts (6)	203.3		24.6		(26.5)		(24.9)		176.5
Mutual fund advisory (7)	102.1		8.7		(15.0)		(17.2)		78.6
Total Wells Fargo Advisors	$	766.5		106.7		(124.7)		(105.3)		643.2
The Private Bank (8)	198.0		27.4		(47.1)		(24.7)		153.6
Total WIM advisory assets	$	964.5		134.1		(171.8)		(130.0)		796.8
December 31, 2021
Client-directed (4)	$	186.3		41.5		(45.0)		22.8		205.6
Financial advisor-directed (5)	211.0		48.7		(41.1)		36.9		255.5
Separate accounts (6)	174.6		31.8		(30.7)		27.6		203.3
Mutual fund advisory (7)	91.4		15.6		(15.0)		10.1		102.1
Total Wells Fargo Advisors	$	663.3		137.6		(131.8)		97.4		766.5
The Private Bank (8)	189.4		40.0		(51.1)		19.7		198.0
Total WIM advisory assets	$	852.7		177.6		(182.9)		117.1		964.5
December 31, 2020
Client directed (4)	$	169.4		36.4		(38.2)		18.7		186.3
Financial advisor directed (5)	176.3		40.6		(33.6)		27.7		211.0
Separate accounts (6)	160.1		24.6		(27.4)		17.3		174.6
Mutual fund advisory (7)	83.7		11.3		(13.9)		10.3		91.4
Total Wells Fargo Advisors	$	589.5		112.9		(113.1)		74.0		663.3
The Private Bank (8)	188.0		34.0		(45.8)		13.2		189.4
Total WIM advisory assets	$	777.5		146.9		(158.9)		87.2		852.7

(1)Inflows include new advisory account assets, contributions, dividends and interest.

(2)Outflows include closed advisory account assets, withdrawals and client management fees.

(3)Market impact reflects gains and losses on portfolio investments.

(4)Investment advice and other services are provided to client, but decisions are made by the client and the fees earned are based on a percentage of the advisory account assets, not the number and size of transactions executed by the client.

(5)Professionally managed portfolios with fees earned based on respective strategies and as a percentage of certain client assets.

(6)Professional advisory portfolios managed by third-party asset managers. Fees are earned based on a percentage of certain client assets.

(7)Program with portfolios constructed of load-waived, no-load and institutional share class mutual funds. Fees are earned based on a percentage of certain client assets.

(8)Discretionary and non-discretionary portfolios held in personal trusts, investment agency, or custody accounts with fees earned based on a percentage of client assets.

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22	Wells Fargo & Company

Corporate includes corporate treasury and enterprise functions, net of allocations (including funds transfer pricing, capital, liquidity and certain expenses), in support of the reportable operating segments as well as our investment portfolio and affiliated venture capital and private equity businesses. In addition, Corporate includes all restructuring charges related to our efficiency initiatives. See Note 20 (Revenue and Expenses) to Financial Statements in this Report for additional information on restructuring charges. Corporate also includes certain lines of business that management has determined are no longer

consistent with the long-term strategic goals of the Company as well as results for previously divested businesses. In fourth quarter 2021, we completed the sales of Wells Fargo Asset Management (WFAM) and our Corporate Trust Services business; however, we continue to provide certain services related to these businesses pursuant to transition services agreements. The transition services agreement related to the sale of our Institutional Retirement and Trust business terminated in June 2022. Table 9i and Table 9j provide additional information for Corporate.

Table 9i: Corporate – Income Statement


(in millions)	2022		2021		$ Change 2022/ 2021	% Change 2022/ 2021		2020		$ Change 2021/ 2020		% Change 2021/ 2020
Income Statement
Net interest income	$	(1,607)			(1,541)		(66)			(4)	%		$	441			(1,982)			NM
Noninterest income	609			10,036		(9,427)			(94)			4,916			5,120			104	%
Total revenue	(998)			8,495		(9,493)			NM		5,357			3,138			59
Net charge-offs	(33)			54		(87)			NM		166			(112)			(67)
Change in the allowance for credit losses	35			3		32			NM		(638)			641			100
Provision for credit losses	2			57		(55)			(96)			(472)			529			112
Noninterest expense	5,774			4,387		1,387			32			5,716			(1,329)			(23)
Income (loss) before income tax expense (benefit)	(6,774)			4,051		(10,825)			NM		113			3,938			NM
Income tax expense (benefit)	(1,885)			596		(2,481)			NM		(670)			1,266			189
Less: Net income (loss) from noncontrolling interests (1)	(312)			1,685		(1,997)			NM		281			1,404			500
Net income (loss)	$	(4,577)			1,770		(6,347)			NM		$	502			1,268			253

NM – Not meaningful

(1)Reflects results attributable to noncontrolling interests predominantly associated with the Company’s consolidated venture capital investments.

Full year 2022 vs. full year 2021

Revenue decreased driven by:

•lower net gains from equity securities due to lower unrealized and realized gains on nonmarketable equity securities from our affiliated venture capital and private equity businesses, and higher impairment driven by market conditions;

•lower investment advisory and other asset-based fees reflecting divestitures in 2021;

•lower gains on sales of corporate debt securities; and

•gains in 2021 on the sales of our Corporate Trust Services business, our student loan portfolio, and WFAM;

partially offset by:

•higher net gains from trading activities;

•lower valuation losses related to the retained litigation risk associated with shares of Visa Class B common stock that we sold; and

•higher lease income driven by a $268 million impairment in 2021 of certain rail cars in our rail car leasing business that are used for the transportation of coal products.

Provision for credit losses decreased due to lower net charge-offs driven by the sale of our student loan portfolio in 2021.

Noninterest expense increased due to:

•higher operating losses reflecting higher expenses primarily related to a variety of historical matters, including litigation and regulatory matters;

partially offset by:

•the impact of divestitures;

•a write-down of goodwill in 2021 related to the sale of our student loan portfolio;

•lower lease expense driven by lower depreciation expense from a reduction in the size of our rail car leasing business; and

•lower restructuring charges.

Corporate includes our rail car leasing business, which had long-lived operating lease assets, net of accumulated depreciation, of $4.7 billion and $5.1 billion as of December 31, 2022, and December 31, 2021, respectively. The average age of our rail cars is 22 years and the rail cars are typically leased to customers under short-term leases of 3 to 5 years. Our three largest concentrations, which represented 55% of our rail car fleet as of December 31, 2022, were rail cars used for the transportation of agricultural grain, coal, and cement/sand products. Impairment may result in the future based on changing economic and market conditions affecting the long-term demand and utility of specific types of rail cars. Our assumptions for impairment are sensitive to estimated utilization and rental rates as well as the estimated economic life of the leased asset. For additional information on the accounting for impairment of operating lease assets, see Note 1 (Summary of Significant Accounting Policies) and Note 8 (Leasing Activity) to Financial Statements in this Report.

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	Wells Fargo & Company	23

Earnings Performance (continued)

Table 9j: Corporate – Balance Sheet


(in millions)	2022		2021		$ Change 2022/ 2021	% Change 2022/ 2021		2020		$ Change 2021/ 2020		% Change 2021/ 2020
Selected Balance Sheet Data (average)
Cash, cash equivalents, and restricted cash	$	147,192			236,124		(88,932)			(38)	%		$	183,420		52,704		29	%
Available-for-sale debt securities	124,308			181,841		(57,533)			(32)			221,493			(39,652)		(18)
Held-to-maturity debt securities	290,087			244,735		45,352			19			172,755			71,980		42
Equity securities	15,695			12,720		2,975			23			12,445			275		2
Total loans	9,143			9,766		(623)			(6)			19,790			(10,024)		(51)
Total assets	638,017			743,089		(105,072)			(14)			675,250			67,839		10
Total deposits	28,457			40,066		(11,609)			(29)			78,172			(38,106)		(49)
Selected Balance Sheet Data (period-end)
Cash, cash equivalents, and restricted cash	$	127,106			209,696		(82,590)			(39)			$	235,262		(25,566)		(11)
Available-for-sale debt securities	102,669			165,926		(63,257)			(38)			208,694			(42,768)		(20)
Held-to-maturity debt securities	294,141			269,285		24,856			9			204,858			64,427		31
Equity securities	15,508			16,549		(1,041)			(6)			10,305			6,244		61
Total loans	9,163			9,997		(834)			(8)			10,623			(626)		(6)
Total assets	601,214			721,335		(120,121)			(17)			728,667			(7,332)		(1)
Total deposits	54,371			32,220		22,151			69			53,037			(20,817)		(39)

Full year 2022 vs. full year 2021

Total assets (average and period-end) decreased reflecting:

•a decrease in cash, cash equivalents, and restricted cash managed by corporate treasury as a result of payments on long-term debt and an increase in loans originated in the operating segments; and

•lower available-for-sale debt securities due to sales and net unrealized losses as well as a transfer from available-for-sale debt securities to held-to-maturity debt securities related to portfolio rebalancing to manage liquidity and interest rate risk.

Total deposits (average) decreased driven by the transition of deposits related to divested businesses.

Total deposits (period-end) increased driven by issuances of certificates of deposit (CDs), partially offset by the transition of deposits related to divested businesses.

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24	Wells Fargo & Company

Balance Sheet Analysis

At December 31, 2022, our assets totaled $1.88 trillion, down $67.1 billion from December 31, 2021.

Available-for-Sale and Held-to-Maturity Debt Securities

Table 10: Available-for-Sale and Held-to-Maturity Debt Securities

	December 31, 2022		December 31, 2021
($ in millions)	Amortized cost, net (1)		Net unrealized gains (losses)		Fair value	Weighted average expected maturity (yrs)		Amortized cost, net (1)		Net unrealized gains (losses)	Fair value		Weighted average expected maturity (yrs)
Available-for-sale (2)	$	121,725			(8,131)		113,594			5.4		$	175,463			1,781			177,244			5.2
Held-to-maturity (3)	297,059			(41,538)		255,521			8.1		272,022			364			272,386			6.3
Total	$	418,784			(49,669)		369,115			n/a	$	447,485			2,145			449,630			n/a

(1)Represents amortized cost of the securities, net of the allowance for credit losses of $6 million and $8 million related to available-for-sale debt securities and $85 million and $96 million related to held-to-maturity debt securities at December 31, 2022 and 2021, respectively.

(2)Available-for-sale debt securities are carried on our consolidated balance sheet at fair value.

(3)Held-to-maturity debt securities are carried on our consolidated balance sheet at amortized cost, net of the allowance for credit losses.

The AFS debt securities portfolio predominantly consists of liquid, high-quality U.S. Treasury and federal agency debt, and agency MBS. The portfolio also includes securities issued by U.S. states and political subdivisions and highly rated collateralized loan obligations (CLOs).

The HTM debt securities portfolio predominantly consists of liquid, high-quality U.S. Treasury and federal agency debt, and agency MBS. The portfolio also includes securities issued by U.S. states and political subdivisions and highly rated CLOs. Debt securities are classified as HTM at the time of purchase or when transferred from the AFS debt securities portfolio. Our intent is to hold these securities to maturity and collect the contractual cash flows. In January 2023, we changed our intent with respect to HTM debt securities with an amortized cost of $23.9 billion and reclassified them to AFS in connection with the adoption of a new accounting standard. For additional information, see the “Current Accounting Developments” section in this Report.

The amortized cost, net of the allowance for credit losses, of AFS and HTM debt securities decreased from December 31, 2021. Purchases of AFS and HTM debt securities were more than offset by portfolio runoff and AFS debt security sales. In addition, we transferred AFS debt securities with a fair value of $50.1 billion to HTM debt securities in 2022 due to actions taken to reposition the overall portfolio for capital management purposes. Debt securities transferred from AFS to HTM in 2022 had $4.5 billion of pre-tax unrealized losses at the time of the transfers.

The total net unrealized losses on AFS and HTM debt securities at December 31, 2022, were driven by higher interest rates and wider credit spreads.

At December 31, 2022, 99% of the combined AFS and HTM debt securities portfolio was rated AA- or above. Ratings are based on external ratings where available and, where not available, based on internal credit grades. See Note 3 (Available-for-Sale and Held-to-Maturity Debt Securities) to Financial Statements in this Report for additional information on AFS and HTM debt securities, including a summary of debt securities by security type.

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	Wells Fargo & Company	25

Balance Sheet Analysis (continued)

Loan Portfolios

Table 11 provides a summary of total outstanding loans by portfolio segment. Commercial loans increased from December 31, 2021, predominantly due to an increase in the commercial and industrial loan portfolio, driven by higher loan demand resulting in increased originations and loan draws, partially offset by paydowns. Consumer loans increased from

December 31, 2021, primarily driven by an increase in the residential mortgage portfolio due to loan originations, partially offset by loan paydowns and the transfer of first lien mortgage loans to loans held for sale (LHFS), which predominantly related to loans purchased from GNMA loan securitization pools in prior periods.

Table 11: Loan Portfolios

($ in millions)	December 31, 2022			$ Change	% Change
Commercial	$	557,516		513,120		44,396		9	%
Consumer	398,355		382,274		16,081		4
Total loans	$	955,871		895,394		60,477		7

and Related Allowance for Credit Losses) to Financial Statements in this Report.

Table 12: Loan Maturities

	December 31, 2022
	Loan maturities		Loans maturing after one year
(in millions)	Within one year		After one year through five years		After five years through fifteen years	After fifteen years		Total		Fixed interest rates	Floating/variable interest rates
Commercial and industrial	$	134,858			229,197		21,255			1,496		386,806		21,507		230,441
Commercial real estate	43,307			88,576		22,431			1,488		155,802		19,679		92,816
Lease financing	3,283			10,159		1,400			66		14,908		11,625		—
Total commercial	181,448			327,932		45,086			3,050		557,516		52,811		323,257
Residential mortgage	10,666			30,464		87,675			140,312		269,117		179,246		79,205
Credit card	46,293			—		—			—		46,293		—		—
Auto	12,672			38,812		2,185			—		53,669		40,997		—
Other consumer	24,995			3,775		483			23		29,276		3,851		430
Total consumer	94,626			73,051		90,343			140,335		398,355		224,094		79,635
Total loans	$	276,074			400,983		135,429			143,385		955,871		276,905		402,892

Deposits

Deposits decreased from December 31, 2021, reflecting:

•customers continuing to allocate more cash into higher yielding liquid alternatives;

•increased consumer spending; and

•the transition of deposits related to divested businesses;

partially offset by:

•higher time deposits driven by issuances of certificates of deposit (CDs).

Table 13 provides additional information regarding deposit balances. Information regarding the impact of deposits on net interest income and a comparison of average deposit balances is provided in the “Earnings Performance – Net Interest Income” section and Table 3 earlier in this Report. In response to rising interest rates in 2022, our average deposit cost in fourth quarter 2022 increased to 0.46%, compared with 0.02% in fourth quarter 2021.

Table 13: Deposits

($ in millions)	Dec 31, 2022			Dec 31, 2021		% of total deposits		$ Change
Noninterest-bearing demand deposits	$	458,010		33	%		$	527,748		36	%	$	(69,738)	(13)	%
Interest-bearing demand deposits	428,877		31			465,887			31		(37,010)		(8)
Savings deposits	410,139		30			439,600			30		(29,461)		(7)
Time deposits	66,197		5			29,461			2		36,736		125
Interest-bearing deposits in non-U.S. offices	20,762		1			19,783			1		979		5
Total deposits	$	1,383,985		100	%		$	1,482,479		100	%	$	(98,494)	(7)

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26	Wells Fargo & Company

As of December 31, 2022 and 2021, total deposits that exceed Federal Deposit Insurance Corporation (FDIC) insurance limits, or are otherwise uninsured, were estimated to be $510 billion and $590 billion, respectively. Estimated uninsured domestic deposits reflect amounts disclosed in the U.S. regulatory reports of our subsidiary banks, with adjustments for

amounts related to consolidated subsidiaries. All non-U.S. deposits are treated for these purposes as uninsured.

Table 14 presents the contractual maturities of estimated time deposits that exceed FDIC insurance limits, or are otherwise uninsured. All non-U.S. time deposits are uninsured.

Table 14: Uninsured Time Deposits by Maturity

(in millions)	Three months or less			After six months through twelve months	After twelve months
December 31, 2022
Domestic time deposits	$	4,514		826		857		906		7,103
Non-U.S. time deposits	499		176		—		15		690
Total	$	5,013		1,002		857		921		7,793

Off-Balance Sheet Arrangements

In the ordinary course of business, we engage in financial transactions that are not recorded on our consolidated balance sheet, or may be recorded on our consolidated balance sheet in amounts that are different from the full contract or notional amount of the transaction. Our off-balance sheet arrangements include unfunded credit commitments, transactions with unconsolidated entities, guarantees, commitments to purchase debt and equity securities, derivatives, and other commitments. These transactions are designed to (1) meet the financial needs of customers, (2) manage our credit, market or liquidity risks, and/or (3) diversify our funding sources.

Unfunded Credit Commitments

Unfunded credit commitments are legally binding agreements to lend to customers with terms covering usage of funds, contractual interest rates, expiration dates, and any required collateral. The maximum credit risk for these commitments will generally be lower than the contractual amount because these commitments may expire without being used or may be cancelled at the customer’s request. Our credit risk monitoring activities include managing the amount of commitments, both to individual customers and in total, and the size and maturity structure of these commitments. For additional information, see Note 5 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.

Transactions with Unconsolidated Entities

In the normal course of business, we enter into various types of on- and off-balance sheet transactions with special purpose entities (SPEs), which are corporations, trusts, limited liability companies or partnerships that are established for a limited purpose. Generally, SPEs are formed in connection with securitization transactions and are considered variable interest entities (VIEs). For additional information, see Note 16 (Securitizations and Variable Interest Entities) to Financial Statements in this Report.

Guarantees and Other Arrangements

Guarantees are contracts that contingently require us to make payments to a guaranteed party based on an event or a change in an underlying asset, liability, rate or index. Guarantees are generally in the form of standby and direct pay letters of credit, written options, recourse obligations, exchange and clearing house guarantees, indemnifications, and other types of similar arrangements. For additional information, see Note 17 (Guarantees and Other Commitments) to Financial Statements in this Report.

Commitments to Purchase Debt and Equity Securities

Derivatives

We use derivatives to manage exposure to market risk, including interest rate risk, credit risk and foreign currency risk, and to assist customers with their risk management objectives. Derivatives are recorded on our consolidated balance sheet at fair value, and volume can be measured in terms of the notional amount, which is generally not exchanged, but is used only as the basis on which interest and other payments are determined. The notional amount is not recorded on our consolidated balance sheet and is not, when viewed in isolation, a meaningful measure of the risk profile of the instruments. For additional information, see Note 14 (Derivatives) to Financial Statements in this Report.

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	Wells Fargo & Company	27

Risk Management

Risk is Part of our Business Model. Risk is the possibility of an event occurring that could adversely affect the Company’s ability to achieve its strategic or business objectives. The Company routinely takes risks to achieve its business goals and to serve its customers. These risks include financial risks, such as interest rate, credit, liquidity, and market risks, and non-financial risks, such as operational risk, which includes compliance and model risks, and strategic and reputation risks.

Risk Appetite. Risk appetite is the amount of risk, within its risk capacity, the Company is comfortable taking given its current level of resources. Risk appetite is articulated in our Statement of Risk Appetite, which establishes acceptable risks and at what level and includes risk appetite principles. The Company’s Statement of Risk Appetite is defined by senior management, approved at least annually by the Board, and helps guide the Company’s business and risk leaders. The Company continuously monitors its risk appetite, and the Board reviews reports which include risk appetite information and analysis.

Risk and Strategy. The Chief Executive Officer (CEO) drives the Company’s strategic planning process, which identifies the Company’s most significant opportunities and challenges, develops options to address them, and evaluates the risks and trade-offs of each. The Company’s risk profile, risk capacity, risk appetite, and risk management effectiveness are considered in the strategic planning process, which is linked with the Company’s capital planning process. The Company’s Independent Risk Management (IRM) organization participates in strategic planning, providing challenge to and independent assessment of the risks associated with strategic initiatives. IRM also independently assesses and challenges the impact of the strategic plan on risk capacity, risk appetite, and risk management effectiveness at the principal lines of business, enterprise functions, and aggregate Company level. After review, the strategic plan is presented to the Board each year with IRM’s evaluation.

Risk and Climate Change. The Company is committed to helping mitigate the impacts of climate change related to its activities and to partner with key stakeholders, including communities and customers, to do the same. The Company expects that climate change will increasingly impact the risk types it manages, and the Company will continue to integrate climate considerations into its risk management framework as its understanding of climate change and risks driven by it evolve.

Risk is Managed by Everyone. Every employee, in the course of their daily activities, creates risk and is responsible for managing risk. Every employee has a role to play in risk management, including establishing and maintaining the Company’s control environment. Every employee must comply with applicable laws, regulations, and Company policies.

or reputation. Because risk management is everyone’s responsibility, all employees are empowered to and expected to challenge risk decisions when appropriate and to escalate their concerns when they have not been addressed. The Company’s performance management and incentive compensation programs are designed to establish a balanced framework for risk and reward under core principles that employees are expected to know and practice. The Board, through its Human Resources Committee, plays an important role in overseeing and providing credible challenge to the Company’s performance management and incentive compensation programs. Effective risk management is a central component of employee performance evaluations.

Risk Governance

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28	Wells Fargo & Company

Each management governance committee, in accordance with its charter, is expected to discuss, document, and make decisions regarding high priority and significant risks, emerging

Table 15 presents, as of December 31, 2022, the structure of the Company’s Board committees and escalation paths of relevant management governance committees reporting to a Board committee.

Table 15: Board and Relevant Management-level Governance Committee Structure


Audit Committee (1)	Finance Committee		Corporate Responsibility Committee		RiskCommittee			Governance & Nominating Committee		Human Resources Committee
							Management Governance Committees
Disclosure Committee		Capital Management Committee				Allowance for Credit Losses Approval Governance Committee			Enterprise Risk & Control Committee			Incentive Compensation & Performance Management Committee
Regulatory Reporting Oversight Committee		Corporate Asset/Liability Committee									Risk & Control Committees
				Recovery & Resolution Committee									Risk Type Committees
														Risk Topic Committees

The ERCC is co-chaired by the CEO and CRO, and its membership is comprised of principal line of business and certain enterprise function heads. The Chief Auditor or a designee attends all meetings of the ERCC. The ERCC has a direct escalation path to the Risk Committee. The ERCC also has an escalation path for certain human capital risks and issues to the Human Resources Committee. In addition, the CRO may escalate anything directly to the Board. Risks and issues are escalated to the ERCC in accordance with the Company’s escalation management policy.

Risk Operating Model – Roles and Responsibilities

The Company has three lines of defense for managing risk: the Front Line, Independent Risk Management, and Internal Audit.

•Independent Risk Management IRM is the second line of defense. It establishes and maintains the Company’s risk management program and provides oversight, including

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	Wells Fargo & Company	29

Risk Management (continued)

challenge to and independent assessment of, the Front Line’s execution of its risk management responsibilities.

Risk Type Classifications

Operational Risk Management

The Board’s Risk Committee has primary oversight responsibility for all aspects of operational risk, including significant supporting programs and/or policies regarding the Company’s business resiliency and disaster recovery, change management, data management, information security, technology, and third-party risk management. As part of its oversight responsibilities, the Board’s Risk Committee reviews and approves significant operational risk policies and oversees the Company’s operational risk management program.

Wells Fargo and other financial institutions, as well as our third-party service providers, continue to be the target of various evolving and adaptive information security threats, including cyber attacks, malware, ransomware, other malicious software intended to exploit hardware or software vulnerabilities, phishing, credential validation, and distributed denial-of-service, in an effort to disrupt the operations of financial institutions, test their cybersecurity capabilities, commit fraud, or obtain confidential, proprietary or other information. Cyber attacks have also focused on targeting online applications and services, such as online banking, as well as cloud-based and other products and services provided by third parties, and have targeted the infrastructure of the internet causing the widespread unavailability of websites and degrading website performance. As a result, information security and the continued development and enhancement of our controls, processes and systems designed to protect our networks, computers, software and data

from attack, damage or unauthorized access remain a priority for Wells Fargo. Wells Fargo is also proactively involved in industry cybersecurity efforts and working with other parties, including our third-party service providers and governmental agencies, to continue to enhance defenses and improve resiliency to information security threats. See the “Risk Factors” section in this Report for additional information regarding the risks associated with a failure or breach of our operational or security systems or infrastructure, including as a result of cyber attacks.

Compliance Risk Management

human capital management (including talent management and succession planning), performance management program, and incentive compensation risk management program.

Model Risk Management

Model risk (a type of operational risk) is the risk arising from the potential for adverse consequences of decisions made based on model output that may be incorrect or used inappropriately.

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30	Wells Fargo & Company

Strategic Risk Management

Reputation Risk Management

Credit Risk Management

We define credit risk as the risk of loss associated with a borrower or counterparty default (failure to meet obligations in accordance with agreed upon terms). Credit risk exists with many of the Company’s assets and exposures such as debt security holdings, certain derivatives, and loans.

The Board’s Risk Committee has primary oversight responsibility for credit risk. A Credit Subcommittee of the Risk Committee assists the Risk Committee in providing oversight of credit risk. At the management level, Corporate Credit Risk, which is part of Independent Risk Management, has oversight responsibility for credit risk. Corporate Credit Risk reports to the CRO and supports periodic reports related to credit risk provided to the Board’s Risk Committee or its Credit Subcommittee.

Table 16: Total Loans Outstanding by Portfolio Segment and Class of Financing Receivable

(in millions)	Dec 31, 2022
Commercial and industrial	$	386,806		350,436
Commercial real estate	155,802		147,825
Lease financing	14,908		14,859
Total commercial	557,516		513,120
Residential mortgage	269,117		258,888
Credit card	46,293		38,453
Auto	53,669		56,659
Other consumer	29,276		28,274
Total consumer	398,355		382,274
Total loans	$	955,871		895,394

•Loan concentrations and related credit quality;

•Counterparty credit risk;

•Economic and market conditions;

•Legislative or regulatory mandates;

•Changes in interest rates;

•Merger and acquisition activities; and

•Reputation risk.

In addition, the Company will continue to integrate climate considerations into its credit risk management activities.

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	Wells Fargo & Company	31

Risk Management – Credit Risk Management (continued)

Credit Quality Overview Table 17 provides credit quality trends.

Table 17: Credit Quality Overview

(in millions)	Dec 31, 2022
Nonaccrual loans
Commercial loans	$	1,823		2,376
Consumer loans	3,803		4,836
Total nonaccrual loans	$	5,626		7,212
Nonaccrual loans as a % of total loans	0.59	%	0.81
Net loan charge-offs as a % of:
Average commercial loans	0.01	%	0.06
Average consumer loans	0.39		0.33
Allowance for credit losses (ACL) for loans	$	13,609		13,788
ACL for loans as a % of total loans	1.42	%	1.54

Additional information on our loan portfolios and our credit quality trends follows.

Significant Loan Portfolio Reviews Measuring and monitoring our credit risk is an ongoing process that tracks delinquencies, collateral values, Fair Isaac Corporation (FICO) scores, economic trends by geographic areas, loan-level risk grading for certain portfolios (typically commercial) and other indications of credit risk. Our credit risk monitoring process is designed to enable early identification of developing risk and to support our determination of an appropriate allowance for credit losses. The following discussion provides additional characteristics and analysis of our significant portfolios. See Note 5 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report for more analysis and credit metric information for each of the following portfolios.

COMMERCIAL AND INDUSTRIAL LOANS AND LEASE FINANCING

We had $12.6 billion of the commercial and industrial loans and lease financing portfolio internally classified as criticized in accordance with regulatory guidance at December 31, 2022, compared with $13.0 billion at December 31, 2021. The decline was driven by decreases in the technology, telecom and media, real estate and construction, and oil, gas and pipelines industries, as these industries continued to recover from the economic impacts of the COVID-19 pandemic, partially offset by an increase in the materials and commodities, and equipment, machinery and parts manufacturing industries.

The portfolio increased at December 31, 2022, compared with December 31, 2021, driven by higher loan demand resulting in increased originations and loan draws, partially offset by paydowns. Table 18 provides our commercial and industrial loans and lease financing by industry. The industry categories are based on the North American Industry Classification System.

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32	Wells Fargo & Company

Table 18: Commercial and Industrial Loans and Lease Financing by Industry

	December 31, 2022		December 31, 2021
($ in millions)	Nonaccrual loans		Loans outstanding balance		% of total loans	Total commitments (1)		Nonaccrual loans	Loans outstanding balance		% of total loans	Total commitments (1)
Financials except banks	$	44			147,171		15	%	$	247,936		104	142,283		16	%	$	236,133
Technology, telecom and media	31			27,767		3		78,230		64		23,345	3		62,984
Real estate and construction	73			24,478		3		57,138		78		25,035	3		55,304
Equipment, machinery and parts manufacturing	83			23,675		2		54,807		24		18,130	2		43,729
Retail	47			19,487		2		54,260		27		17,645	2		41,344
Materials and commodities	86			16,610		2		41,707		32		14,684	2		36,660
Oil, gas and pipelines	55			9,991		1		39,329		197		8,828	*	28,978
Food and beverage manufacturing	17			17,393		2		35,094		7		13,242	1	30,882
Health care and pharmaceuticals	21			14,861		2		30,463		24		12,847	1	28,808
Auto related	10			13,168		1		28,545		31		10,629	1	25,735
Commercial services	50			11,418		1		27,989		78		10,492	1	24,617
Utilities	18			9,457		*		26,918		77		6,982	*	22,406
Entertainment and recreation	28			13,085		1		24,535		23		9,907	1	17,893
Diversified or miscellaneous	2			8,161		*		22,432		3		7,493	*	18,317
Banks	—			14,403		2		16,733		—		16,178	2	16,612
Transportation services	237			8,389		*		16,342		288		8,162	*	14,710
Insurance and fiduciaries	1			4,691		*		15,741		1		3,387	*	13,993
Agribusiness	24			6,180		*		14,063		35		6,086	*	11,576
Government and education	25			6,482		*		12,590		5		5,863	*	11,193
Other (2)	13			4,847		*		14,325		30		4,077	*	11,583
Total	$	865			401,714		42	%	$	859,177		1,128	365,295		41	%	$	753,457

*Less than 1%.

(1)Total commitments consist of loans outstanding plus unfunded credit commitments, excluding issued letters of credit. For additional information on issued letters of credit, see Note 17 (Guarantees and Other Commitments) to Financial Statements in this Report.

(2)No other single industry had total loans in excess of $3.4 billion and $3.1 billion at December 31, 2022 and 2021, respectively.

Table 18a: Financials Except Banks Industry Category

	December 31, 2022		December 31, 2021
($ in millions)	Nonaccrual loans		Loans outstanding balance		% of total loans	Total commitments (1)		Nonaccrual loans		Loans outstanding balance		% of total loans	Total commitments (1)
Asset managers and funds (2)	$	1			52,254		5	%		$	100,537		1		60,518		7	%	$	101,035
Commercial finance (3)	31			53,269		5			76,334			82		46,043		5		69,923
Real estate finance (4)	8			24,620		3			41,589			9		23,231		3		37,997
Consumer finance (5)	4			17,028		2			29,476			12		12,491		1		27,178
Total	$	44			147,171		15	%		$	247,936		104		142,283		16	%	$	236,133

(1)Total commitments consist of loans outstanding plus unfunded credit commitments, excluding issued letters of credit. For additional information on issued letters of credit, see Note 17 (Guarantees and Other Commitments) to Financial Statements in this Report.

(2)Includes loans for subscription or capital calls and loans to prime brokerage customers and securities firms.

(3)Includes asset-based lending and leasing, including loans to special purpose entities, loans to commercial leasing entities, structured lending facilities to commercial loan managers, and also includes collateralized loan obligations (CLOs) in loan form, all of which were rated AA or above, of $7.8 billion and $8.1 billion at December 31, 2022 and 2021, respectively.

(4)Includes originators or servicers of financial assets collateralized by commercial or residential real estate loans.

(5)Includes originators or servicers of financial assets collateralized by consumer loans such as auto loans and leases, and credit cards.

Our commercial and industrial loans and lease financing portfolio also included non-U.S. loans of $79.7 billion and $78.0 billion at December 31, 2022 and 2021, respectively. Significant industry concentrations of non-U.S. loans at December 31, 2022 and 2021, respectively, included:

•$45.7 billion and $46.7 billion in the financials except banks industry;

•$14.1 billion and $15.9 billion in the banks industry; and

•$1.2 billion and $1.7 billion in the oil, gas and pipelines industry.

Risk mitigation actions, including the restructuring of repayment terms, securing collateral or guarantees, and entering into extensions, are based on a re-underwriting of the loan and our assessment of the borrower’s ability to perform under the agreed-upon terms. Extension terms generally range from six to thirty-six months and may require that the borrower provide additional economic support in the form of partial repayment, or additional collateral or guarantees. In cases where the value of collateral or financial condition of the borrower is insufficient to

Column 1	Column 2	Column 3
	Wells Fargo & Company	33

Risk Management – Credit Risk Management (continued)

repay our loan, we may rely upon the support of an outside repayment guarantee in providing the extension.

Our ability to seek performance under a guarantee is directly related to the guarantor’s creditworthiness, capacity and willingness to perform, which is evaluated on an annual basis, or more frequently as warranted. Our evaluation is based on the most current financial information available and is focused on various key financial metrics, including net worth, leverage, and current and future liquidity. We consider the guarantor’s reputation, creditworthiness, and willingness to work with us based on our analysis as well as other lenders’ experience with the guarantor. Our assessment of the guarantor’s credit strength is reflected in our loan risk ratings for such loans. The loan risk rating and accruing status are important factors in our allowance for credit losses methodology.

In considering the accrual status of the loan, we evaluate

the collateral and future cash flows as well as the anticipated support of any repayment guarantor. In many cases, the

COMMERCIAL REAL ESTATE (CRE) Our CRE loan portfolio is comprised of CRE mortgage and CRE construction loans. We generally subject CRE loans to individual risk assessment using our internal borrower and collateral quality ratings. We had $11.3 billion of CRE mortgage loans classified as criticized at December 31, 2022, compared with $13.1 billion at December 31, 2021, and $1.1 billion of CRE construction loans classified as criticized at December 31, 2022, compared with $1.7 billion at December 31, 2021. The decrease in criticized CRE loans was driven by the hotel/motel and shopping center property types, as these property types continued to recover from the economic impacts of the COVID-19 pandemic, partially offset by an increase in the office buildings and apartment property types. Criticized CRE loans at December 31, 2022, increased compared with September 30, 2022, primarily due to an increase in the office buildings property type. The credit quality of the office buildings property type could continue to be adversely affected if weakened demand for office space continues to drive higher vacancy rates and deteriorating operating performance. At December 31, 2022, nearly one-third of the CRE loans in the office buildings property type had recourse to a guarantor, typically through a repayment guarantee, in addition to the related collateral.

The total CRE loan portfolio increased $8.0 billion from December 31, 2021, predominantly driven by an increase in loans for apartments and industrial/warehouse property types, partially offset by a decrease in loans for the shopping center property type. The CRE loan portfolio included $7.6 billion of non-U.S. CRE loans at December 31, 2022, down from $8.7 billion at December 31, 2021. The portfolio is diversified both geographically and by property type. The largest geographic concentrations of CRE loans are in California, New York, Texas, and Florida, which represented a combined 49% of the total CRE portfolio. The largest property type concentrations are apartments at 26% and office buildings at 23% of the portfolio. The unfunded credit commitments were $8.8 billion and $11.5 billion at December 31, 2022 and 2021, respectively, for CRE mortgage loans and $20.7 billion and $20.0 billion, respectively, for CRE construction loans.

Column 1	Column 2
34	Wells Fargo & Company

Table 19 provides our CRE loans by state and property type.

Table 19: CRE Loans by State and Property Type

												Dec 31, 2021
		Real estate mortgage		Real estate construction		Total commercial real estate		Total commercial real estate
($ in millions)	Nonaccrual loans	Loans outstanding balance		Nonaccrual loans	Loans outstanding balance		Nonaccrual loans	Loans outstanding balance	Loans as % of total loans	Total commitments (1)	Loans outstanding balance	Total commitments (1)
By state:
California		$	121		29,531			1		4,754		122		34,285		4%	$	39,594		34,668		40,241
New York		106		15,009			—		2,285		106		17,294		2	19,360			15,636	17,967
Texas		23		11,564			—		1,243		23		12,807		1	14,941			10,605	12,263
Florida		10		9,833			—		1,585		10		11,418		1	14,690			10,435	13,219
Washington		80		4,253			—		1,350		80		5,603		*	6,868			5,301	7,013
Georgia		69		4,661			—		767		69		5,428		*	6,651			4,662	5,857
North Carolina		4		4,345			—		882		4		5,227		*	6,650			4,755	6,160
Arizona		14		4,761			—		541		14		5,302		*	6,288			5,046	5,975
New Jersey		7		2,738			—		1,381		7		4,119		*	5,660			3,625	4,793
Illinois		11		3,988			—		603		11		4,591		*	5,394			4,042	4,560
Other (2)		511		41,546			1		8,182		512		49,728		5	59,224			49,050	61,235
Total		$	956		132,229			2		23,573		958		155,802		16%	$	185,320		147,825	179,283
By property:
Apartments		$	8		31,205			—		8,538		8		39,743		4%	$	51,567		31,901		42,119
Office buildings		186		32,478			—		3,666		186		36,144		4	40,827			36,736	42,781
Industrial/warehouse		42		17,244			—		3,390		42		20,634		2	24,546			17,714	20,967
Hotel/motel		153		11,212			—		1,539		153		12,751		1	13,758			12,764	13,179
Retail (excl shopping center)		197		11,621			2		132		199		11,753		1	12,486			12,450	13,014
Shopping center		259		9,014			—		520		259		9,534		*	10,131			10,448	11,082
Institutional		33		5,201			—		2,524		33		7,725		*	9,178			7,743	9,588
Mixed use properties		54		4,906			—		981		54		5,887		*	7,139			6,303	10,718
Collateral pool		—		3,031			—		31		—		3,062		*	3,662			3,509	4,106
Storage facility		—		2,772			—		157		—		2,929		*	3,201			2,257	2,742
Other		24		3,545			—		2,095		24		5,640		*	8,825			6,000	8,987
Total		$	956		132,229			2		23,573		958		155,802		16	%	$	185,320		147,825		179,283

* Less than 1%.

(1)Total commitments consist of loans outstanding plus unfunded credit commitments, excluding issued letters of credit. For additional information on issued letters of credit, see

Note 17 (Guarantees and Other Commitments) to Financial Statements in this Report.

(2)Includes 40 states; no state in Other had loans in excess of $4.1 billion and $3.7 billion at December 31, 2022 and 2021, respectively.

NON-U.S. LOANS Our classification of non-U.S. loans is based on whether the borrower’s primary address is outside of the United States. At December 31, 2022, non-U.S. loans totaled $87.5 billion, representing approximately 9% of our total consolidated loans outstanding, compared with $86.9 billion, or approximately 10% of our total consolidated loans outstanding, at December 31, 2021. Non-U.S. loans were approximately 5% and 4% of our total consolidated assets at December 31, 2022 and 2021, respectively.

which gives consideration for allowable transfers of risk, such as guarantees and collateral, and may be different from the reporting based on the borrower’s primary address.

Our largest single country exposure outside the U.S. at December 31, 2022, was the United Kingdom, which totaled $33.2 billion, or approximately 2% of our total assets, and included $5.5 billion of sovereign claims. Our United Kingdom sovereign claims arise from deposits we have placed with the Bank of England pursuant to regulatory requirements in support of our London branch.

•Lending and deposits exposure includes outstanding loans, unfunded credit commitments, and deposits with non-U.S. banks. These balances are presented prior to the deduction of allowance for credit losses or collateral received under the terms of the credit agreements, if any.

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	Wells Fargo & Company	35

Risk Management – Credit Risk Management (continued)

•Securities exposure represents debt and equity securities of non-U.S. issuers. Long and short positions are netted, and net short positions are reflected as negative exposure.

•Derivatives and other exposure represents foreign exchange contracts, derivative contracts, securities resale agreements, and securities lending agreements.

Table 20: Select Country Exposures

	December 31, 2022
	Lending and deposits		Securities		Derivatives and other	Total exposure
($ in millions)	Sovereign		Non-sovereign		Sovereign	Non-sovereign		Sovereign		Non-sovereign	Sovereign		Non- sovereign (1)		Total
Top 20 country exposures:
United Kingdom	$	5,513			24,291		—			1,102		2			2,299		5,515		27,692		33,207
Canada	1			18,051		1			582		69			294		71		18,927		18,998
Cayman Islands	—			8,464		—			—		—			179		—		8,643		8,643
Luxembourg	—			6,719		—			32		—			177		—		6,928		6,928
Japan	5,658			700		—			365		—			46		5,658		1,111		6,769
Ireland	6			4,888		—			223		—			107		6		5,218		5,224
France	57			4,138		—			108		175			72		232		4,318		4,550
Germany	—			3,910		—			29		—			202		—		4,141		4,141
Bermuda	—			3,600		—			35		—			30		—		3,665		3,665
Guernsey	—			3,375		—			—		—			12		—		3,387		3,387
South Korea	—			2,983		(1)			381		1			15		—		3,379		3,379
China	17			2,966		1			259		17			35		35		3,260		3,295
Netherlands	—			3,165		—			(6)		—			124		—		3,283		3,283
Chile	—			1,939		—			212		—			—		—		2,151		2,151
Australia	—			1,969		—			5		—			30		—		2,004		2,004
Brazil	—			1,499		—			1		9			—		9		1,500		1,509
United Arab Emirates	—			1,477		—			11		—			—		—		1,488		1,488
Switzerland	—			1,202		—			(4)		—			170		—		1,368		1,368
India	250			1,072		(64)			(5)		—			1		186		1,068		1,254
Belgium	—			1,103		—			1		—			4		—		1,108		1,108
Total top 20 country exposures	$	11,502			97,511		(63)			3,331		273			3,797		11,712		104,639		116,351

(1)Total non-sovereign exposure comprised $51.2 billion exposure to financial institutions and $53.4 billion to non-financial corporations at December 31, 2022.

RESIDENTIAL MORTGAGE LOANS Our residential mortgage loan portfolio is comprised of 1–4 family first and junior lien mortgage loans. Residential mortgage – first lien loans comprised 95% of the total residential mortgage loan portfolio at December 31, 2022, compared with 94% at December 31, 2021.

The residential mortgage loan portfolio includes loans with adjustable-rate features. We monitor the risk of default as a result of interest rate increases on adjustable-rate mortgage (ARM) loans, which may be mitigated by product features that limit the amount of the increase in the contractual interest rate. The default risk of these loans is considered in our ACL for loans. ARM loans were 7% of total loans at both December 31, 2022 and 2021, with an initial reset date in 2025 or later for the majority of this portfolio at December 31, 2022. We do not offer option ARM products, nor do we offer variable-rate mortgage products with fixed payment amounts, commonly referred to within the financial services industry as negative amortizing mortgage loans.

The residential mortgage – junior lien portfolio consists of residential mortgage lines of credit and loans that are subordinate in rights to an existing lien on the same property. These lines and loans may have draw periods, interest-only payments, balloon payments, adjustable rates and similar features. Junior lien loan products are primarily amortizing payment loans with fixed interest rates and repayment periods between five to 30 years. We continuously monitor the credit performance of our residential mortgage – junior lien portfolio for trends and factors that influence the frequency and severity of losses, such as junior lien performance when the first lien loan is delinquent.

The outstanding balance of residential mortgage lines of credit was $18.3 billion at December 31, 2022. The unfunded credit commitments for these lines of credit totaled $35.5 billion at December 31, 2022. Our residential mortgage lines of credit

(both first and junior lien) generally have draw periods of 10, 15 or 20 years with variable interest rate and payment options available during the draw period of (1) interest-only or (2) 1.5% of outstanding principal balance plus accrued interest. As of December 31, 2022, a significant portion of the lines of credit in a draw period used the interest-only option. The lines that enter their amortization period may experience higher delinquencies and higher loss rates than the ones in their draw or term period. We have considered this increased risk in our ACL for loans estimate. Interest-only lines and loans were approximately 2% and 3% of total loans at December 31, 2022 and 2021, respectively.

During the draw period, the borrower has the option of converting all or a portion of the line from a variable interest rate to a fixed rate with terms including interest-only payments for a fixed period between three to seven years or a fully amortizing payment with a fixed period between five to 30 years. At the end of the draw period, a line of credit generally converts to an amortizing payment schedule with repayment terms of up to 30 years based on the balance at time of conversion. Certain lines and loans have been structured with a balloon payment, which requires full repayment of the outstanding balance at the end of the term period. The conversion of lines or loans to fully amortizing or balloon payoff may result in a significant payment increase, which can affect some borrowers’ ability to repay the outstanding balance.

In anticipation of our residential mortgage line of credit borrowers reaching the end of their draw period, we have created a program to inform, educate and help these borrowers transition from interest-only to fully-amortizing payments or full repayment. We monitor the performance of the borrowers moving through the program in an effort to refine our ongoing program strategy.

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36	Wells Fargo & Company

Part of our credit monitoring includes tracking delinquency, current FICO scores and loan/combined loan to collateral values (LTV/CLTV) on the entire residential mortgage loan portfolio. CLTV represents the ratio of the total loan balance of first and junior lien mortgages (including unused line amounts for credit line products) to property collateral value. For additional information regarding credit quality indicators, see Note 5 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.

We continue to modify residential mortgage loans to assist homeowners and other borrowers experiencing financial difficulties. Under these programs, we may provide concessions

such as interest rate reductions, forbearance of principal, and in some cases, principal forgiveness. These programs generally include trial payment periods of three to four months, and after successful completion and compliance with terms during this period, the loan is permanently modified. Loans included under these programs are accounted for as troubled debt restructurings (TDRs) at the start of the trial period or at the time of permanent modification, if no trial period is used. Customer payment deferral activities instituted in response to the COVID-19 pandemic could continue to delay the recognition of delinquencies. For additional information on customer accommodations, including loan modifications, in response to the COVID-19 pandemic, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

Residential Mortgage – First Lien Portfolio Our residential mortgage – first lien portfolio increased $13.5 billion from

December 31, 2021, driven by originations, partially offset by loan paydowns and the transfer of first lien mortgage loans to loans held for sale (LHFS), which predominantly related to loans purchased from GNMA loan securitization pools in prior periods.

Table 21 shows certain delinquency and loss information for the residential mortgage – first lien portfolio and lists the top five states by outstanding balance.

Table 21: Residential Mortgage – First Lien Portfolio Performance

	Outstanding balance		% of total loans		% of loans 30 days or more past due	Net loan charge-off rate (1)
	December 31,		December 31,		December 31,	Year ended December 31,
($ in millions)	2022		2021		2022	2021		2022		2021	2022		2021
California (2)	$	110,877			100,933		11.60	%		11.27		0.45			0.95		—		(0.01)
New York	31,753			30,039		3.32			3.35		0.80			1.34		(0.02)		0.12
Florida	10,535			9,978		1.10			1.11		1.13			1.93		(0.08)		0.09
Washington	10,523			8,636		1.10			0.96		0.30			0.47		—		—
New Jersey	10,416			10,205		1.09			1.14		1.24			1.95		0.01		0.08
Other (3)	72,843			69,321		7.62			7.74		0.93			1.48		0.01		0.01
Total	246,947			229,112		25.83			25.57		0.69			1.23		—		0.02
Government insured/guaranteed loans (4)	8,860			13,158		0.93			1.47
Total first lien mortgage portfolio	$	255,807			242,270		26.76	%		27.04

(1)The net loan charge-off rate for the year ended December 31, 2021, includes $120 million of loan charge-offs related to a change in practice to fully charge-off certain delinquent legacy residential mortgage loans.

(2)Our residential mortgage loans to borrowers in California are located predominantly within the larger metropolitan areas, with no single California metropolitan area consisting of more than 4% of total loans.

(3)Consists of 45 states; no state in Other had loans in excess of $7.7 billion and $7.2 billion at December 31, 2022, and 2021, respectively.

(4)Represents loans, substantially all of which were purchased from GNMA loan securitization pools, where the repayment of the loans is predominantly insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA). For additional information on GNMA loan securitization pools, see the “Risk Management – Credit Risk Management – Mortgage Banking Activities” section in this Report.

Column 1	Column 2	Column 3
	Wells Fargo & Company	37

Risk Management – Credit Risk Management (continued)

Residential Mortgage – Junior Lien Portfolio Our residential mortgage – junior lien portfolio decreased $3.3 billion from December 31, 2021, driven by loan paydowns.

Table 22 shows certain delinquency and loss information for the residential mortgage – junior lien portfolio and lists the top five states by outstanding balance.

Table 22: Residential Mortgage – Junior Lien Portfolio Performance

	Outstanding balance		% of total loans		% of loans 30 daysor more past due	Net loan charge-off rate (1)
	December 31,		December 31,		December 31,	Year ended December 31,
($ in millions)	2022		2021		2022	2021		2022		2021	2022		2021
California	$	3,550			4,310		0.37	%		0.48		2.02			3.52		(0.26)		(0.59)
New Jersey	1,383			1,728		0.14			0.19		2.76			2.98		0.10		0.04
Florida	1,165			1,533		0.12			0.17		2.69			2.54		(0.71)		(0.13)
Pennsylvania	832			1,039		0.09			0.12		2.76			2.19		(0.17)		(0.12)
New York	794			975		0.08			0.11		2.86			4.05		(0.09)		0.57
Other (2)	5,586			7,033		0.58			0.79		2.05			2.25		(0.53)		(0.51)
Total junior lien mortgage portfolio	$	13,310			16,618		1.38	%		1.86		2.27			2.91		(0.36)		(0.36)

(1)The net loan charge-off rate for the year ended December 31, 2021, includes $32 million of loan charge-offs related to a change in practice to fully charge-off certain delinquent legacy residential mortgage loans.

(2)Consists of 45 states; no state in Other had loans in excess of $790 million and $980 million at December 31, 2022, and 2021, respectively.

Table 23: Credit Card, Auto, and Other Consumer Loans

	December 31, 2022		December 31, 2021
($ in millions)	Outstanding balance		% of total loans		Outstanding balance		% of total loans
Credit card	$	46,293			4.84	%		$	38,453		4.29	%
Auto	53,669			5.61			56,659			6.33
Other consumer (1)	29,276			3.06			28,274			3.16
Total	$	129,238			13.51	%		$	123,386		13.78	%

(1)Includes $19.4 billion and $18.6 billion at December 31, 2022 and 2021, respectively, of commercial and consumer securities-based loans originated by the WIM operating segment.

Credit Card The increase in the outstanding balance at December 31, 2022, compared with December 31, 2021, was due to higher purchase volume and the launch of new products.

Auto The decrease in the outstanding balance at December 31, 2022, compared with December 31, 2021, was due to lower origination volumes reflecting credit tightening actions and continued price competition due to rising interest rates.

Other Consumer The increase in the outstanding balance at December 31, 2022, compared with December 31, 2021, was primarily due to originations of personal lines and loans.

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38	Wells Fargo & Company

NONPERFORMING ASSETS (NONACCRUAL LOANS AND FORECLOSED ASSETS) We generally place loans on nonaccrual status when:

•they are 90 days (120 days with respect to residential mortgage loans) past due for interest or principal, unless the loan is both well-secured and in the process of collection;

•part of the principal balance has been charged off; or

•for junior lien mortgage loans, we have evidence that the related first lien mortgage may be 120 days past due or in the process of foreclosure regardless of the junior lien delinquency status.

Customer payment deferral activities in the residential mortgage portfolio instituted in response to the COVID-19 pandemic could continue to delay the recognition of nonaccrual loans for those residential mortgage customers who would have otherwise moved into nonaccrual status. For additional information on customer accommodations, including loan modifications, in response to the COVID-19 pandemic, see

Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

Table 24 summarizes nonperforming assets (NPAs).

Table 24: Nonperforming Assets (Nonaccrual Loans and Foreclosed Assets)

	December 31,
($ in millions)	2022		2021
Nonaccrual loans:
Commercial and industrial	$	746			980
Commercial real estate	958			1,248
Lease financing	119			148
Total commercial	1,823			2,376
Residential mortgage (1)	3,611			4,604
Auto	153			198
Other consumer	39			34
Total consumer	3,803			4,836
Total nonaccrual loans	$	5,626			7,212
As a percentage of total loans	0.59	%		0.81
Foreclosed assets:
Government insured/guaranteed (2)	$	22			16
Non-government insured/guaranteed	115			96
Total foreclosed assets	137			112
Total nonperforming assets	$	5,763			7,324
As a percentage of total loans	0.60	%		0.82

(1)Residential mortgage loans predominantly insured by the FHA or guaranteed by the VA are not placed on nonaccrual status because they are insured or guaranteed.

(2)Consistent with regulatory reporting requirements, foreclosed real estate resulting from government insured/guaranteed loans are classified as nonperforming. Both principal and interest related to these foreclosed real estate assets are collectible because the loans were predominantly insured by the FHA or guaranteed by the VA. Receivables related to the foreclosure of certain government guaranteed real estate mortgage loans are excluded from this table and included in Accounts Receivable in Other Assets. For additional information on the classification of certain government-guaranteed mortgage loans upon foreclosure, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

Commercial nonaccrual loans decreased $553 million from December 31, 2021, due to improved credit quality across our commercial loan portfolios. For additional information on commercial nonaccrual loans, see the “Risk Management – Credit Risk Management – Commercial and Industrial Loans and Lease Financing” and “Risk Management – Credit Risk Management – Commercial Real Estate” sections in this Report.

Consumer nonaccrual loans decreased $1.0 billion from December 31, 2021, driven by a decrease in residential mortgage nonaccrual loans primarily due to sustained payment performance of borrowers after exiting COVID-19-related accommodation programs.

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	Wells Fargo & Company	39

Risk Management – Credit Risk Management (continued)

Table 25: Analysis of Changes in Nonaccrual Loans


(in millions)	2022		2021
Commercial nonaccrual loans
Balance, beginning of period	$	2,376			4,779
Inflows	1,391			2,113
Outflows:
Returned to accruing	(451)			(1,003)
Foreclosures	(20)			(13)
Charge-offs	(247)			(533)
Payments, sales and other	(1,226)			(2,967)
Total outflows	(1,944)			(4,516)
Balance, end of period	1,823			2,376
Consumer nonaccrual loans
Balance, beginning of period	4,836			3,949
Inflows	1,728			3,281
Outflows:
Returned to accruing	(1,599)			(828)
Foreclosures	(85)			(69)
Charge-offs	(245)			(252)
Payments, sales and other	(832)			(1,245)
Total outflows	(2,761)			(2,394)
Balance, end of period	3,803			4,836
Total nonaccrual loans	$	5,626			7,212

•97% of total commercial nonaccrual loans are secured, the majority of which are secured by real estate.

•81% of commercial nonaccrual loans were current on interest and 77% of commercial nonaccrual loans were current on both principal and interest, but were on nonaccrual status because the full or timely collection of interest or principal had become uncertain.

•99% of total consumer nonaccrual loans are secured, of which 95% are secured by real estate and 98% have a combined LTV (CLTV) ratio of 80% or less.

•$588 million of the $743 million of consumer loans in bankruptcy or discharged in bankruptcy, and classified as nonaccrual, were current.

Table 26 provides a summary of foreclosed assets and an analysis of changes in foreclosed assets.

Table 26: Foreclosed Assets

(in millions)					December 31,
				2022		2021
Summary by loan segment
Government insured/guaranteed	$	22			16
Commercial	65			54
Consumer	50			42
Total foreclosed assets	$	137			112
(in millions)			Year ended December 31,
				2022		2021
Analysis of changes in foreclosed assets
Balance, beginning of period					$	112		159
Net change in government insured/guaranteed (1)					6		(2)
Additions to foreclosed assets (2)					420		370
Reductions from sales and write-downs					(401)		(415)
Balance, end of period					$	137		112

(1)Foreclosed government insured/guaranteed loans are temporarily transferred to and held by us as servicer, until reimbursement is received from FHA or VA.

(2)Includes loans moved into foreclosed assets from nonaccrual status and repossessed autos.

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40	Wells Fargo & Company

As part of our actions to support customers during the COVID-19 pandemic, we temporarily suspended certain residential mortgage foreclosure activities through December 31, 2021. Beginning January 1, 2022, we resumed these mortgage foreclosure activities. For additional information on loans in process of foreclosure, see Note 5 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.

TROUBLED DEBT RESTRUCTURINGS (TDRs) Table 27 provides information regarding the recorded investment of loans modified in TDRs. TDRs decreased from December 31, 2021, predominantly driven by a decrease in residential mortgage loans, partially offset by an increase in trial modifications. The decrease in residential mortgage loans was due to paydowns and transfers to LHFS, which related to loans purchased from GNMA loan securitization pools. In January 2023, we adopted a new

accounting standard that eliminates the accounting and reporting guidance for TDRs. For additional information, see the “Current Accounting Developments” section in this Report.

The amount of our TDRs at December 31, 2022, would have otherwise been higher without the TDR relief provided by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus (Revised) (Interagency Statement). Customers who are unable to resume making their contractual loan payments upon exiting from these deferral programs may require further assistance and may receive or be eligible to receive modifications, which may be classified as TDRs. For additional information on customer accommodations, including loan modifications, in response to the COVID-19 pandemic, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

Table 27: TDR Balances

	December 31,
(in millions)	2022		2021
Commercial and industrial	$	543			793
Commercial real estate	431			545
Lease financing	5			10
Total commercial TDRs	979			1,348
Residential mortgage	7,429			8,228
Credit card	407			309
Auto	118			169
Other consumer	58			57
Trial modifications	242			71
Total consumer TDRs	8,254			8,834
Total TDRs	$	9,233			10,182
TDRs on nonaccrual status	$	3,223			3,142
TDRs on accrual status:
Government insured/guaranteed	1,870			2,462
Non-government insured/guaranteed	4,140			4,578
Total TDRs	$	9,233			10,182

Our nonaccrual policies are generally the same for all loan types when a restructuring is involved. We may re-underwrite loans at the time of restructuring to determine whether there is sufficient evidence of sustained repayment capacity based on the borrower’s documented income, debt to income ratios, and other factors. Loans that are not re-underwritten or loans that lack sufficient evidence of sustained repayment capacity at the time of modification are charged down to the fair value of the collateral, if applicable. For an accruing loan that has been modified, if the borrower has demonstrated performance under the previous terms and the underwriting process shows the capacity to continue to perform under the restructured terms, the loan will generally remain in accruing status. Otherwise, the loan will be placed in nonaccrual status and may be returned to accruing status when the borrower demonstrates a sustained period of performance, generally six consecutive months of payments, or equivalent, inclusive of consecutive payments made prior to modification. Loans will also be placed on nonaccrual status, and a corresponding charge-off is recorded to the loan balance, when we believe that principal and interest contractually due under the modified agreement will not be collectible. See Note 5 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report for additional information regarding TDRs.

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	Wells Fargo & Company	41

Risk Management – Credit Risk Management (continued)

Table 28 provides an analysis of the changes in TDRs. Loans modified more than once as a TDR are reported as inflows only in the period they are first modified. In addition to foreclosures,

sales and transfers to held for sale, we may remove loans from TDR classification, but only if they have been refinanced or restructured at market terms and qualify as a new loan.

Table 28: Analysis of Changes in TDRs


(in millions)	2022	2021
Commercial TDRs
Balance, beginning of period	$	1,348		2,731
Inflows (1)	544		746
Outflows
Charge-offs	(10)		(141)
Foreclosure	—		(5)
Payments, sales and other (2)	(903)		(1,983)
Balance, end of period	979		1,348
Consumer TDRs
Balance, beginning of period	8,834		11,792
Inflows (1)	1,892		1,665
Outflows
Charge-offs	(150)		(185)
Foreclosure	(54)		(56)
Payments, sales and other (2)	(2,439)		(4,363)
Net change in trial modifications (3)	171		(19)
Balance, end of period	8,254		8,834
Total TDRs	$	9,233		10,182

(1)Inflows include loans that modify, even if they resolve within the period, as well as gross advances on term loans that modified in a prior period and net advances on revolving TDRs that modified in a prior period.

(2)Other outflows include normal amortization/accretion of loan basis adjustments and loans transferred to LHFS. Occasionally, loans that have been refinanced or restructured at market terms qualify as new loans, which are also included as other outflows.

(3)Net change in trial modifications includes: inflows of new TDRs entering the trial payment period, net of outflows for modifications that either (i) successfully perform and enter into a permanent modification or (ii) did not successfully perform according to the terms of the trial period plan and are subsequently charged-off, foreclosed upon, or otherwise resolved.

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42	Wells Fargo & Company

NET CHARGE-OFFS Table 29 presents net loan charge-offs.

Table 29: Net Loan Charge-offs

		Quarter ended December 31,		Year ended December 31,
		2022		2021		2022		2021
($ in millions)	Net loan charge- offs		% of avg. loans (1)		Net loan charge- offs		% of avg. loans (1)		Net loan charge- offs		% of avg. loans		Net loan charge- offs		% of avg. loans
Commercial and industrial	$	66			0.07	%		$	3			—	%		$	83		0.02	%		$	218		0.07	%
Commercial real estate	10			0.03			22			0.06			(11)			(0.01)		53			0.04
Lease financing	3			0.06			3			0.09			7			0.04		24			0.15
	Total commercial	79			0.06			28			0.02			79			0.01		295			0.06
Residential mortgage	(12)			(0.02)			118			0.18			(63)			(0.02)		(17)			(0.01)
Credit card	274			2.42			150			1.61			851			2.06		800			2.26
Auto	137			1.00			58			0.41			422			0.76		181			0.35
Other consumer	82			1.13			67			0.96			319			1.11		315			1.22
	Total consumer	481			0.48			393			0.41			1,529			0.39		1,279			0.33
	Total	$	560			0.23	%		$	421			0.19	%		$	1,608		0.17	%		$	1,574		0.18	%

(1)Net loan charge-offs as a percentage of average respective loans are annualized.

The decrease in commercial net loan charge-offs in 2022, compared with 2021, was driven by lower losses in our commercial and industrial and commercial real estate mortgage portfolios.

The increase in consumer net loan charge-offs in 2022, compared with 2021, was predominantly due to higher losses in our auto portfolio, driven by loans originated in 2021.

The COVID-19 pandemic may continue to impact the credit quality of our loan portfolio. Although the potential impacts were considered in our allowance for credit losses for loans, payment deferral activities in our residential mortgage portfolio instituted in response to the COVID-19 pandemic could continue to delay the recognition of residential mortgage loan charge-offs. For additional information on customer accommodations in response to the COVID-19 pandemic, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

ALLOWANCE FOR CREDIT LOSSES We maintain an allowance for credit losses (ACL) for loans, which is management’s estimate of the expected life-time credit losses in the loan portfolio and unfunded credit commitments, at the balance sheet date, excluding loans and unfunded credit commitments carried at fair value or held for sale. Additionally, we maintain an ACL for debt securities classified as either AFS or HTM, other financial assets measured at amortized cost, net investments in leases, and other off-balance sheet credit exposures.

We apply a disciplined process and methodology to establish our ACL each quarter. The process for establishing the ACL for loans takes into consideration many factors, including historical and forecasted loss trends, loan-level credit quality ratings and loan grade-specific characteristics. The process involves subjective and complex judgments. In addition, we review a variety of credit metrics and trends. These credit metrics and trends, however, do not solely determine the amount of the allowance as we use several analytical tools. For additional information on our ACL, see the “Critical Accounting Policies – Allowance for Credit Losses” section and Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report. For additional information on our ACL for loans, see

Note 5 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report, and for additional information on our ACL for debt securities, see Note 3 (Available-for-Sale and Held-to-Maturity Debt Securities) to Financial Statements in this Report.

Table 30 presents the allocation of the ACL for loans by loan portfolio segment and class.

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	Wells Fargo & Company	43

Risk Management – Credit Risk Management (continued)

Table 30: Allocation of the ACL for Loans

	Dec 31, 2022		Dec 31, 2021
($ in millions)	ACL		ACL as % of loan class		Loans as % of total loans		ACL		ACL as % of loan class		Loans as % of total loans
Commercial and industrial	$	4,507			1.17	%		40			$	4,873		1.39	%	39
Commercial real estate	2,231			1.43			16			2,516			1.70		17
Lease financing	218			1.46			2			402			2.71		2
Total commercial	6,956			1.25			58			7,791			1.52		58
Residential mortgage (1)	1,096			0.41			28			1,286			0.50		29
Credit card	3,567			7.71			5			3,290			8.56		4
Auto	1,380			2.57			6			928			1.64		6
Other consumer	610			2.08			3			493			1.74		3
Total consumer	6,653			1.67			42			5,997			1.57		42
Total	$	13,609			1.42	%		100			$	13,788		1.54	%	100
Components:
Allowance for loan losses					$	12,985						12,490
Allowance for unfunded credit commitments					624						1,298
Allowance for credit losses					$	13,609						13,788
Ratio of allowance for loan losses to total net loan charge-offs					8.08x						7.94
Ratio of allowance for loan losses to total nonaccrual loans					2.31							1.73
Allowance for loan losses as a percentage of total loans					1.36	%						1.39

(1)Includes negative allowance for expected recoveries of amounts previously charged off.

The ratios for the allowance for loan losses and the ACL for loans presented in Table 30 may fluctuate from period to period due to such factors as the mix of loan types in the portfolio, borrower credit strength, and the value and marketability of collateral.

The ACL for loans decreased $179 million, or 1%, from December 31, 2021, reflecting reduced uncertainty around the economic impact of the COVID-19 pandemic on our loan portfolio. This decrease was partially offset by loan growth and a less favorable economic environment. The detail of the changes in the ACL for loans by portfolio segment (including charge-offs and recoveries by loan class) is included in Note 5 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.

We consider multiple economic scenarios to develop our estimate of the ACL for loans, which generally include a base scenario, along with an optimistic (upside) and one or more pessimistic (downside) scenarios. We weighted the base scenario and the downside scenarios in our estimate of the ACL for loans at December 31, 2022. The base scenario assumed elevated inflation and economic contraction in the near term, reflecting increased unemployment rates from historically low levels. The downside scenarios assumed a more substantial economic contraction due to high inflation, declining property values, and lower business and consumer confidence.

The forecasted key economic variables used in our estimate of the ACL for loans at December 31 and September 30, 2022, are presented in Table 31.

Table 31: Forecasted Key Economic Variables

	2Q 2023
Weighted blend of economic scenarios:
U.S. unemployment rate (1):
December 31, 2022	4.3	%	5.5	6.2
September 30, 2022	5.4		6.1	6.4
U.S. real GDP (2):
December 31, 2022	(2.5)		(1.0)	1.1
September 30, 2022	(1.1)		1.0	1.9
Home price index (3):
December 31, 2022	(4.7)		(7.0)	(6.2)
September 30, 2022	(2.2)		(3.7)	(3.7)
Commercial real estate asset prices (3):
December 31, 2022	(3.8)		(6.7)	(5.8)
September 30, 2022	(1.7)		(4.7)	(4.2)

(1)Quarterly average.

(2)Percent change from the preceding period, seasonally adjusted annualized rate.

(3)Percent change year over year of national average; outlook differs by geography and property type.

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44	Wells Fargo & Company

We believe the ACL for loans of $13.6 billion at December 31, 2022, was appropriate to cover expected credit losses, including unfunded credit commitments, at that date. The entire allowance is available to absorb credit losses from the total loan portfolio. The ACL for loans is subject to change and reflects existing factors as of the date of determination, including economic or market conditions and ongoing internal and external examination processes. Due to the sensitivity of the ACL for loans to changes in the economic and business environment,

it is possible that we will incur incremental credit losses not anticipated as of the balance sheet date. Our process for determining the ACL is discussed in the “Critical Accounting Policies – Allowance for Credit Losses” section and Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

In connection with our sales and securitization of residential mortgage loans, we have established a mortgage repurchase liability, initially at fair value, related to various representations and warranties that reflect management’s estimate of losses for loans for which we could have a repurchase obligation, whether or not we currently service those loans, based on a combination of factors. See Note 16 (Securitizations and Variable Interest Entities) to Financial Statements in this Report for additional information about our liability for mortgage loan repurchase losses.

We provide recourse to GSEs for commercial mortgage loans sold under various programs and arrangements. The terms of these programs require that we incur a pro-rata share of actual losses in the event of borrower default. See Note 17 (Guarantees and Other Commitments) to Financial Statements in this Report for additional information about our exposure to loss related to these programs.

In addition to servicing loans in our portfolio, we act as servicer and/or master servicer of residential and commercial mortgage loans included in GSE-guaranteed mortgage securitizations, GNMA-guaranteed mortgage securitizations of FHA-insured/VA-guaranteed mortgages and private label mortgage securitizations, as well as for unsecuritized loans owned by institutional investors.

In accordance with applicable servicing guidelines, upon transfer as servicer, we retain the option to repurchase loans from GNMA loan securitization pools, which generally becomes exercisable when three scheduled loan payments remain unpaid by the borrower. We generally repurchase these loans for cash and as a result, our total consolidated assets do not change. At December 31, 2022 and 2021, these repurchased loan balances were $9.8 billion and $17.3 billion, respectively, which included $8.6 billion and $12.9 billion, respectively, in loans held for investment, with the remainder in loans held for sale.

Repurchased loans that regain current status or are otherwise modified in accordance with applicable servicing guidelines may be included in future GNMA loan securitization pools. However, in accordance with guidance issued by GNMA, certain loans repurchased after June 30, 2020, are ineligible for inclusion in future GNMA loan securitization pools until the borrower has timely made six consecutive payments. This requirement may delay our ability to transfer loans into the securitization market. See Note 16 (Securitizations and Variable Interest Entities) to Financial Statements in this Report for additional information about our involvement with mortgage loan securitizations.

Each agreement under which we act as servicer or master servicer generally specifies a standard of responsibility for actions we take in such capacity. We are required to indemnify the securitization trustee against any failure by us, as servicer or master servicer, to perform our servicing obligations. In addition, if we commit a breach of our obligations as servicer or master servicer, we may be subject to termination if the breach is not cured within a specified period. The standards governing servicing in GSE-guaranteed securitizations, and the possible remedies for violations of such standards, vary, and those standards and remedies are determined by servicing guides maintained by the GSEs, contracts between the GSEs and individual servicers and topical guides published by the GSEs from time to time. Such remedies could include indemnification or repurchase of an affected mortgage loan. In addition, in connection with our servicing activities, we could become subject to consent orders and settlement agreements with federal and state regulators for alleged servicing issues and practices. In general, these can require us to provide customers with loan modification relief, refinancing relief, and foreclosure prevention and assistance, and can result in business restrictions or the imposition of certain monetary penalties on us. For example, on September 9, 2021, the Company entered into a consent order with the OCC requiring the Company to improve the execution, risk management, and oversight of loss mitigation activities in its Home Lending business. For additional information on certain consent orders applicable to the Company, see the “Overview” section in this Report.

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	Wells Fargo & Company	45

Asset/Liability Management

Asset/liability management involves evaluating, monitoring and managing interest rate risk, market risk, liquidity and funding. Primary oversight of interest rate risk and market risk resides with the Finance Committee of the Board, which oversees the administration and effectiveness of financial risk management policies and processes used to assess and manage these risks.

Primary oversight of liquidity and funding resides with the Risk Committee of the Board.

INTEREST RATE RISK Interest rate risk is the risk that market fluctuations in interest rates, credit spreads, or foreign exchange can cause a loss of the Company’s earnings and capital stemming from mismatches in the Company’s asset and liability cash flows primarily arising from customer-related activities such as lending and deposit-taking. We are subject to interest rate risk because:

•assets and liabilities may mature or reprice at different times. If assets reprice faster than liabilities and interest rates are generally rising, earnings will initially increase;

•assets and liabilities may reprice at the same time but by different amounts;

•short-term and long-term market interest rates may change by different amounts. For example, the shape of the yield curve may affect yield for new loans and funding costs differently;

•the remaining maturity for various assets or liabilities may shorten or lengthen as interest rates change. For example, if long-term mortgage interest rates increase sharply, mortgage-related products may pay down at a slower rate than anticipated, which could impact portfolio income; or

•interest rates may have a direct or indirect effect on loan demand, collateral values, credit losses, mortgage origination volume, and the fair value of MSRs and other financial instruments.

We assess interest rate risk by comparing outcomes under various net interest income simulations using many interest rate scenarios that differ in the direction of interest rate changes, the degree of change over time, the speed of change and the projected shape of the yield curve. These simulations require assumptions regarding drivers of earnings and balance sheet composition such as loan originations, prepayment rates on loans and debt securities, deposit flows and mix, as well as pricing strategies.

Our most recent simulations, as presented in Table 32, estimate net interest income sensitivity over the next 12 months using instantaneous movements across the yield curve with both lower and higher interest rates relative to our base scenario. Steeper and flatter scenarios measure non-parallel changes in the yield curve, with long-term interest rates defined as all tenors three years and longer and short-term interest rates defined as all tenors less than three years. Where applicable, U.S. dollar interest rates are floored at 0.00%. The following describes the simulation assumptions for the scenarios presented in Table 32:

•Simulations are dynamic and reflect anticipated changes to our assets and liabilities.

•Other macroeconomic variables that could be correlated with the changes in interest rates are held constant.

•Mortgage prepayment and origination assumptions vary across scenarios and reflect only the impact of the higher or lower interest rates.

•Our base scenario deposit forecast incorporates mix changes consistent with the base interest rate trajectory. Deposit mix is modeled to be the same in the base scenario and the alternative scenarios. In higher interest rate scenarios, customer deposit activity that shifts balances into higher yielding products could impact expected net interest income.

•The interest rate sensitivity of deposits is modeled using the historical behavior of our deposits portfolio and reflects the expectations of deposit products repricing as market interest rates change (referred to as deposit betas). Our actual experience in base and alternative scenarios may differ from expectations due to the lag or acceleration of deposit repricing, changes in consumer behavior, and other factors.

•We hold the size of the projected debt and equity securities portfolios constant across scenarios.

Table 32: Net Interest Income Sensitivity Over the Next 12 Months Using Instantaneous Movements

($ in billions)	Dec 31, 2022
Parallel shift:
+100 bps shift in interest rates	$	2.3		7.1
-100 bps shift in interest rates	(1.7)		(3.3)
Steeper yield curve: (1)
+100 bps shift in long-term interest rates	0.8		n/a
-100 bps shift in short-term interest rates	(1.0)		n/a
+50 bps shift in long-term interest rates	0.4		1.2
-50 bps shift in short-term interest rates	(0.5)		(0.9)
Flatter yield curve: (1)
+100 bps shift in short-term interest rates	1.5		n/a
-100 bps shift in long-term interest rates	(0.7)		n/a
+50 bps shift in short-term interest rates	0.7		2.6
-50 bps shift in long-term interest rates	(0.4)		(1.0)

(1)In fourth quarter 2022, given the higher levels of interest rates and volatility, we presented 100 bps shifts in our steeper and flatter scenarios.

The changes in our interest rate sensitivity from December 31, 2021, to December 31, 2022, in Table 32 reflected updates to our base scenario, including expectations for balance sheet composition and interest rates. Our interest rate sensitivity indicates that we would expect to benefit from higher interest rates as our assets would reprice faster and to a greater degree than our liabilities, while in the case of lower interest rates, our assets would reprice downward and to a greater degree than our liabilities resulting in lower net interest income. For the December 31, 2021, simulations with downward shifts in interest rates, the 0.00% interest rate floor limited the amount of the decline in net interest income.

The sensitivity results above do not capture noninterest income or expense impacts. Our interest rate sensitive noninterest income and expense are impacted by mortgage banking activities that may have sensitivity impacts that move in the opposite direction of our net interest income. See the “Risk Management – Asset/Liability Management – Mortgage Banking Interest Rate and Market Risk” section in this Report for additional information.

Interest rate sensitive noninterest income is also impacted by changes in earnings credit for noninterest-bearing deposits that reduce treasury management deposit-related service fees

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46	Wells Fargo & Company

on commercial accounts, and by trading assets. In addition, the impact to net interest income does not include the fair value changes of trading securities, which, along with the effects of related economic hedges, are recorded in noninterest income. In addition to changes in interest rates, net interest income and noninterest income from trading securities may be impacted by the actual composition of the trading portfolio. For additional information on our trading assets and liabilities, see Note 2 (Trading Activities) to Financial Statements in this Report.

We use the debt securities portfolio and exchange-traded and over-the-counter (OTC) interest rate derivatives to manage our interest rate exposures. As interest rates increase, changes in the fair value of AFS debt securities may negatively affect accumulated other comprehensive income (AOCI), which lowers the amount of our regulatory capital. AOCI also includes unrealized gains or losses related to the transfer of debt securities from AFS to HTM, which are subsequently amortized into earnings over the life of the security with no further impact from interest rate changes. See Note 1 (Summary of Significant Accounting Policies) and Note 3 (Available-for-Sale and Held-to-Maturity Debt Securities) to Financial Statements in this Report for additional information on the debt securities portfolios. We use derivatives for asset/liability management in two main ways:

•to convert the cash flows from selected asset and/or liability instruments/portfolios including investments, commercial loans and long-term debt, from floating-rate payments to fixed-rate payments, or vice versa; and

•to economically hedge our mortgage origination pipeline, funded mortgage loans, and MSRs.

In 2022, we entered into interest rate swap hedges to reduce AOCI sensitivity of our AFS debt securities portfolio. Additionally, we entered into interest rate swaps to convert the interest cash flows of some floating-rate assets, such as commercial loans and certain interest-earning deposits with banks, to fixed-rates. Derivatives used to hedge our interest rate risk exposures are presented in Note 14 (Derivatives) to Financial Statements in this Report.

MORTGAGE BANKING INTEREST RATE AND MARKET RISK We originate, fund and service mortgage loans, which subjects us to various risks, including market, interest rate, credit, and liquidity risks that can be substantial. Based on market conditions and other factors, we reduce credit and liquidity risks by selling or securitizing mortgage loans. We determine whether mortgage loans will be held for investment or held for sale at the time of commitment, but may change our intent to hold loans for investment or sale as part of our corporate asset/liability management activities. We may also retain securities in our investment portfolio at the time we securitize mortgage loans.

The valuation of our residential MSRs can be highly subjective and involve complex judgments by management about matters that are inherently unpredictable. Changes in

interest rates influence a variety of significant assumptions captured in the periodic valuation of residential MSRs, including prepayment rates, expected returns and potential risks on the servicing asset portfolio, costs to service, the value of escrow balances and other servicing valuation elements. See the “Critical Accounting Policies – Valuation of Residential Mortgage Servicing Rights” section in this Report for additional information on the valuation of our residential MSRs.

An increase in interest rates generally reduces the propensity for refinancing, extends the expected duration of the servicing portfolio, and therefore increases the estimated fair value of the MSRs. However, an increase in interest rates can also reduce mortgage loan demand, including refinancing activity, which reduces noninterest income from origination activities. A decline in interest rates would generally have an opposite impact.

To reduce our exposure to changes in interest rates, our residential MSRs are economically hedged with a combination of derivative instruments, including interest rate swaps, Eurodollar futures, highly liquid mortgage forward contracts and interest rate options. Hedging the various sources of interest rate risk in mortgage banking is a complex process that requires sophisticated modeling and constant monitoring. There are several potential risks to earnings from mortgage banking related to origination volumes and mix, valuation of MSRs and associated hedging results, the relationship and degree of volatility between short-term and long-term interest rates, and changes in servicing and foreclosures costs. While we attempt to balance our mortgage banking interest rate and market risks, the financial instruments we use may not perfectly correlate with the values and income being hedged.

The size of the hedge and the particular combination of hedging instruments at any point in time is designed to reduce the volatility of our earnings over various time frames within a range of mortgage interest rates. Market factors, the composition of the mortgage servicing portfolio, and the relationship between the origination and servicing sides of our mortgage businesses change continually, and therefore the types of instruments used in our hedging are reviewed daily and rebalanced based on our evaluation of current market factors and the interest rate risk inherent in our portfolio.

For additional information on mortgage banking, including key assumptions and the sensitivity of the fair value of MSRs, see Note 6 (Mortgage Banking Activities), Note 14 (Derivatives), and Note 15 (Fair Values of Assets and Liabilities) to Financial Statements in this Report.

MARKET RISK Market risk is the risk of possible economic loss from adverse changes in market risk factors such as interest rates, credit spreads, foreign exchange rates, equity and commodity prices, and the risk of possible loss due to counterparty exposure. This applies to implied volatility risk, basis risk, and market liquidity risk. It includes price risk in the trading book, mortgage servicing rights and the hedge effectiveness risk associated with mortgage loans held at fair value, and impairment of private equity investments.

The Board’s Finance Committee has primary oversight responsibility for market risk and oversees the Company’s market risk exposure and market risk management strategies.

In addition, the Board’s Risk Committee has certain oversight responsibilities with respect to market risk, including counterparty risk. The Finance Committee reports key market risk matters to the Risk Committee.

At the management level, the Market and Counterparty Risk Management function, which is part of IRM, has oversight responsibility for market risk across the enterprise. The Market

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	Wells Fargo & Company	47

Risk Management – Asset/Liability Management (continued)

and Counterparty Risk Management function reports into Corporate and Investment Banking Risk and provides periodic reports related to market risk to the Board’s Finance Committee.

MARKET RISK – TRADING ACTIVITIES We engage in trading activities to accommodate the investment and risk management activities of our customers and to execute economic hedging to manage certain balance sheet risks. These trading activities predominantly occur within our CIB businesses and, to a lesser extent, other businesses of the Company. Debt securities held for trading, equity securities held for trading, trading loans and trading derivatives are financial instruments used in our trading activities, and all are carried at fair value. Income earned on the financial instruments used in our trading activities include net interest income, changes in fair value and realized gains and losses. Net interest income earned from our trading activities is reflected in the interest income and interest expense components of our consolidated statement of income. Changes in fair value of the financial instruments used in our trading activities are reflected in net gains from trading activities. For additional information on the financial instruments used in our trading activities and the income from these trading activities, see Note 2 (Trading Activities) to Financial Statements in this Report.

function aggregates and monitors exposures against our established risk appetite. Changes to the market risk profile are analyzed and reported on a daily basis. The Company monitors various market risk exposure measures from a variety of perspectives, including line of business, product, risk type, and legal entity.

Trading VaR is the measure used to provide insight into the market risk exhibited by the Company’s trading positions. The Company calculates Trading VaR for risk management purposes to establish line of business and Company-wide risk limits. Trading VaR is calculated based on all trading positions on our consolidated balance sheet.

Table 33 shows the Company’s Trading General VaR by risk category. Our Trading General VaR uses a historical simulation model which assumes that historical changes in market values are representative of the potential future outcomes and measures the expected earnings loss of the Company over a

1-day time interval at a 99% confidence level. Our historical simulation model is based on equally weighted data from a

12-month historical look-back period. We believe using a

Average Company Trading General VaR was $35 million for the year ended December 31, 2022, compared with $49 million for the year ended December 31, 2021. The decrease in average Company Trading General VaR for the year ended December 31, 2022, compared with the year ended December 31, 2021, was primarily driven by changes in portfolio composition.

Table 33: Trading 1-Day 99% General VaR by Risk Category

	Year ended December 31,
	2022				2021
(in millions)	Period end		Average		Low	High				Period end	Average		Low		High
Company Trading General VaR Risk Categories
Credit	$	29			32		19		85					19			38		12		112
Interest rate	25			25		9		88					15			25		4		120
Equity	27			23		13		38					15			30		13		72
Commodity	4			6		2		20					10			7		2		28
Foreign exchange	1			1		0		2					1			1		0		1
Diversification benefit (1)	(47)			(52)							(40)			(52)
Company Trading General VaR	$	39			35							20			49

(1)The period-end VaR was less than the sum of the VaR components described above, which is due to portfolio diversification. The diversification effect arises because the risks are not perfectly correlated causing a portfolio of positions to usually be less risky than the sum of the risks of the positions alone. The diversification benefit is not meaningful for low and high metrics since they may occur on different days.

estimate the risk of losses based on management’s assumptions of abnormal but severe market movements such as severe credit spread widening or a large decline in equity prices. These scenarios assume that the market moves happen instantaneously and no repositioning or hedging activity takes place to mitigate losses as events unfold (a conservative approach since experience demonstrates otherwise).

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48	Wells Fargo & Company

scenarios are based on plausible but rare events, and the analysis addresses how these events might affect the risk factors relevant to a portfolio.

MARKET RISK – EQUITY SECURITIES We are directly and indirectly affected by changes in the equity markets. We make and manage direct investments in start-up businesses, emerging growth companies, management buy-outs, acquisitions and corporate recapitalizations. We also invest in non-affiliated funds that make similar private equity investments. These private equity investments are made within capital allocations approved by management and the Board. The Board reviews business developments, key risks and historical returns for the private equity investment portfolio at least annually. Management reviews these investments at least quarterly to assess them for impairment and observable price changes. For nonmarketable equity securities, the analysis is based on facts and circumstances of each individual investment and the expectations for that investment’s cash flows, capital needs, the viability of its business model, our exit strategy, and observable price changes that are similar to the investments held. Investments in nonmarketable equity securities include private equity investments accounted for under the equity method, fair value through net income, and the measurement alternative.

As part of our business to support our customers, we trade public equities, listed/OTC equity derivatives and convertible bonds. We have parameters that govern these activities. We also have marketable equity securities that include investments relating to our venture capital activities. We manage these marketable equity securities within capital risk limits approved by management and the Board and monitored by Corporate ALCO and the Market Risk Committee. The fair value changes in these marketable equity securities are recognized in net income. For additional information, see Note 4 (Equity Securities) to Financial Statements in this Report.

LIQUIDITY RISK AND FUNDING Liquidity risk is the risk arising from the inability of the Company to meet obligations when they come due, or roll over funds at a reasonable cost, without incurring heightened costs. In the ordinary course of business, we enter into contractual obligations that may require future cash payments, including funding for customer loan requests, customer deposit maturities and withdrawals, debt service, leases for premises and equipment, and other cash commitments. The objective of effective liquidity management is to ensure that we can meet our contractual obligations and other cash commitments efficiently under both normal operating conditions and under periods of Wells Fargo-specific and/or market stress. For additional information on these obligations, see the following sections and Notes to Financial Statements in this Report:

•“Unfunded Credit Commitments” section within Loans and Related Allowance for Credit Losses (Note 5)

•Leasing Activity (Note 8)

•Deposits (Note 9)

•Long-Term Debt (Note 10)

•Guarantees and Other Commitments (Note 17)

•Employee Benefits (Note 21)

•Income Taxes (Note 22)

Liquidity Stress Tests Liquidity stress tests are performed to help ensure that the Company has sufficient liquidity to meet contractual and contingent outflows modeled under a variety of stress scenarios. Our scenarios utilize market-wide as well as corporate-specific events, including a range of stress conditions and time horizons. Stress testing results facilitate evaluation of the Company’s projected liquidity position during stress and inform future needs in the Company’s funding plan.

Contingency Funding Plan Our contingency funding plan (CFP), which is approved by Corporate ALCO and the Board’s Risk Committee, sets out the Company’s strategies and action plans to address potential liquidity needs during market-wide or idiosyncratic liquidity events. The CFP establishes measures for monitoring emerging liquidity events and describes the processes for communicating and managing stress events should they occur. The CFP also identifies alternate funding and liquidity strategies available to the Company in a period of stress.

The FRB, OCC and FDIC have also issued a rule implementing a stable funding requirement, known as the net stable funding ratio (NSFR), which requires a covered banking organization, such as Wells Fargo, to maintain a minimum amount of stable funding, including common equity, long-term debt and most types of deposits, in relation to its assets, derivative exposures and commitments over a one-year horizon period. The NSFR applies to the Company and to our IDIs with total assets of $10 billion or more. As of December 31, 2022, we were compliant with the NSFR requirement.

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	Wells Fargo & Company	49

Risk Management – Asset/Liability Management (continued)

Liquidity Coverage Ratio As of December 31, 2022, the Company, Wells Fargo Bank, N.A., and Wells Fargo National Bank West exceeded the minimum LCR requirement of 100%.

Table 34 presents the Company’s quarterly average values for the daily-calculated LCR and its components calculated pursuant

to the LCR rule requirements. The LCR represents average HQLA divided by average projected net cash outflows, as each is defined under the LCR rule.

Table 34: Liquidity Coverage Ratio

	Average for quarter ended
(in millions, except ratio)	Dec 31, 2022		Sep 30, 2022		Dec 31, 2021
HQLA (1):
Eligible cash	$	123,446		125,576			210,527
Eligible securities (2)	231,337		238,678			172,761
Total HQLA	354,783		364,254			383,288
Projected net cash outflows (3)	292,001		296,495			325,015
LCR	122	%		123			118

(1)Excludes excess HQLA at certain subsidiaries that are not transferable to other Wells Fargo entities.

(2)Net of applicable haircuts required under the LCR rule.

(3)Projected net cash outflows are calculated by applying a standardized set of outflow and inflow assumptions, defined by the LCR rule, to various exposures and liability types, such as deposits and unfunded loan commitments, which are prescribed based on a number of factors including the type of customer and the nature of the account.

Liquidity Sources We maintain liquidity in the form of cash, interest-earning deposits with banks, and unencumbered high-quality, liquid debt securities. These assets make up our primary sources of liquidity. Our primary sources of liquidity are substantially the same in composition as HQLA under the LCR rule; however, our primary sources of liquidity will generally exceed HQLA calculated under the LCR rule due to the applicable haircuts to HQLA and the exclusion of excess HQLA at our subsidiary IDIs required under the LCR rule. Our primary sources of liquidity are presented in Table 35 at fair value, which also includes encumbered securities that are not included as available HQLA in the calculation of the LCR.

Our cash is predominantly on deposit with the Federal Reserve. Debt securities included as part of our primary sources of liquidity are comprised of U.S. Treasury and federal agency debt, and MBS issued by federal agencies within our debt securities portfolio. We believe these debt securities provide quick sources of liquidity through sales or by pledging to obtain financing, regardless of market conditions. Some of these debt securities are within our HTM portfolio and, as such, are not intended for sale but may be pledged to obtain financing.

Table 35: Primary Sources of Liquidity

	December 31, 2022		December 31, 2021
(in millions)	Total		Encumbered		Unencumbered	Total		Encumbered		Unencumbered
Interest-earning deposits with banks	$	124,561			—		124,561			209,614		—		209,614
Debt securities of U.S. Treasury and federal agencies	59,570			12,080		47,490			56,486		4,066		52,420
Federal agency mortgage-backed securities	230,881			34,151		196,730			293,870		58,955		234,915
Total	$	415,012			46,231		368,781			559,970		63,021		496,949

In addition to our primary sources of liquidity shown in

Table 35, liquidity is also available through the sale or financing of other debt securities including trading and/or AFS debt securities as well as through the sale, securitization or financing of loans, to the extent such debt securities and loans are not encumbered.

Funding Sources The Parent acts as a source of funding for the Company through the issuance of long-term debt and equity. WFC Holdings, LLC (the “IHC”) is an intermediate holding company and subsidiary of the Parent, which provides funding support for the ongoing operational requirements of the Parent and certain of its direct and indirect subsidiaries. For additional information on the IHC, see the “Regulatory Matters – ‘Living Will’ Requirements and Related Matters” section in this Report. Additional subsidiary funding is provided by deposits, short-term borrowings and long-term debt.

Deposits have historically provided a sizable source of relatively low-cost funds. Deposits were 145% and 166% of total loans at December 31, 2022 and 2021, respectively.

As of December 31, 2022, we had approximately $209.0 billion of available borrowing capacity at various Federal Home Loan Banks and the Federal Reserve Discount Window. Although available, we do not view the borrowing capacity at the Federal Reserve Discount Window as a primary source of liquidity. Table 36 presents a summary of our short-term borrowings, which generally mature in less than 30 days. For additional information on the classification of our short-term borrowings, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report. We pledge certain financial instruments that we own to collateralize repurchase agreements and other securities financings. For additional information, see the “Pledged Assets” section of Note 18 (Pledged Assets and Collateral) to Financial Statements in this Report.

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50	Wells Fargo & Company

Table 36: Short-Term Borrowings

(in millions)	December 31, 2022
Federal funds purchased and securities sold under agreements to repurchase	$	30,623		21,191
Other short-term borrowings (1)	20,522		13,218
Total	$	51,145		34,409

(1)Includes $7.0 billion and $0 of Federal Home Loan Bank (FHLB) advances at December 31, 2022 and 2021, respectively.

liquidity position, we may redeem or repurchase, and subsequently retire, our outstanding debt securities in privately negotiated or open market transactions, by tender offer, or otherwise.

Table 37 presents a summary of our long-term debt. For additional information on our long-term debt, including contractual maturities, see Note 10 (Long-Term Debt), and for information on the classification of our long-term debt, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

Table 37: Long-Term Debt

(in millions)	December 31, 2022
Wells Fargo & Company (Parent Only)	$	134,401		146,286
Wells Fargo Bank, N.A., and other bank entities (Bank) (1)	39,189		12,858
Other consolidated subsidiaries	1,280		1,545
Total	$	174,870		160,689

(1)Includes $27.0 billion and $0 of FHLB advances at December 31, 2022 and 2021, respectively. For additional information, see Note 10 (Long-Term Debt) to Financial Statements in this Report.

There were no actions undertaken by the rating agencies with regard to our credit ratings during fourth quarter 2022.

See the “Risk Factors” section in this Report for additional information regarding our credit ratings and the potential impact a credit rating downgrade would have on our liquidity and operations as well as Note 14 (Derivatives) to Financial Statements in this Report for information regarding additional collateral and funding obligations required for certain derivative instruments in the event our credit ratings were to fall below investment grade.

The credit ratings of the Parent and Wells Fargo Bank, N.A., as of December 31, 2022, are presented in Table 38.

Table 38: Credit Ratings as of December 31, 2022

		Wells Fargo & Company	Wells Fargo Bank, N.A.
	Senior debt	Short-term borrowings	Long-term deposits	Short-term borrowings
Moody’s	A1	P-1	Aa1	P-1
S&P Global Ratings	BBB+	A-2	A+	A-1
Fitch Ratings	A+	F1	AA	F1+
DBRS Morningstar	AA (low)	R-1 (middle)	AA	R-1 (high)

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	Wells Fargo & Company	51

Capital Management

We have an active program for managing capital through a comprehensive process for assessing the Company’s overall capital adequacy. Our objective is to maintain capital at an amount commensurate with our risk profile and risk tolerance objectives, and to meet both regulatory and market expectations. We primarily fund our capital needs through the retention of earnings net of both dividends and share repurchases, as well as through the issuance of preferred stock and long- and short-term debt. Retained earnings at December 31, 2022, increased $7.3 billion from December 31, 2021, predominantly as a result of $13.2 billion of Wells Fargo net income, partially offset by $5.4 billion of common and preferred stock dividends. During 2022, we issued $1.8 billion of common stock, substantially all of which was issued in connection with employee compensation and benefits. In 2022, we repurchased 110 million shares of common stock at a cost of $6 billion. In 2022, our AOCI decreased $11.7 billion, predominantly due to net unrealized losses on AFS debt securities. As interest rates increase, changes in the fair value of AFS debt securities may negatively affect AOCI, which lowers the amount of our risk-based capital. For additional information about capital planning, see the “Capital Planning and Stress Testing” section below.

In 2022, we redeemed $609 million of preferred stock. For additional information, see Note 11 (Preferred Stock) to Financial Statements in this Report.

Regulatory Capital Requirements

Table 39: Risk-Based Capital Requirements – Standardized Approach as of December 31, 2022

Table 40: Risk-Based Capital Requirements – Advanced Approach as of December 31, 2022

In addition to the risk-based capital requirements described in Table 39 and Table 40, if the FRB determines that a period of excessive credit growth is contributing to an increase in systemic risk, a countercyclical buffer of up to 2.50% could be added to the risk-based capital ratio requirements under federal banking regulations. The countercyclical buffer in effect at December 31, 2022, was 0.00%.

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52	Wells Fargo & Company

wholesale funding and will generally result in higher surcharges than under method one. Because the G-SIB capital surcharge is calculated annually based on data that can differ over time, the amount of the surcharge is subject to change in future years. If our annual calculation results in a decrease to our G-SIB capital surcharge, the decrease takes effect the next calendar year. If our annual calculation results in an increase to our G-SIB capital surcharge, the increase takes effect in two calendar years. Our

G-SIB capital surcharge will continue to be 1.50% in 2023.

The tables that follow provide information about our risk-based capital and related ratios as calculated under Basel III capital rules. Table 41 summarizes our CET1, Tier 1 capital, total capital, RWAs and capital ratios.

Table 41: Capital Components and Ratios

		Standardized Approach		Advanced Approach
($ in millions)		Required Capital Ratios (1)		Dec 31, 2022		Dec 31, 2021		Required Capital Ratios (1)	Dec 31, 2022		Dec 31, 2021
Common Equity Tier 1	(A)			$	133,527			140,643				133,527			140,643
Tier 1 capital	(B)			152,567			159,671				152,567			159,671
Total capital	(C)			186,747			196,281				177,258			186,553
Risk-weighted assets	(D)			1,259,889			1,239,026				1,112,307			1,116,068
Common Equity Tier 1 capital ratio	(A)/(D)	9.20	%		10.60		*	11.35		8.50			12.00			12.60
Tier 1 capital ratio	(B)/(D)	10.70			12.11		*	12.89		10.00			13.72			14.31
Total capital ratio	(C)/(D)	12.70			14.82		*	15.84		12.00			15.94			16.72

*Denotes the binding ratio under the Standardized and Advanced Approaches at December 31, 2022.

(1)Represents the minimum ratios required to avoid restrictions on capital distributions and discretionary bonus payments at December 31, 2022.

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	Wells Fargo & Company	53

Capital Management (continued)

Table 42 provides information regarding the calculation and composition of our risk-based capital under the Standardized and Advanced Approaches.

Table 42: Risk-Based Capital Calculation and Components

(in millions)		Dec 31, 2022
Total equity		$	181,875		190,110
Adjustments:
Preferred stock (1)		(19,448)		(20,057)
Additional paid-in capital on preferred stock (1)		173		136
Unearned Employee Stock Ownership Plan (ESOP) shares (1)		—		646
Noncontrolling interests		(1,986)		(2,504)
Total common stockholders’ equity		$	160,614		168,331
Adjustments:
Goodwill		(25,173)		(25,180)
Certain identifiable intangible assets (other than MSRs)		(152)		(225)
Goodwill and other intangibles on investments in consolidated portfolio companies (included in other assets)		(2,427)		(2,437)
Applicable deferred taxes related to goodwill and other intangible assets (2)		890		765
CECL transition provision (3)		180		241
Other		(405)		(852)
Common Equity Tier 1 under the Standardized and Advanced Approaches		$	133,527		140,643
Preferred stock (1)		19,448		20,057
Additional paid-in capital on preferred stock (1)		(173)		(136)
Unearned ESOP shares (1)		—		(646)
Other		(235)		(247)
Total Tier 1 capital under the Standardized and Advanced Approaches	(A)	$	152,567		159,671
Long-term debt and other instruments qualifying as Tier 2		20,503		22,740
Qualifying allowance for credit losses (4)		13,959		14,149
Other		(282)		(279)
Total Tier 2 capital under the Standardized Approach	(B)	$	34,180		36,610
Total qualifying capital under the Standardized Approach	(A)+(B)	$	186,747		196,281
Long-term debt and other instruments qualifying as Tier 2		20,503		22,740
Qualifying allowance for credit losses (4)		4,470		4,421
Other		(282)		(279)
Total Tier 2 capital under the Advanced Approach	(C)	$	24,691		26,882
Total qualifying capital under the Advanced Approach	(A)+(C)	$	177,258		186,553

(1)In fourth quarter 2022, we redeemed all outstanding shares of our ESOP Cumulative Convertible Preferred Stock in exchange for shares of the Company’s common stock. For additional information, see Note 11 (Preferred Stock) to Financial Statements in this Report.

(3)In second quarter 2020, the Company elected to apply a modified transition provision issued by federal banking regulators related to the impact of the current expected credit loss accounting standard (CECL) on regulatory capital. The rule permits certain banking organizations to exclude from regulatory capital the initial adoption impact of CECL, plus 25% of the cumulative changes in the allowance for credit losses (ACL) under CECL for each period until December 31, 2021, followed by a three-year phase-out period in which the benefit is reduced by 25% in year one, 50% in year two and 75% in year three.

(4)Differences between the approaches are driven by the qualifying amounts of ACL includable in Tier 2 capital. Under the Advanced Approach, eligible credit reserves represented by the amount of qualifying ACL in excess of expected credit losses (using regulatory definitions) is limited to 0.60% of Advanced credit RWAs, whereas the Standardized Approach includes ACL in Tier 2 capital up to 1.25% of Standardized credit RWAs. Under both approaches, any excess ACL is deducted from the respective total RWAs.

Table 43 provides the composition of our RWAs under the Standardized and Advanced Approaches.

Table 43: Risk-Weighted Assets

	Standardized Approach
(in millions)	Dec 31, 2022		Dec 31, 2021		Dec 31, 2022			Dec 31, 2021
Risk-weighted assets (RWAs):
Credit risk	$	1,218,006			1,186,810		757,436			747,714
Market risk	41,883			52,216		41,883			52,216
Operational risk	—			—		312,988			316,138
Total RWAs	$	1,259,889			1,239,026		1,112,307			1,116,068

(1)RWAs calculated under the Advanced Approach utilize a risk-sensitive methodology, which relies upon the use of internal credit models based upon our experience with internal rating grades. Advanced Approach also includes an operational risk component, which reflects the risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events.

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54	Wells Fargo & Company

Table 44 provides an analysis of the changes in CET1.

Table 44: Analysis of Changes in Common Equity Tier 1

(in millions)
Common Equity Tier 1 at December 31, 2021	$	140,643
Net income applicable to common stock	12,067
Common stock dividends	(4,184)
Common stock issued, repurchased, and stock compensation-related items	(3,930)
Changes in accumulated other comprehensive income	(11,677)
Goodwill	7
Certain identifiable intangible assets (other than MSRs)	73
Goodwill and other intangibles on investments in consolidated portfolio companies (included in other assets)	10
Applicable deferred taxes related to goodwill and other intangible assets (1)	125
CECL transition provision (2)	(61)
Other	454
Change in Common Equity Tier 1	(7,116)
Common Equity Tier 1 at December 31, 2022	$	133,527

(2)In second quarter 2020, the Company elected to apply a modified transition provision issued by federal banking regulators related to the impact of CECL on regulatory capital. The rule permits certain banking organizations to exclude from regulatory capital the initial adoption impact of CECL, plus 25% of the cumulative changes in the allowance for credit losses (ACL) under CECL for each period until December 31, 2021, followed by a three-year phase-out period in which the benefit is reduced by 25% in year one, 50% in year two and 75% in year three.

Table 45 presents net changes in the components of RWAs under the Standardized and Advanced Approaches.

Table 45: Analysis of Changes in RWAs

(in millions)	Standardized Approach	Advanced Approach
Risk-weighted assets (RWAs) at December 31, 2021	$	1,239,026		1,116,068
Net change in credit risk RWAs	31,196		9,722
Net change in market risk RWAs	(10,333)		(10,333)
Net change in operational risk RWAs	—		(3,150)
Total change in RWAs	20,863		(3,761)
RWAs at December 31, 2022	$	1,259,889		1,112,307

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	Wells Fargo & Company	55

Capital Management (continued)

Table 46 provides a reconciliation of these non-GAAP financial measures to GAAP financial measures.

Table 46: Tangible Common Equity

		Balance at period-end						Average balance
		Quarter ended				Year ended
(in millions, except ratios)		Dec 31, 2022		Dec 31, 2021	Dec 31, 2020				Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Total equity		$	181,875			190,110		185,712					183,224	191,219		184,689
Adjustments:
Preferred stock (1)		(19,448)			(20,057)		(21,136)					(19,930)		(21,151)		(21,364)
Additional paid-in capital on preferred stock (1)		173			136		152					143		137		148
Unearned ESOP shares (1)		—			646		875					512		874		1,007
Noncontrolling interests		(1,986)			(2,504)		(1,033)					(2,323)		(1,601)		(769)
Total common stockholders’ equity	(A)	160,614			168,331		164,570					161,626		169,478		163,711
Adjustments:
Goodwill		(25,173)			(25,180)		(26,392)					(25,177)		(26,087)		(26,387)
Certain identifiable intangible assets (other than MSRs)		(152)			(225)		(342)					(190)		(294)		(389)
Goodwill and other intangibles on investments in consolidated portfolio companies (included in other assets)		(2,427)			(2,437)		(1,965)					(2,359)		(2,226)		(2,002)
Applicable deferred taxes related to goodwill and other intangible assets (2)		890			765		856					864		867		834
Tangible common equity	(B)	$	133,752			141,254		136,727					134,764		141,738		135,767
Common shares outstanding	(C)	3,833.8			3,885.8		4,144.0					N/A	N/A	N/A
Net income applicable to common stock	(D)	N/A		N/A	N/A				$	12,067		20,256		1,786
Book value per common share	(A)/(C)	$	41.89			43.32		39.71					N/A	N/A	N/A
Tangible book value per common share	(B)/(C)	34.89			36.35		32.99					N/A	N/A	N/A
Return on average common stockholders’ equity (ROE)	(D)/(A)	N/A		N/A	N/A				7.47	%	11.95		1.09
Return on average tangible common equity (ROTCE)	(D)/(B)	N/A		N/A	N/A				8.95		14.29		1.32

LEVERAGE REQUIREMENTS As a BHC, we are required to maintain a supplementary leverage ratio (SLR) to avoid restrictions on capital distributions and discretionary bonus payments and maintain a minimum Tier 1 leverage ratio. Table 47 presents the leverage requirements applicable to the Company as of December 31, 2022.

Table 47: Leverage Requirements Applicable to the Company

The FRB and OCC have proposed amendments to the SLR rules (Proposed SLR rules) that would replace the 2.00% supplementary leverage buffer with a buffer equal to one-half of our G-SIB capital surcharge. The Proposed SLR rules would similarly tailor the current 6.00% SLR requirement for our IDIs.

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56	Wells Fargo & Company

At December 31, 2022, the Company’s SLR was 6.86%, and each of our IDIs exceeded their applicable SLR requirements. Table 48 presents information regarding the calculation and components of the Company’s SLR and Tier 1 leverage ratio.

Table 48: Leverage Ratios for the Company

($ in millions)		Quarter ended December 31, 2022
Tier 1 capital	(A)	$	152,567
Total average assets		1,875,396
Less: Goodwill and other permitted Tier 1 capital deductions (net of deferred tax liabilities)		28,442
Total adjusted average assets		1,846,954
Plus adjustments for off-balance sheet exposures:
Derivatives (1)		63,277
Repo-style transactions (2)		3,250
Other (3)		311,308
Total off-balance sheet exposures		377,835
Total leverage exposure	(B)	$	2,224,789
Supplementary leverage ratio	(A)/(B)	6.86	%
Tier 1 leverage ratio (4)		8.26	%

(1)Adjustment represents derivatives and collateral netting exposures as defined for supplementary leverage ratio determination purposes.

(2)Adjustment represents counterparty credit risk for repo-style transactions where Wells Fargo & Company is the principal counterparty facing the client.

(3)Adjustment represents credit equivalent amounts of other off-balance sheet exposures not already included as derivatives and repo-style transactions exposures.

(4)The Tier 1 leverage ratio consists of Tier 1 capital divided by total average assets, excluding goodwill and certain other items as determined under the rule.

Table 49: Components Used to Calculate TLAC and Eligible Unsecured Long-Term Debt Requirements

TLAC requirement Greater of:
18.00% of RWAs		7.50% of total leverage exposure (the denominator of the SLR calculation)
+	+
TLAC buffer (equal to 2.50% of RWAs + method one G-SIB capital surcharge + any countercyclical buffer)	External TLAC leverage buffer (equal to 2.00% of total leverage exposure)
Minimum amount of eligible unsecured long-term debt Greater of:
6.00% of RWAs		4.50% of total leverage exposure
+
Greater of method one and method two G-SIB capital surcharge

Under the Proposed SLR rules, the 2.00% external TLAC leverage buffer would be replaced with a buffer equal to one-half of our applicable G-SIB capital surcharge, and the leverage

component for calculating the minimum amount of eligible unsecured long-term debt would be modified from 4.50% of total leverage exposure to 2.50% of total leverage exposure plus one-half of our applicable G-SIB capital surcharge.

Table 50 provides our TLAC and eligible unsecured long-term debt and related ratios.

Table 50: TLAC and Eligible Unsecured Long-Term Debt

December 31, 2022
($ in millions)	TLAC (1)		Regulatory Minimum (2)		Eligible Unsecured Long-term Debt		Regulatory Minimum
Total eligible amount	$	293,152				134,521
Percentage of RWAs (3)	23.27	%		21.50			10.68	7.50
Percentage of total leverage exposure	13.18			9.50			6.05	4.50

(1)TLAC ratios are calculated using the CECL transition provision issued by federal banking regulators.

(2)Represents the minimum required to avoid restrictions on capital distributions and discretionary bonus payments.

(3)Our minimum TLAC and eligible unsecured long-term debt requirements are calculated based on the greater of RWAs determined under the Standardized and Advanced Approaches.

Our principal U.S. broker-dealer subsidiaries, Wells Fargo Securities, LLC, and Wells Fargo Clearing Services, LLC, are subject to regulations to maintain minimum net capital requirements. As of December 31, 2022, these broker-dealer subsidiaries were in compliance with their respective regulatory minimum net capital requirements.

Capital Planning and Stress Testing

Our planned long-term capital structure is designed to meet regulatory and market expectations. We believe that our long-term targeted capital structure enables us to invest in and grow our business, satisfy our customers’ financial needs in varying environments, access markets, and maintain flexibility to return capital to our shareholders. Our long-term targeted capital structure also considers capital levels sufficient to exceed capital requirements, including the G-SIB capital surcharge and the stress capital buffer, as well as potential changes to regulatory requirements for our capital ratios, planned capital actions, changes in our risk profile and other factors. Accordingly, our long-term target capital levels are set above their respective regulatory minimums plus buffers.

As part of the annual Comprehensive Capital Analysis and Review, the FRB generates a supervisory stress test. The FRB reviews the supervisory stress test results as required under the Dodd-Frank Act using a common set of capital actions for all large BHCs and also reviews the Company’s proposed capital actions.

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Capital Management (continued)

Securities Repurchases

From time to time the Board authorizes the Company to repurchase shares of our common stock. Although we announce when the Board authorizes share repurchases, we typically do not give any public notice before we repurchase our shares. Various factors determine the amount of our share repurchases, including our capital requirements, the number of shares we expect to issue for employee benefit plans and any acquisitions, market conditions (including the trading price of our stock), and regulatory and legal considerations, including under the FRB’s capital plan rule. Due to the various factors that may impact the

amount of our share repurchases and the fact that we tend to be in the market regularly to satisfy repurchase considerations under our capital plan, our share repurchases occur at various price levels. We may suspend share repurchase activity at any time.

At December 31, 2022, we had remaining Board authority to repurchase approximately 250 million shares, subject to regulatory and legal conditions. For additional information about share repurchases during fourth quarter 2022, see Part II, Item 5 in our 2022 Form 10-K.

Regulatory Matters

The U.S. financial services industry is subject to significant regulation and regulatory oversight initiatives. This regulation and oversight may continue to impact how U.S. financial services companies conduct business and may continue to result in increased regulatory compliance costs. The following highlights the more significant regulations and regulatory oversight initiatives that have affected or may affect our business. For additional information about the regulatory matters discussed below and other regulations and regulatory oversight matters, see Part I, Item 1 “Regulation and Supervision” of our 2022 Form 10-K, and the “Overview,” “Capital Management,” “Forward-Looking Statements” and “Risk Factors” sections and Note 25 (Regulatory Capital Requirements and Other Restrictions) to Financial Statements in this Report.

Dodd-Frank Act

•Enhanced supervision and regulation of systemically important firms. The Dodd-Frank Act grants broad authority to federal banking regulators to establish enhanced supervisory and regulatory requirements for systemically important firms. The FRB has finalized a number of regulations implementing enhanced prudential requirements for large bank holding companies (BHCs) like Wells Fargo regarding risk-based capital and leverage, risk and liquidity management, single counterparty credit limits, and imposing debt-to-equity limits on any BHC that regulators determine poses a grave threat to the financial stability of the United States. The FRB and OCC have also finalized rules implementing stress testing requirements for large BHCs and national banks. In addition, the FRB has proposed a rule to establish remediation requirements for large BHCs experiencing financial distress. Furthermore, to promote a BHC’s safety and soundness and the financial and operational resilience of its operations, the FRB has finalized guidance regarding effective boards of directors of large BHCs and has proposed related guidance identifying core principles for effective senior management. The OCC, under separate authority, has finalized guidelines establishing heightened governance and risk management standards for large national banks such as Wells Fargo Bank, N.A. The OCC guidelines require covered banks to establish and adhere to a written risk governance framework to manage and control their risk-taking activities. The guidelines also formalize roles and responsibilities for risk management practices within covered banks and create certain risk oversight responsibilities for their boards of directors. In addition to

•Regulation of consumer financial products. The Dodd-Frank Act established the Consumer Financial Protection Bureau (CFPB) to ensure that consumers receive clear and accurate disclosures regarding financial products and are protected from unfair, deceptive or abusive practices. The CFPB has issued a number of rules impacting consumer financial products, including rules regarding the origination, servicing, notification, disclosure and other requirements with respect to residential mortgage lending, as well as rules impacting prepaid cards, credit cards, and other financial products and banking-related activities. In addition to these rulemaking activities, the CFPB is continuing its ongoing supervisory examination activities of the financial services industry with respect to a number of consumer businesses and products, including mortgage lending and servicing, fair lending requirements, and auto finance.

•Regulation of swaps and other derivatives activities. The Dodd-Frank Act established a comprehensive framework for regulating over-the-counter derivatives, and, pursuant to authority granted by the Dodd-Frank Act, the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) have adopted comprehensive sets of rules regulating swaps and security-based swaps, respectively, and the OCC and other federal regulatory agencies have adopted margin requirements for uncleared swaps and security-based swaps. As a provisionally-registered swap dealer and a conditionally-registered security-based swap dealer, Wells Fargo Bank, N.A., is subject to these rules. These rules, as well as others adopted or under consideration by regulators in the United States and other jurisdictions, may negatively impact customer demand for over-the-counter derivatives, impact our ability to offer customers new derivatives or amendments to existing derivatives, and may increase our costs for engaging in swaps, security-based swaps, and other derivatives activities.

Regulatory Capital, Leverage, and Liquidity Requirements

The Company and each of our IDIs are subject to various regulatory capital adequacy requirements administered by the FRB and the OCC. For example, the Company is subject to rules issued by federal banking regulators to implement Basel III risk-based capital requirements for U.S. banking organizations. The Company and its IDIs are also required to maintain specified

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58	Wells Fargo & Company

leverage and supplementary leverage ratios. In addition, the Company is required to have a minimum amount of total loss absorbing capacity for purposes of resolvability and resiliency. Federal banking regulators have also issued final rules requiring a liquidity coverage ratio and a net stable funding ratio. For additional information on the final risk-based capital, leverage and liquidity rules, and additional capital requirements applicable to us, see the “Capital Management” and “Risk Management – Asset/Liability Management – Liquidity Risk and Funding – Liquidity Standards” sections in this Report.

“Living Will” Requirements and Related Matters

Rules adopted by the FRB and the FDIC under the Dodd-Frank Act require large financial institutions, including Wells Fargo, to prepare and periodically submit resolution plans, also known as “living wills,” that would facilitate their rapid and orderly resolution in the event of material financial distress or failure. Under the rules, rapid and orderly resolution means a reorganization or liquidation of the covered company under the U.S. Bankruptcy Code that can be accomplished in a reasonable period of time and in a manner that substantially mitigates the risk that failure would have serious adverse effects on the financial stability of the United States. In addition to the Company’s resolution plan, our national bank subsidiary, Wells Fargo Bank, N.A. (the “Bank”), is also required to prepare and periodically submit a resolution plan. If the FRB and/or FDIC determine that our resolution plan has deficiencies, they may impose more stringent capital, leverage or liquidity requirements on us or restrict our growth, activities or operations until we adequately remedy the deficiencies. If the FRB and/or FDIC ultimately determine that we have been unable to remedy any deficiencies, they could require us to divest certain assets or operations. On November 23, 2022, the FRB and FDIC announced that the Company’s most recent resolution plan did not have any shortcomings or deficiencies.

desirable strategy under its implementation of the orderly liquidation authority, but not all aspects of how the FDIC might exercise this authority are known and additional rulemaking is possible.

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	Wells Fargo & Company	59

Regulatory Matters (continued)

periodically submit to the OCC a recovery plan that sets forth the Bank’s plan to remain a going concern when the Bank is experiencing considerable financial or operational stress, but has not yet deteriorated to the point where liquidation or resolution is imminent. If either the FRB or the OCC determines that our recovery plan is deficient, they may impose fines, restrictions on our business or ultimately require us to divest assets.

Other Regulatory Related Matters

◦Consent Orders Discussed in the “Overview” Section in this Report. For a discussion of certain consent orders applicable to the Company, see the “Overview” section in this Report.

•Regulatory Developments in Response to Climate Change. Federal and state governments and government agencies have demonstrated increased attention to the impacts and potential risks associated with climate change. For example, federal banking regulators are reviewing the implications of climate change on the financial stability of the United States and the identification and management by large banks of climate-related financial risks. In addition, the SEC has proposed rules that would require public companies to disclose certain climate-related information, including greenhouse gas emissions, climate-related targets and goals, and governance of climate-related risks and relevant risk management processes. The approaches taken by various governments and government agencies can vary significantly, evolve over time, and sometimes conflict. Any current or future rules, regulations, and guidance related to climate change and its impacts could require us to change certain of our business practices, reduce our revenue and earnings, impose additional costs on us, or otherwise adversely affect our business operations and/or competitive position.

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60	Wells Fargo & Company

Critical Accounting Policies

•the allowance for credit losses;

•the valuation of residential MSRs;

•the fair value of financial instruments;

•income taxes;

•liability for contingent litigation losses; and

•goodwill impairment.

Management has discussed these critical accounting policies and the related estimates and judgments with the Board’s Audit Committee.

Allowance for Credit Losses

We maintain an allowance for credit losses (ACL) for loans, which is management’s estimate of the expected credit losses in the loan portfolio and unfunded credit commitments, at the balance sheet date, excluding loans and unfunded credit commitments carried at fair value or held for sale. Additionally, we maintain an ACL for debt securities classified as either HTM or AFS, other financial assets measured at amortized cost, net investments in leases, and other off-balance sheet credit exposures. For additional information, see Note 1 (Summary of Significant Accounting Policies) and Note 5 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.

Changes in the ACL and, therefore, in the related provision for credit losses can materially affect net income. In applying the judgment and review required to determine the ACL, management considerations include the evaluation of past events, historical experience, changes in economic forecasts and conditions, customer behavior, collateral values, the length of the initial loss forecast period, and other influences. From time to time, changes in economic factors or assumptions, business strategy, products or product mix, or debt security investment strategy, may result in a corresponding increase or decrease in our ACL. While our methodology attributes portions of the ACL to specific financial asset classes (loan and debt security portfolios) or loan portfolio segments (commercial and consumer), the entire ACL is available to absorb credit losses of the Company.

Judgment is specifically applied in:

and collateral asset prices. While many of these economic variables are evaluated at the macro-economy level, some economic variables are forecasted at more granular levels, for example, using the metro statistical area (MSA) level for unemployment rates, home prices and commercial real estate prices. At least annually, we assess the length of the initial loss forecast period and have currently set the period to two years. For the initial loss forecast period, we forecast multiple economic scenarios that generally include a base scenario with an optimistic (upside) and one or more pessimistic (downside) scenarios. Management exercises judgment when assigning weight to the economic scenarios that are used to estimate future credit losses.

•Usage of credit loss estimation models. We use internally developed models that incorporate credit attributes and economic variables to generate credit loss estimates. Management uses judgment and quantitative analytics in the determination of segmentation, modeling approach, and variables that are leveraged in the models. These models are independently validated in accordance with the Company’s policies. We routinely assess our model performance and apply adjustments when necessary to improve the accuracy of loss estimation. We also assess our models for limitations against the company-wide risk inventory to help appropriately capture known and emerging risks in our estimate of expected credit losses and apply overlays as needed.

•Valuation of collateral. The current fair value of collateral is utilized to assess the expected credit losses when a financial asset is considered to be collateral dependent. We apply judgment when valuing the collateral either through appraisals, evaluation of the cash flows of the property, or other quantitative techniques. Decreases in collateral valuations support incremental charge-downs and increases in collateral valuation are included in the ACL as a negative allowance when the financial asset has been previously written-down below current recovery value.

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Critical Accounting Policies (continued)

options. We also incorporate any scenarios where we reasonably expect to provide an extension through a troubled debt restructuring (TDR). Credit card loans have indeterminate maturities, which requires that we determine a contractual life by estimating the application of future payments to the outstanding loan amount.

Our sensitivity analysis does not represent management’s view of expected credit losses at the balance sheet date. We applied a 100% weight to a more severe downside scenario in our sensitivity analysis to reflect the potential for further economic deterioration. The outcome of the scenario was influenced by the duration, severity, and timing of changes in economic variables within the scenario. The sensitivity analysis resulted in a hypothetical increase in the ACL for loans of approximately $7.0 billion at December 31, 2022. The hypothetical increase in our ACL for loans does not incorporate the impact of management judgment for qualitative factors applied in the current ACL for loans, which may have a positive or negative effect on the results. It is possible that others performing similar sensitivity analyses could reach different conclusions or results.

Valuation of Residential Mortgage Servicing Rights (MSRs)

MSRs are assets that represent the rights to service mortgage loans for others. We recognize MSRs when we retain servicing rights in connection with the sale or securitization of loans we originate (asset transfers), or purchase servicing rights from third parties. We also have acquired MSRs in the past under co-issuer agreements that provide for us to service loans that were originated and securitized by third-party correspondents.

We carry our MSRs related to residential mortgage loans at fair value. Periodic changes in our residential MSRs and the economic hedges used to hedge our residential MSRs are reflected in earnings.

We use a model to estimate the fair value of our residential MSRs. The model is validated in accordance with Company policies by an internal model validation group. The model calculates the present value of estimated future net servicing income and incorporates inputs and assumptions that market participants use in estimating fair value. Certain significant inputs and assumptions generally are not observable in the market and require judgment to determine.

If observable market indications do become available, these are factored into the estimates as appropriate:

•The mortgage loan prepayment rate used to estimate future net servicing income. The prepayment rate is the annual rate at which borrowers are forecasted to repay their mortgage loan principal; this rate also includes estimated borrower defaults. We use models to estimate prepayment rate and borrower defaults which are influenced by changes in mortgage interest rates and borrower behavior.

•The discount rate used to present value estimated future net servicing income. The discount rate is the required rate of return investors in the market would expect for an asset with similar risk. To determine the discount rate, we consider the risk premium for uncertainties in the cash flow estimates such as from servicing operations (e.g., possible changes in future servicing costs, ancillary income and earnings on escrow accounts). In 2022, we enhanced our approach for estimating the discount rate to a more dynamic methodology for market curves and volatility.

Fair Value of Financial Instruments

We use fair value measurements to record fair value adjustments to certain financial instruments and to fulfill fair value disclosure requirements. For example, assets and liabilities held for trading purposes, marketable equity securities, AFS debt securities, derivatives and a majority of our LHFS are carried at fair value each period. Other financial instruments, such as certain LHFS, substantially all nonmarketable equity securities, and loans held for investment, are not carried at fair value each period but may require nonrecurring fair value adjustments through the application of an accounting method

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such as lower-of-cost-or-fair value (LOCOM), write-downs of individual assets, or application of the measurement alternative for certain nonmarketable equity securities. We also disclose our estimate of fair value for financial instruments not carried at fair value, such as HTM debt securities, loans held for investment, and long-term debt.

The accounting requirements for fair value measurements include a three-level hierarchy for disclosure of assets and liabilities recorded at fair value. The classification of assets and liabilities within the hierarchy is based on whether the inputs to the valuation methodology used for measurement are observable or unobservable. Observable inputs reflect market-derived or market-based information obtained from independent sources, while unobservable inputs reflect our estimates about market data.

When developing fair value measurements, we maximize the use of observable inputs and minimize the use of unobservable inputs. When available, we use quoted prices in active markets to measure fair value. If quoted prices in active markets are not available, fair value measurement is based upon models that generally use market-based or independently sourced market parameters, including interest rate yield curves, prepayment rates, option volatilities and currency rates. However, when observable market data is limited or not available, fair value estimates are typically determined using internal models based on unobservable inputs. Internal models used to determine fair value are validated in accordance with Company policies by an internal model validation group. Additionally, we use third-party pricing services to obtain fair values, which are used to either record the price of an instrument or to corroborate internal prices. Third-party price validation procedures are performed over the reasonableness of the fair value measurements.

When using internal models based on unobservable inputs, management judgment is necessary as we make judgments about significant assumptions that market participants would use to estimate fair value. Determination of these assumptions includes consideration of many factors, including market conditions and liquidity levels. Changes in the market conditions, such as reduced liquidity in the capital markets or changes in secondary market activities, may reduce the availability and reliability of quoted prices or observable data used to determine fair value. In such cases, it may be appropriate to adjust available quoted prices or observable market data. For example, we may adjust a price received from a third-party pricing service using internal models based on discounted cash flows when the impact of illiquid markets has not already been incorporated in the fair value measurement. Additionally, for certain residential LHFS and certain debt and equity securities where the significant inputs have become unobservable due to illiquid markets and a third-party pricing service is not used, our discounted cash flow model uses a discount rate that reflects what we believe a market participant would require in light of the illiquid market.

and significant inputs used to estimate fair value. The classification as Level 2 or Level 3 is based upon the specific facts and circumstances of each instrument or instrument category and judgments are made regarding the significance of unobservable inputs to each instrument’s fair value measurement in its entirety. If unobservable inputs are considered significant to the fair value measurement, the instrument is classified as Level 3.

Table 51 presents our (1) assets and liabilities recorded at fair value on a recurring basis and (2) Level 3 assets and liabilities recorded at fair value on a recurring basis, both presented as a percentage of our total assets and total liabilities.

Table 51: Fair Value Level 3 Summary

	December 31, 2022		December 31, 2021
($ in billions)	Total balance		Level 3 (1)		Total balance		Level 3 (1)
Assets recorded at fairvalue on a recurring basis	$	264.4			11.5			348.9		19.6
As a percentage of total assets	14	%		*		18			1
Liabilities recorded at fair value on a recurring basis	$	41.7			4.7			30.1		2.6
As a percentage of total liabilities	2	%		*		2			*

*Less than 1%.

(1)Before derivative netting adjustments.

Income Taxes

We file income tax returns in the jurisdictions in which we operate and evaluate income tax expense in two components: current and deferred income tax expense. Current income tax expense represents our estimated taxes to be paid or refunded for the current period and includes income tax expense related to uncertain tax positions. Uncertain tax positions that meet the more likely than not recognition threshold are measured to determine the amount of benefit to recognize. An uncertain tax position is measured at the largest amount of benefit that management believes has a greater than 50% likelihood of realization upon settlement. Tax benefits not meeting our realization criteria represent unrecognized tax benefits.

Deferred income taxes are based on the balance sheet method and deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Under the balance sheet method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax basis of assets and liabilities, and recognizes enacted changes in tax rates and laws in the period in which they occur. Deferred tax assets are recognized subject to management’s judgment that realization is more likely than not. A valuation allowance reduces deferred tax assets to the realizable amount.

The income tax laws of the jurisdictions in which we operate are complex and subject to different interpretations by management and the relevant government taxing authorities. In establishing a provision for income tax expense, we must make judgments about the application of these inherently complex tax laws. We must also make estimates about when in the future certain items will affect taxable income in the various tax jurisdictions. Our interpretations may be subjected to review during examination by taxing authorities and disputes may arise

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Critical Accounting Policies (continued)

over the respective tax positions. We attempt to resolve these disputes during the tax examination and audit process and ultimately through the court systems when applicable.

We monitor relevant tax authorities and revise our estimate of accrued income taxes due to changes in income tax laws and their interpretation by the courts and regulatory authorities on a quarterly basis. Revisions of our estimate of accrued income taxes also may result from our own income tax planning and from the resolution of income tax controversies. Such revisions in our estimates may be material to our operating results for any given quarter.

See Note 22 (Income Taxes) to Financial Statements in this Report for a further description of our provision for income taxes and related income tax assets and liabilities.

Liability for Contingent Litigation Losses

We apply judgment when establishing an accrual for potential losses associated with legal actions and in establishing the range of reasonably possible losses in excess of the accrual. Our judgment in establishing accruals and the range of reasonably possible losses in excess of the Company’s accrual for probable and estimable losses is influenced by our understanding of information currently available related to the legal evaluation and potential outcome of actions, including input and advice on these matters from our internal counsel, external counsel and senior management. These matters may be in various stages of investigation, discovery or proceedings. They may also involve a wide variety of claims across our businesses, legal entities and jurisdictions. The eventual outcome may be a scenario that was not considered or was considered remote in anticipated occurrence. Accordingly, our estimate of potential losses will change over time and the actual losses may vary significantly.

See Note 13 (Legal Actions) to Financial Statements in this Report for additional information.

Goodwill Impairment

regulators, or company specific factors such as a decline in market capitalization.

We identify reporting units to be assessed for goodwill impairment at the reportable operating segment level or one level below. We calculate reporting unit carrying amounts as allocated capital plus assigned goodwill and other intangible assets. We allocate capital to the reporting units under a risk-sensitive framework driven by our regulatory capital requirements. We estimate fair value of the reporting units based on a balanced weighting of fair values estimated using both an income approach and a market approach which are intended to reflect Company performance and expectations as well as external market conditions. The methodologies for calculating carrying amounts and estimating fair values are periodically assessed by senior management and revised as necessary.

The income approach is a discounted cash flow (DCF) analysis, which estimates the present value of future cash flows associated with each reporting unit. A DCF analysis requires significant judgment to model financial forecasts for our reporting units, which includes future expectations of economic conditions and balance sheet changes, as well as considerations related to future business activities. The forecasts are reviewed by senior management. For periods after our financial forecasts, we incorporate a terminal value estimate based on an assumed long-term growth rate. We discount these forecasted cash flows using a consistent rate derived from the capital asset pricing model which produces an estimated cost of equity for our reporting units, which reflects risks and uncertainties in the financial markets and in our internally generated business projections.

The market approach utilizes observable market data from comparable publicly traded companies, such as price-to-earnings or price-to-tangible book value ratios, to estimate a reporting unit’s fair value. The results of the market approach include a control premium to represent our expectation of a hypothetical acquisition of the reporting unit. Management uses judgment in the selection of comparable companies and includes those with the most similar business activities.

The aggregate fair value of our reporting units exceeded our market capitalization for our fourth quarter 2022 assessment. Factors that we considered in our assessment and contributed to this difference included: (i) an overall premium that would be paid to gain control of the operating and financial decisions of the Company, (ii) synergies that we believe may not be reflected in the price of the Company’s common stock, and (iii) risks or benefits at the Company level that may not be reflected in the aggregated fair value of the individual reporting units, such as the impacts of a variety of historical matters, including litigation, regulatory, and customer remediation matters.

Based on our fourth quarter 2022 assessment, there was no impairment of goodwill at December 31, 2022. The fair values of each reporting unit exceeded their carrying amounts by substantial amounts, with the exception of our Consumer Lending reporting unit. Although the fair value of our Consumer Lending reporting unit exceeded its carrying amount by more than 10%, it was the most sensitive to changes in valuation assumptions, particularly related to the financial forecasts of

the supporting businesses. The home lending business may experience uncertainty related to the current mortgage origination market and the outcome of planned changes to the business model. The credit card business has forecasted higher loan balances driven by growth from new products. Adverse changes to these forecasts may result in an impairment. Using our fourth quarter 2022 assessment, we would need to

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experience a substantial decrease in forecasted earnings of the Consumer Lending reporting unit or have a significant increase

in the discount rate used for the DCF analysis to result in an impairment. The amount of goodwill assigned to the Consumer Lending reporting unit was $7.1 billion at December 31, 2022.

Declines in our ability to generate revenue, significant increases in credit losses or other expenses, or adverse actions

from regulators are factors that could result in material goodwill impairment of any reporting unit in a future period.

For additional information on goodwill and our reportable operating segments, see Note 1 (Summary of Significant Accounting Policies), Note 7 (Intangible Assets and Other Assets), and Note 19 (Operating Segments) to Financial Statements in this Report.

Current Accounting Developments

Table 52 provides the significant accounting updates applicable to us that have been issued by the Financial Accounting Standards Board (FASB) but are not yet effective.

Table 52: Current Accounting Developments – Issued Standards

Description and Effective Date		Financial statement impact
Accounting Standards Update (ASU) 2018-12 – Financial Services – Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts and subsequent related updates
The Update, effective January 1, 2023, requires market risk benefits (features of insurance contracts that protect the policyholder from other-than-nominal capital market risk and expose the insurer to that risk) to be measured at fair value through earnings with changes in fair value attributable to our own credit risk recognized in other comprehensive income. The Update also requires more frequent updates for insurance assumptions, mandates the use of a standardized discount rate for traditional long-duration contracts, and simplifies the amortization of deferred acquisition costs.		We adopted the Update on January 1, 2023, with retroactive application to prior periods. The most significant impact of adoption relates to reinsurance of variable annuity products for a limited number of our insurance clients. Our reinsurance business is no longer entering into new contracts. These variable annuity products contain guaranteed minimum benefits that require us to make benefit payments for the remainder of the policyholder’s life once the account values are exhausted. These guaranteed minimum benefits meet the definition of market risk benefits and are measured at fair value. At adoption, the effect of the difference between fair value and the carrying value of our market risk benefits, net of income tax adjustments and excluding the impact of our own credit risk, was approximately $325 million as of January 1, 2023. The adjustment increased our retained earnings and regulatory capital amounts and ratios. The adjustment for the impact of our own credit risk recorded as an increase to other comprehensive income was approximately $15 million, net of tax, as of January 1, 2023. We expect future earnings volatility from changes in the fair value of market risk benefits, which are sensitive to changes in equity and fixed income markets, as well as policyholder behavior and changes in mortality assumptions. We economically hedge the market volatility, where feasible. Changes in the accounting for the liability of future policy benefits for traditional long-duration contracts and deferred acquisition costs did not have a material impact upon adoption.
ASU 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging – Portfolio Layer Method
The Update, effective January 1, 2023 (with early adoption permitted), establishes the portfolio layer method, which expands an entity’s ability to achieve fair value hedge accounting for interest rate risk hedges of closed portfolios of financial assets. The Update also provides guidance on the accounting for hedged item basis adjustments under the portfolio layer method.		We adopted the Update on January 1, 2023 on a prospective basis. No cumulative effect adjustment to the opening balance of stockholders’ equity was required upon adoption, as impacts to us were reflected prospectively. The Update improves our ability to use derivatives to hedge interest rate risk exposures associated with portfolios of financial assets, such as fixed-rate available-for-sale debt securities and loans. The Update allows us to hedge a larger proportion of these portfolios by expanding the number and type of derivatives permitted as eligible hedges, as well as by increasing the scope of eligible hedged items to include both prepayable and nonprepayable assets. Upon adoption, any election to designate portfolio layer method hedges is applied prospectively. Additionally, the Update permits a one-time reclassification of debt securities from held-to-maturity to available-for-sale classification as long as the securities are designated in a portfolio layer method hedge no later than 30 days after the adoption date. In January 2023, we reclassified fixed-rate debt securities with an aggregate fair value of $23.2 billion and amortized cost of $23.9 billion from held-to-maturity to available-for-sale and designated interest rate swaps with notional amounts of $20.1 billion as fair value hedges using the portfolio layer method. The transfer of debt securities was recorded at fair value and resulted in approximately $566 million of unrealized losses associated with available-for-sale debt securities being recorded to other comprehensive income, net of deferred taxes.

(continued on following page)

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Current Accounting Developments (continued)

(continued from previous page)

Description and Effective Date		Financial statement impact
ASU 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures
The Update, effective January 1, 2023 (with early adoption permitted), eliminates the accounting and reporting for TDRs by creditors and introduces new required disclosures for loan modifications made to borrowers experiencing financial difficulty. The Update also amends the guidance for vintage disclosures to require disclosure of current period gross charge-offs by year of origination.		We adopted the Update on January 1, 2023. The Update will impact the measurement of the ACL for loans and require new enhanced disclosures related to loan modifications and credit quality, specifically the Update:•Eliminates the requirement to use a discounted cash flow (DCF) approach to measure the ACL for TDRs and instead allows for the use of an expected loss approach for all loans. On January 1, 2023, we removed the interest concession component recognized in the ACL for TDRs using a DCF approach. The cumulative effect adjustment reflected the difference between the pre-modification and post-modification effective interest rates, which would have been recognized over the remaining life of the loans as interest income. The adjustment was a reduction to the ACL for loans of approximately $430 million, and an increase to retained earnings of approximately $320 million, after-tax. This adjustment to retained earnings impacts regulatory capital amounts and ratios. •Eliminates TDR disclosures and requires new disclosures for modifications made to borrowers experiencing financial difficulty in the form of principal forgiveness, interest rate reduction, other than insignificant payment delay, term extension, or a combination of these modifications. •Requires us to provide current period gross charge-offs by origination date (vintage) in our credit quality disclosures on a prospective basis beginning as of the adoption date.

Other Accounting Developments

The following Updates are applicable to us but are not expected to have a material impact on our consolidated financial statements:

•ASU 2021-08 – Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers

•ASU 2022-03 – Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions

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Forward-Looking Statements

This document contains forward-looking statements. In addition, we may make forward-looking statements in our other documents filed or furnished with the Securities and Exchange Commission, and our management may make forward-looking statements orally to analysts, investors, representatives of the media and others. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “target,” “projects,” “outlook,” “forecast,” “will,” “may,” “could,” “should,” “can” and similar references to future periods. In particular, forward-looking statements include, but are not limited to, statements we make about: (i) the future operating or financial performance of the Company, including our outlook for future growth; (ii) our noninterest expense and efficiency ratio; (iii) future credit quality and performance, including our expectations regarding future loan losses, our allowance for credit losses, and the economic scenarios considered to develop the allowance; (iv) our expectations regarding net interest income and net interest margin; (v) loan growth or the reduction or mitigation of risk in our loan portfolios; (vi) future capital or liquidity levels, ratios or targets; (vii) the performance of our mortgage business and any related exposures; (viii) the expected outcome and impact of legal, regulatory and legislative developments, as well as our expectations regarding compliance therewith; (ix) future common stock dividends, common share repurchases and other uses of capital; (x) our targeted range for return on assets, return on equity, and return on tangible common equity; (xi) expectations regarding our effective income tax rate; (xii) the outcome of contingencies, such as legal proceedings; (xiii) environmental, social and governance related goals or commitments; and (xiv) the Company’s plans, objectives and strategies.

•current and future economic and market conditions, including the effects of declines in housing prices, high unemployment rates, U.S. fiscal debt, budget and tax matters, geopolitical matters (including the conflict in Ukraine), and any slowdown in global economic growth;

•the effect of the COVID-19 pandemic, including on our credit quality and business operations, as well as its impact on general economic and financial market conditions;

•current, pending or future legislation or regulation that could have a negative effect on our revenue and businesses,

including rules and regulations relating to bank products and financial services;

•developments in our mortgage banking business, including the extent of the success of our mortgage loan modification efforts, the amount of mortgage loan repurchase demands that we receive, any negative effects relating to our mortgage servicing, loan modification or foreclosure practices, and the effects of regulatory or judicial requirements or guidance impacting our mortgage banking business and any changes in industry standards or our strategic plans for the business;

•significant turbulence or a disruption in the capital or financial markets, which could result in, among other things, reduced investor demand for mortgage loans, a reduction in the availability of funding or increased funding costs, and declines in asset values and/or recognition of impairments of securities held in our debt securities and equity securities portfolios;

•the effect of a fall in stock market prices on our investment banking business and our fee income from our brokerage and wealth management businesses;

•negative effects from the retail banking sales practices matter and from instances where customers may have experienced financial harm, including on our legal, operational and compliance costs, our ability to engage in certain business activities or offer certain products or services, our ability to keep and attract customers, our ability to attract and retain qualified employees, and our reputation;

•resolution of regulatory matters, litigation, or other legal actions, which may result in, among other things, additional costs, fines, penalties, restrictions on our business activities, reputational harm, or other adverse consequences;

•a failure in or breach of our operational or security systems or infrastructure, or those of our third-party vendors or other service providers, including as a result of cyber attacks;

•the effect of changes in the level of checking or savings account deposits on our funding costs and net interest margin;

•fiscal and monetary policies of the Federal Reserve Board;

•changes to U.S. tax guidance and regulations as well as the effect of discrete items on our effective income tax rate;

•our ability to develop and execute effective business plans and strategies; and

•the other risk factors and uncertainties described under “Risk Factors” in this Report.

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Forward-Looking Statements (continued)

In addition to the above factors, we also caution that the amount and timing of any future common stock dividends or repurchases will depend on the earnings, cash requirements and financial condition of the Company, market conditions, capital requirements (including under Basel capital standards), common stock issuance requirements, applicable law and regulations (including federal securities laws and federal banking regulations), and other factors deemed relevant by the Company, and may be subject to regulatory approval or conditions.

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FY 2021 10-K MD&A

SEC filing source: 0000072971-22-000096.

Extracted from a substantive MD&A body after the formal Item 7 span was a TOC or reference stub. Source document followed from filing index: wfc-20211231_d2.htm. Confidence: high. Filing date: 2022-02-22. Report date: 2021-12-31.

Overview

Wells Fargo & Company is a leading financial services company that has approximately $1.9 trillion in assets, proudly serves one in three U.S. households and more than 10% of small businesses in the U.S., and is the leading middle market banking provider in the U.S. We provide a diversified set of banking, investment and mortgage products and services, as well as consumer and commercial finance, through our four reportable operating segments: Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth and Investment Management. Wells Fargo ranked No. 37 on Fortune’s 2021 rankings of America’s largest corporations. We ranked fourth in assets and third in the market value of our common stock among all U.S. banks at December 31, 2021.

Wells Fargo’s top priority remains building a risk and control infrastructure appropriate for its size and complexity. The Company is subject to a number of consent orders and other regulatory actions, which may require the Company, among other things, to undertake certain changes to its business, operations, products and services, and risk management practices. Addressing these regulatory actions is expected to take multiple years, and we are likely to experience issues or delays along the way in satisfying their requirements. Issues or delays with one regulatory action could affect our progress on others, and failure to satisfy the requirements of a regulatory action on a timely basis could result in additional penalties, enforcement actions, and other negative consequences, which could be significant. While we still have significant work to do, the Company is committed to devoting the resources necessary to operate with strong business practices and controls, maintain the highest level of integrity, and have an appropriate culture in place.

Federal Reserve Board Consent Order Regarding Governance Oversight and Compliance and Operational Risk Management

and the plans are approved and implemented to the satisfaction of the FRB, the Company’s total consolidated assets as defined under the consent order will be limited to the level as of December 31, 2017. Compliance with this asset cap is measured on a two-quarter daily average basis to allow for management of temporary fluctuations. Due to the COVID-19 pandemic, on April 8, 2020, the FRB amended the consent order to allow the Company to exclude from the asset cap any on-balance sheet exposure resulting from loans made by the Company in connection with the Small Business Administration’s Paycheck Protection Program and the FRB’s Main Street Lending Program. As required under the amendment to the consent order, to the extent the Company chooses to exclude these exposures from the asset cap, certain fees and other economic benefits received by the Company from loans made in connection with these programs shall be transferred to the U.S. Treasury or to nonprofit organizations approved by the FRB that support small businesses. As of December 31, 2021, the Company had not excluded these exposures from the asset cap. After removal of the asset cap, a second third-party review must also be conducted to assess the efficacy and sustainability of the enhancements and improvements.

On April 20, 2018, the Company entered into consent orders with the Consumer Financial Protection Bureau (CFPB) and the Office of the Comptroller of the Currency (OCC) to pay an aggregate of $1 billion in civil money penalties to resolve matters regarding the Company’s compliance risk management program and past practices involving certain automobile collateral protection insurance (CPI) policies and certain mortgage interest rate lock extensions. As required by the consent orders, the Company submitted to the CFPB and OCC an enterprise-wide compliance risk management plan and a plan to enhance the Company’s internal audit program with respect to federal consumer financial law and the terms of the consent orders. In addition, as required by the consent orders, the Company submitted for non-objection plans to remediate customers affected by the automobile collateral protection insurance and mortgage interest rate lock matters, as well as a plan for the management of remediation activities conducted by the Company. The Company continues to work to address the provisions of the consent orders. The Company has not yet satisfied certain aspects of the consent orders, and as a result, we believe regulators may impose additional penalties or take other

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enforcement actions. On September 9, 2021, the OCC assessed a $250 million civil money penalty against the Company related to insufficient progress in addressing requirements under the OCC’s April 2018 consent order and loss mitigation activities in the Company’s Home Lending business.

Consent Order with the OCC Regarding Loss Mitigation Activities

Retail Sales Practices Matters and Other Customer Remediation Activities

Our priority of rebuilding trust has also included an effort to identify other areas or instances where customers may have experienced financial harm, provide remediation as appropriate, and implement additional operational and control procedures. We are working with our regulatory agencies in this effort. We have previously disclosed key areas of focus as part of our rebuilding trust efforts and are in the process of providing remediation for those matters. We have accrued for the probable and estimable remediation costs related to our rebuilding trust efforts, which amounts may change based on additional facts and information, as well as ongoing reviews and communications with our regulators. As our ongoing reviews continue and as we continue to strengthen our risk and control infrastructure, we have identified and may in the future identify additional items or areas of potential concern. To the extent issues are identified, we will continue to assess any customer harm and provide remediation as appropriate.

For additional information regarding retail sales practices matters and other customer remediation activities, including related legal and regulatory risk, see the “Risk Factors” section and Note 15 (Legal Actions) to Financial Statements in this Report.

Recent Developments

COVID-19 Pandemic

In response to the COVID-19 pandemic, we have been working diligently to protect employee safety while continuing to carry out Wells Fargo’s role as a provider of essential services to the public. We have taken comprehensive steps to help customers, employees and communities.

We have strong levels of capital and liquidity, and we remain focused on delivering for our customers and communities to get through these unprecedented times.

PAYCHECK PROTECTION PROGRAM The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) created funding for the Small Business Administration’s (SBA) loan program providing forgiveness of up to the full principal amount of qualifying loans guaranteed under a program called the Paycheck Protection Program (PPP). We funded approximately $14.0 billion in loans under the PPP. At December 31, 2021, we had $2.4 billion of PPP loans outstanding. We voluntarily committed to donate all of the gross processing fees received from PPP loans funded in 2020. In 2021, we fulfilled this approximately $420 million commitment.

LIBOR Transition

In preparation for the cessation of the various LIBOR settings, we have undertaken a variety of activities. Among other things, we proactively implemented internal “stop-sell” dates to discontinue offering products referencing LIBOR except pursuant to limited exceptions consistent with regulatory guidance. At the same time, we expanded our suite of product offerings that are indexed to alternative reference rates.

We also continue to transition our legacy LIBOR contracts to alternative reference rates. We transitioned substantially all of our legacy contracts with LIBOR settings impacted by the December 31, 2021, cessation date to alternative reference rates, and we will continue to address contracts with LIBOR settings that are impacted by the June 30, 2023, cessation date.

•For USD LIBOR contracts that mature before June 30, 2023, those contracts that are renewed or replaced will be indexed to alternative reference rates.

•At December 31, 2021, the notional amount of our derivatives indexed to USD LIBOR, including bilateral contracts that mature after June 30, 2023, and centrally-cleared contracts that mature either before or after June 30, 2023, was over $6 trillion. We expect substantially all of these contracts to transition to SOFR either prior to or immediately after June 30, 2023, in accordance with existing fallback provisions.

•At December 31, 2021, we had over $350 billion of USD LIBOR commercial credit facilities that mature after June 30, 2023. These contracts generally do not contain appropriate fallback provisions. We are proactively engaging with our clients and contract parties to amend these contracts to replace LIBOR with an alternative reference rate or to include appropriate fallback provisions, if necessary.

•At December 31, 2021, we had approximately $30 billion of USD LIBOR consumer loans and lines secured by residential real estate that mature after June 30, 2023. We expect

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	Wells Fargo & Company	3

Overview (continued)

these contracts to transition to alternative reference rates in accordance with existing fallback provisions.

•At December 31, 2021, we had approximately $45 billion of debt securities indexed to USD LIBOR that mature after June 30, 2023. Substantially all of these debt securities contain fallback provisions and are expected to transition to an alternative reference rate immediately after June 30, 2023.

Additionally, we continue to monitor legislative developments that would provide a statutory framework to replace LIBOR with a benchmark rate based on SOFR in contracts that do not have fallback provisions or that have fallback provisions resulting in a replacement rate based on LIBOR.

For information regarding the risks and potential impact of LIBOR or any other referenced financial metric being significantly changed, replaced, or discontinued, see the “Risk Factors” section in this Report.

Capital Matters

Effective October 1, 2021, through September 30, 2022, the Company’s stress capital buffer used to determine our minimum risk-based capital requirements under the Standardized Approach became 3.10%. Beginning January 1, 2022, our global systemically important bank (G-SIB) capital surcharge decreased by 50 basis points from 2.00% to 1.50%.

Effective January 1, 2022, we are required to use the Standardized Approach for Counterparty Credit Risk (SA-CCR) for calculating exposure amounts for credit risk-weighted assets (RWAs) on derivative contracts. The adoption of SA-CCR resulted in an increase of less than 1.00% in total RWAs under the Standardized Approach (which was our binding approach at December 31, 2021) and a decrease of less than 0.50% in total leverage exposure at January 1, 2022.

On January 25, 2022, the Board approved an increase to the Company’s first quarter 2022 common stock dividend to $0.25 per share. For additional information about capital planning, see the “Capital Management – Capital Planning and Stress Testing” section in this Report.

Business Divestitures

On November 1, 2021, we closed our previously announced agreement to sell our Corporate Trust Services business and our previously announced agreement to sell Wells Fargo Asset Management (WFAM). We recorded net gains of $674 million and $269 million, respectively, from these sales, which are subject to certain post-closing adjustments and earn-out provisions.

Financial Performance

In 2021, we generated $21.5 billion of net income and diluted earnings per common share (EPS) of $4.95, compared with $3.4 billion of net income and EPS of $0.43 in 2020. Financial performance for 2021, compared with 2020, included the following:

•total revenue increased due to higher net gains from equity securities, mortgage banking income, and investment advisory and other asset-based fee income, partially offset by lower net interest income;

•provision for credit losses decreased reflecting continued improvements in the economic environment, which led to lower charge-offs and better portfolio credit quality;

•noninterest expense decreased due to lower operating losses, restructuring charges, and professional and outside

services expense, partially offset by higher incentive and revenue-related compensation in personnel expense;

•average loans decreased due to paydowns exceeding originations in our residential mortgage loan portfolio, weak demand for commercial loans, and the reclassification of student loans (included in other consumer loans) to loans held for sale (LHFS); and

•average deposits increased driven by growth in the Consumer Banking and Lending, Commercial Banking, and Wealth and Investment Management (WIM) operating segments due to higher levels of liquidity and savings for consumer and commercial customers reflecting government stimulus programs and continued economic uncertainty associated with the COVID-19 pandemic, as well as the impact of payment deferral programs on consumer customers, partially offset by actions taken to manage under the asset cap which reduced deposits in the Corporate and Investment Banking operating segment and Corporate.

In second quarter 2021, we retroactively changed the accounting for certain tax-advantaged investments. These changes had a nominal impact on net income and retained earnings on an annual basis and did not impact historical trends or business drivers. Prior period financial statement line items have been revised to conform with the current period presentation. Prior period risk-based capital and certain other regulatory related metrics were not revised. For additional information, including the financial statement line items impacted by these changes, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

Capital and Liquidity

We maintained a strong capital position in 2021, with total equity of $190.1 billion at December 31, 2021, compared with $185.7 billion at December 31, 2020. Our liquidity and regulatory capital ratios remained strong at December 31, 2021, including:

•our Common Equity Tier 1 (CET1) ratio was 11.35% under the Standardized Approach (our binding ratio), which continued to exceed both the regulatory requirement of 9.60% and our current internal target;

•our eligible external total loss absorbing capacity (TLAC) as a percentage of total risk-weighted assets was 23.03%, compared with the regulatory requirement of 21.50%; and

•our liquidity coverage ratio (LCR) was 118%, which continued to exceed the regulatory minimum of 100%.

Credit Quality

Credit quality reflected the improving economic environment.

•The allowance for credit losses (ACL) for loans of $13.8 billion at December 31, 2021, decreased $5.9 billion from December 31, 2020.

•Our provision for credit losses for loans was $(4.2) billion in 2021, down from $14.0 billion in 2020. The decrease in the ACL for loans and the provision for credit losses in 2021, compared with 2020, reflected continued improvements in the economic environment, which led to lower charge-offs and better portfolio credit quality.

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•The allowance coverage for total loans was 1.54% at December 31, 2021, compared with 2.22% at December 31, 2020.

•Commercial portfolio net loan charge-offs were $295 million, or 6 basis points of average commercial loans, in 2021, compared with net loan charge-offs of $1.6 billion, or 31 basis points, in 2020, due to lower losses and higher recoveries in our commercial and industrial portfolio primarily driven by the oil, gas and pipelines industry, and in the real estate mortgage portfolio.

•Consumer portfolio net loan charge-offs were $1.3 billion, or 33 basis points of average consumer loans, in 2021, compared with net loan charge-offs of $1.7 billion, or 39 basis points, in 2020, predominantly driven by lower losses in our credit card portfolio as a result of government stimulus programs instituted in response to the COVID-19 pandemic, improvements in the economic environment and

better portfolio credit quality, partially offset by $152 million of residential mortgage loan charge-offs as a result of a change in practice to fully charge-off certain delinquent legacy residential mortgage loans.

•Nonperforming assets (NPAs) of $7.3 billion at December 31, 2021, decreased $1.6 billion, or 18%, from December 31, 2020, predominantly driven by decreases in our commercial and industrial portfolio as a result of paydowns in the oil, gas, and pipelines industry, partially offset by increases in our residential mortgage – first lien portfolio from certain borrowers exiting COVID-19 related accommodation programs. NPAs represented 0.82% of total loans at December 31, 2021.

Table 1 presents a three-year summary of selected financial data and Table 2 presents selected ratios and per common

share data.

Table 1: Summary of Selected Financial Data

	Year ended December 31,
(in millions, except per share amounts)	2021		2020		$ Change 2021/ 2020	% Change 2021/ 2020		2019							$ Change 2020/ 2019	% Change 2020/ 2019
Income statement
Net interest income	$	35,779			39,956		(4,177)			(10)	%		$	47,303					(7,347)		(16)	%
Noninterest income	42,713			34,308		8,405			24			39,529						(5,221)		(13)
Total revenue	78,492			74,264		4,228			6			86,832						(12,568)		(14)
Net charge-offs	1,582			3,370		(1,788)			(53)			2,762						608		22
Change in the allowance for credit losses	(5,737)			10,759		(16,496)			NM		(75)						10,834		NM
Provision for credit losses	(4,155)			14,129		(18,284)			NM		2,687						11,442		426
Noninterest expense	53,831			57,630		(3,799)			(7)			58,178						(548)		(1)
Net income before noncontrolling interests	23,238			3,662		19,576			535			20,206						(16,544)		(82)
Less: Net income from noncontrolling interests	1,690			285		1,405			493			491						(206)		(42)
Wells Fargo net income	21,548			3,377		18,171			538			19,715						(16,338)		(83)
Earnings per common share	4.99			0.43		4.56			NM		4.12						(3.69)		(90)
Diluted earnings per common share	4.95			0.43		4.52			NM		4.09						(3.66)		(89)
Dividends declared per common share	0.60			1.22		(0.62)			(51)			1.92						(0.70)		(36)
Balance sheet (at year end)
Debt securities	537,531			501,207		36,324			7			497,125						4,082		1
Loans	895,394			887,637		7,757			1			962,265						(74,628)		(8)
Allowance for loan losses	12,490			18,516		(6,026)			(33)			9,551						8,965		94
Equity securities	72,886			60,008		12,878			21			66,439						(6,431)		(10)
Assets	1,948,068			1,952,911		(4,843)			—			1,925,753						27,158		1
Deposits	1,482,479			1,404,381		78,098			6			1,322,626						81,755		6
Long-term debt	160,689			212,950		(52,261)			(25)			228,191						(15,241)		(7)
Common stockholders’ equity	168,331			164,570		3,761			2			166,387						(1,817)		(1)
Wells Fargo stockholders’ equity	187,606			184,680		2,926			2			186,864						(2,184)		(1)
Total equity	190,110			185,712		4,398			2			187,702						(1,990)		(1)

NM – Not meaningful

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Overview (continued)

Table 2: Ratios and Per Common Share Data

	Year ended December 31,
	2021		2020		2019
Performance ratios
Return on average assets (ROA) (1)	1.11	%		0.17		1.03
Return on average equity (ROE) (2)	12.0			1.1		10.4
Return on average tangible common equity (ROTCE) (3)	14.3			1.3		12.4
Efficiency ratio (4)	69			78		67
Capital and other metrics (5)
At year end:
Wells Fargo common stockholders’ equity to assets	8.64			8.43		8.64
Total equity to assets	9.76			9.51		9.75
Risk-based capital ratios and components (6):
Standardized Approach:
Common Equity Tier 1 (CET1)	11.35			11.59		11.14
Tier 1 capital	12.89			13.25		12.76
Total capital	15.84			16.47		15.75
Risk-weighted assets (RWAs) (in billions)	$	1,239.0			1,193.7		1,245.9
Advanced Approach:
Common Equity Tier 1 (CET1)	12.60	%		11.94		11.91
Tier 1 capital	14.31			13.66		13.64
Total capital	16.72			16.14		16.16
Risk-weighted assets (RWAs) (in billions)	$	1,116.1			1,158.4		1,165.1
Tier 1 leverage ratio	8.34	%		8.32		8.31
Supplementary Leverage Ratio (SLR)	6.89			8.05		7.07
Total Loss Absorbing Capacity (TLAC) Ratio (7)	23.03			25.74		23.28
Liquidity Coverage Ratio (LCR) (8)	118			133		120
Average balances:
Average Wells Fargo common stockholders’ equity to average assets	8.73			8.43		9.15
Average total equity to average assets	9.85			9.51		10.31
Per common share data
Dividend payout ratio (9)	12.1			283.7		46.9
Book value (10)	$	43.32			39.71		40.24

(1)Represents Wells Fargo net income divided by average assets.

(2)Represents Wells Fargo net income applicable to common stock divided by average common stockholders’ equity.

(3)Tangible common equity is a non-GAAP financial measure and represents total equity less preferred equity, noncontrolling interests, goodwill, certain identifiable intangible assets (other than mortgage servicing rights) and goodwill and other intangibles on nonmarketable equity securities, net of applicable deferred taxes. The methodology of determining tangible common equity may differ among companies. Management believes that return on average tangible common equity, which utilizes tangible common equity, is a useful financial measure because it enables management, investors, and others to assess the Company’s use of equity. For additional information, including a corresponding reconciliation to generally accepted accounting principles (GAAP) financial measures, see the “Capital Management – Tangible Common Equity” section in this Report.

(4)The efficiency ratio is noninterest expense divided by total revenue (net interest income and noninterest income).

(5)See the “Capital Management” section and Note 28 (Regulatory Capital Requirements and Other Restrictions) to Financial Statements in this Report for additional information.

(6)The information presented reflects fully phased-in CET1, tier 1 capital, and RWAs, but reflects total capital in accordance with transition requirements. For additional information, see the “Capital Management” section and Note 28 (Regulatory Capital Requirements and Other Restrictions) to Financial Statements in this Report.

(7)Represents TLAC divided by the greater of RWAs determined under the Standardized and Advanced Approaches, which is our binding TLAC ratio.

(8)Represents high-quality liquid assets divided by projected net cash outflows, as each is defined under the LCR rule.

(9)Dividend payout ratio is dividends declared per common share as a percentage of diluted earnings per common share.

(10)Book value per common share is common stockholders’ equity divided by common shares outstanding.

Column 1	Column 2
6	Wells Fargo & Company

Earnings Performance

Wells Fargo net income for 2021 was $21.5 billion ($4.95 diluted EPS), compared with $3.4 billion ($0.43 diluted EPS) for 2020. Net income increased in 2021, compared with 2020, due to a $18.3 billion decrease in provision for credit losses, a $8.4 billion increase in noninterest income, and a $3.8 billion decrease in noninterest expense, partially offset by a $6.7 billion increase in income tax expense, a $4.2 billion decrease in net interest income, and a $1.4 billion increase in net income from noncontrolling interests.

For a discussion of our 2020 financial results, compared with 2019, see the “Earnings Performance” section of our Annual Report on Form 10-K for the year ended December 31, 2020.

Net Interest Income

Net interest income and net interest margin decreased in 2021, compared with 2020, due to the impact of lower interest rates, lower loan balances reflecting soft demand, elevated prepayments and refinancing activity, the sale of our student loan portfolio in the first half of 2021, unfavorable hedge ineffectiveness accounting results, and higher securities premium amortization, partially offset by lower costs and balances of interest-bearing deposits and long-term debt. Net interest income in 2021 included interest income from PPP loans of $518 million. Additionally, in 2021, we had interest income associated with loans we purchased from Government National Mortgage Association (GNMA) loan securitization pools of $1.1 billion. For additional information about loans purchased from GNMA loan securitization pools, see the “Risk Management – Credit Risk Management – Mortgage Banking Activities” section in this Report.

Table 3 presents the individual components of net interest income and the net interest margin. Net interest income and net interest margin are presented on a taxable-equivalent basis in Table 3 to consistently reflect income from taxable and tax-exempt loans and debt and equity securities based on a 21% federal statutory tax rate for the periods ended December 31, 2021, 2020 and 2019.

Column 1	Column 2	Column 3
	Wells Fargo & Company	7

Earnings Performance (continued)

Table 3: Average Balances, Yields and Rates Paid (Taxable-Equivalent Basis) (1)

	Year ended December 31,
					2021						2020					2019
(in millions)	Average balance		Interest income/ expense		Interest rates		Average balance		Interest income/ expense		Interest rates		Average balance	Interest income/ expense		Interest rates
Assets
Interest-earning deposits with banks	$	236,281			314			0.13	%		$	186,386		547			0.29	%		$	135,741	2,875		2.12	%
Federal funds sold and securities purchased under resale agreements	69,720			14			0.02			82,798			393		0.47			99,286			2,164	2.18
Debt securities:
Trading debt securities	88,282			2,107			2.39			94,731			2,544		2.69			93,655			3,149	3.36
Available-for-sale debt securities	189,237			2,924			1.55			229,077			5,248		2.29			262,694			8,493	3.23
Held-to-maturity debt securities	245,304			4,589			1.87			173,505			3,841		2.21			149,105			3,814	2.56
Total debt securities	522,823			9,620			1.84			497,313			11,633		2.34			505,454			15,456	3.06
Loans held for sale (2)	27,554			865			3.14			27,493			947		3.45			21,516			892	4.14
Loans:
Commercial loans:
Commercial and industrial – U.S.	252,025			6,526			2.59			281,080			7,912		2.82			284,888			12,107	4.25
Commercial and industrial – Non-U.S.	71,114			1,448			2.04			66,915			1,673		2.50			64,274			2,385	3.71
Real estate mortgage	121,638			3,276			2.69			122,482			3,842		3.14			121,813			5,356	4.40
Real estate construction	21,589			667			3.09			21,608			760		3.52			21,183			1,095	5.17
Lease financing	15,519			692			4.46			17,801			877		4.93			19,302			957	4.96
Total commercial loans	481,885			12,609			2.62			509,886			15,064		2.95			511,460			21,900	4.28
Consumer loans:
Residential mortgage – first lien	249,862			7,903			3.16			288,105			9,661		3.35			288,059			10,974	3.81
Residential mortgage – junior lien	19,710			818			4.15			26,700			1,185		4.44			31,989			1,800	5.63
Credit card	35,471			4,086			11.52			37,093			4,315		11.63			38,865			4,889	12.58
Auto	51,576			2,317			4.49			48,362			2,379		4.92			45,901			2,362	5.15
Other consumer	25,784			962			3.73			31,642			1,719		5.43			34,682			2,412	6.95
Total consumer loans	382,403			16,086			4.21			431,902			19,259		4.46			439,496			22,437	5.11
Total loans (2)	864,288			28,695			3.32			941,788			34,323		3.64			950,956			44,337	4.66
Equity securities	31,946			608			1.91			28,950			557		1.92			35,930			966	2.69
Other	10,052			6			0.06			7,505			14		0.18			5,579			90	1.62
Total interest-earning assets	$	1,762,664			40,122			2.28	%		$	1,772,233		48,414			2.73	%		$	1,754,462	66,780		3.81	%
Cash and due from banks	24,562			—					21,676			—				19,558			—
Goodwill	26,087			—					26,387			—				26,409			—
Other	128,592			—					121,413			—				111,361			—
Total noninterest-earning assets	$	179,241			—					169,476			—				157,328			—
Total assets	$	1,941,905			40,122					1,941,709			48,414				1,911,790			66,780
Liabilities
Deposits:
Demand deposits	$	450,131			127			0.03	%		$	98,182		184			0.19	%		$	59,121	789		1.33	%
Savings deposits	423,221			124			0.03			744,226			1,492		0.20			705,957			4,132	0.59
Time deposits	36,519			122			0.33			81,674			892		1.09			123,634			2,776	2.25
Deposits in non-U.S. offices	28,297			15			0.05			39,260			236		0.60			53,438			938	1.75
Total interest-bearing deposits	938,168			388			0.04			963,342			2,804		0.29			942,150			8,635	0.92
Short-term borrowings:
Federal funds purchased and securities sold under agreements to repurchase	35,245			8			0.02			58,971			276		0.47			102,888			2,169	2.11
Other short-term borrowings	12,020			(48)			(0.41)			11,235			(25)		(0.22)			12,449			148	1.20
Total short-term borrowings	47,265			(40)			(0.09)			70,206			251		0.36			115,337			2,317	2.01
Long-term debt	178,742			3,173			1.78			224,587			4,471		1.99			232,491			7,350	3.16
Other liabilities	28,809			395			1.37			28,435			438		1.54			25,771			551	2.13
Total interest-bearing liabilities	$	1,192,984			3,916			0.33	%		$	1,286,570		7,964			0.62	%		$	1,315,749	18,853		1.43	%
Noninterest-bearing demand deposits	499,644			—					412,669			—				344,111			—
Other noninterest-bearing liabilities	58,058			—					57,781			—				54,756			—
Total noninterest-bearing liabilities	$	557,702			—					470,450			—				398,867			—
Total liabilities	$	1,750,686			3,916					1,757,020			7,964				1,714,616			18,853
Total equity	191,219			—					184,689			—				197,174			—
Total liabilities and equity	$	1,941,905			3,916					1,941,709			7,964				1,911,790			18,853
Interest rate spread on a taxable-equivalent basis (3)					1.95	%						2.11	%					2.38	%
Net interest margin and net interest income on a taxable-equivalent basis (3)			$	36,206			2.05	%				$	40,450		2.28	%				$	47,927	2.73	%

(1)The average balance amounts represent amortized costs. The interest rates are based on interest income or expense amounts for the period and are annualized. Interest rates and amounts include the effects of hedge and risk management activities associated with the respective asset and liability categories.

(2)Nonaccrual loans and any related income are included in their respective loan categories.

(3)Includes taxable-equivalent adjustments of $427 million, $494 million and $624 million for the years ended December 31, 2021, 2020 and 2019, respectively, predominantly related to tax-exempt income on certain loans and securities.

Column 1	Column 2
8	Wells Fargo & Company

Table 4: Analysis of Changes in Net Interest Income

	Year ended December 31,
	2021 vs. 2020		2020 vs. 2019
(in millions)	Volume		Rate		Total	Volume		Rate		Total
Increase (decrease) in interest income:
Interest-earning deposits with banks	$	119			(352)		(233)			797		(3,125)		(2,328)
Federal funds sold and securities purchased under resale agreements	(53)			(326)		(379)			(309)		(1,462)		(1,771)
Debt securities:
Trading debt securities	(165)			(272)		(437)			35		(640)		(605)
Available-for-sale debt securities	(813)			(1,511)		(2,324)			(991)		(2,254)		(3,245)
Held-to-maturity debt securities	1,405			(657)		748			584		(557)		27
Total debt securities	427			(2,440)		(2,013)			(372)		(3,451)		(3,823)
Loans held for sale	2			(84)		(82)			219		(164)		55
Loans:
Commercial loans:
Commercial and industrial – U.S.	(775)			(611)		(1,386)			(160)		(4,035)		(4,195)
Commercial and industrial – Non-U.S.	99			(324)		(225)			94		(806)		(712)
Real estate mortgage	(26)			(540)		(566)			29		(1,543)		(1,514)
Real estate construction	(1)			(92)		(93)			22		(357)		(335)
Lease financing	(106)			(79)		(185)			(74)		(6)		(80)
Total commercial loans	(809)			(1,646)		(2,455)			(89)		(6,747)		(6,836)
Consumer loans:
Residential mortgage – first lien	(1,232)			(526)		(1,758)			2		(1,315)		(1,313)
Residential mortgage – junior lien	(294)			(73)		(367)			(270)		(345)		(615)
Credit card	(188)			(41)		(229)			(216)		(358)		(574)
Auto	153			(215)		(62)			125		(108)		17
Other consumer	(281)			(476)		(757)			(198)		(495)		(693)
Total consumer loans	(1,842)			(1,331)		(3,173)			(557)		(2,621)		(3,178)
Total loans	(2,651)			(2,977)		(5,628)			(646)		(9,368)		(10,014)
Equity securities	54			(3)		51			(165)		(244)		(409)
Other	4			(12)		(8)			23		(99)		(76)
Total increase (decrease) in interest income	(2,098)			(6,194)		(8,292)			(453)		(17,913)		(18,366)
Increase (decrease) in interest expense:
Deposits:
Demand deposits	$	208			(265)		(57)			324		(929)		(605)
Savings deposits	(461)			(907)		(1,368)			217		(2,857)		(2,640)
Time deposits	(340)			(430)		(770)			(748)		(1,136)		(1,884)
Deposits in non-U.S. offices	(52)			(169)		(221)			(202)		(500)		(702)
Total interest-bearing deposits	(645)			(1,771)		(2,416)			(409)		(5,422)		(5,831)
Short-term borrowings:
Federal funds purchased and securities sold under agreements to repurchase	(80)			(188)		(268)			(671)		(1,222)		(1,893)
Other short-term borrowings	(2)			(21)		(23)			(14)		(159)		(173)
Total short-term borrowings	(82)			(209)		(291)			(685)		(1,381)		(2,066)
Long-term debt	(855)			(443)		(1,298)			(242)		(2,637)		(2,879)
Other liabilities	6			(49)		(43)			52		(165)		(113)
Total increase (decrease) in interest expense	(1,576)			(2,472)		(4,048)			(1,284)		(9,605)		(10,889)
Increase (decrease) in net interest income on a taxable-equivalent basis	$	(522)			(3,722)		(4,244)			831		(8,308)		(7,477)

Column 1	Column 2	Column 3
	Wells Fargo & Company	9

Earnings Performance (continued)

Noninterest Income

Table 5: Noninterest Income

	Year ended December 31,
(in millions)	2021		2020		$ Change 2021/ 2020	% Change 2021/ 2020		2019		$ Change 2020/ 2019		% Change 2020/ 2019
Deposit-related fees	$	5,475			5,221		254			5	%		$	5,819		(598)		(10)	%
Lending-related fees	1,445			1,381		64			5			1,474			(93)		(6)
Investment advisory and other asset-based fees	11,011			9,863		1,148			12			9,814			49		—
Commissions and brokerage services fees	2,299			2,384		(85)			(4)			2,461			(77)		(3)
Investment banking fees	2,354			1,865		489			26			1,797			68		4
Card fees	4,175			3,544		631			18			4,016			(472)		(12)
Net servicing income	194			(139)		333			240		522			(661)		NM
Net gains on mortgage loan originations/sales	4,762			3,632		1,130			31		2,193			1,439		66
Mortgage banking	4,956			3,493		1,463			42		2,715			778		29
Net gains from trading activities	284			1,172		(888)			(76)			993			179		18
Net gains on debt securities	553			873		(320)			(37)			140			733		524
Net gains from equity securities	6,427			665		5,762			866		2,843			(2,178)		(77)
Lease income	996			1,245		(249)			(20)			1,614			(369)		(23)
Other	2,738			2,602		136			5			5,843			(3,241)		(55)
Total	$	42,713			34,308		8,405			24			$	39,529		(5,221)		(13)

NM – Not meaningful

Full year 2021 vs. full year 2020

Deposit-related fees increased driven by:

•higher consumer transaction volumes as 2020 included reduced volumes due to the economic slowdown associated with the COVID-19 pandemic;

•lower fee waivers and reversals as 2020 included elevated fee waivers due to our actions to support customers during the COVID-19 pandemic; and

•higher treasury management fees on commercial accounts driven by an increase in transaction service volumes and repricing, as well as a lower earnings credit rate due to the lower interest rate environment.

In January 2022, we announced enhancements and changes to help our consumer customers avoid overdraft-related fees. We expect this will lower certain deposit-related fees starting in 2022.

Lending-related fees increased reflecting higher loan commitment fees.

Investment advisory and other asset-based fees increased reflecting:

• higher market valuations on WIM advisory assets;

partially offset by:

•lower asset-based fees due to the sale of WFAM on November 1, 2021.

For additional information on certain client investment assets, see the “Earnings Performance – Operating Segment Results – Wealth and Investment Management – WIM Advisory Assets” and “Earnings Performance – Operating Segment Results – Corporate – Wells Fargo Asset Management (WFAM) Assets Under Management” sections in this Report.

Commission and brokerage services fees decreased driven by lower transactional revenue.

Investment banking fees increased driven by higher debt underwriting fees, including loan syndication fees, as well as higher advisory fees and equity underwriting fees.

Card fees increased reflecting:

•higher interchange fees driven by increased purchase and transaction volumes;

partially offset by:

•higher rewards, including promotional offers on our new Active CashSM card.

Net servicing income increased reflecting:

•negative mortgage servicing right (MSR) valuation adjustments in 2020 for higher expected servicing costs and higher prepayment estimates due to improved economic conditions in 2021;

partially offset by:

•lower servicing fees due to a lower balance of loans serviced for others.

Net gains on mortgage loan originations/sales increased

driven by:

•higher gains in 2021 related to the resecuritization of loans we purchased from GNMA loan securitization pools in 2020;

•losses in 2020 driven by the impact of interest rate volatility on hedging activities associated with our residential mortgage loans held for sale portfolio and pipeline, as well as valuation losses on certain residential and commercial loans held for sale due to the impact of the COVID-19 pandemic on market conditions; and

•a shift in production to more retail loans, which have a higher production margin compared with correspondent loans.

For additional information on servicing income and net gains on mortgage loan originations/sales, see Note 9 (Mortgage Banking Activities) to Financial Statements in this Report.

Column 1	Column 2
10	Wells Fargo & Company

Net gains from trading activities decreased reflecting:

•lower volumes of interest rate products;

•lower client trading activity for equity products due to market volatility in 2020; and

•lower client trading activity for credit products, reflecting greater market liquidity in 2020 from government actions taken in response to the COVID-19 pandemic;

partially offset by:

•higher client trading activity for asset-backed finance products.

Net gains on debt securities decreased due to:

• lower gains on sales of agency mortgage-backed securities (MBS) and municipal bonds;

partially offset by:

•higher gains on sales of corporate and other debt securities.

Net gains from equity securities increased driven by:

•higher unrealized gains on nonmarketable equity securities from our affiliated venture capital and private equity businesses;

•higher realized gains on the sales of equity securities; and

•lower impairment of equity securities due to improved market conditions in 2021.

Lease income decreased driven by a $268 million impairment of certain rail cars in our rail car leasing business used for the transportation of coal products.

Other income increased due to gains in 2021 of:

•$674 million on the sale of our Corporate Trust Services business;

•$355 million on the sale of our student loan portfolio; and

•$269 million on the sale of WFAM;

partially offset by:

•lower gains on the sales of certain residential mortgage loans which were reclassified to held for sale;

•higher valuation losses related to the retained litigation risk, including the timing and amount of final settlement, associated with shares of Visa Class B common stock that we previously sold. For additional information, see the “Risk Management – Asset/Liability Management – Market Risk – Equity Securities” section in this Report; and

•lower income from our investments accounted for under the equity method.

Column 1	Column 2	Column 3
	Wells Fargo & Company	11

Earnings Performance (continued)

Noninterest Expense

Table 6: Noninterest Expense

	Year ended December 31,
(in millions)	2021		2020		$ Change 2021/ 2020	% Change 2021/ 2020		2019		$ Change 2020/ 2019		% Change 2020/ 2019
Personnel	$	35,541			34,811		730			2	%		$	35,128		(317)		(1)	%
Technology, telecommunications and equipment	3,227			3,099		128			4			3,276			(177)		(5)
Occupancy	2,968			3,263		(295)			(9)			2,945			318		11
Operating losses	1,568			3,523		(1,955)			(55)			4,321			(798)		(18)
Professional and outside services	5,723			6,706		(983)			(15)			6,745			(39)		(1)
Leases (1)	867			1,022		(155)			(15)			1,155			(133)		(12)
Advertising and promotion	600			600		—			—			1,076			(476)		(44)
Restructuring charges	76			1,499		(1,423)			(95)		—			1,499		NM
Other	3,261			3,107		154			5			3,532			(425)		(12)
Total	$	53,831			57,630		(3,799)			(7)			$	58,178		(548)		(1)

NM – Not meaningful

(1)Represents expenses for assets we lease to customers.

Full Year 2021 vs. full year 2020

Personnel expense increased driven by:

•higher revenue-related compensation expense;

•higher incentive compensation expense;

•higher market valuations on stock-based compensation; and

•higher deferred compensation expense;

partially offset by:

•lower salaries as a result of reduced headcount.

In second quarter 2020, we entered into arrangements to transition our economic hedges of the deferred compensation plan liabilities from equity securities to derivative instruments. As a result of this transition, changes in fair value of derivatives used to economically hedge the deferred compensation plan are reported in personnel expense rather than in net gains (losses) from equity securities within noninterest income. For additional information on the derivatives used in the economic hedges, see Note 16 (Derivatives) to Financial Statements in this Report.

Technology, telecommunications and equipment expense increased due to higher expense for technology contracts and the reversal of a software licensing liability accrual in 2020.

Occupancy expense decreased driven by:

•lower cleaning fees, supplies, and equipment expenses as 2020 included higher expenses due to the COVID-19 pandemic; and

•lower rent expense.

Operating losses decreased driven by lower expense for customer remediation accruals and litigation accruals, partially offset by a $250 million civil money penalty associated with the September 2021 OCC enforcement action.

Professional and outside services expense decreased driven by efficiency initiatives to reduce our spending on consultants and contractors.

Leases expense decreased driven by lower depreciation expense from the reduction in the size of our operating lease asset portfolio.

Restructuring charges decreased due to lower personnel costs related to our efficiency initiatives that began in third quarter 2020. For additional information on restructuring charges, see Note 22 (Restructuring Charges) to Financial Statements in this Report.

Other expenses increased driven by a write-down of goodwill in 2021 related to the sale of our student loan portfolio.

Income Tax Expense

Income tax expense was $5.6 billion in 2021, compared with an income tax benefit of $1.2 billion in 2020, driven by higher pre-tax income. The effective income tax rate was 20.6% for 2021, compared with (52.1)% for 2020. The effective income tax rate for 2021 reflected the impact of higher pre-tax income while the effective income tax rate for 2020 reflected both the impact of income tax benefits (including tax credits) on lower pre-tax income and income tax benefits related to the resolution and reevaluation of prior period matters with U.S. federal and state tax authorities. The income tax expense (benefit) and our effective income tax rate for both years reflected the impact of changes in accounting policy for certain tax-advantaged investments adopted in second quarter 2021. For additional information on income taxes, see Note 23 (Income Taxes) to Financial Statements in this Report.

Operating Segment Results

Our management reporting is organized into four reportable operating segments: Consumer Banking and Lending; Commercial Banking; Corporate and Investment Banking; and Wealth and Investment Management. All other business activities that are not included in the reportable operating segments have been included in Corporate. For additional information, see Table 7. We define our reportable operating segments by type of product and customer segment, and their results are based on our management reporting process. The management reporting process measures the performance of the reportable operating segments based on the Company’s management structure, and the results are regularly reviewed by our Chief Executive Officer and Operating Committee. The management reporting process is based on U.S. GAAP and includes specific adjustments, such as funds transfer pricing for asset/liability management, shared revenues and expenses, and taxable-equivalent adjustments to consistently reflect income

Column 1	Column 2
12	Wells Fargo & Company

from taxable and tax-exempt sources, which allows management to assess performance consistently across the operating segments.

In February 2021, we announced an agreement to sell WFAM, and in first quarter 2021, we moved the business from the Wealth and Investment Management operating segment to Corporate. In March 2021, we announced an agreement to sell our Corporate Trust Services business and, in second quarter 2021, we moved the business from the Commercial Banking operating segment to Corporate. Prior period balances have been revised to conform with the current period presentation. These changes did not impact the previously reported consolidated financial results of the Company. On November 1, 2021, we closed the sales of our Corporate Trust Services business and WFAM.

In second quarter 2021, we elected to change our accounting method for low-income housing tax credit (LIHTC) investments and elected to change the presentation of investment tax credits related to solar energy investments. These accounting policy changes had a nominal impact on reportable operating segment results. Prior period financial statement line items for the Company, as well as for the reportable operating segments, have been revised to conform with the current period presentation. Our LIHTC investments are included in the Corporate and Investment Banking operating segment and our solar energy investments are included in the Commercial Banking operating segment. For additional information, see the “Overview – Recent Developments” section and Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

Allocated Capital Reportable operating segments are allocated capital under a risk-sensitive framework that is primarily based on aspects of our regulatory capital requirements, and the assumptions and methodologies used to allocate capital are periodically assessed and revised. Management believes that return on allocated capital is a useful financial measure because it enables management, investors, and others to assess a reportable operating segment’s use of capital.

Table 7: Management Reporting Structure

	Wells Fargo & Company
			Consumer Banking and Lending				Commercial Banking				Corporate and Investment Banking				Wealth and Investment Management			Corporate
			• Consumer and Small Business Banking • Home Lending • Credit Card • Auto • Personal Lending				• Middle Market Banking • Asset-Based Lending and Leasing				• Banking • Commercial Real Estate • Markets				• Wells Fargo Advisors • The Private Bank				• Corporate Treasury • Enterprise Functions • Investment Portfolio • Affiliated venture capital and private equity businesses • Non-strategic businesses

Column 1	Column 2	Column 3
	Wells Fargo & Company	13

Earnings Performance (continued)

Table 8 and the following discussion present our results by reportable operating segment. For additional information, see Note 26 (Operating Segments) to Financial Statements in this Report.

Table 8: Operating Segment Results – Highlights

(in millions)	Consumer Banking and Lending			Corporate and Investment Banking	Wealth and Investment Management			Reconciling Items (2)	Consolidated Company
Year ended December 31, 2021
Net interest income	$	22,807		4,960		7,410		2,570		(1,541)		(427)		35,779
Noninterest income	12,070		3,589		6,429		11,776		10,036		(1,187)		42,713
Total revenue	34,877		8,549		13,839		14,346		8,495		(1,614)		78,492
Provision for credit losses	(1,178)		(1,500)		(1,439)		(95)		57		—		(4,155)
Noninterest expense	24,648		5,862		7,200		11,734		4,387		—		53,831
Income (loss) before income tax expense (benefit)	11,407		4,187		8,078		2,707		4,051		(1,614)		28,816
Income tax expense (benefit)	2,852		1,045		2,019		680		596		(1,614)		5,578
Net income before noncontrolling interests	8,555		3,142		6,059		2,027		3,455		—		23,238
Less: Net income (loss) from noncontrolling interests	—		8		(3)		—		1,685		—		1,690
Net income	$	8,555		3,134		6,062		2,027		1,770		—		21,548
Year ended December 31, 2020
Net interest income	$	23,378		6,134		7,509		2,988		441		(494)		39,956
Noninterest income	10,638		3,041		6,419		10,225		4,916		(931)		34,308
Total revenue	34,016		9,175		13,928		13,213		5,357		(1,425)		74,264
Provision for credit losses	5,662		3,744		4,946		249		(472)		—		14,129
Noninterest expense	26,976		6,323		7,703		10,912		5,716		—		57,630
Income (loss) before income tax expense (benefit)	1,378		(892)		1,279		2,052		113		(1,425)		2,505
Income tax expense (benefit)	302		(208)		330		514		(670)		(1,425)		(1,157)
Net income (loss) before noncontrolling interests	1,076		(684)		949		1,538		783		—		3,662
Less: Net income (loss) from noncontrolling interests	—		5		(1)		—		281		—		285
Net income (loss)	$	1,076		(689)		950		1,538		502		—		3,377
Year ended December 31, 2019
Net interest income	$	25,786		7,981		8,008		3,906		2,246		(624)		47,303
Noninterest income	12,105		3,721		6,442		10,506		7,550		(795)		39,529
Total revenue	37,891		11,702		14,450		14,412		9,796		(1,419)		86,832
Provision for credit losses	2,184		190		173		2		138		—		2,687
Noninterest expense	26,998		6,598		7,432		12,167		4,983		—		58,178
Income (loss) before income tax expense (benefit)	8,709		4,914		6,845		2,243		4,675		(1,419)		25,967
Income tax expense (benefit)	2,814		1,246		1,658		562		900		(1,419)		5,761
Net income before noncontrolling interests	5,895		3,668		5,187		1,681		3,775		—		20,206
Less: Net income (loss) from noncontrollinginterests	—		6		(1)		—		486		—		491
Net income	$	5,895		3,662		5,188		1,681		3,289		—		19,715

(1)All other business activities that are not included in the reportable operating segments have been included in Corporate. For additional information, see the “Corporate” section below.

(2)Taxable-equivalent adjustments related to tax-exempt income on certain loans and debt securities are included in net interest income, while taxable-equivalent adjustments related to income tax credits for low-income housing and renewable energy investments are included in noninterest income, in each case with corresponding impacts to income tax expense (benefit). Adjustments are included in Corporate, Commercial Banking, and Corporate and Investment Banking and are eliminated to reconcile to the Company’s consolidated financial results.

Column 1	Column 2
14	Wells Fargo & Company

Consumer Banking and Lending offers diversified financial products and services for consumers and small businesses with annual sales generally up to $5 million. These financial products and services include checking and savings accounts, credit and

debit cards, as well as home, auto, personal, and small business lending. Table 8a and Table 8b provide additional information for Consumer Banking and Lending.

Table 8a: Consumer Banking and Lending – Income Statement and Selected Metrics


($ in millions, unless otherwise noted)	2021		2020		$ Change 2021/ 2020	% Change 2021/ 2020		2019		$ Change 2020/ 2019		% Change 2020/ 2019
Income Statement
Net interest income	$	22,807			23,378		(571)			(2)	%		$	25,786			(2,408)			(9)	%
Noninterest income:
Deposit-related fees	3,045			2,904		141			5			3,582			(678)			(19)
Card fees	3,930			3,318		612			18			3,672			(354)			(10)
Mortgage banking	4,490			3,224		1,266			39			2,314			910			39
Other	605			1,192		(587)			(49)			2,537			(1,345)			(53)
Total noninterest income	12,070			10,638		1,432			13			12,105			(1,467)			(12)
Total revenue	34,877			34,016		861			3			37,891			(3,875)			(10)
Net charge-offs	1,439			1,875		(436)			(23)			2,235			(360)			(16)
Change in the allowance for credit losses	(2,617)			3,787		(6,404)			NM		(51)			3,838			NM
Provision for credit losses	(1,178)			5,662		(6,840)			NM		2,184			3,478			159
Noninterest expense	24,648			26,976		(2,328)			(9)			26,998			(22)			—
Income before income tax expense	11,407			1,378		10,029			728		8,709			(7,331)			(84)
Income tax expense	2,852			302		2,550			844		2,814			(2,512)			(89)
Net income	$	8,555			1,076		7,479			695		$	5,895			(4,819)			(82)
Revenue by Line of Business
Consumer and Small Business Banking	$	18,958			18,684		274			1			$	21,148			(2,464)			(12)
Consumer Lending:
Home Lending	8,154			7,875		279			4			8,817			(942)			(11)
Credit Card	5,527			5,288		239			5			5,707			(419)			(7)
Auto	1,733			1,575		158			10			1,567			8			1
Personal Lending	505			594		(89)			(15)			652			(58)			(9)
Total revenue	$	34,877			34,016		861			3			$	37,891			(3,875)			(10)
Selected Metrics
Consumer Banking and Lending:
Return on allocated capital (1)	17.2	%		1.6						12.1	%
Efficiency ratio (2)	71			79						71
Headcount (#) (period-end)	112,913			125,034				(10)			134,881					(7)
Retail bank branches (#)	4,777			5,032				(5)			5,352					(6)
Digital active customers (# in millions) (3)	33.0			32.0				3			30.3					6
Mobile active customers (# in millions) (3)	27.3			26.0				5			24.4					7
Consumer and Small Business Banking:
Deposit spread (4)	1.5	%		1.8						2.4	%
Debit card purchase volume ($ in billions) (5)	$	471.5			391.9		79.6			20			$	367.6			24.3			7
Debit card purchase transactions (# in millions) (5)	9,808			8,792				12			9,189					(4)

(continued on following page)

Column 1	Column 2	Column 3
	Wells Fargo & Company	15

Earnings Performance (continued)

(continued from previous page)


($ in millions, unless otherwise noted)	2021		2020		$ Change 2021/ 2020	% Change 2021/ 2020		2019		$ Change 2020/ 2019		% Change 2020/ 2019
Home Lending:
Mortgage banking:
Net servicing income	$	35			(160)		195			122	%		$	454			(614)			NM
Net gains on mortgage loan originations/sales	4,455			3,384		1,071			32			1,860			1,524			82	%
Total mortgage banking	$	4,490			3,224		1,266			39			$	2,314			910			39
Originations ($ in billions):
Retail	$	138.5			118.7		19.8			17			$	96.4			22.3			23
Correspondent	66.5			104.0		(37.5)			(36)			107.6			(3.6)			(3)
Total originations	$	205.0			222.7		(17.7)			(8)			$	204.0			18.7			9
% of originations held for sale (HFS)	64.6	%		73.9						66.1	%
Third-party mortgage loans serviced (period-end)($ in billions) (6)	$	716.8			856.7		(139.9)			(16)			$	1,063.4			(206.7)			(19)
Mortgage servicing rights (MSR) carrying value (period-end)	6,920			6,125		795			13			11,517			(5,392)			(47)
Ratio of MSR carrying value (period-end) to third-party mortgage loans serviced (period-end) (6)	0.97	%		0.71						1.08	%
Home lending loans 30+ days delinquencyrate (7)(8)(9)	0.39			0.64						0.64
Credit Card:
Point of sale (POS) volume ($ in billions)	$	102.5			81.6		20.9			26			$	88.2			(6.6)			(7)
New accounts (# in thousands) (10)	1,640			1,022				60			1,840					(44)
Credit card loans 30+ days delinquency rate (9)	1.50	%		2.17						2.63	%
Auto:
Auto originations ($ in billions)	$	33.9			22.8		11.1			49			$	25.4			(2.6)			(10)
Auto loans 30+ days delinquency rate (8)(9)	1.84	%		1.77						2.56	%
Personal Lending:
New funded balances	$	2,507			1,599	908			57			$	2,829			(1,230)			(43)

NM – Not meaningful

(2)Efficiency ratio is segment noninterest expense divided by segment total revenue (net interest income and noninterest income).

(4)Deposit spread is (i) the internal funds transfer pricing credit on segment deposits minus interest paid to customers for segment deposits, divided by (ii) average segment deposits.

(5)Debit card purchase volume and transactions reflect combined activity for both consumer and business debit card purchases.

(6)Excludes residential mortgage loans subserviced for others.

(7)Excludes residential mortgage loans insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA) and loans held for sale.

(8)Excludes nonaccrual loans.

(10)Excludes certain private label new account openings.

Full year 2021 vs. full year 2020

Revenue increased driven by:

•higher mortgage banking noninterest income due to higher gains in 2021 related to the resecuritization of loans we purchased from GNMA loan securitization pools in 2020, losses in 2020 driven by the impact of interest rate volatility on hedging activities and valuation losses due to the impact of the COVID-19 pandemic on market conditions, and a shift in production to more retail loans, which have a higher production margin compared with correspondent loans;

•higher card fees reflecting higher interchange fees driven by increased purchase and transaction volumes, partially offset by higher rewards, including promotional offers on our new Active CashSM card; and

•higher deposit-related fees driven by higher consumer transaction volumes as 2020 included reduced volumes due to the economic slowdown associated with the COVID-19 pandemic;

partially offset by:

•lower net interest income reflecting a lower deposit spread and lower loan balances, partially offset by higher deposit balances; and

•lower other income driven by lower gains on the sales of certain residential mortgage loans which were reclassified to held for sale.

Provision for credit losses decreased driven by an improved economic environment.

Noninterest expense decreased driven by:

•lower operating losses due to lower expense for customer remediation accruals and litigation accruals;

•lower personnel expense reflecting additional payments made in 2020 to certain customer-facing and support employees and for back-up child care services, as well as lower branch staffing expense in 2021 related to efficiency initiatives in Consumer and Small Business Banking, partially

Column 1	Column 2
16	Wells Fargo & Company

offset by higher revenue-related compensation in Home Lending;

•lower advertising and promotion expense; and

•lower occupancy expense related to lower cleaning fees, supplies, and equipment expenses as 2020 included higher expenses due to the COVID-19 pandemic;

partially offset by:

•higher charitable donations expense driven by the donation of PPP processing fees; and

•higher Federal Deposit Insurance Corporation (FDIC) deposit assessment expense driven by both a higher assessment rate and a higher deposit assessment base.

Table 8b: Consumer Banking and Lending – Balance Sheet

	Year ended December 31,
(in millions)	2021		2020		$ Change 2021/ 2020	% Change 2021/ 2020		2019		$ Change 2020/ 2019		% Change 2020/ 2019
Selected Balance Sheet Data (average)
Loans by Line of Business:
Home Lending	$	224,446			268,586		(44,140)			(16)	%		$	276,962		(8,376)		(3)	%
Auto	52,293			49,460		2,833			6			47,117			2,343		5
Credit Card	35,471			37,093		(1,622)			(4)			38,865			(1,772)		(5)
Small Business	16,625			15,173		1,452			10			9,951			5,222		52
Personal Lending	5,050			6,151		(1,101)			(18)			6,871			(720)		(10)
Total loans	$	333,885			376,463		(42,578)			(11)			$	379,766		(3,303)		(1)
Total deposits	834,739			722,085		112,654			16			629,110			92,975		15
Allocated capital	48,000			48,000		—			—			46,000			2,000		4
Selected Balance Sheet Data (period-end)
Loans by Line of Business:
Home Lending	$	214,407			253,942		(39,535)			(16)			$	278,325		(24,383)		(9)
Auto	57,260			49,072		8,188			17			49,124			(52)		—
Credit Card	38,453			36,664		1,789			5			41,013			(4,349)		(11)
Small Business	11,270			17,743		(6,473)			(36)			9,695			8,048		83
Personal Lending	5,184			5,375		(191)			(4)			6,845			(1,470)		(21)
Total loans	$	326,574			362,796		(36,222)			(10)			$	385,002		(22,206)		(6)
Total deposits	883,674			784,565		99,109			13			647,152			137,413		21

Full year 2021 vs. full year 2020

Total loans (average and period-end) decreased as paydowns exceeded originations. Home Lending loan balances were also impacted by actions taken in 2020 to temporarily curtail certain non-conforming residential mortgage originations and suspend home equity originations. Small Business period-end loan balances were also impacted by a decline in PPP loans.

Total deposits (average and period-end) increased driven by higher levels of liquidity and savings for consumer customers reflecting government stimulus programs and payment deferral programs, as well as continued economic uncertainty associated with the COVID-19 pandemic.

Column 1	Column 2	Column 3
	Wells Fargo & Company	17

Earnings Performance (continued)

Commercial Banking provides financial solutions to private, family owned and certain public companies. Products and services include banking and credit products across multiple

industry sectors and municipalities, secured lending and lease products, and treasury management. Table 8c and Table 8d provide additional information for Commercial Banking.

Table 8c: Commercial Banking – Income Statement and Selected Metrics

	Year ended December 31,
($ in millions)	2021		2020		$ Change 2021/ 2020	% Change 2021/ 2020		2019		$ Change 2020/ 2019		% Change 2020/ 2019
Income Statement
Net interest income	$	4,960			6,134		(1,174)			(19)	%		$	7,981		(1,847)		(23)	%
Noninterest income:
Deposit-related fees	1,285			1,219		66			5			1,175			44		4
Lending-related fees	532			531		1			—			524			7		1
Lease income	682			646		36			6			931			(285)		(31)
Other	1,090			645		445			69			1,091			(446)		(41)
Total noninterest income	3,589			3,041		548			18			3,721			(680)		(18)
Total revenue	8,549			9,175		(626)			(7)			11,702			(2,527)		(22)
Net charge-offs	101			590		(489)			(83)			215			375		174
Change in the allowance for credit losses	(1,601)			3,154		(4,755)			NM		(25)			3,179		NM
Provision for credit losses	(1,500)			3,744		(5,244)			NM		190			3,554		NM
Noninterest expense	5,862			6,323		(461)			(7)			6,598			(275)		(4)
Income (loss) before income tax expense (benefit)	4,187			(892)		5,079			569			4,914			(5,806)		NM
Income tax expense (benefit)	1,045			(208)		1,253			602			1,246			(1,454)		NM
Less: Net income from noncontrolling interests	8			5		3			60			6			(1)		(17)
Net income (loss)	$	3,134			(689)		3,823			555			$	3,662		(4,351)		NM
Revenue by Line of Business
Middle Market Banking	$	4,642			5,067		(425)			(8)			$	6,691		(1,624)		(24)
Asset-Based Lending and Leasing	3,907			4,108		(201)			(5)			5,011			(903)		(18)
Total revenue	$	8,549			9,175		(626)			(7)			$	11,702		(2,527)		(22)
Revenue by Product
Lending and leasing	$	4,835			5,432		(597)			(11)			$	5,983		(551)		(9)
Treasury management and payments	2,825			3,205		(380)			(12)			4,872			(1,667)		(34)
Other	889			538		351			65			847			(309)		(36)
Total revenue	$	8,549			9,175		(626)			(7)			$	11,702		(2,527)		(22)
Selected Metrics
Return on allocated capital	15.1	%		(4.5)						16.8	%
Efficiency ratio	69			69						56
Headcount (#) (period-end)	18,397			20,241			(9)			21,798				(7)

NM – Not meaningful

Full year 2021 vs. full year 2020

Revenue decreased driven by:

•lower net interest income reflecting lower loan balances driven by weak demand and the lower interest rate environment, partially offset by higher income from higher deposit balances;

partially offset by:

•higher other noninterest income due to higher realized and unrealized gains on the sales of equity securities and higher income from renewable energy investments; and

•higher deposit-related fees due to higher treasury management fees driven by an increase in transaction volumes and repricing.

Provision for credit losses decreased driven by an improved economic environment.

Noninterest expense decreased driven by:

•lower spending related to efficiency initiatives, including lower personnel expense from reduced headcount;

•lower lease expense driven by lower depreciation expense from a reduction in the size of our operating lease asset portfolio; and

•lower professional and outside services expense reflecting decreased project-related expense.

Column 1	Column 2
18	Wells Fargo & Company

Table 8d: Commercial Banking – Balance Sheet

	Year ended December 31,
(in millions)	2021		2020		$ Change 2021/ 2020		% Change 2021/ 2020		2019		$ Change 2020/ 2019		% Change 2020/ 2019
Selected Balance Sheet Data (average)
Loans:
Commercial and industrial	$	120,396			143,263			(22,867)			(16)	%		$	157,829			(14,566)		(9)	%
Commercial real estate	47,018			52,220			(5,202)			(10)			54,416			(2,196)			(4)
Lease financing and other	13,823			15,953			(2,130)			(13)			17,109			(1,156)			(7)
Total loans	$	181,237			211,436			(30,199)			(14)			$	229,354			(17,918)		(8)
Loans by Line of Business:
Middle Market Banking	$	102,882			112,848			(9,966)			(9)			$	119,717			(6,869)		(6)
Asset-Based Lending and Leasing	78,355			98,588			(20,233)			(21)			109,637			(11,049)			(10)
Total loans	$	181,237			211,436			(30,199)			(14)			$	229,354			(17,918)		(8)
Total deposits	197,269			178,946			18,323			10			159,763			19,183			12
Allocated capital	19,500			19,500		—			—			20,500		(1,000)			(5)
Selected Balance Sheet Data (period-end)
Loans:
Commercial and industrial	$	131,078			124,253			6,825			5			$	153,601			(29,348)		(19)
Commercial real estate	45,467			49,903			(4,436)			(9)			53,526			(3,623)			(7)
Lease financing and other	13,803			14,821			(1,018)			(7)			17,654			(2,833)			(16)
Total loans	$	190,348			188,977			1,371			1			$	224,781			(35,804)		(16)
Loans by Line of Business:
Middle Market Banking	$	106,834			101,193			5,641			6			$	115,187			(13,994)		(12)
Asset-Based Lending and Leasing	83,514			87,784			(4,270)			(5)			109,594			(21,810)			(20)
Total loans	$	190,348			188,977			1,371			1			$	224,781			(35,804)		(16)
Total deposits	205,428			188,292			17,136			9			168,081			20,211			12

Full year 2021 vs. full year 2020

Total loans (average) decreased driven by lower loan demand, including lower line utilization, and higher paydowns reflecting continued high levels of client liquidity and strength in the capital markets, partially offset by modest loan growth in late 2021 driven by higher line utilization, as well as customer growth.

Total deposits (average and period-end) increased due to higher levels of liquidity and lower investment spending reflecting government stimulus programs and continued economic uncertainty associated with the COVID-19 pandemic.

Column 1	Column 2	Column 3
	Wells Fargo & Company	19

Earnings Performance (continued)

estate lending and servicing, equity and fixed income solutions, as well as sales, trading, and research capabilities. Table 8e and Table 8f provide additional information for Corporate and Investment Banking.

Table 8e: Corporate and Investment Banking – Income Statement and Selected Metrics

	Year ended December 31,
($ in millions)	2021		2020		$ Change 2021/ 2020	% Change 2021/ 2020		2019		$ Change 2020/ 2019		% Change 2020/ 2019
Income Statement
Net interest income	$	7,410			7,509		(99)			(1)	%		$	8,008			(499)			(6)	%
Noninterest income:
Deposit-related fees	1,112			1,062		50			5			1,029			33			3
Lending-related fees	761			684		77			11			710			(26)			(4)
Investment banking fees	2,405			1,952		453			23			1,804			148			8
Net gains from trading activities	272			1,190		(918)			(77)			1,022			168			16
Other	1,879			1,531		348			23			1,877			(346)			(18)
Total noninterest income	6,429			6,419		10			—			6,442			(23)			—
Total revenue	13,839			13,928		(89)			(1)			14,450			(522)			(4)
Net charge-offs	(22)			742		(764)			NM		173			569			329
Change in the allowance for credit losses	(1,417)			4,204		(5,621)			NM		—			4,204			NM
Provision for credit losses	(1,439)			4,946		(6,385)			NM		173			4,773			NM
Noninterest expense	7,200			7,703		(503)			(7)			7,432			271			4
Income before income tax expense	8,078			1,279		6,799			532		6,845			(5,566)			(81)
Income tax expense	2,019			330		1,689			512		1,658			(1,328)			(80)
Less: Net loss from noncontrolling interests	(3)			(1)		(2)			NM		(1)			—			—
Net income	$	6,062			950		5,112			538		$	5,188			(4,238)			(82)
Revenue by Line of Business
Banking:
Lending	$	1,948			1,767		181			10			$	1,811			(44)			(2)
Treasury Management and Payments	1,468			1,680		(212)			(13)			2,290			(610)			(27)
Investment Banking	1,654			1,448		206			14			1,370			78			6
Total Banking	5,070			4,895		175			4			5,471			(576)			(11)
Commercial Real Estate	3,963			3,607		356			10			4,260			(653)			(15)
Markets:
Fixed Income, Currencies, and Commodities (FICC)	3,710			4,314		(604)			(14)			3,760			554			15
Equities	897			1,204		(307)			(25)			1,078			126			12
Credit Adjustment (CVA/DVA) and Other	91			26		65			250			(6)			32			533
Total Markets	4,698			5,544		(846)			(15)			4,832			712			15
Other	108			(118)		226			192			(113)			(5)			(4)
Total revenue	$	13,839			13,928		(89)			(1)			$	14,450			(522)			(4)
Selected Metrics
Return on allocated capital	16.9	%		1.8						15.4	%
Efficiency ratio	52			55						51
Headcount (#) (period-end)	8,489			8,178			4			7,918				3

NM – Not meaningful

Full year 2021 vs. full year 2020

Revenue decreased driven by:

•lower net gains from trading activities driven by lower volumes of interest rate products, lower client trading activity for equity products due to market volatility in 2020, and lower client trading activity for credit products reflecting greater market liquidity in 2020 from government actions taken in response to the COVID-19 pandemic, partially offset by higher client trading activity for asset-backed finance products;

partially offset by:

•higher investment banking fees due to higher debt underwriting fees, including loan syndication fees, as well as higher advisory fees and equity underwriting fees;

•higher other noninterest income driven by higher commercial mortgage banking income due to higher servicing income and gains on the sales of mortgage loans, as well as higher income from low-income housing investments; and

•higher lending-related fees reflecting increased loan commitment fees.

Column 1	Column 2
20	Wells Fargo & Company

Provision for credit losses decreased driven by an improved economic environment.

Noninterest expense decreased driven by:

•lower operating losses due to lower expense for litigation accruals;

•lower expenses from operations and enterprise functions; and

•lower professional and outside services expense driven by efficiency initiatives to reduce our spending on consultants and contractors;

partially offset by:

•higher personnel expense driven by higher incentive compensation expense.

Table 8f: Corporate and Investment Banking – Balance Sheet

	Year ended December 31,
(in millions)	2021		2020		$ Change 2021/ 2020	% Change 2021/ 2020		2019		$ Change 2020/ 2019		% Change 2020/ 2019
Selected Balance Sheet Data (average)
Loans:
Commercial and industrial	$	170,713			172,492		(1,779)			(1)	%		$	168,506		3,986		2	%
Commercial real estate	86,323			82,832		3,491			4			79,804			3,028		4
Total loans	$	257,036			255,324		1,712			1			$	248,310		7,014		3
Loans by Line of Business:
Banking	$	93,766			93,501		265			—			$	90,749		2,752		3
Commercial Real Estate	110,978			108,279		2,699			2			104,261			4,018		4
Markets	52,292			53,544		(1,252)			(2)			53,300			244		—
Total loans	$	257,036			255,324		1,712			1			$	248,310		7,014		3
Trading-related assets:
Trading account securities	$	110,386			109,803		583			1			$	115,937		(6,134)		(5)
Reverse repurchase agreements/securities borrowed	59,044			71,485		(12,441)			(17)			89,190			(17,705)		(20)
Derivative assets	25,315			21,986		3,329			15			12,762			9,224		72
Total trading-related assets	$	194,745			203,274		(8,529)			(4)			$	217,889		(14,615)		(7)
Total assets	523,344			521,514		1,830			—			520,379			1,135		—
Total deposits	189,176			234,332		(45,156)			(19)			238,651			(4,319)		(2)
Allocated capital	34,000			34,000		—			—			31,500			2,500		8
Selected Balance Sheet Data (period-end)
Loans:
Commercial and industrial	$	191,391			160,000		31,391			20			$	173,985		(13,985)		(8)
Commercial real estate	92,983			84,456		8,527			10			79,451			5,005		6
Total loans	$	284,374			244,456		39,918			16			$	253,436		(8,980)		(4)
Loans by Line of Business:
Banking	$	101,926			84,640		17,286			20			$	93,117		(8,477)		(9)
Commercial Real Estate	125,926			107,207		18,719			17			103,938			3,269		3
Markets	56,522			52,609		3,913			7			56,381			(3,772)		(7)
Total loans	$	284,374			244,456		39,918			16			$	253,436		(8,980)		(4)
Trading-related assets:
Trading account securities	$	108,697			109,311		(614)			(1)			$	124,808		(15,497)		(12)
Reverse repurchase agreements/securities borrowed	55,973			57,248		(1,275)			(2)			90,077			(32,829)		(36)
Derivative assets	21,398			25,916		(4,518)			(17)			14,382			11,534		80
Total trading-related assets	$	186,068			192,475		(6,407)			(3)			$	229,267		(36,792)		(16)
Total assets	546,549			508,518		38,031			7			538,007			(29,489)		(5)
Total deposits	168,609			203,004		(34,395)			(17)			261,134			(58,130)		(22)

Full year 2021 vs. full year 2020

Total assets (period-end) increased reflecting higher loan balances driven by customer usage of lines of credit due to increased corporate spending.

Total deposits (average and period-end) decreased reflecting continued actions to manage under the asset cap.

Column 1	Column 2	Column 3
	Wells Fargo & Company	21

Earnings Performance (continued)

offices, consumer bank branches, independent offices, and digitally through WellsTrade® and Intuitive Investor®. Table 8g and Table 8h provide additional information for Wealth and Investment Management.

Table 8g: Wealth and Investment Management

	Year ended December 31,
($ in millions, unless otherwise noted)	2021		2020		$ Change 2021/ 2020	% Change 2021/ 2020		2019		$ Change 2020/ 2019		% Change 2020/ 2019
Income Statement
Net interest income	$	2,570			2,988		(418)			(14)	%		$	3,906			(918)		(24)	%
Noninterest income:
Investment advisory and other asset-based fees	9,574			8,085		1,489			18			7,909			176			2
Commissions and brokerage services fees	2,010			2,078		(68)			(3)			2,170			(92)			(4)
Other	192			62		130			210			427			(365)			(85)
Total noninterest income	11,776			10,225		1,551			15			10,506			(281)			(3)
Total revenue	14,346			13,213		1,133			9			14,412			(1,199)			(8)
Net charge-offs	10			(3)		13			433		—			(3)			NM
Change in the allowance for credit losses	(105)			252		(357)			NM		2			250			NM
Provision for credit losses	(95)			249		(344)			NM		2			247			NM
Noninterest expense	11,734			10,912		822			8			12,167			(1,255)			(10)
Income before income tax expense	2,707			2,052		655			32			2,243			(191)			(9)
Income tax expense	680			514		166			32			562			(48)			(9)
Net income	$	2,027			1,538		489			32			$	1,681			(143)		(9)
Selected Metrics
Return on allocated capital	22.6	%		17.0						18.6	%
Efficiency ratio	82			83						84
Headcount (#) (period-end)	25,906			28,306				(8)			29,530					(4)
Advisory assets ($ in billions)	$	964			853		111			13			$	778			75		10
Other brokerage assets and deposits ($ in billions)	1,219			1,152		67			6			1,108			44			4
Total client assets ($ in billions)	$	2,183			2,005		178			9			$	1,886			119		6
Annualized revenue per advisor ($ in thousands) (1)	1,114			939		175			19			985			(46)			(5)
Total financial and wealth advisors (#) (period-end)	12,367			13,513				(8)			14,414					(6)
Selected Balance Sheet Data (average)
Total loans	$	82,364			78,775		3,589			5			$	74,986			3,789		5
Total deposits	176,562			162,476		14,086			9			139,099			23,377			17
Allocated capital	8,750			8,750		—			—			8,750			—			—
Selected Balance Sheet Data (period-end)
Total loans	$	84,101			80,785		3,316			4			$	77,140			3,645		5
Total deposits	192,548			175,483		17,065			10			143,830			31,653			22

NM – Not meaningful

(1)Represents annualized segment total revenue divided by average total financial and wealth advisors for the period.

Full year 2021 vs. full year 2020

Revenue increased driven by:

•higher investment advisory and other asset-based fees due to higher market valuations on WIM advisory assets; and

•higher gains on deferred compensation plan investments, which are included in other noninterest income (largely offset by personnel expense);

partially offset by:

•lower net interest income reflecting the lower interest rate environment, partially offset by higher deposit and loan balances.

Provision for credit losses decreased driven by an improved economic environment.

Noninterest expense increased due to:

•higher personnel expense driven by higher revenue-related compensation expense and higher deferred compensation expense; and

•the reversal of a software licensing liability accrual in 2020;

partially offset by:

•lower professional and outside services expense driven by efficiency initiatives to reduce our spending on consultants and contractors.

Total loans (average and period-end) increased due to higher securities-based loan balances.

Total deposits (average and period-end) increased primarily due to growth in customer balances in both The Private Bank and Wells Fargo Advisors.

Column 1	Column 2
22	Wells Fargo & Company

WIM Advisory Assets In addition to transactional accounts, WIM offers advisory account relationships to brokerage customers. Fees from advisory accounts are based on a percentage of the market value of the assets as of the beginning of the quarter, which vary across the account types based on the distinct services provided, and are affected by investment performance as well as asset inflows and outflows. Advisory accounts include assets that are financial advisor-directed and separately managed by third-party managers, as well as certain client-directed brokerage assets where we earn a fee for advisory and other services, but do not have investment discretion.

WIM also manages personal trust and other assets for high net worth clients, with fee income earned based on a percentage of the market value of these assets. Table 8h presents advisory assets activity by WIM line of business for the years ended December 31, 2021, 2020 and 2019. Management believes that advisory assets is a useful metric because it allows management, investors, and others to assess how changes in asset amounts may impact the generation of certain asset-based fees.

For the years ended December 31, 2021, 2020 and 2019, the average fee rate by account type ranged from 50 to 120 basis points.

Table 8h: WIM Advisory Assets


(in billions)	Balance, beginning of period	Inflows (1)	Outflows (2)	Market impact (3)	Balance, end of period
December 31, 2021
Client-directed (4)	$	186.3		41.5		(45.0)		22.8		205.6
Financial advisor-directed (5)	211.0		48.7		(41.1)		36.9		255.5
Separate accounts (6)	174.6		31.8		(30.7)		27.6		203.3
Mutual fund advisory (7)	91.4		15.6		(15.0)		10.1		102.1
Total Wells Fargo Advisors	$	663.3		137.6		(131.8)		97.4		766.5
The Private Bank (8)	189.4		40.0		(51.1)		19.7		198.0
Total WIM advisory assets	$	852.7		177.6		(182.9)		117.1		964.5
December 31, 2020
Client directed (4)	$	169.4		36.4		(38.2)		18.7		186.3
Financial advisor directed (5)	176.3		40.6		(33.6)		27.7		211.0
Separate accounts (6)	160.1		24.6		(27.4)		17.3		174.6
Mutual fund advisory (7)	83.7		11.3		(13.9)		10.3		91.4
Total Wells Fargo Advisors	$	589.5		112.9		(113.1)		74.0		663.3
The Private Bank (8)	188.0		34.0		(45.8)		13.2		189.4
Total WIM advisory assets	$	777.5		146.9		(158.9)		87.2		852.7
December 31, 2019
Client directed (4)	$	151.5		33.5		(41.8)		26.2		169.4
Financial advisor directed (5)	141.9		33.9		(34.7)		35.2		176.3
Separate accounts (6)	136.4		24.2		(29.7)		29.2		160.1
Mutual fund advisory (7)	71.3		11.8		(14.1)		14.7		83.7
Total Wells Fargo Advisors	$	501.1		103.4		(120.3)		105.3		589.5
Total Private Bank (8)	173.0		34.5		(43.8)		24.3		188.0
Total WIM advisory assets	$	674.1		137.9		(164.1)		129.6		777.5

(1)Inflows include new advisory account assets, contributions, dividends and interest.

(2)Outflows include closed advisory account assets, withdrawals and client management fees.

(3)Market impact reflects gains and losses on portfolio investments.

(5)Professionally managed portfolios with fees earned based on respective strategies and as a percentage of certain client assets.

(6)Professional advisory portfolios managed by WFAM or third-party asset managers. Fees are earned based on a percentage of certain client assets.

(7)Program with portfolios constructed of load-waived, no-load and institutional share class mutual funds. Fees are earned based on a percentage of certain client assets.

(8)Discretionary and non-discretionary portfolios held in personal trusts, investment agency, or custody accounts with fees earned based on a percentage of client assets.

Column 1	Column 2	Column 3
	Wells Fargo & Company	23

Earnings Performance (continued)

Corporate includes corporate treasury and enterprise functions, net of allocations (including funds transfer pricing, capital, liquidity and certain expenses), in support of the reportable operating segments, as well as our investment portfolio and affiliated venture capital and private equity businesses. In addition, Corporate includes all restructuring charges related to our efficiency initiatives. See Note 22 (Restructuring Charges) to

Financial Statements in this Report for additional information on restructuring charges. Corporate also includes certain lines of business that management has determined are no longer consistent with the long-term strategic goals of the Company, as well as results for previously divested businesses. Table 8i,

Table 8j, and Table 8k provide additional information for Corporate.

Table 8i: Corporate – Income Statement and Selected Metrics

	Year ended December 31,
($ in millions, unless otherwise noted)	2021		2020		$ Change 2021/ 2020	% Change 2021/ 2020		2019		$ Change 2020/ 2019		% Change 2020/ 2019
Income Statement
Net interest income	$	(1,541)			441		(1,982)			NM		$	2,246			(1,805)			(80)	%
Noninterest income	10,036			4,916		5,120			104	%		7,550			(2,634)			(35)
Total revenue	8,495			5,357		3,138			59			9,796			(4,439)			(45)
Net charge-offs	54			166		(112)			(67)			139			27			19
Change in the allowance for credit losses	3			(638)		641			100		(1)			(637)			NM
Provision for credit losses	57			(472)		529			112			138			(610)			NM
Noninterest expense	4,387			5,716		(1,329)			(23)			4,983			733			15
Income before income tax expense (benefit)	4,051			113		3,938			NM		4,675			(4,562)			(98)
Income tax expense (benefit)	596			(670)		1,266			189			900			(1,570)			NM
Less: Net income from noncontrolling interests (1)	1,685			281		1,404			500			486			(205)			(42)
Net income	$	1,770			502		1,268			253			$	3,289			(2,787)			(85)
Selected Metrics
Headcount (#) (period-end) (2)	83,730			86,772				(4)			77,797					12

NM – Not meaningful

(1)Reflects results attributable to noncontrolling interests predominantly associated with the Company’s consolidated venture capital investments.

(2)Beginning in first quarter 2021, employees who were notified of displacement remained as headcount in their respective operating segment rather than included in Corporate.

Full year 2021 vs. full year 2020

Revenue increased driven by:

•higher unrealized gains on nonmarketable equity securities from our affiliated venture capital and private equity businesses, higher realized gains on the sales of equity securities, as well as lower impairment of equity securities due to improved market conditions in 2021; and

•gains on the sales of our Corporate Trust Services business, our student loan portfolio, and WFAM;

partially offset by:

•lower net interest income reflecting the lower interest rate environment, unfavorable hedge ineffectiveness accounting results, and lower loan balances;

•lower gains on debt securities from sales of agency MBS and municipal bonds, partially offset by higher gains on sales of corporate and other debt securities;

•lower asset-based fees due to the sale of WFAM on November 1, 2021;

•lower lease income driven by a $268 million impairment of certain rail cars in our rail car leasing business used for the transportation of coal products; and

•higher valuation losses related to the retained litigation risk, including the timing and amount of final settlement, associated with shares of Visa Class B common stock that we previously sold.

Provision for credit losses increased due to a reduction in the allowance for credit losses in 2020 as a result of the reclassification of our student loan portfolio to loans held for sale, partially offset by an improved economic environment.

Noninterest expense decreased due to:

•lower restructuring charges; and

•lower expenses related to divested businesses;

partially offset by:

•higher incentive compensation expense, including the impact of higher market valuations on stock-based compensation;

•higher deferred compensation expense; and

•a write-down of goodwill in 2021 related to the sale of our student loan portfolio.

Corporate includes our rail car leasing business, which had long-lived operating lease assets (as a lessor) of $5.1 billion, which was net of $2.1 billion of accumulated depreciation, as of December 31, 2021. The average age of our rail cars is 22 years and the rail cars are typically leased under short-term leases of 3 to 5 years. Our three largest concentrations, which represented 55% of our rail car fleet as of December 31, 2021, were rail cars used for the transportation of agricultural grain, coal, and cement/sand products.

In 2021, we observed that a decline in the market led to continued weakening demand for certain rail cars used for the transportation of coal products. We expect that both utilization and rental rates for these leased rail cars may remain low in future periods and, therefore, we recognized an impairment charge related to these leased rail cars of $268 million in fourth quarter 2021 as an offset to our lease income, which is included in noninterest income. We believe no other classes of rail cars were impaired as of December 31, 2021. Additional impairment may result in the future based on changing economic and market conditions affecting the long-term demand and utility of specific types of rail cars. Our assumptions for impairment are sensitive to estimated utilization and rental rates, as well as the estimated

Column 1	Column 2
24	Wells Fargo & Company

economic life of the leased asset. For additional information on the accounting for impairment of operating lease assets, see Note 1 (Summary of Significant Accounting Policies) and Note 5 (Leasing Activity) to Financial Statements in this Report.

In addition, Corporate includes assets under management (AUM) and assets under administration (AUA) for Institutional

Retirement and Trust (IRT) client assets of $19 billion and $582 billion, respectively, at December 31, 2021, which we continue to administer at the direction of the buyer pursuant to a transition services agreement. The transition services agreement terminates in June 2022.

Table 8j: Corporate – Balance Sheet


(in millions)	2021		2020		$ Change 2021/ 2020	% Change 2021/ 2020		2019		$ Change 2020/ 2019		% Change 2020/ 2019
Selected Balance Sheet Data (average)
Cash, cash equivalents, and restricted cash	$	236,124			183,420		52,704			29	%		$	130,532		52,888		41	%
Available-for-sale debt securities	181,841			221,493		(39,652)			(18)			252,099			(30,606)		(12)
Held-to-maturity debt securities	244,735			172,755		71,980			42			147,303			25,452		17
Equity securities	12,720			12,445		275			2			13,188			(743)		(6)
Total loans	9,766			19,790		(10,024)			(51)			18,540			1,250		7
Total assets	743,089			675,250		67,839			10			623,075			52,175		8
Total deposits	40,066			78,172		(38,106)			(49)			119,638			(41,466)		(35)
Selected Balance Sheet Data (period-end)
Cash, cash equivalents, and restricted cash	$	209,696			235,262		(25,566)			(11)			$	111,408		123,854		111
Available-for-sale debt securities	165,926			208,694		(42,768)			(20)			250,801			(42,107)		(17)
Held-to-maturity debt securities	269,285			204,858		64,427			31			153,142			51,716		34
Equity securities	16,549			10,305		6,244			61			13,770			(3,465)		(25)
Total loans	9,997			10,623		(626)			(6)			21,906			(11,283)		(52)
Total assets	721,335			728,667		(7,332)			(1)			610,673			117,994		19
Total deposits	32,220			53,037		(20,817)			(39)			102,429			(49,392)		(48)

Full year 2021 vs. full year 2020

Total assets (average) increased due to:

•an increase in cash, cash equivalents, and restricted cash managed by corporate treasury as a result of an increase in deposits from the reportable operating segments; and

•an increase in held-to-maturity debt securities related to portfolio rebalancing to manage liquidity and interest rate risk;

partially offset by:

•a decline in available-for-sale debt securities related to portfolio rebalancing to manage liquidity and interest rate risk; and

•a decline in loans due to the sale of our student loan portfolio.

Total assets (period-end) decreased modestly reflecting the timing of cash deployment by our investment portfolio near the end of 2021, partially offset by an increase in equity securities related to our affiliated venture capital business.

Total deposits (average and period-end) decreased reflecting actions taken to manage under the asset cap.

Column 1	Column 2	Column 3
	Wells Fargo & Company	25

Earnings Performance (continued)

Wells Fargo Asset Management (WFAM) Assets Under Management On November 1, 2021 we closed our previously announced agreement to sell WFAM. Prior to the sale, we earned investment advisory and other asset-based fees from managing and administering assets through WFAM, which offered Wells Fargo proprietary mutual funds and managed institutional separate accounts. Generally, we earned fees from AUM where we had discretionary management authority over the investments and generated fees as a percentage of the market

value of the AUM. WFAM assets under management consisted of equity, alternative, balanced, fixed income, money market, and stable value, and included client assets that were managed or sub-advised on behalf of other Wells Fargo lines of business. Table 8k presents WFAM AUM activity for the years ended December 31, 2021, 2020 and 2019. Management believes that AUM is a useful metric because it allows management, investors, and others to assess how changes in asset amounts may impact the generation of certain asset-based fees.

Table 8k: WFAM Assets Under Management


(in billions)	Balance, beginning of period	Inflows (1)	Outflows (2)	Market impact (3)	Sale of WFAM on November 1, 2021	Balance, end of period
December 31, 2021
Money market funds (4)	$	197.4		—		(6.3)		—		(191.1)		—
Other assets managed	405.6		69.3		(90.5)		11.6		(396.0)		—
Total WFAM assets under management	$	603.0		69.3		(96.8)		11.6		(587.1)		—
December 31, 2020
Money market funds (4)	$	130.6		66.8		—		—		—		197.4
Other assets managed	378.2		101.3		(104.7)		30.8		—		405.6
Total WFAM assets under management	$	508.8		168.1		(104.7)		30.8		—		603.0
December 31, 2019
Money market funds (4)	$	112.4		18.2		—		—		—		130.6
Other assets managed	353.5		75.1		(86.1)		35.7		—		378.2
Total WFAM assets under management	$	465.9		93.3		(86.1)		35.7		—		508.8

(1)Inflows include new managed account assets, contributions, dividends and interest.

(2)Outflows include closed managed account assets, withdrawals and client management fees.

(3)Market impact reflects gains and losses on portfolio investments.

(4)Money Market funds activity is presented on a net inflow or net outflow basis, because the gross flows are not meaningful nor used by management as an indicator of performance.

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26	Wells Fargo & Company

Balance Sheet Analysis

At December 31, 2021, our assets totaled $1.95 trillion, down $4.8 billion from December 31, 2020.

Available-for-Sale and Held-to-Maturity Debt Securities

Table 9: Available-for-Sale and Held-to-Maturity Debt Securities

	December 31, 2021		December 31, 2020
($ in millions)	Amortized cost, net (1)		Net unrealized gains		Fair value	Weighted average expected maturity (yrs)		Amortized cost, net (1)		Net unrealized gains	Fair value	Weighted average expected maturity (yrs)
Available-for-sale (2)	175,463			1,781		177,244			5.2		215,533		4,859	220,392	4.5
Held-to-maturity (3)	272,022			364		272,386			6.3		205,720		6,587	212,307	4.5
Total	$	447,485			2,145		449,630			n/a	421,253		11,446	432,699	n/a

(1)Represents amortized cost of the securities, net of the allowance for credit losses of $8 million and $28 million related to available-for-sale debt securities and $96 million and $41 million related to held-to-maturity debt securities at December 31, 2021 and 2020, respectively.

(2)Available-for-sale debt securities are carried on the consolidated balance sheet at fair value.

(3)Held-to-maturity debt securities are carried on the consolidated balance sheet at amortized cost, net of the allowance for credit losses.

Table 9 presents a summary of our portfolio of investments in available-for-sale (AFS) and held-to-maturity (HTM) debt securities. The size and composition of our AFS and HTM debt securities is dependent upon the Company’s liquidity and interest rate risk management objectives. The AFS debt securities portfolio can be used to meet funding needs that arise in the normal course of business or due to market stress. Changes in our interest rate risk profile may occur due to changes in overall economic or market conditions, which could influence loan origination demand, prepayment rates, or deposit balances and mix. In response, the AFS debt securities portfolio can be rebalanced to meet the Company’s interest rate risk management objectives. In addition to meeting liquidity and interest rate risk management objectives, the AFS and HTM debt securities portfolios may provide yield enhancement over other short-term assets. See the “Risk Management – Asset/Liability Management” section in this Report for additional information on liquidity and interest rate risk.

The amortized cost, net of the allowance for credit losses, of AFS and HTM debt securities increased from December 31, 2020. We continued to purchase AFS and HTM debt securities, including HTM debt securities through securitizations of LHFS, which more than offset portfolio runoff and AFS debt security sales. In addition, we transferred $56.0 billion of AFS debt securities to HTM debt securities in 2021 due to actions taken to reposition the overall portfolio for capital management purposes.

The total net unrealized gains on AFS and HTM debt securities decreased from December 31, 2020, driven by higher interest rates.

At December 31, 2021, 98% of the combined AFS and HTM debt securities portfolio was rated AA- or above. Ratings are based on external ratings where available and, where not available, based on internal credit grades. See Note 3 (Available-for-Sale and Held-to-Maturity Debt Securities) to Financial Statements in this Report for additional information on AFS and HTM debt securities, including a summary of debt securities by security type.

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	Wells Fargo & Company	27

Balance Sheet Analysis (continued)

Loan Portfolios

Table 10 provides a summary of total outstanding loans by portfolio segment. Commercial loans increased from December 31, 2020, predominantly due to an increase in the commercial and industrial loan portfolio, driven by higher loan demand resulting in increased originations and loan draws, partially offset by paydowns and PPP loan forgiveness. Consumer

loans decreased from December 31, 2020, predominantly driven by a decrease in the residential mortgage – first lien portfolio due to loan paydowns reflecting the low interest rate environment and the transfer of $17.8 billion of first lien mortgage loans to loans held for sale (LHFS) substantially all of which related to the sales of loans purchased from GNMA loan securitization pools in prior periods, partially offset by originations of $72.6 billion.

Table 10: Loan Portfolios

(in millions)	December 31, 2021
Commercial	$	513,120		478,417
Consumer	382,274		409,220
Total loans	$	895,394		887,637
Change from prior year-end	$	7,757		(74,628)

and Related Allowance for Credit Losses) to Financial Statements in this Report.

Table 11 shows contractual maturities by class of loan and the distribution by changes in interest rates for loans with a contractual maturity greater than one year. Nonaccrual loans and loans with indeterminate maturities have been classified as maturing within one year.

Table 11: Loan Maturities

	December 31, 2021
	Loan maturities		Loans maturing after one year
(in millions)	Within one year		After one year through five years		After five years through fifteen years	After fifteen years		Total		Fixed interest rates	Floating/variable interest rates
Commercial:
Commercial and industrial	$	127,237			199,907		22,510			782		350,436		22,827		200,372
Real estate mortgage	27,847			74,775		23,329			1,782		127,733		20,283		79,603
Real estate construction	8,147			11,541		394			10		20,092		254		11,691
Lease financing	3,519			10,178		1,083			79		14,859		11,340		—
Total commercial	166,750			296,401		47,316			2,653		513,120		54,704		291,666
Consumer:
Residential mortgage – first lien	10,489			28,557		82,159			121,065		242,270		163,105		68,676
Residential mortgage – junior lien	1,018			968		2,567			12,065		16,618		4,299		11,301
Credit card	38,453			—		—			—		38,453		—		—
Auto	13,034			40,120		3,505			—		56,659		43,625		—
Other consumer	25,148			2,846		252			28		28,274		2,465		661
Total consumer	88,142			72,491		88,483			133,158		382,274		213,494		80,638
Total loans	$	254,892			368,892		135,799			135,811		895,394		268,198		372,304

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28	Wells Fargo & Company

Deposits

Deposits increased from December 31, 2020, reflecting:

•higher levels of liquidity and savings for consumer customers reflecting government stimulus programs and payment deferral programs, as well as continued economic uncertainty associated with the COVID-19 pandemic;

partially offset by:

•actions taken to manage under the asset cap resulting in declines in time deposits, such as brokered certificates of

deposit (CDs), and interest-bearing deposits in non-U.S. offices.

Table 12 provides additional information regarding deposits. Information regarding the impact of deposits on net interest income and a comparison of average deposit balances is provided in the “Earnings Performance – Net Interest Income” section and Table 3 earlier in this Report.

Table 12: Deposits

($ in millions)	Dec 31, 2021			Dec 31, 2020		% of total deposits		% Change
Noninterest-bearing demand deposits	$	527,748		36	%		$	467,068		33	%	13
Interest-bearing demand deposits	465,887		31			447,446			32		4
Savings deposits	439,600		30			404,935			29		9
Time deposits	29,461		2			49,775			4		(41)
Interest-bearing deposits in non-U.S. offices	19,783		1			35,157			2		(44)
Total deposits	$	1,482,479		100	%		$	1,404,381		100	%	6

As of December 31, 2021 and 2020, total deposits that exceed FDIC insurance limits, or are otherwise uninsured, were estimated to be $590 billion and $560 billion, respectively. Estimated uninsured domestic deposits reflect amounts disclosed in the U.S. regulatory reports of our subsidiary banks, with adjustments for amounts related to consolidated

subsidiaries. All non-U.S. deposits are treated for these purposes as uninsured.

Table 13 presents the contractual maturities of estimated time deposits that exceed FDIC insurance limits, or are otherwise uninsured. All non-U.S. time deposits are uninsured.

Table 13: Uninsured Time Deposits by Maturity

(in millions)	Three months or less			After six months through twelve months	After twelve months
December 31, 2021
Domestic time deposits	$	2,866		491		467		773		4,597
Non-U.S. time deposits	316		235		—		—		551
Total	$	3,182		726		467		773		5,148

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	Wells Fargo & Company	29

Off-Balance Sheet Arrangements

In the ordinary course of business, we engage in financial transactions that are not recorded on the consolidated balance sheet, or may be recorded on the consolidated balance sheet in amounts that are different from the full contract or notional amount of the transaction. Our off-balance sheet arrangements include commitments to lend and purchase debt and equity securities, transactions with unconsolidated entities, guarantees, derivatives, and other commitments. These transactions are designed to (1) meet the financial needs of customers, (2) manage our credit, market or liquidity risks, and/or (3) diversify our funding sources.

Commitments to Lend

We enter into commitments to lend to customers, which are usually at a stated interest rate, if funded, and for specific purposes and time periods. When we enter into commitments, we are exposed to credit risk. The maximum credit risk for these commitments will generally be lower than the contractual amount because a significant portion of these commitments are not funded. For additional information, see Note 4 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.

Transactions with Unconsolidated Entities

In the normal course of business, we enter into various types of on- and off-balance sheet transactions with special purpose entities (SPEs), which are corporations, trusts, limited liability companies or partnerships that are established for a limited purpose. Generally, SPEs are formed in connection with securitization transactions and are considered variable interest entities (VIEs). For additional information, see Note 8 (Securitizations and Variable Interest Entities) to Financial Statements in this Report.

Guarantees and Other Arrangements

Guarantees are contracts that contingently require us to make payments to a guaranteed party based on an event or a change in an underlying asset, liability, rate or index. Guarantees are generally in the form of standby and direct pay letters of credit, written options, recourse obligations, exchange and clearing house guarantees, indemnifications, and other types of similar arrangements. For additional information, see Note 13 (Guarantees and Other Commitments) to Financial Statements in this Report.

Commitments to Purchase Debt and Equity Securities

We enter into commitments to purchase securities under resale agreements. We also may enter into commitments to purchase debt and equity securities to provide capital for customers’ funding, liquidity or other future needs. For additional information, see Note 13 (Guarantees and Other Commitments) to Financial Statements in this Report.

Derivatives

We use derivatives to manage exposure to market risk, including interest rate risk, credit risk and foreign currency risk, and to assist customers with their risk management objectives. Derivatives are recorded on the consolidated balance sheet at fair value, and volume can be measured in terms of the notional amount, which is generally not exchanged, but is used only as the basis on which interest and other payments are determined. The notional amount is not recorded on the consolidated balance sheet and is not, when viewed in isolation, a meaningful measure of the risk profile of the instruments. For additional information, see Note 16 (Derivatives) to Financial Statements in this Report.

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30	Wells Fargo & Company

Risk Management

Risk and Strategy. The Chief Executive Officer (CEO) drives the Company’s strategic planning process, which identifies the Company’s most significant opportunities and challenges, develops options to address them, and evaluates the risks and trade-offs of each. The Company’s risk profile, risk capacity, risk appetite, and risk management effectiveness are considered in the strategic planning process, which is closely linked with the Company’s capital planning process. The Company’s Independent Risk Management (IRM) organization participates in strategic planning, providing challenge to and independent assessment of the risks associated with strategic initiatives. IRM also independently assesses and challenges the impact of the strategic plan on risk capacity, risk appetite, and risk management effectiveness at the principal lines of business, enterprise functions, and aggregate Company level. After review, the strategic plan is presented to the Board each year with IRM’s evaluation.

Risk is Managed by Everyone. Every employee, in the course of their daily activities, creates risk and is responsible for managing risk. Every employee has a role to play in risk management, including establishing and maintaining the Company’s control environment. Every employee must comply with applicable laws, regulations, and Company policies.

Risk and Culture. Senior management sets the tone at the top by supporting a strong culture, defined by the Company’s expectations, that guides how employees conduct themselves and make decisions. The Board holds senior management accountable for establishing and maintaining this culture and for effectively managing risk. Senior management expects employees to speak up when they see something that could cause harm to the Company’s customers, communities, employees, shareholders, or reputation. Because risk management is everyone’s responsibility, all employees are empowered to and expected to challenge risk decisions when appropriate and to escalate their concerns when they have not been addressed. The Company’s performance management and incentive compensation programs are designed to establish a balanced framework for risk and reward under core principles that employees are expected to know and practice. The Board, through its Human Resources Committee, plays an important role in overseeing and providing credible challenge to the Company’s performance management and incentive compensation programs. Effective risk management is a central component of employee performance evaluations.

Wells Fargo’s top priority is to strengthen our company by building an appropriate risk and control infrastructure. We continue to enhance our risk management programs, including our operational and compliance risk management as required by the FRB’s February 2, 2018, and the CFPB/OCC’s April 20, 2018, consent orders.

Risk Governance

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	Wells Fargo & Company	31

Risk Management (continued)

Each management governance committee, in accordance with its charter, is expected to discuss, document, and make decisions regarding high priority and significant risks, emerging

Table 14 presents, as of December 31, 2021, the structure of the Company’s Board committees and management governance committees reporting to a Board committee, including relevant reporting and escalation paths.

Table 14: Board and Management-level Governance Committee Structure


Audit Committee (1)	Finance Committee		Corporate Responsibility Committee		RiskCommittee			Governance & Nominating Committee		Human Resources Committee
							Management Governance Committees
Disclosure Committee		Capital Management Committee				Allowance for Credit Losses Approval Governance Committee			Enterprise Risk & Control Committee			Incentive Compensation and Performance Management Committee
Regulatory and Risk Reporting Oversight Committee		Corporate Asset/Liability Committee									Risk and Control Committees
				Recovery and Resolution Committee									Risk Type Committees
														Risk Topic Committees

(1)The Audit Committee additionally oversees the internal audit function; external auditor independence, activities, and performance; and the disclosure framework for financial, regulatory and risk reports prepared for the Board, management, and bank regulatory agencies; and assists the Board in its oversight of the Company’s compliance with legal and regulatory requirements.

The ERCC is co-chaired by the CEO and CRO, and its membership is comprised of principal line of business and certain enterprise function heads. The Chief Auditor or a designee attends all meetings of the ERCC. The ERCC has a direct escalation path to the Risk Committee. The ERCC also escalates certain human capital risks and issues to the Human Resources Committee. In addition, the CRO may escalate anything directly to the Board. Risks and issues are escalated to the ERCC in accordance with the Company’s escalation management policy.

risks that the respective principal line of business or enterprise function generate and manage, and the controls the principal line of business or enterprise function are expected to have in place.

Risk Operating Model – Roles and Responsibilities

The Company has three lines of defense for managing risk: the Front Line, Independent Risk Management, and Internal Audit.

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32	Wells Fargo & Company

Risk Type Classifications

Operational Risk Management

The Board’s Risk Committee has primary oversight responsibility for all aspects of operational risk, including significant supporting programs and/or policies regarding the Company’s business resiliency and disaster recovery, data management, information security, technology, and third-party risk management. As part of its oversight responsibilities, the Board’s Risk Committee reviews and approves significant operational risk policies and oversees the Company’s operational risk management program.

At the management level, Operational Risk Management, which is part of IRM, has oversight responsibility for operational risk. Operational Risk Management reports to the CRO and provides periodic reports related to operational risk to the Board’s Risk Committee. Operational Risk Management’s oversight responsibilities include change management risk, human capital risk, technology risk, third-party risk, information management risk, information security risk, data management risk, and fraud risk.

Information security is a significant operational risk for financial institutions such as Wells Fargo and includes the risk arising from unauthorized access, use, disclosure, disruption, modification, or destruction of information or information systems. The Board is actively engaged in the oversight of the Company’s information security risk management and cyber defense programs. The Board’s Risk Committee has primary oversight responsibility for information security risk and approves the Company’s information security program, which includes the information security policy and the cyber defense program. A Technology Subcommittee of the Risk Committee assists the Risk Committee in providing oversight of technology, information security, and cybersecurity risks as well as data management risk. The Technology Subcommittee reviews and recommends to the Risk Committee for approval any significant programs and/or policies supporting information security risk (including cybersecurity risk), technology risk, and data management risk.

Wells Fargo and other financial institutions, as well as their third- party service providers, continue to be the target of various evolving and adaptive cyber attacks, including malware, ransomware, other malicious software intended to exploit hardware or software vulnerabilities, phishing, credential validation, and distributed denial-of-service, in an effort to disrupt the operations of financial institutions, test their cybersecurity capabilities, commit fraud, or obtain confidential, proprietary or other information. Cyber attacks have also focused on targeting online applications and services, such as online banking, as well as cloud-based and other products and services provided by third parties, and have targeted the

infrastructure of the internet causing the widespread unavailability of websites and degrading website performance. As a result, information security and the continued development and enhancement of our controls, processes and systems designed to protect our networks, computers, software and data from attack, damage or unauthorized access remain a priority for Wells Fargo. Wells Fargo is also proactively involved in industry cybersecurity efforts and working with other parties, including our third-party service providers and governmental agencies, to continue to enhance defenses and improve resiliency to cybersecurity and other information security threats. See the “Risk Factors” section in this Report for additional information regarding the risks associated with a failure or breach of our operational or security systems or infrastructure, including as a result of cyber attacks.

Compliance Risk Management

human capital management (including talent management and succession planning), performance management program, and incentive compensation risk management program.

Model Risk Management

Model risk (a type of operational risk) is the risk arising from the potential for adverse consequences from decisions made based on model output that may be incorrect or used inappropriately.

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	Wells Fargo & Company	33

Risk Management (continued)

Strategic Risk Management

Reputation Risk Management

Reputation risk is the risk arising from the potential that negative stakeholder opinion or negative publicity regarding the Company’s business practices, whether true or not, will adversely impact current or projected financial conditions and resilience, cause a decline in the customer base, or result in costly litigation. Stakeholders include employees, customers, communities, shareholders, regulators, elected officials, advocacy groups, and media organizations.

Credit Risk Management

We define credit risk as the risk of loss associated with a borrower or counterparty default (failure to meet obligations in accordance with agreed upon terms). Credit risk exists with many

of the Company’s assets and exposures such as loans, debt securities, and certain derivatives.

The Board’s Risk Committee has primary oversight responsibility for credit risk. A Credit Subcommittee of the Risk Committee assists the Risk Committee in providing oversight of credit risk. At the management level, Credit Risk, which is part of IRM, has oversight responsibility for credit risk. Credit Risk reports to the CRO and supports periodic reports related to credit risk provided to the Board’s Risk Committee or its Credit Subcommittee.

Loan Portfolio Our loan portfolios represent the largest component of assets on our consolidated balance sheet for which we have credit risk. Table 15 presents our total loans outstanding by portfolio segment and class of financing receivable.

Table 15: Total Loans Outstanding by Portfolio Segment and Class of Financing Receivable

(in millions)	Dec 31, 2021
Commercial:
Commercial and industrial	$	350,436		318,805
Real estate mortgage	127,733		121,720
Real estate construction	20,092		21,805
Lease financing	14,859		16,087
Total commercial	513,120		478,417
Consumer:
Residential mortgage – first lien	242,270		276,674
Residential mortgage – junior lien	16,618		23,286
Credit card	38,453		36,664
Auto	56,659		48,187
Other consumer	28,274		24,409
Total consumer	382,274		409,220
Total loans	$	895,394		887,637

•Loan concentrations and related credit quality;

•Counterparty credit risk;

•Economic and market conditions;

•Legislative or regulatory mandates;

•Changes in interest rates;

•Merger and acquisition activities; and

•Reputation risk.

In addition, the Company will continue to integrate climate considerations into its credit risk management activities.

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34	Wells Fargo & Company

Credit Quality Overview Credit quality in 2021 reflected continued improvement in the economic environment. In particular:

•Nonaccrual loans were $7.2 billion at December 31, 2021, down from $8.7 billion at December 31, 2020. Commercial nonaccrual loans decreased to $2.4 billion at December 31, 2021, compared with $4.8 billion at December 31, 2020, and consumer nonaccrual loans increased to $4.8 billion at December 31, 2021, compared with $3.9 billion at December 31, 2020. Nonaccrual loans represented 0.81% of total loans at December 31, 2021, compared with 0.98% at December 31, 2020.

•Net loan charge-offs as a percentage of our average commercial and consumer loan portfolios were 0.06% and 0.33%, respectively, in 2021, compared with 0.31% and 0.39%, respectively, in 2020.

•Loans that are not government insured/guaranteed and 90 days or more past due and still accruing were $235 million and $424 million in our commercial and consumer portfolios, respectively, at December 31, 2021, compared with $78 million and $612 million at December 31, 2020.

•Our provision for credit losses for loans was $(4.2) billion in 2021, compared with $14.0 billion in 2020.

•The ACL for loans decreased to $13.8 billion, or 1.54% of total loans, at December 31, 2021, compared with $19.7 billion, or 2.22%, at December 31, 2020.

Additional information on our loan portfolios and our credit quality trends follows.

COVID-Related Lending Accommodations During 2021, we provided customers with residential mortgage loan payment deferrals of up to 18 months in response to the COVID-19 pandemic. At December 31, 2021, approximately $1.1 billion of unpaid principal balance related to residential mortgage loans, excluding those insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA), remained in a deferral period.

Based on guidance in the CARES Act and the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus (Revised) issued by federal banking regulators in April 2020 (the Interagency Statement), both of which we elected to apply, loan modifications related to COVID-19 and that meet certain other criteria are exempt from troubled debt restructuring (TDR) classification. The TDR relief provided by the CARES Act guidance is no longer available after January 1, 2022; however, certain COVID-related lending accommodations may continue to be eligible for TDR relief under the Interagency Statement. At December 31, 2021, the majority of residential mortgage loans that were in a deferral period, excluding those that were government insured/guaranteed, met the criteria for TDR relief and were therefore not classified as TDRs.

Customers who were current prior to entering the deferral period and confirmed their ability to return to their contractual loan payments upon exiting the deferral period will remain on accrual status. Customers who are unable to resume making their contractual loan payments upon exiting the deferral period are generally placed on nonaccrual status until they perform for a period of time. Such customers may require further assistance after exiting from these deferral programs and may receive or be eligible to receive modifications, or may be charged-off in accordance with our policies. For additional information about our COVID-related modifications, see Note 1 (Summary of

Significant Accounting Policies) to Financial Statements in this Report.

Significant Loan Portfolio Reviews Measuring and monitoring our credit risk is an ongoing process that tracks delinquencies, collateral values, Fair Isaac Corporation (FICO) scores, economic trends by geographic areas, loan-level risk grading for certain portfolios (typically commercial) and other indications of credit risk. Our credit risk monitoring process is designed to enable early identification of developing risk and to support our determination of an appropriate allowance for credit losses. The following discussion provides additional characteristics and analysis of our significant portfolios. See Note 4 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report for more analysis and credit metric information for each of the following portfolios.

COMMERCIAL AND INDUSTRIAL LOANS AND LEASE FINANCING

We had $13.0 billion of the commercial and industrial loans and lease financing portfolio internally classified as criticized in accordance with regulatory guidance at December 31, 2021, compared with $19.3 billion at December 31, 2020. The change was driven by decreases in the oil, gas and pipelines, retail, transportation services, and entertainment and recreation industries, as these industries continue to recover from the effects of the COVID-19 pandemic.

The portfolio increased at December 31, 2021, compared with December 31, 2020, driven by higher loan demand resulting in increased originations and loan draws, partially offset by paydowns and PPP loan forgiveness. Table 16 provides our commercial and industrial loans and lease financing by industry. The industry categories are based on the North American Industry Classification System.

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	Wells Fargo & Company	35

Risk Management – Credit Risk Management (continued)

Table 16: Commercial and Industrial Loans and Lease Financing by Industry

	December 31, 2021		December 31, 2020
($ in millions)	Nonaccrual loans		Total portfolio		% of total loans	Total commitments (1)		Nonaccrual loans		Total portfolio		% of total loans	Total commitments (1)
Financials except banks	$	104			142,283		16	%		$	236,435		$	160		117,726			13	%	$	206,999
Technology, telecom and media	64			23,345		3			63,551			144		23,061		3			56,500
Real estate and construction	78			25,035		3			56,278			133		23,113		3			51,526
Equipment, machinery and parts manufacturing	24			18,130		2			43,778			81		18,158		2			41,332
Retail	27			17,645		2			41,447			94		17,393		2			41,669
Materials and commodities	32			14,684		2			36,704			39		12,071		1			33,879
Food and beverage manufacturing	7			13,242		1			30,903			17		12,401		1			28,908
Health care and pharmaceuticals	24			12,847		1			29,057			145		15,322		2			32,154
Oil, gas and pipelines	197			8,828		*		29,010			953		10,471		1			30,055
Auto related	31			10,629		1			25,772			79		11,817		1			25,034
Commercial services	78			10,492		1			24,804			107		10,284		1			24,442
Utilities	77			6,982		*		22,428			2		5,031		*		18,564
Diversified or miscellaneous	3			7,493		*		19,395			7		5,437		*		14,717
Entertainment and recreation	23			9,907		1		17,943			263		9,884		1		17,551
Insurance and fiduciaries	1			3,387		*		17,521			2		3,297		*		14,334
Banks	—			16,178		2			16,615			—		12,789		1		13,842
Transportation services	288			8,162		*		14,775			573		9,236		1		15,531
Agribusiness	35			6,086		*		11,701			81		6,314		*		11,642
Government and education	5			5,863		*		11,358			9		5,464		*		11,065
Other (2)	30			4,077		*		20,112			68		5,623		*		23,315
Total	$	1,128			365,295		41	%		$	769,587		$	2,957		334,892			33	%	$	713,059

*Less than 1%.

(1)Total commitments consist of loans outstanding plus unfunded credit commitments, excluding issued letters of credit.

(2)No other single industry had total loans in excess of $3.1 billion and $3.8 billion at December 31, 2021 and 2020, respectively.

Loans to financials except banks, our largest industry concentration, is predominantly comprised of loans to investment firms, financial vehicles, nonbank creditors, rental and leasing companies, securities firms, and investment banks. We had $93.6 billion and $80.0 billion of loans originated by our Asset Backed Finance (ABF) and Financial Institution Group (FIG) lines of business at December 31, 2021 and 2020, respectively. These loans include: (i) loans to customers related to their subscription or capital calls, (ii) loans to nonbank lenders collateralized by commercial loans, and (iii) loans to originators or servicers of financial assets collateralized by residential real estate or other consumer loans such as credit cards, auto loans and leases, student loans and other financial assets eligible for the securitization market. These ABF and FIG loans are limited to a percentage of the value of the underlying financial assets considering underlying credit risk, asset duration, and ongoing performance. These ABF and FIG loans may also have other features to manage credit risk such as cross-collateralization, credit enhancements, and contractual re-margining of collateral supporting the loans. In addition, loans to financials except banks included collateralized loan obligations (CLOs) in loan form, all of which were rated AA or above, of $8.1 billion and $7.9 billion at December 31, 2021 and 2020, respectively.

Oil, gas and pipelines loans included $5.8 billion and $7.5 billion of senior secured loans outstanding at December 31, 2021 and 2020, respectively. Oil, gas and pipelines nonaccrual loans decreased at December 31, 2021, compared with December 31, 2020, driven by loan paydowns.

We continue to perform enhanced credit monitoring for certain industries that we consider to be directly and most adversely affected by the COVID-19 pandemic.

Our commercial and industrial loans and lease financing portfolio also includes non-U.S. loans of $78.0 billion and $63.8 billion at December 31, 2021 and 2020, respectively.

Significant industry concentrations of non-U.S. loans at December 31, 2021 and 2020, respectively, included:

•$46.7 billion and $36.2 billion in the financials except banks category;

•$15.9 billion and $12.8 billion in the banks category; and

•$1.7 billion and $1.6 billion in the oil, gas and pipelines category.

Our ability to seek performance under a guarantee is directly related to the guarantor’s creditworthiness, capacity and willingness to perform, which is evaluated on an annual basis, or more frequently as warranted. Our evaluation is based on the most current financial information available and is focused on various key financial metrics, including net worth, leverage, and current and future liquidity. We consider the guarantor’s reputation, creditworthiness, and willingness to work with us based on our analysis, as well as other lenders’ experience with the guarantor. Our assessment of the guarantor’s credit strength is reflected in our loan risk ratings for such loans. The loan risk rating and accruing status are important factors in our allowance for credit losses methodology.

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36	Wells Fargo & Company

In considering the accrual status of the loan, we evaluate

the collateral and future cash flows, as well as the anticipated support of any repayment guarantor. In many cases, the

COMMERCIAL REAL ESTATE (CRE) We generally subject CRE loans to individual risk assessment using our internal borrower and collateral quality ratings. We had $13.1 billion of CRE mortgage loans classified as criticized at December 31, 2021, compared with $12.0 billion at December 31, 2020, and $1.7 billion of CRE construction loans classified as criticized at December 31, 2021, compared with $1.6 billion at December 31, 2020. The increase in criticized CRE mortgage and construction loans was driven by the hotel/motel, apartment, and institutional property types and

reflected the economic impact of the COVID-19 pandemic. Due to uncertainty in the recovery from the economic impacts of the COVID-19 pandemic, the credit quality of certain property types within our CRE loan portfolio, such as retail, hotel/motel, office buildings, and shopping centers, could continue to be adversely affected.

The total CRE loan portfolio increased $4.3 billion from December 31, 2020, driven by an increase in CRE mortgage loans predominantly related to apartments, 1-4 family structure, hotel/motel, and industrial property types, partially offset by a decrease in CRE construction loans. The CRE loan portfolio included $8.7 billion of non-U.S. CRE loans at December 31, 2021. The portfolio is diversified both geographically and by property type. The largest geographic concentrations of CRE loans are in California, New York, Texas, and Florida, which combined represented 48% of the total CRE portfolio. The largest property type concentrations are office buildings at 25% and apartments at 22% of the portfolio.

Table 17 summarizes CRE loans by state and property type with the related nonaccrual totals at December 31, 2021.

Table 17: CRE Loans by State and Property Type

	December 31, 2021
	Real estate mortgage		Real estate construction		Total	% of total loans
($ in millions)	Nonaccrual loans		Total portfolio		Nonaccrual loans	Total portfolio		Nonaccrual loans		Total portfolio
By state:
California	$	187			31,007		2			3,661		189		34,668		4	%
New York	132			13,283		2			2,353		134		15,636		2
Texas	88			9,456		—			1,149		88		10,605		1
Florida	98			9,086		1			1,349		99		10,435		1
Washington	84			4,121		—			1,180		84		5,301		*
Arizona	45			4,712		—			334		45		5,046		*
North Carolina	5			4,124		—			631		5		4,755		*
Georgia	13			4,324		—			338		13		4,662		*
Illinois	15			3,563		—			479		15		4,042		*
New Jersey	47			2,809		—			816		47		3,625		*
Other (1)	521			41,248		8			7,802		529		49,050		5
Total	$	1,235			127,733		13			20,092		1,248		147,825		17	%
By property:
Office buildings	$	133			33,657		1			3,079		134		36,736		4	%
Apartments	13			24,663		—			7,238		13		31,901		4
Industrial/warehouse	78			16,086		—			1,628		78		17,714		2
Hotel/motel	254			11,261		—			1,503		254		12,764		1
Retail (excluding shopping center)	132			12,352		3			98		135		12,450		1
Shopping center	422			9,554		—			894		422		10,448		1
Institutional	50			5,344		1			2,399		51		7,743		*
Mixed use properties	80			5,321		1			982		81		6,303		*
Collateral pool	—			3,308		—			201		—		3,509		*
1-4 family structure	—			8		—			1,049		—		1,057		*
Other	73			6,179		7			1,021		80		7,200		*
Total	$	1,235			127,733		13			20,092		1,248		147,825		17	%

* Less than 1%.

(1)Includes 40 states; no state in Other had loans in excess of $3.6 billion.

NON-U.S. LOANS Our classification of non-U.S. loans is based on whether the borrower’s primary address is outside of the United States. At December 31, 2021, non-U.S. loans totaled $86.9 billion, representing approximately 10% of our total consolidated loans outstanding, compared with $72.9 billion, or approximately 8% of our total consolidated loans outstanding, at December 31, 2020. Non-U.S. loans were approximately 4% of

our total consolidated assets at both December 31, 2021, and December 31, 2020.

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Risk Management – Credit Risk Management (continued)

counterparties and regulatory agencies. We establish exposure limits for each country through a centralized oversight process based on customer needs, and through consideration of the relevant and distinct risk of each country. We monitor exposures closely and adjust our country limits in response to changing conditions. We evaluate our individual country risk exposure based on our assessment of the borrower’s ability to repay,

which gives consideration for allowable transfers of risk, such as guarantees and collateral, and may be different from the reporting based on the borrower’s primary address.

Our largest single country exposure outside the U.S. at December 31, 2021, was the United Kingdom, which totaled $36.0 billion, or approximately 2% of our total assets, and included $7.9 billion of sovereign claims. Our United Kingdom sovereign claims arise from deposits we have placed with the Bank of England pursuant to regulatory requirements in support of our London branch.

Table 18 provides information regarding our top 20 exposures by country (excluding the U.S.), based on our assessment of risk, which gives consideration to the country of any guarantors and/or underlying collateral. With respect to Table 18:

•Securities exposure represents debt and equity securities of non-U.S. issuers. Long and short positions are netted, and net short positions are reflected as negative exposure.

•Derivatives and other exposure represents foreign exchange contracts, derivative contracts, securities resale agreements, and securities lending agreements.

Table 18: Select Country Exposures

	December 31, 2021
	Lending and deposits		Securities		Derivatives and other	Total exposure
($ in millions)	Sovereign		Non-sovereign		Sovereign	Non-sovereign		Sovereign		Non-sovereign	Sovereign		Non- sovereign (1)		Total
Top 20 country exposures:
United Kingdom	$	7,912			24,793		—			978		1			2,365		7,913		28,136		36,049
Canada	1			17,347		—			145		7			364		8		17,856		17,864
Cayman Islands	—			6,971		—			—		—			95		—		7,066		7,066
Ireland	557			4,904		—			185		—			68		557		5,157		5,714
Guernsey	—			4,193		—			—		—			60		—		4,253		4,253
Bermuda	—			3,877		—			68		—			63		—		4,008		4,008
Luxembourg	—			3,582		—			99		—			87		—		3,768		3,768
Germany	—			3,177		—			68		—			231		—		3,476		3,476
China	8			3,287		1			66		29			27		38		3,380		3,418
France	91			2,969		—			140		111			28		202		3,137		3,339
Netherlands	—			2,191		—			83		—			81		—		2,355		2,355
South Korea	—			2,025		(4)			137		—			13		(4)		2,175		2,171
India	—			1,553		—			68		—			1		—		1,622		1,622
Switzerland	—			1,380		—			1		—			200		—		1,581		1,581
Brazil	—			1,516		—			3		—			2		—		1,521		1,521
Chile	—			1,326		—			30		—			1		—		1,357		1,357
Australia	—			1,231		—			(9)		—			14		—		1,236		1,236
Norway	—			1,045		—			116		—			4		—		1,165		1,165
Japan	166			809		—			48		—			37		166		894		1,060
United Arab Emirates	—			881		—			82		—			—		—		963		963
Total top 20 country exposures	$	8,735			89,057		(3)			2,308		148			3,741		8,880		95,106		103,986

(1)Total non-sovereign exposure comprised $47.7 billion exposure to financial institutions and $47.4 billion to non-financial corporations at December 31, 2021.

RESIDENTIAL MORTGAGE LOANS Our residential mortgage loan portfolio is comprised of 1-4 family first and junior lien mortgage loans. Residential mortgage – first lien loans comprised 94% of the total residential mortgage loan portfolio at December 31, 2021, compared with 92% at December 31, 2020.

The residential mortgage loan portfolio includes some loans with adjustable-rate features and some with an interest-only feature as part of the loan terms. Interest-only loans were approximately 3% of total loans at both December 31, 2021, and December 31, 2020. We believe our origination process appropriately addresses our adjustable-rate mortgage (ARM) reset risk across our residential mortgage loans and our ACL for loans considers this risk. We do not offer option ARM products, nor do we offer variable-rate mortgage products with fixed payment amounts, commonly referred to within the financial services industry as negative amortizing mortgage loans.

payments, balloon payments, adjustable rates and similar features. Junior lien loan products are primarily amortizing payment loans with fixed interest rates and repayment periods between five to 30 years. We continuously monitor the credit performance of our residential mortgage – junior lien portfolio for trends and factors that influence the frequency and severity of losses, such as junior lien performance when the first lien loan is delinquent.

Our residential mortgage lines of credit (both first and junior lien) generally have draw periods of 10, 15 or 20 years with variable interest rate and payment options available during the draw period of (1) interest-only or (2) 1.5% of outstanding principal balance plus accrued interest. As of December 31, 2021, lines of credit in a draw period primarily used the interest-only option. The lines that enter their amortization period may experience higher delinquencies and higher loss rates than the ones in their draw or term period. We have considered this increased risk in our ACL estimate.

During the draw period, the borrower has the option of converting all or a portion of the line from a variable interest rate

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to a fixed rate with terms including interest-only payments for a fixed period between three to seven years or a fully amortizing payment with a fixed period between five to 30 years. At the end of the draw period, a line of credit generally converts to an amortizing payment schedule with repayment terms of up to 30 years based on the balance at time of conversion. Certain lines and loans have been structured with a balloon payment, which requires full repayment of the outstanding balance at the end of the term period. The conversion of lines or loans to fully amortizing or balloon payoff may result in a significant payment increase, which can affect some borrowers’ ability to repay the outstanding balance.

In anticipation of our residential mortgage line of credit borrowers reaching the end of their contractual commitment, we have created a program to inform, educate and help these borrowers transition from interest-only to fully-amortizing payments or full repayment. We monitor the performance of the borrowers moving through the program in an effort to refine our ongoing program strategy.

We monitor changes in real estate values and underlying economic or market conditions for all geographic areas of our residential mortgage portfolio as part of our credit risk management process. Our periodic review of this portfolio includes original appraisals adjusted for the change in Home Price Index (HPI) or estimates from automated valuation models (AVMs) to support property values. AVMs are computer-based tools used to estimate the market value of homes. AVMs are a lower-cost alternative to appraisals and support valuations of large numbers of properties in a short period of time using market comparables and price trends for local market areas. The primary risk associated with the use of AVMs is that the value of an individual property may vary significantly from the average for the market area. We have processes to periodically validate AVMs and specific risk management guidelines addressing the circumstances when AVMs may be used. Additional information about appraisals, AVMs, and our policy for their use can be found in Note 4 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.

Part of our credit monitoring includes tracking delinquency, current FICO scores and loan/combined loan to collateral values (LTV/CLTV) on the entire residential mortgage loan portfolio. CLTV represents the ratio of the total loan balance of first and junior lien mortgages (including unused line amounts for credit line products) to property collateral value. Excluding government insured/guaranteed loans, these credit risk indicators on the residential mortgage portfolio were:

•Loans 30 days or more delinquent at December 31, 2021, totaled $3.3 billion, or 1% of residential mortgage loans, compared with $4.7 billion, or 2%, at December 31, 2020;

•Lines of credit in their draw period that were 30 days or more past due were $293 million, or 2% of such lines, at December 31, 2021, and $381 million, or 2%, at December 31, 2020, compared with amortizing lines of credit that were 30 days or more past due of $395 million, or 7% of such lines, at December 31, 2021, and $378 million, or 5%, at December 31, 2020;

•Loans with FICO scores lower than 640 totaled $3.8 billion, or 1% of residential mortgage loans, at December 31, 2021, compared with $5.6 billion, or 2%, at December 31, 2020; and

•Loans with a LTV/CLTV greater than 100% totaled $465 million at December 31, 2021, or less than 1% of residential mortgage loans, compared with $1.6 billion, or 1%, at December 31, 2020.

With respect to residential mortgage – junior lien loans that had a CLTV greater than 100%:

•Such loans totaled 1% of the junior lien portfolio at December 31, 2021, compared with 3% at December 31, 2020; and

•3% were 30 days or more delinquent at both December 31, 2021, and December 31, 2020.

Customer payment deferral activities instituted in response to the COVID-19 pandemic could continue to delay the recognition of delinquencies. For additional information regarding credit quality indicators, see Note 4 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.

We continue to modify residential mortgage loans to assist homeowners and other borrowers experiencing financial difficulties. Under these programs, we may provide concessions such as interest rate reductions, forbearance of principal, and in some cases, principal forgiveness. These programs generally include trial payment periods of three to four months, and after successful completion and compliance with terms during this period, the loan is permanently modified. Loans included under these programs are accounted for as TDRs at the start of the trial period or at the time of permanent modification, if no trial period is used. For additional information on customer accommodations, including loan modifications, in response to the COVID-19 pandemic, see the “Risk Management – Credit Risk Management – COVID-Related Lending Accommodations” section in this Report.

Residential Mortgage – First Lien Portfolio Our residential mortgage – first lien portfolio decreased $34.4 billion from December 31, 2020, driven by loan paydowns reflecting the low interest rate environment and the transfer of $17.8 billion of first lien mortgage loans to loans held for sale (LHFS) substantially all of which related to the sales of loans purchased from GNMA loan securitization pools in prior periods, partially offset by originations of $72.6 billion.

Table 19 shows certain delinquency and loss information for the residential mortgage – first lien portfolio and lists the top five states by outstanding balance.

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Risk Management – Credit Risk Management (continued)

Table 19: Residential Mortgage – First Lien Portfolio Performance

	Outstanding balance		% of total loans		% of loans 30 days or more past due	Net loan charge-off rate (1)
	December 31,		December 31,		December 31,	Year ended December 31,
($ in millions)	2021		2020		2021	2020		2021		2020	2021		2020
California (2)	$	100,933			104,260		11.27	%		11.75		0.95			1.00		(0.01)		(0.01)
New York	30,039			31,028		3.35			3.50		1.34			1.40		0.12		0.01
New Jersey	10,205			12,073		1.14			1.36		1.95			1.92		0.08		—
Florida	9,978			10,623		1.11			1.20		1.93			2.56		0.09		—
Washington	8,636			9,094		0.96			1.02		0.47			0.66		—		(0.01)
Other (3)	69,321			79,356		7.74			8.94		1.48			1.60		0.01		0.01
Total	229,112			246,434		25.57			27.77		1.23			1.34		0.02		—
Government insured/guaranteed loans (4)	13,158			30,240		1.47			3.41
Total first lien mortgage portfolio	$	242,270			276,674		27.04			31.18

(3)Consists of 45 states; no state in Other had loans in excess of $7.2 billion and $7.8 billion at December 31, 2021, and December 31, 2020, respectively.

(4)Represents loans, substantially all of which were repurchased from GNMA loan securitization pools, where the repayment of the loans is predominantly insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA). For additional information on GNMA loan securitization pools, see the “Risk Management – Credit Risk Management – Mortgage Banking Activities” section in this Report.

Residential Mortgage – Junior Lien Portfolio Our residential mortgage – junior lien portfolio decreased $6.7 billion from December 31, 2020, driven by loan paydowns.

Table 20 shows certain delinquency and loss information for the residential mortgage – junior lien portfolio and lists the top five states by outstanding balance.

Table 20: Residential Mortgage – Junior Lien Portfolio Performance

	Outstanding balance		% of total loans		% of loans 30 daysor more past due	Net loan charge-off rate (1)
	December 31,		December 31,		December 31,	Year ended December 31,
($ in millions)	2021		2020		2021	2020		2021		2020	2021		2020
California	$	4,310			6,237		0.48	%		0.70		3.52			2.20		(0.59)		(0.35)
New Jersey	1,728			2,258		0.19			0.25		2.98			2.84		0.04		(0.02)
Florida	1,533			2,119		0.17			0.24		2.54			3.06		(0.13)		(0.14)
Pennsylvania	1,039			1,377		0.12			0.16		2.19			2.30		(0.12)		(0.15)
Virginia	976			1,355		0.11			0.15		2.56			2.41		(0.30)		(0.10)
Other (2)	7,032			9,940		0.79			1.12		2.75			2.31		(0.39)		(0.19)
Total junior lien mortgage portfolio	$	16,618			23,286		1.86	%		2.62		2.91			2.41		(0.36)		(0.21)

(2)Consists of 45 states; no state in Other had loans in excess of $1.0 billion and $1.3 billion at December 31, 2021, and December 31, 2020, respectively.

The outstanding balance of residential mortgage lines of credit was $22.8 billion at December 31, 2021. The unfunded credit commitments for these lines of credit totaled $45.6 billion at December 31, 2021.

On a monthly basis, we monitor the payment characteristics of borrowers in our residential mortgage – first and junior lien lines of credit portfolios. In December 2021, excluding borrowers with COVID-related loan modification payment deferrals:

•Approximately 45% of these borrowers paid only the minimum amount due and approximately 50% paid more than the minimum amount due. The rest were either delinquent or paid less than the minimum amount due.

•For the borrowers with an interest-only payment feature, approximately 29% paid only the minimum amount due and approximately 66% paid more than the minimum amount due.

CREDIT CARD, AUTO AND OTHER CONSUMER LOANS Table 21 shows the outstanding balance of our credit card, auto and other consumer loan portfolios. For information regarding credit quality indicators for these portfolios, see Note 4 (Loans and

Related Allowance for Credit Losses) to Financial Statements in this Report.

Table 21: Credit Card, Auto, and Other Consumer Loans

	December 31, 2021		December 31, 2020
($ in millions)	Outstanding balance		% of total loans		Outstanding balance		% of total loans
Credit card	$	38,453			4.29	%		$	36,664		4.13	%
Auto	56,659			6.33			48,187			5.43
Other consumer	28,274			3.16			24,409			2.75
Total	$	123,386			13.78	%		$	109,260		12.31	%

Credit Card Our credit card portfolio totaled $38.5 billion at December 31, 2021, compared with $36.7 billion at December 31, 2020, due to strong purchase volume and the launch of new products.

Auto Our auto portfolio totaled $56.7 billion at December 31, 2021, compared with $48.2 billion at December 31, 2020. The increase in the outstanding balance at December 31, 2021,

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compared with December 31, 2020, was driven by strong consumer demand for automobiles.

Other Consumer Other consumer loans, which primarily include securities-based loans as well as personal lines and loans, totaled $28.3 billion at December 31, 2021, compared with $24.4 billion at December 31, 2020, driven by an increase in margin loans.

NONPERFORMING ASSETS (NONACCRUAL LOANS AND FORECLOSED ASSETS) We generally place loans on nonaccrual status when:

•they are 90 days (120 days with respect to residential mortgage loans) past due for interest or principal, unless the loan is both well-secured and in the process of collection or the loan is in an active payment deferral as a result of the COVID-19 pandemic;

•part of the principal balance has been charged off; or

•for junior lien mortgages, we have evidence that the related first lien mortgage may be 120 days past due or in the process of foreclosure regardless of the junior lien delinquency status.

Customer payment deferral activities instituted in response to the COVID-19 pandemic could continue to delay the recognition of nonaccrual loans for those customers who would have otherwise moved into nonaccrual status. For additional information on customer accommodations, including loan modifications, in response to the COVID-19 pandemic, see the “Risk Management – Credit Risk Management – COVID-Related Lending Accommodations” section in this Report.

Table 22 summarizes nonperforming assets (NPAs) at December 31, 2021 and 2020.

Table 22: Nonperforming Assets (Nonaccrual Loans and Foreclosed Assets)

	December 31,
(in millions)	2021		2020
Nonaccrual loans:
Commercial:
Commercial and industrial	$	980			2,698
Real estate mortgage	1,235			1,774
Real estate construction	13			48
Lease financing	148			259
Total commercial	2,376			4,779
Consumer:
Residential mortgage – first lien (1)	3,803			2,957
Residential mortgage – junior lien (1)	801			754
Auto	198			202
Other consumer	34			36
Total consumer	4,836			3,949
Total nonaccrual loans	$	7,212			8,728
As a percentage of total loans	0.81	%		0.98
Foreclosed assets:
Government insured/guaranteed (2)	$	16			18
Non-government insured/guaranteed	96			141
Total foreclosed assets	112			159
Total nonperforming assets	$	7,324			8,887
As a percentage of total loans	0.82	%		1.00

(1)Residential mortgage loans predominantly insured by the FHA or guaranteed by the VA are not placed on nonaccrual status because they are insured or guaranteed.

(2)Consistent with regulatory reporting requirements, foreclosed real estate resulting from government insured/guaranteed loans are classified as nonperforming. Both principal and interest related to these foreclosed real estate assets are collectible because the loans were predominantly insured by the FHA or guaranteed by the VA. Receivables related to the foreclosure of certain government guaranteed real estate mortgage loans are excluded from this table and included in Accounts Receivable in Other Assets. For additional information on the classification of certain government-guaranteed mortgage loans upon foreclosure, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

Commercial nonaccrual loans decreased $2.4 billion from December 31, 2020, primarily due to a decline in commercial and industrial nonaccrual loans, as a result of paydowns in the oil, gas, and pipelines industry. For additional information on commercial nonaccrual loans, see the “Risk Management – Credit Risk Management – Commercial and Industrial Loans and Lease Financing” and “Risk Management – Credit Risk Management – Commercial Real Estate” sections in this Report.

Consumer nonaccrual loans increased $887 million from December 31, 2020, predominantly driven by an increase in residential mortgage – first lien nonaccrual loans as certain customers exited from accommodation programs provided in response to the COVID-19 pandemic. Customers requiring further payment assistance after exiting from these programs may have their loans modified or may be eligible to receive modifications.

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Risk Management – Credit Risk Management (continued)

Table 23 provides an analysis of the changes in nonaccrual loans. Typically, changes to nonaccrual loans period-over-period represent inflows for loans that are placed on nonaccrual status in accordance with our policies, offset by reductions for loans

Table 23: Analysis of Changes in Nonaccrual Loans


(in millions)	2021	2020
Commercial nonaccrual loans
Balance, beginning of period	4,779		2,254
Inflows	2,113		7,232
Outflows:
Returned to accruing	(1,003)		(385)
Foreclosures	(13)		(37)
Charge-offs	(533)		(1,669)
Payments, sales and other	(2,967)		(2,616)
Total outflows	(4,516)		(4,707)
Balance, end of period	2,376		4,779
Consumer nonaccrual loans
Balance, beginning of period	3,949		3,092
Inflows	3,281		2,616
Outflows:
Returned to accruing	(828)		(757)
Foreclosures	(69)		(36)
Charge-offs (1)	(252)		(159)
Payments, sales and other	(1,245)		(807)
Total outflows	(2,394)		(1,759)
Balance, end of period	4,836		3,949
Total nonaccrual loans	7,212		8,728

(1)Charge-offs for the year ended December 31, 2021, includes $152 million of loan charge-offs related to a change in practice to fully charge-off certain delinquent legacy residential mortgage loans.

We believe exposure to loss on nonaccrual loans is mitigated by the following factors at December 31, 2021:

•95% of total commercial nonaccrual loans are secured.

•84% of commercial nonaccrual loans were current on interest and 81% of commercial nonaccrual loans were current on both principal and interest, but were on nonaccrual status because the full or timely collection of interest or principal had become uncertain.

•99% of total consumer nonaccrual loans are secured, of which 95% are secured by real estate and 96% have a combined LTV (CLTV) ratio of 80% or less.

•of the $907 million of consumer loans in bankruptcy or discharged in bankruptcy, and classified as nonaccrual, $675 million were current.

•the remaining risk of loss of all nonaccrual loans has been considered in developing our allowance for loan losses.

If interest due on all nonaccrual loans (including loans that were, but are no longer on nonaccrual status at year end) had been accrued under the original terms, approximately $335 million of interest would have been recorded as income on these loans, compared with $309 million actually recorded as interest income in 2021, versus $329 million and $303 million, respectively, in 2020.

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Table 24 provides a summary of foreclosed assets and an analysis of changes in foreclosed assets.

Table 24: Foreclosed Assets


(in millions)	2021		2020
Summary by loan segment
Government insured/guaranteed	$	16			18
Commercial	54			70
Consumer	42			71
Total foreclosed assets	112			159
Analysis of changes in foreclosed assets
Balance, beginning of period	$	159			303
Net change in government insured/guaranteed (1)	(2)			(32)
Additions to foreclosed assets (2)	370			332
Reductions from sales and write-downs	(415)			(444)
Balance, end of period	$	112			159

(1)Foreclosed government insured/guaranteed loans are temporarily transferred to and held by us as servicer, until reimbursement is received from FHA or VA.

(2)Includes loans moved into foreclosed assets from nonaccrual status and repossessed autos.

As part of our actions to support customers during the COVID-19 pandemic, we temporarily suspended certain mortgage foreclosure activities through December 31, 2021, which has affected the amount of our foreclosed assets. Beginning January 1, 2022, we resumed these mortgage foreclosure activities. For additional information on loans in process of foreclosure, see Note 4 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.

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Risk Management – Credit Risk Management (continued)

TROUBLED DEBT RESTRUCTURINGS (TDRs) Table 25 provides information regarding the recorded investment of loans modified in TDRs. TDRs decreased from December 31, 2020, predominantly related to commercial and industrial loans and residential mortgage – first lien loans. The decrease in commercial and industrial loans was primarily due to paydowns in the oil, gas, and pipelines industry. The decrease in residential mortgage – first lien loans was due to paydowns and transfers to LHFS, which related to sales of repurchased loans from GNMA loan securitization pools.

The amount of our TDRs at December 31, 2021, would have otherwise been higher without the TDR relief provided by the

CARES Act and Interagency Statement. Customers who are unable to resume making their contractual loan payments upon exiting from these deferral programs may require further assistance and may receive or be eligible to receive modifications, which may be classified as TDRs. For additional information on the CARES Act and the Interagency Statement, see the “Risk Management – Credit Risk Management – Credit Quality Overview – COVID-Related Lending Accommodations” section in this Report.

Table 25: TDR Balances

	December 31,
(in millions)	2021		2020
Commercial:
Commercial and industrial	$	793			1,933
Real estate mortgage	543			774
Real estate construction	2			15
Lease financing	10			9
Total commercial TDRs	1,348			2,731
Consumer:
Residential mortgage – first lien	7,282			9,764
Residential mortgage – junior lien	946			1,237
Credit card	309			458
Auto	169			176
Other consumer	57			67
Trial modifications	71			90
Total consumer TDRs	8,834			11,792
Total TDRs	$	10,182			14,523
TDRs on nonaccrual status	$	3,142			4,456
TDRs on accrual status:
Government insured/guaranteed	2,462			3,721
Non-government insured/guaranteed	4,578			6,346
Total TDRs	$	10,182			14,523

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44	Wells Fargo & Company

In those situations where principal is forgiven, the entire amount of such forgiveness is immediately charged off. When we delay the timing on the repayment of a portion of principal (principal forbearance), we charge off the amount of forbearance if that amount is not considered fully collectible. The allowance for loan losses for TDRs was $211 million and $565 million at December 31, 2021 and 2020, respectively.

Our nonaccrual policies are generally the same for all

loan types when a restructuring is involved. We may

re-underwrite loans at the time of restructuring to determine whether there is sufficient evidence of sustained repayment capacity based on the borrower’s documented income, debt

to income ratios, and other factors. Loans that are not re-underwritten or loans that lack sufficient evidence of sustained repayment capacity at the time of modification are charged down to the fair value of the collateral, if applicable. For an accruing loan that has been modified, if the borrower has demonstrated performance under the previous terms and the underwriting process shows the capacity to continue to perform

under the restructured terms, the loan will generally remain in accruing status. Otherwise, the loan will be placed in nonaccrual status and may be returned to accruing status when the borrower demonstrates a sustained period of performance, generally six consecutive months of payments, or equivalent, inclusive of consecutive payments made prior to modification. Loans will also be placed on nonaccrual status, and a corresponding charge-off is recorded to the loan balance, when we believe that principal and interest contractually due under the modified agreement will not be collectible. See Note 4 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report for additional information regarding TDRs.

Table 26 provides an analysis of the changes in TDRs. Loans modified more than once as a TDR are reported as inflows only in the period they are first modified. In addition to foreclosures, sales and transfers to held for sale, we may remove loans from TDR classification, but only if they have been refinanced or restructured at market terms and qualify as a new loan.

Table 26: Analysis of Changes in TDRs


(in millions)	2021	2020
Commercial TDRs
Balance, beginning of period	2,731		1,901
Inflows (1)	746		2,775
Outflows
Charge-offs	(141)		(265)
Foreclosure	(5)		—
Payments, sales and other (2)	(1,983)		(1,680)
Balance, end of period	1,348		2,731
Consumer TDRs
Balance, beginning of period	11,792		9,882
Inflows (1)	1,665		4,768
Outflows
Charge-offs	(185)		(224)
Foreclosure	(56)		(77)
Payments, sales and other (2)	(4,363)		(2,532)
Net change in trial modifications (3)	(19)		(25)
Balance, end of period	8,834		11,792
Total TDRs	10,182		14,523

(3)Net change in trial modifications includes: inflows of new TDRs entering the trial payment period, net of outflows for modifications that either (i) successfully perform and enter into a permanent modification, or (ii) did not successfully perform according to the terms of the trial period plan and are subsequently charged-off, foreclosed upon or otherwise resolved.

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Risk Management – Credit Risk Management (continued)

NET CHARGE-OFFS Table 27 presents net loan charge-offs.

Table 27: Net Loan Charge-offs

		Quarter ended					Year ended
		December 31,						December 31,
($ in millions)	Net loan charge- offs		% of avg. loans (1)						Net loan charge- offs	% of avg. loans
2021
Commercial:
	Commercial and industrial	$	3			—	%					$	218		0.07	%
	Real estate mortgage	22			0.07						53			0.04
	Real estate construction	—			—						—			—
	Lease financing	3			0.09						24			0.16
Total commercial	28			0.02						295			0.06
Consumer:
	Residential mortgage – first lien	110			0.18						53			0.02
	Residential mortgage – junior lien	8			0.19						(70)			(0.36)
	Credit card	150			1.61						800			2.26
	Auto	58			0.41						181			0.35
	Other consumer	67			0.96						315			1.22
Total consumer	393			0.41						1,279			0.33
	Total	$	421			0.19	%					$	1,574		0.18	%
2020
Commercial:
	Commercial and industrial	$	111			0.14	%					$	1,239		0.36	%
	Real estate mortgage	162			0.53						283			0.23
	Real estate construction	—			—						(19)			(0.09)
	Lease financing	35			0.83						87			0.49
Total commercial	308			0.26						1,590			0.31
Consumer:
	Residential mortgage – first lien	(3)			—						(5)			—
	Residential mortgage – junior lien	(24)			(0.39)						(55)			(0.21)
	Credit card	190			2.09						1,139			3.07
	Auto	51			0.43						270			0.56
	Other consumer	62			0.88						350			1.10
Total consumer	276			0.26						1,699			0.39
	Total	$	584			0.26	%					$	3,289		0.35	%

(1)Quarterly net charge-offs as a percentage of average respective loans are annualized.

The decrease in commercial net loan charge-offs in 2021, compared with the prior year, was due to lower losses and higher recoveries in the commercial and industrial portfolio primarily driven by the oil, gas, and pipeline industry, and in the real estate mortgage portfolio.

The decrease in consumer net loan charge-offs in 2021, compared with the prior year, was driven by lower losses in the credit card portfolio reflecting the impact of government stimulus programs instituted in response to the COVID-19 pandemic, improvements in the economic environment and better portfolio credit quality, partially offset by $152 million of residential mortgage loan charge-offs related to a change in practice to fully charge-off certain delinquent legacy residential mortgage loans.

The COVID-19 pandemic may continue to impact the credit quality of our loan portfolio. Although the potential impacts were considered in our allowance for credit losses for loans, payment deferral activities instituted in response to the COVID-19 pandemic could continue to delay the recognition of loan charge-offs. For additional information on customer accommodations in response to the COVID-19 pandemic, see the “Risk Management

– Credit Risk Management – COVID-Related Lending Accommodations” section in this Report.

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46	Wells Fargo & Company

Allowance for Credit Losses” section and Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report. For additional information on our ACL for loans, see

Note 4 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report, and for additional

information on our ACL for debt securities, see Note 3 (Available-for-Sale and Held-to-Maturity Debt Securities) to Financial Statements in this Report.

Table 28 presents the allocation of the ACL for loans by loan portfolio segment and class at December 31, 2021 and 2020.

Table 28: Allocation of the ACL for Loans

	Dec 31, 2021		Dec 31, 2020
($ in millions)	ACL		Loans as % of total loans		ACL		Loans as % of total loans
Commercial:
Commercial and industrial	$	4,873			39	%		$	7,230		36	%
Real estate mortgage	2,085			14			3,167			14
Real estate construction	431			2			410			2
Lease financing	402			2			709			2
Total commercial	7,791			57			11,516			54
Consumer:
Residential mortgage – first lien	1,156			28			1,600			31
Residential mortgage – junior lien	130			2			653			3
Credit card	3,290			4			4,082			4
Auto	928			6			1,230			5
Other consumer	493			3			632			3
Total consumer	5,997			43			8,197			46
Total	$	13,788			100	%		$	19,713		100	%
Components:
Allowance for loan losses			$	12,490				18,516
Allowance for unfunded credit commitments			1,298				1,197
Allowance for credit losses			$	13,788				19,713
Ratio of allowance for loan losses to total net loan charge-offs			7.94x				5.63
Ratio of allowance for loan losses to total nonaccrual loans			1.73				2.12
Allowance for loan losses as a percentage of total loans			1.39	%				2.09
Allowance for credit losses for loans as a percentage of total loans			1.54					2.22

The ACL for loans decreased $5.9 billion, or 30%, from December 31, 2020, reflecting better portfolio credit quality and continued improvements in current and forecasted economic conditions. Total provision for credit losses for loans was $(4.2) billion in 2021, compared with $14.0 billion in 2020, reflecting continued improvements in the economic environment, which led to lower charge-offs and better portfolio credit quality. The detail of the changes in the ACL for loans by portfolio segment (including charge-offs and recoveries by loan class) is included in Note 4 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.

We consider multiple economic scenarios to develop our estimate of the ACL for loans, which generally include a base scenario, along with an optimistic (upside) and one or more pessimistic (downside) scenarios. In our estimate of the ACL for loans at December 31, 2021, we weighted the base scenario and the downside scenarios to reflect our expectations for overall limited economic improvement balanced against the potential for higher inflation, supply chain constraints, and a continuation of the COVID-19 pandemic, including the possibility of additional variants. The base scenario assumed strong economic conditions in the near term with a return to normalized levels in 2023. The downside scenarios assumed economic contractions due to the

COVID-19 pandemic, including government restrictions and other economic disruptions.

Additionally, we consider qualitative factors that represent risks inherent in our processes and assumptions such as economic environmental factors, modeling assumptions and performance, and other subjective factors, including industry trends and emerging risk assessments. We also considered the significant uncertainty related to the duration and severity of the economic impacts from the COVID-19 pandemic and the incremental risks to our loan portfolio.

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Risk Management – Credit Risk Management (continued)

The forecasted key economic variables used in our estimate of the ACL for loans at December 31 and September 30, 2021, are presented in Table 29.

Table 29: Forecasted Key Economic Variables

	2Q 2022
Weighted blend of economic scenarios:
U.S. unemployment rate (1):
September 30, 2021	6.2	%	6.6	6.7
December 31, 2021	4.8		5.4	5.9
U.S. real GDP (2):
September 30, 2021	(0.2)		0.6	2.0
December 31, 2021	1.4		(0.3)	1.4
Home price index (3):
September 30, 2021	(1.2)		(6.5)	(6.5)
December 31, 2021	5.9		(4.3)	(6.0)
Commercial real estate asset prices (3):
September 30, 2021	(3.3)		(7.7)	(7.4)
December 31, 2021	5.0		(4.2)	(6.0)

(1)Quarterly average.

(2)Percent change from the preceding period, seasonally adjusted annualized rate.

(3)Percent change year over year of national average; outlook differs by geography and property type.

Future amounts of the ACL for loans will be based on a variety of factors, including loan balance changes, portfolio credit quality and mix changes, and changes in general economic conditions and expectations (including for unemployment and GDP), among other factors. There remains uncertainty related to the length and severity of the economic impact of the COVID-19 pandemic, including the possibility of additional variants, and the impact of other factors that may influence the level of expected losses and associated amounts of the ACL. The COVID-19 pandemic could continue to impact the recognition of credit losses in our loan portfolios and may result in increases or decreases in our ACL.

We believe the ACL for loans of $13.8 billion at December 31, 2021, was appropriate to cover expected credit losses, including unfunded credit commitments, at that date. The entire allowance is available to absorb credit losses from the total loan portfolio. The ACL for loans is subject to change and reflects existing factors as of the date of determination, including economic or market conditions and ongoing internal and external examination processes. Due to the sensitivity of the ACL for loans to changes in the economic and business environment, it is possible that we will incur incremental credit losses not anticipated as of the balance sheet date. Our process for determining the ACL is discussed in the “Critical Accounting Policies – Allowance for Credit Losses” section and Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

MORTGAGE BANKING ACTIVITIES We sell residential and commercial mortgage loans to various parties, including (1) government-sponsored entities (GSEs) Federal Home Loan Mortgage Corporation (FHLMC) and Federal National Mortgage Association (FNMA) who include the mortgage loans in GSE-guaranteed mortgage securitizations, (2) SPEs that issue private label MBS, and (3) other financial institutions that purchase mortgage loans for investment or private label securitization. In addition, we pool FHA-insured and VA-guaranteed residential mortgage loans that are then used to back securities guaranteed by the Government National Mortgage Association (GNMA). We

may be required to repurchase these mortgage loans, indemnify the securitization trust, investor or insurer, or reimburse the securitization trust, investor or insurer for credit losses incurred on loans (collectively, repurchase) in the event of a breach of contractual representations or warranties that is not remedied within a period (usually 90 days or less) after we receive notice of the breach.

In connection with our sales and securitization of residential mortgage loans to various parties, we have established a mortgage repurchase liability, initially at fair value, related to various representations and warranties that reflect management’s estimate of losses for loans for which we could have a repurchase obligation, whether or not we currently service those loans, based on a combination of factors. See Note 8 (Securitizations and Variable Interest Entities) to Financial Statements in this Report for additional information about our liability for mortgage loan repurchase losses.

We provide recourse to GSEs for commercial mortgage loans sold under various programs and arrangements. The terms of these programs require that we incur a pro-rata share of actual losses in the event of borrower default. See Note 13 (Guarantees and Other Commitments) to Financial Statements in this Report for additional information about our exposure to loss related to these programs.

The loans we service were originated by us or by other mortgage loan originators. As servicer, our primary duties are typically to (1) collect payments due from borrowers, (2) advance certain delinquent payments of principal and interest on the mortgage loans, (3) maintain and administer any hazard, title or primary mortgage insurance policies relating to the mortgage loans, (4) maintain any required escrow accounts for payment of taxes and insurance and administer escrow payments, and (5) foreclose on defaulted mortgage loans or, to the extent consistent with the related servicing agreement, consider alternatives to foreclosure, such as loan modifications or short sales, and for certain investors, manage the foreclosed property through liquidation. As master servicer, our primary duties are typically to (1) supervise, monitor and oversee the servicing of the mortgage loans by the servicer, and (2) advance delinquent amounts required by non-affiliated servicers who fail to perform their advancing obligations. The amount and timing of reimbursement for advances of delinquent payments vary by investor and the applicable servicing agreements. See Note 9 (Mortgage Banking Activities) to Financial Statements in this Report for additional information about residential and commercial servicing rights, servicer advances and servicing fees.

In accordance with applicable servicing guidelines, delinquency status continues to advance for loans with COVID-related payment deferrals, which has resulted in an increase in delinquent loans serviced for others and a corresponding increase in loans eligible for repurchase from GNMA loan securitization pools. Upon transfer as servicer, we retain the option to repurchase loans from GNMA loan securitization pools, which becomes exercisable when three scheduled loan payments remain unpaid by the borrower. We generally repurchase these loans for cash and as a result, our total consolidated assets do not change. As a result of the COVID-19 pandemic, our repurchases of these loans were elevated in 2020, but returned to more

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normalized levels in 2021. These repurchased loan balances were $17.3 billion and $34.8 billion at December 31, 2021 and 2020, respectively, which included $12.9 billion and $29.9 billion, respectively, in our held for investment loan portfolio, with the remainder in loans held for sale.

Repurchased loans that regain current status or are otherwise modified in accordance with applicable servicing guidelines may be included in future GNMA loan securitization pools. However, in accordance with guidance issued by GNMA, certain loans repurchased after June 30, 2020, are ineligible for inclusion in future GNMA loan securitization pools until the borrower has timely made six consecutive payments. This requirement may delay our ability to resell loans into the securitization market. See Note 8 (Securitizations and Variable Interest Entities) to Financial Statements in this Report for additional information about our involvement with mortgage loan securitizations.

Each agreement under which we act as servicer or master servicer generally specifies a standard of responsibility for actions we take in such capacity. We are required to indemnify the securitization trustee against any failure by us, as servicer or master servicer, to perform our servicing obligations. In addition, if we commit a breach of our obligations as servicer or master servicer, we may be subject to termination if the breach is not cured within a specified period. The standards governing servicing in GSE-guaranteed securitizations, and the possible remedies for violations of such standards, vary, and those standards and remedies are determined by servicing guides maintained by the GSEs, contracts between the GSEs and individual servicers and topical guides published by the GSEs from time to time. Such remedies could include indemnification or repurchase of an affected mortgage loan. In addition, in connection with our servicing activities, we could become subject to consent orders and settlement agreements with federal and state regulators for alleged servicing issues and practices. In general, these can require us to provide customers with loan modification relief, refinancing relief, and foreclosure prevention and assistance, and can result in business restrictions or the imposition of certain monetary penalties on us. For example, on September 9, 2021, the Company entered into a consent order with the OCC requiring the Company to improve the execution, risk management, and oversight of loss mitigation activities in its Home Lending business. For additional information on the OCC consent order, see the “Overview” section in this Report.

Asset/Liability Management

INTEREST RATE RISK Interest rate risk is created in our role as a financial intermediary for customers based on investments such as loans and other extensions of credit and debt securities.

Interest rate risk can have a significant impact to our earnings. We are subject to interest rate risk because:

•assets and liabilities may mature or reprice at different times. If assets reprice faster than liabilities and interest rates are generally rising, earnings will initially increase;

•assets and liabilities may reprice at the same time but by different amounts;

•short-term and long-term market interest rates may change by different amounts. For example, the shape of the yield curve may affect yield for new loans and funding costs differently;

•the remaining maturity for various assets or liabilities may shorten or lengthen as interest rates change. For example, if long-term mortgage interest rates increase sharply, MBS held in the debt securities portfolio may pay down at a slower rate than anticipated, which could impact portfolio income; or

•interest rates may have a direct or indirect effect on loan demand, collateral values, credit losses, mortgage origination volume, and the fair value of MSRs and other financial instruments.

Our most recent simulations, as presented in Table 30, estimate net interest income sensitivity over the next 12 months using instantaneous movements across the yield curve with both lower and higher interest rates relative to our base scenario. Steeper and flatter scenarios measure non-parallel changes in the yield curve, with long-term interest rates defined as all tenors three years and longer (e.g., 10-year U.S. Treasury securities) and short-term interest rates defined as all tenors less than three years. Where applicable, U.S. dollar interest rates are floored at 0.00%. The following describes the simulation assumptions for the scenarios presented in Table 30:

•Simulations are dynamic and reflect anticipated changes to our assets and liabilities.

•Other macroeconomic variables that could be correlated with the changes in interest rates are held constant.

•Mortgage prepayment and origination assumptions vary across scenarios and reflect only the impact of the higher or lower interest rates.

•Our base scenario deposit forecast incorporates mix changes consistent with the base interest rate trajectory. Deposit mix is modeled to be the same as in the base scenario across the alternative scenarios. In higher interest rate scenarios, customer deposit activity that shifts balances into higher-yielding products could impact expected net interest income.

•Deposit rates paid may change with market interest rate changes. Our interest rate sensitivity of deposits, referred to as deposit betas, is modeled using the historical behavior of our deposits portfolio. The actual deposit rates paid may differ from the assumed deposit rates paid in these scenarios due to lags in repricing and other factors.

•We hold the size of the projected debt and equity securities portfolios constant across scenarios.

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	Wells Fargo & Company	49

Risk Management – Asset/Liability Management (continued)

Table 30: Net Interest Income Sensitivity

($ in billions)	Dec 31, 2021
Parallel Shift:
+100 bps shift in interest rates	$	7.1		6.7
-100 bps shift in interest rates	(3.3)		(2.7)
Steeper yield curve:
+50 bps shift in long-term interest rates	1.2		1.3
Flatter yield curve:
+50 bps shift in short-term interest rates	2.6		2.2
-50 bps shift in long-term interest rates	(1.0)		(1.4)

The interest rate sensitivity included in Table 30 indicates that we would expect to benefit from higher interest rates as our assets would reprice faster and to a greater degree than our liabilities, while in the case of lower interest rates, our assets would reprice downward and to a greater degree than our liabilities resulting in lower net interest income. For the simulations with downward shifts in interest rates, the 0.00% interest rate floor limits the amount of the decline in net interest income. We may have a larger decline in net interest income when interest rates increase for the base scenario relative to the interest rate floor.

The sensitivity results above do not capture noninterest income or expense impacts. Our interest rate sensitive noninterest income and expense are predominantly driven by mortgage banking activities, and may move in the opposite direction of our net interest income. Mortgage originations generally decline in response to higher interest rates and generally increase in response to lower interest rates, particularly refinancing activity. Mortgage banking results are also impacted by the valuation of MSRs and related hedge positions. See the “Risk Management – Asset/Liability Management – Mortgage Banking Interest Rate and Market Risk” section in this Report for additional information.

Interest rate sensitive noninterest income also results from changes in earnings credit for noninterest-bearing deposits that reduce treasury management deposit service fees. Additionally, our trading assets are (before the effects of certain economic hedges) generally less sensitive to changes in interest rates than the related funding liabilities. As a result, net interest income from the trading portfolio contracts and expands as interest rates rise and fall, respectively. The impact to net interest income does not include the fair value changes of trading securities, which, along with the effects of related economic hedges, are recorded in noninterest income. For additional information on our trading assets and liabilities, see Note 2 (Trading Activities) to Financial Statements in this Report.

We use the debt securities portfolio and exchange-traded and over-the-counter (OTC) interest rate derivatives to manage our interest rate exposures. See Note 1 (Summary of Significant Accounting Policies), and Note 3 (Available-for-Sale and Held-to-Maturity Debt Securities) to Financial Statements in this Report for additional information on the use of the debt securities portfolios. The notional or contractual amount, credit risk amount and fair value of the derivatives used to hedge our interest rate risk exposures as of December 31, 2021 and 2020, are presented in Note 16 (Derivatives) to Financial Statements in this Report. We use derivatives for asset/liability management in two main ways:

•to convert the cash flows from selected asset and/or liability instruments/portfolios including investments, commercial loans and long-term debt, from fixed-rate payments to floating-rate payments, or vice versa; and

•to economically hedge our mortgage origination pipeline, funded mortgage loans, and MSRs.

MORTGAGE BANKING INTEREST RATE AND MARKET RISK We originate, fund and service mortgage loans, which subjects us to various risks, including credit, liquidity and interest rate risks. Based on market conditions and other factors, we reduce credit and liquidity risks by selling or securitizing mortgage loans. We determine whether mortgage loans will be held for investment or held for sale at the time of commitment, but may change our intent to hold loans for investment or sale as part of our corporate asset/liability management activities. We may also retain securities in our investment portfolio at the time we securitize mortgage loans.

We typically originate agency residential mortgage loans as held for sale and certain prime non-agency residential mortgage loans as held for investment. Occasionally, we designate some of our agency residential mortgage loans as held for investment and non-agency residential mortgage loan originations as held for sale in support of future issuances of private label residential mortgage-backed securities (RMBS). We issued $2.2 billion and $2.6 billion of RMBS in 2021 and 2020, respectively.

Interest rate and market risk can be substantial in our mortgage businesses. Changes in interest rates may impact origination and servicing fees, the fair value of our residential MSRs, LHFS, and derivative loan commitments (interest rate “locks”) extended to mortgage applicants, as well as the associated income or loss in mortgage banking noninterest income, including the gains or losses related to economic hedges of MSRs and LHFS. Given the time it takes for customer behavior to fully react to interest rate changes, as well as the time required for processing a new application, providing the commitment, and securitizing and selling the loan, interest rate changes will generally affect our mortgage banking noninterest income on a lagging basis. The amount and timing of the impact will depend on the magnitude, speed and duration of the changes in interest rates.

The valuation of our residential MSRs can be highly subjective and involve complex judgments by management about matters that are inherently unpredictable. See the “Critical Accounting Policies – Valuation of Residential Mortgage Servicing Rights” section in this Report for additional information. Changes in interest rates influence a variety of significant assumptions included in the periodic valuation of residential MSRs, including prepayment rates, expected returns and potential risks on the servicing asset portfolio, costs to service, the value of escrow balances and other servicing valuation elements. For additional information on mortgage banking, including key economic assumptions and the sensitivity of the fair value of MSRs, see Note 9 (Mortgage Banking Activities) and Note 17 (Fair Values of Assets and Liabilities) to Financial Statements in this Report.

An increase in interest rates generally reduces the propensity for refinancing, extends the expected duration of the servicing portfolio and, therefore, increases the estimated fair value of the MSRs. However, an increase in interest rates can also reduce mortgage loan demand, which reduces noninterest income from origination activities. A decline in interest rates would generally have an opposite impact.

To reduce our exposure to changes in interest rates, our residential MSRs are economically hedged with a combination of derivative instruments, including interest rate swaps, Eurodollar futures, highly liquid mortgage forward contracts and interest rate options. MSR hedging results include a combination of directional gain or loss due to market changes as well as any carry

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50	Wells Fargo & Company

income related to mortgage forward contracts. Carry income represents accretion from the forward delivery price to the spot price including both the yield earned on the reference securities and the market implied cost of financing during the period. A steep yield curve generally produces higher carry income while a flat or inverted yield curve can result in lower or potentially negative carry income.

our mortgage businesses change continually, the types of instruments used in our hedging are reviewed daily and rebalanced based on our evaluation of current market factors

and the interest rate risk inherent in our portfolio.

Hedging the various sources of interest rate risk in mortgage banking is a complex process that requires sophisticated modeling and constant monitoring. There are several potential risks to earnings from mortgage banking related to origination volumes and mix, valuation of MSRs and associated hedging results, the relationship and degree of volatility between short-term and long-term interest rates, and changes in servicing and foreclosures costs. While we attempt to balance our mortgage banking interest rate and market risks, the financial instruments we use may not perfectly correlate with the values and income being hedged.

MARKET RISK Market risk is the risk of possible economic loss from adverse changes in market risk factors such as interest rates, credit spreads, foreign exchange rates, equity and commodity prices, and the risk of possible loss due to counterparty exposure. This applies to implied volatility risk, basis risk, and market liquidity risk. It also includes price risk in the trading book, mortgage servicing rights and the hedge effectiveness risk associated with the mortgage book, and impairment of private equity investments.

The Board’s Finance Committee has primary oversight responsibility for market risk and oversees the Company’s market risk exposure and market risk management strategies.

In addition, the Board’s Risk Committee has certain oversight responsibilities with respect to market risk, including adjusting the Company’s market risk appetite with input from the Finance Committee. The Finance Committee also reports key market risk matters to the Risk Committee.

At the management level, the Market and Counterparty Risk Management function, which is part of IRM, has oversight responsibility for market risk. The Market and Counterparty Risk Management function reports into the CRO and provides periodic reports related to market risk to the Board’s Finance Committee.

reflected in the interest income and interest expense components of our consolidated statement of income. Changes in fair value of the financial instruments used in our trading activities are reflected in net gains from trading activities. For additional information on the financial instruments used in our trading activities and the income from these trading activities, see Note 2 (Trading Activities) to Financial Statements in this Report.

Value-at-risk (VaR) is a statistical risk measure used to estimate the potential loss from adverse moves in the financial markets. The Company uses VaR metrics complemented with sensitivity analysis and stress testing in measuring and monitoring market risk. These market risk measures are monitored at both the business unit level and at aggregated levels on a daily basis. Our corporate market risk management function aggregates and monitors all exposures to ensure risk measures are within our established risk appetite. Changes to the market risk profile are analyzed and reported on a daily basis. The Company monitors various market risk exposure measures from a variety of perspectives, including line of business, product, risk type, and legal entity.

Trading VaR is the measure used to provide insight into the market risk exhibited by the Company’s trading positions. The Company calculates Trading VaR for risk management purposes to establish line of business and Company-wide risk limits. Trading VaR is calculated based on all trading positions on our consolidated balance sheet.

1-day time interval at a 99% confidence level. Our historical simulation model is based on equally weighted data from a

12-month historical look-back period. We believe using a

Average Company Trading General VaR was $49 million for the year ended December 31, 2021, compared with $123 million for the year ended December 31, 2020. The decrease in average Company Trading General VaR for the year ended December 31, 2021, was driven by market volatility due to the COVID-19 pandemic, in particular changes in interest rate curves and a significant widening of credit spreads exiting the 12-month historical look-back window used to calculate VaR.

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	Wells Fargo & Company	51

Risk Management – Asset/Liability Management (continued)

Table 31: Trading 1-Day 99% General VaR by Risk Category

	Year ended December 31,
	2021				2020
(in millions)	Period end		Average		Low	High				Period end	Average	Low		High
Company Trading General VaR Risk Categories
Credit	$	19			38		12		112				106			72		15		121
Interest rate	15			25		4		120				81			104		5		241
Equity	15			30		13		72				32			14		4		35
Commodity	10			7		2		28				3			3		1		8
Foreign exchange	1			1		0		1				1			1		1		6
Diversification benefit (1)	(40)			(52)							(126)		(71)
Company Trading General VaR	20			49							97		123

credit spread widening or a large decline in equity prices.

These scenarios assume that the market moves happen instantaneously and no repositioning or hedging activity takes place to mitigate losses as events unfold (a conservative approach since experience demonstrates otherwise).

investments are made within capital allocations approved by management and the Board. The Board’s policy is to review business developments, key risks and historical returns for the private equity investment portfolio at least annually. Management reviews these investments at least quarterly to assess them for impairment and observable price changes. For nonmarketable equity securities, the analysis is based on facts and circumstances of each individual investment and the expectations for that investment’s cash flows, capital needs, the viability of its business model, our exit strategy, and observable price changes that are similar to the investments held. Investments in nonmarketable equity securities include private equity investments accounted for under the equity method, fair value through net income, and the measurement alternative.

In conjunction with the March 2008 initial public offering (IPO) of Visa, Inc. (Visa), we received approximately 20.7 million shares of Visa Class B common stock, the class which was apportioned to member banks of Visa at the time of the IPO.

To manage our exposure to Visa and realize the value of the appreciated Visa shares, we incrementally sold these shares through a series of sales, thereby eliminating this position as of September 30, 2015. As part of these sales, we agreed to compensate the buyer for any additional contributions to a litigation settlement fund for the litigation matters associated with the Class B shares we sold. Our exposure to this retained litigation risk has been updated quarterly and is reflected on our consolidated balance sheet. For additional information about the associated litigation matters, see the “Interchange Litigation” section in Note 15 (Legal Actions) to Financial Statements in this Report.

As part of our business to support our customers, we trade public equities, listed/OTC equity derivatives and convertible bonds. We have parameters that govern these activities. We also have marketable equity securities that include investments relating to our venture capital activities. We manage these marketable equity securities within capital risk limits approved by management and the Board and monitored by Corporate ALCO and the Market Risk Committee. The fair value changes in these marketable equity securities are recognized in net income. For additional information, see Note 6 (Equity Securities) to Financial Statements in this Report.

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other business activities. Each business line monitors and manages these indirect risks.

LIQUIDITY RISK AND FUNDING In the ordinary course of business, we enter into contractual obligations that may require future cash payments, including funding for customer loan requests, customer deposit maturities and withdrawals, debt service, leases for premises and equipment, and other cash commitments. The objective of effective liquidity management is to ensure that we can meet our contractual obligations and other cash commitments efficiently under both normal operating conditions and under periods of Wells Fargo-specific and/or market stress. For additional information on these obligations, see the following sections and Notes to Financial Statements in this Report:

•“Commitments to Lend” section within Loans and Related Allowance for Credit Losses (Note 4)

•Leasing Activity (Note 5)

•Deposits (Note 11)

•Long-Term Debt (Note 12)

•Guarantees and Other Commitments (Note 13)

•Employee Benefits and Other Expenses (Note 21)

•Income Taxes (Note 23)

To help achieve this objective, the Board establishes liquidity guidelines that require sufficient asset-based liquidity to cover potential funding requirements and to avoid over-dependence on volatile, less reliable funding markets. These guidelines are monitored on a monthly basis by the Corporate ALCO and on a quarterly basis by the Board. These guidelines are established and monitored for both the consolidated company and for the Parent on a stand-alone basis to ensure that the Parent is a source of strength for its regulated, deposit-taking banking subsidiaries. The Parent acts as a source of funding for the Company through the issuance of long-term debt and equity, and WFC Holdings, LLC, an intermediate holding company and subsidiary of the Parent (the “IHC”), provides funding support for the ongoing operational requirements of the Parent and certain of its direct and indirect subsidiaries. For additional information on the IHC, see the “Regulatory Matters – ‘Living Will’ Requirements and Related Matters” section in this Report.

the Company’s projected liquidity position during stress and inform future needs in the Company’s funding plan.

Liquidity Standards We are subject to a rule issued by the FRB, OCC and FDIC that establishes a quantitative minimum liquidity requirement consistent with the LCR established by the Basel Committee on Banking Supervision (BCBS). The rule requires a covered banking organization to hold high-quality liquid assets (HQLA) in an amount equal to or greater than its projected net cash outflows during a 30-day stress period. Our HQLA under the rule predominantly consists of central bank deposits, government debt securities, and mortgage-backed securities of federal agencies. The LCR applies to the Company on a consolidated basis and to our insured depository institutions (IDIs) with total assets of $10 billion or more. In addition, rules issued by the FRB impose enhanced liquidity risk management standards on large bank holding companies (BHCs), such as Wells Fargo.

The FRB, OCC and FDIC have also issued a rule implementing a stable funding requirement, known as the net stable funding ratio (NSFR), which requires a covered banking organization, such as Wells Fargo, to maintain a minimum amount of stable funding, including common equity, long-term debt and most types of deposits, in relation to its assets, derivative exposures and commitments over a one-year horizon period. The NSFR applies to the Company on a consolidated basis and to our IDIs with total assets of $10 billion or more. As of December 31, 2021, we were compliant with the NSFR requirement.

Liquidity Coverage Ratio As of December 31, 2021, the consolidated Company, Wells Fargo Bank, N.A., and Wells Fargo National Bank West exceeded the minimum LCR requirement of 100%, which is calculated as HQLA divided by projected net cash outflows, as each is defined under the LCR rule. Table 32 presents the Company’s quarterly average values for the daily-calculated LCR and its components calculated pursuant to the LCR rule requirements.

Table 32: Liquidity Coverage Ratio

	Average for Quarter ended
(in millions, except ratio)	Dec 31, 2021		Sep 30, 2021		Dec 31, 2020
HQLA (1):
Eligible cash	$	210,527		244,260			213,937
Eligible securities (2)	172,761		138,525			201,060
Total HQLA	383,288		382,785			414,997
Projected net cash outflows	325,015		320,782			312,697
LCR	118	%		119			133

(1)Excludes excess HQLA at certain subsidiaries that is not transferable to other Wells Fargo entities.

(2)Net of applicable haircuts required under the LCR rule.

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	Wells Fargo & Company	53

Risk Management – Asset/Liability Management (continued)

Liquidity Sources We maintain liquidity in the form of cash, cash equivalents and unencumbered high-quality, liquid debt securities. These assets make up our primary sources of liquidity. Our primary sources of liquidity are substantially the same in composition as HQLA under the LCR rule; however, our primary sources of liquidity will generally exceed HQLA calculated under the LCR rule due to the applicable haircuts to HQLA and the exclusion of excess HQLA at our subsidiary IDIs required under the LCR rule. Our primary sources of liquidity are presented in Table 33 at fair value, which also includes encumbered securities that are not included as available HQLA in the calculation of the LCR.

Table 33: Primary Sources of Liquidity

	December 31, 2021		December 31, 2020
(in millions)	Total		Encumbered		Unencumbered	Total		Encumbered		Unencumbered
Interest-earning deposits with banks	$	209,614			—		209,614			236,376		—		236,376
Debt securities of U.S. Treasury and federal agencies	56,486			4,066		52,420			70,756		5,370		65,386
Federal agency mortgage-backed securities	293,870			58,955		234,915			258,668		49,156		209,512
Total	$	559,970			63,021		496,949			565,800		54,526		511,274

In addition to our primary sources of liquidity shown in

Table 33, liquidity is also available through the sale or financing of other debt securities including trading and/or AFS debt securities, as well as through the sale, securitization or financing of loans, to the extent such debt securities and loans are not encumbered. As of December 31, 2021, we also maintained approximately $208.2 billion of available borrowing capacity at various Federal Home Loan Banks and the Federal Reserve Discount Window.

Deposits have historically provided a sizable source of relatively low-cost funds. Deposits were 166% and 158% of total

loans at December 31, 2021 and 2020, respectively. Additional funding is provided by long-term debt and short-term borrowings. Table 34 presents a summary of our short-term borrowings, which generally mature in less than 30 days. We pledge certain financial instruments that we own to collateralize repurchase agreements and other securities financings. For additional information, see the “Pledged Assets” section of

Note 14 (Pledged Assets and Collateral) to Financial Statements in this Report.

Table 34: Short-Term Borrowings

(in millions)	December 31, 2021
Federal funds purchased and securities sold under agreements to repurchase	$	21,191		46,362
Other short-term borrowings	13,218		12,637
Total	$	34,409		58,999

We access domestic and international capital markets for long-term funding (generally greater than one year) through issuances of registered debt securities, private placements and asset-backed secured funding. We issue long-term debt in a variety of maturities and currencies to achieve cost-efficient funding and to maintain an appropriate maturity profile. Proceeds from securities issued were used for general corporate purposes, and, unless otherwise specified in the applicable prospectus or prospectus supplement, we expect the proceeds

from securities issued in the future will be used for the same purposes. Depending on market conditions and our liquidity position, we may redeem or repurchase, and subsequently retire, our outstanding debt securities in privately negotiated or open market transactions, by tender offer, or otherwise. Table 35 presents a summary of our long-term debt. For additional information, including contractual maturities of our long-term debt, see Note 12 (Long-Term Debt) to Financial Statements in this Report.

Table 35: Long-Term Debt

(in millions)	December 31, 2021
Wells Fargo & Company (Parent Only)	$	146,286		182,212
Wells Fargo Bank, N.A. and other bank entities (Bank)	12,858		27,130
Other consolidated subsidiaries	1,545		3,608
Total	$	160,689		212,950

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54	Wells Fargo & Company

There were no actions undertaken by the rating agencies with regard to our credit ratings during fourth quarter 2021. On

February 16, 2022, Moody's Investors Service (Moody’s) affirmed the Company’s ratings and changed the rating outlook to stable from negative.

See the “Risk Factors” section in this Report for additional information regarding our credit ratings and the potential impact a credit rating downgrade would have on our liquidity and operations, as well as Note 16 (Derivatives) to Financial Statements in this Report for information regarding additional collateral and funding obligations required for certain derivative instruments in the event our credit ratings were to fall below investment grade.

The credit ratings of the Parent and Wells Fargo Bank, N.A., as of December 31, 2021, are presented in Table 36.

Table 36: Credit Ratings as of December 31, 2021

		Wells Fargo & Company	Wells Fargo Bank, N.A.
	Senior debt	Short-term borrowings	Long-term deposits	Short-term borrowings
Moody’s	A1	P-1	Aa1	P-1
S&P Global Ratings	BBB+	A-2	A+	A-1
Fitch Ratings	A+	F1	AA	F1+
DBRS Morningstar	AA (low)	R-1 (middle)	AA	R-1 (high)

FEDERAL HOME LOAN BANK MEMBERSHIP The Federal Home Loan Banks (the FHLBs) are a group of cooperatives that lending institutions use to finance housing and economic development in local communities. We are a member of the FHLBs based in Dallas, Des Moines and San Francisco. FHLB members are required to maintain a minimum investment in capital stock of the applicable FHLB. The board of directors of each FHLB can increase the minimum investment requirements in the event it has concluded that additional capital is required to allow it to meet its own regulatory capital requirements. Any increase in the minimum investment requirements outside of specified ranges requires the approval of the Federal Housing Finance Agency. Because the extent of any obligation to increase our investment in any of the FHLBs depends entirely upon the occurrence of a future event, the amount of any future investment in the capital stock of the FHLBs is not determinable.

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	Wells Fargo & Company	55

Capital Management

We have an active program for managing capital through a comprehensive process for assessing the Company’s overall capital adequacy. Our objective is to maintain capital at an amount commensurate with our risk profile and risk tolerance objectives, and to meet both regulatory and market expectations. We primarily fund our capital needs through the retention of earnings net of both dividends and share repurchases, as well as through the issuance of preferred stock and long- and short-term debt. Retained earnings at December 31, 2021, increased $17.6 billion from December 31, 2020, predominantly as a result of $21.5 billion of Wells Fargo net income, partially offset by $3.7 billion of common and preferred stock dividends. During 2021, we issued $2.1 billion of common stock, substantially all of which was issued in connection with employee compensation and benefits. In 2021, we repurchased 306 million shares of common stock at a cost of $14.5 billion. For additional information about capital planning, see the “Capital Planning and Stress Testing” section below.

In 2021, we issued $5.8 billion of preferred stock and redeemed $6.7 billion of preferred stock. For additional information, see Note 18 (Preferred Stock) to Financial Statements in this Report.

Regulatory Capital Requirements

Table 37: Risk-Based Capital Requirements – Standardized Approach as of December 31, 2021

Table 38: Risk-Based Capital Requirements – Advanced Approach as of December 31, 2021

In addition to the risk-based capital requirements described in Table 37 and Table 38, if the FRB determines that a period of excessive credit growth is contributing to an increase in systemic risk, a countercyclical buffer of up to 2.50% could be added to the risk-based capital ratio requirements under federal banking regulations. The FRB did not include a countercyclical buffer in the risk-based capital ratio requirements at December 31, 2021.

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As a G-SIB, we are also subject to the FRB’s rule implementing an additional capital surcharge of between 1.00-4.50% on the risk-based capital ratio requirements of G-SIBs. Under the rule, we must annually calculate our surcharge under two methods and use the higher of the two surcharges. The first method (method one) considers our size, interconnectedness, cross-jurisdictional activity, substitutability, and complexity, consistent with the methodology developed by the BCBS and the Financial Stability Board (FSB). The second method (method two) uses similar inputs, but replaces substitutability with use of short-term wholesale funding and will generally result in higher surcharges than under method one. Because the G-SIB capital surcharge is calculated annually based on data that can differ over time, the amount of the surcharge is subject to change in future years. Our G-SIB capital surcharge decreased by 50 basis points to 1.50% beginning in first quarter 2022.

Effective January 1, 2022, we are required by federal banking regulators to use the Standardized Approach for Counterparty Credit Risk (SA-CCR) for calculating exposure amounts for credit RWAs on derivative contracts. SA-CCR replaced the current exposure method for calculating these exposure amounts for purposes of our risk-based capital ratios and our supplementary leverage ratio. The adoption of SA-CCR resulted in an increase of less than 1.00% in total RWAs under the Standardized Approach (which was our binding approach at December 31, 2021) and a decrease of less than 0.50% in total leverage exposure at January 1, 2022.

The Basel III capital requirements for calculating CET1 and tier 1 capital, along with RWAs, are fully phased-in. However, the requirements for determining tier 2 and total capital remained in accordance with transition requirements at December 31, 2021, but became fully phased-in beginning January 1, 2022.

The tables that follow provide information about our risk-based capital and related ratios as calculated under Basel III capital rules. Although we report certain capital amounts and ratios in accordance with transition requirements for bank regulatory reporting purposes, we manage our capital on a fully phased-in basis. For information about our capital requirements calculated in accordance with transition requirements, see

Note 28 (Regulatory Capital Requirements and Other Restrictions) to Financial Statements in this Report.

Table 39 summarizes our CET1, tier 1 capital, total capital, RWAs and capital ratios on a fully phased-in basis at December 31, 2021 and 2020. Fully phased-in total capital amounts and ratios are considered non-GAAP financial measures that are used by management, bank regulatory agencies, investors and analysts to assess and monitor the Company’s capital position. See Table 40 for information regarding the calculation and components of our CET1, tier 1 capital, total capital and RWAs, as well as a corresponding reconciliation to GAAP financial measures for our fully phased-in total capital amounts.

Table 39: Capital Components and Ratios (Fully Phased-In)

		Standardized Approach		Advanced Approach
(in millions, except ratios)		Required Capital Ratios (1)		Dec 31, 2021		Dec 31, 2020		Required Capital Ratios (1)	Dec 31, 2021		Dec 31, 2020
Common Equity Tier 1	(A)			$	140,643			138,297				$	140,643		138,297
Tier 1 Capital	(B)			159,671			158,196				159,671			158,196
Total Capital	(C)			196,281			196,529				186,553			186,803
Risk-Weighted Assets	(D)			1,239,026			1,193,744				1,116,068			1,158,355
Common Equity Tier 1 Capital Ratio	(A)/(D)	9.60	%		11.35		*	11.59		9.00			12.60		11.94
Tier 1 Capital Ratio	(B)/(D)	11.10			12.89		*	13.25		10.50			14.31		13.66
Total Capital Ratio	(C)/(D)	13.10			15.84		*	16.47		12.50			16.72		16.14

*Denotes the binding ratio under the Standardized and Advanced Approaches at December 31, 2021.

(1)Represents the minimum ratios required to avoid restrictions on capital distributions and discretionary bonus payments at December 31, 2021.

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	Wells Fargo & Company	57

Capital Management (continued)

Table 40 provides information regarding the calculation and composition of our risk-based capital under the Standardized and Advanced Approaches at December 31, 2021 and 2020.

Table 40: Risk-Based Capital Calculation and Components

		Standardized Approach
(in millions)		Dec 31, 2021		Dec 31, 2020			Dec 31, 2021	Dec 31, 2020
Total equity (1)		190,110			185,712			$	190,110		185,712
Effect of accounting policy changes (1)		—			208			—		208
Total equity (as reported)		190,110			185,920			190,110		185,920
Adjustments:
Preferred stock		(20,057)			(21,136)			(20,057)		(21,136)
Additional paid-in capital on preferred stock		136			152			136		152
Unearned ESOP shares		646			875			646		875
Noncontrolling interests		(2,504)			(1,033)			(2,504)		(1,033)
Total common stockholders’ equity		$	168,331			164,778			168,331		164,778
Adjustments:
Goodwill		(25,180)			(26,392)			(25,180)		(26,392)
Certain identifiable intangible assets (other than MSRs)		(225)			(342)			(225)		(342)
Goodwill and other intangibles on nonmarketable equity securities (included in other assets)		(2,437)			(1,965)			(2,437)		(1,965)
Applicable deferred taxes related to goodwill and other intangible assets (2)		765			856			765		856
CECL transition provision (3)		241			1,720			241		1,720
Other		(852)			(358)			(852)		(358)
Common Equity Tier 1		$	140,643			138,297			140,643		138,297
Preferred stock		20,057			21,136			20,057		21,136
Additional paid-in capital on preferred stock		(136)			(152)			(136)		(152)
Unearned ESOP shares		(646)			(875)			(646)		(875)
Other		(247)			(210)			(247)		(210)
Total Tier 1 capital	(A)	$	159,671			158,196			159,671		158,196
Long-term debt and other instruments qualifying as Tier 2		22,740			24,387			22,740		24,387
Qualifying allowance for credit losses (4)		14,149			14,134			4,421		4,408
Other		(279)			(188)			(279)		(188)
Total Tier 2 capital (fully phased-in)	(B)	$	36,610			38,333			26,882		28,607
Effect of Basel III transition requirements		27			131			27		131
Total Tier 2 capital (Basel III transition requirements)		$	36,637			38,464			26,909		28,738
Total qualifying capital (fully phased-in)	(A)+(B)	$	196,281			196,529			186,553		186,803
Total Effect of Basel III transition requirements		27			131			27		131
Total qualifying capital (Basel III transition requirements)		$	196,308			196,660			186,580		186,934
Risk-Weighted Assets (RWAs)(5):
Credit risk		1,186,810			1,125,813			$	747,714		752,999
Market risk		52,216			67,931			52,216		67,931
Operational risk		—			—			316,138		337,425
Total RWAs		$	1,239,026			1,193,744			1,116,068		1,158,355

(1)In second quarter 2021, we elected to change our accounting method for low-income housing tax credit investments and elected to change the presentation of investment tax credits related to solar energy investments. Prior period total equity was revised to conform with the current period presentation. Prior period risk-based capital and certain other regulatory related metrics were not revised.

(3)At December 31, 2021, the impact of the current expected credit losses (CECL) transition provision issued by federal banking regulators on our regulatory capital was an increase in capital of $241 million, reflecting a $991 million (post-tax) increase in capital recognized upon our initial adoption of CECL, offset by 25% of the $4.9 billion increase in our ACL under CECL from January 1, 2020, through December 31, 2021.

(5)RWAs calculated under the Advanced Approach utilize a risk-sensitive methodology, which relies upon the use of internal credit models based upon our experience with internal rating grades. Advanced Approach also includes an operational risk component, which reflects the risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events.

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58	Wells Fargo & Company

Table 41 presents the changes in CET1 for the year ended December 31, 2021.

Table 41: Analysis of Changes in Common Equity Tier 1

(in millions)
Common Equity Tier 1 at December 31, 2020	$	138,297
Net income applicable to common stock	20,256
Common stock dividends	(2,426)
Common stock issued, repurchased, and stock compensation-related items	(12,197)
Changes in cumulative other comprehensive income	(1,896)
Goodwill	1,212
Certain identifiable intangible assets (other than MSRs)	117
Goodwill and other intangibles on nonmarketable equity securities (included in other assets)	(472)
Applicable deferred taxes related to goodwill and other intangible assets (1)	(91)
CECL transition provision (2)	(1,479)
Other	(678)
Change in Common Equity Tier 1	2,346
Common Equity Tier 1 at December 31, 2021	$	140,643

(2)At December 31, 2021, the impact of the CECL transition provision issued by federal banking regulators on our regulatory capital was an increase in capital of $241 million, reflecting a $991 million (post-tax) increase in capital recognized upon our initial adoption of CECL, offset by 25% of the $4.9 billion increase in our ACL under CECL from January 1, 2020, through December 31, 2021.

Table 42 presents net changes in the components of RWAs under the Standardized and Advanced Approaches for the year ended December 31, 2021.

Table 42: Analysis of Changes in RWAs

(in millions)	Standardized Approach	Advanced Approach
RWAs at December 31, 2020	1,193,744		$	1,158,355
Net change in credit risk RWAs	60,997		(5,285)
Net change in market risk RWAs	(15,715)		(15,715)
Net change in operational risk RWAs	—		(21,287)
Total change in RWAs	45,282		(42,287)
RWAs at December 31, 2021	$	1,239,026		$	1,116,068

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	Wells Fargo & Company	59

Capital Management (continued)

TANGIBLE COMMON EQUITY We also evaluate our business based on certain ratios that utilize tangible common equity. Tangible common equity is a non-GAAP financial measure and represents total equity less preferred equity, noncontrolling interests, goodwill, certain identifiable intangible assets (other than MSRs) and goodwill and other intangibles on nonmarketable equity securities, net of applicable deferred taxes. The ratios are (i) tangible book value per common share, which represents tangible common equity divided by common shares outstanding; and (ii) return on average tangible common equity (ROTCE),

which represents our annualized earnings as a percentage of tangible common equity. The methodology of determining tangible common equity may differ among companies. Management believes that tangible book value per common share and return on average tangible common equity, which utilize tangible common equity, are useful financial measures because they enable management, investors, and others to assess the Company’s use of equity.

Table 43 provides a reconciliation of these non-GAAP financial measures to GAAP financial measures.

Table 43: Tangible Common Equity

		Balance at period end						Average balance
		Quarter ended				Year ended
(in millions, except ratios)		Dec 31, 2021		Dec 31, 2020	Dec 31, 2019				Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total equity		$	190,110			185,712		187,702					191,219	184,689		197,174
Adjustments:
Preferred stock		(20,057)			(21,136)		(21,549)					(21,151)		(21,364)		(22,522)
Additional paid-in capital on preferred stock		136			152		(71)					137		148		(81)
Unearned ESOP shares		646			875		1,143					874		1,007		1,306
Noncontrolling interests		(2,504)			(1,033)		(838)					(1,601)		(769)		(962)
Total common stockholders’ equity	(A)	168,331			164,570		166,387					169,478		163,711		174,915
Adjustments:
Goodwill		(25,180)			(26,392)		(26,390)					(26,087)		(26,387)		(26,409)
Certain identifiable intangible assets (other than MSRs)		(225)			(342)		(437)					(294)		(389)		(493)
Goodwill and other intangibles on nonmarketable equity securities (included in other assets)		(2,437)			(1,965)		(2,146)					(2,226)		(2,002)		(2,174)
Applicable deferred taxes related to goodwill and other intangibleassets (1)		765			856		810					867		834		792
Tangible common equity	(B)	$	141,254			136,727		138,224					141,738		135,767		146,631
Common shares outstanding	(C)	3,885.8			4,144.0		4,134.4					N/A	N/A	N/A
Net income applicable to common stock	(D)	N/A		N/A	N/A				$	20,256		1,786		18,103
Book value per common share	(A)/(C)	$	43.32			39.71		40.24					N/A	N/A	N/A
Tangible book value per common share	(B)/(C)	36.35			32.99		33.43					N/A	N/A	N/A
Return on average common stockholders’ equity (ROE)	(D)/(A)	N/A		N/A	N/A				11.95	%	1.09		10.35
Return on average tangible common equity (ROTCE)	(D)/(B)	N/A		N/A	N/A				14.29		1.32		12.35

LEVERAGE REQUIREMENTS As a BHC, we are required to maintain a supplementary leverage ratio (SLR) to avoid restrictions on capital distributions and discretionary bonus payments and maintain a minimum tier 1 leverage ratio. Table 44 presents the leverage requirements applicable to the Company as of December 31, 2021.

Table 44: Leverage Requirements Applicable to the Company

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60	Wells Fargo & Company

At December 31, 2021, the Company’s SLR was 6.89%, and each of our IDIs exceeded their applicable SLR requirements. Table 45 presents information regarding the calculation and components of the Company’s SLR and tier 1 leverage ratio.

Table 45: Leverage Ratios for the Company

(in millions, except ratios)		Quarter ended December 31, 2021
Tier 1 capital	(A)	$	159,671
Total average assets		1,943,670
Less: Goodwill and other permitted Tier 1 capital deductions (net of deferred tax liabilities)		28,085
Total adjusted average assets		1,915,585
Plus adjustments for off-balance sheet exposures:
Derivatives (1)		71,926
Repo-style transactions (2)		3,080
Other (3)		325,488
Total off-balance sheet exposures		400,494
Total leverage exposure	(B)	$	2,316,079
Supplementary leverage ratio	(A)/(B)	6.89	%
Tier 1 leverage ratio (4)		8.34	%

(1)Adjustment represents derivatives and collateral netting exposures as defined for supplementary leverage ratio determination purposes.

(2)Adjustment represents counterparty credit risk for repo-style transactions where Wells Fargo & Company is the principal counterparty facing the client.

(3)Adjustment represents credit equivalent amounts of other off-balance sheet exposures not already included as derivatives and repo-style transactions exposures.

(4)The tier 1 leverage ratio consists of tier 1 capital divided by total average assets, excluding goodwill and certain other items as determined under the rule.

TOTAL LOSS ABSORBING CAPACITY As a G-SIB, we are required to have a minimum amount of equity and unsecured long-term debt for purposes of resolvability and resiliency, often referred to as Total Loss Absorbing Capacity (TLAC). U.S. G-SIBs are required to have a minimum amount of TLAC (consisting of CET1 capital and additional tier 1 capital issued directly by the top-tier or covered BHC plus eligible external long-term debt) to avoid restrictions on capital distributions and discretionary bonus payments, as well as a minimum amount of eligible unsecured long-term debt. The components used to calculate our minimum TLAC and eligible unsecured long-term debt requirements as of December 31, 2021, are presented in Table 46.

Table 46: Components Used to Calculate TLAC and Eligible Unsecured Long-Term Debt Requirements

TLAC requirement Greater of:
18.00% of RWAs		7.50% of total leverage exposure (the denominator of the SLR calculation)
+	+
TLAC buffer (equal to 2.50% of RWAs + method one G-SIB capital surcharge + any countercyclical buffer)	External TLAC leverage buffer (equal to 2.00% of total leverage exposure)
Minimum amount of eligible unsecured long-term debt Greater of:
6.00% of RWAs		4.50% of total leverage exposure
+
Greater of method one and method two G-SIB capital surcharge

Under the Proposed SLR rules, the 2.00% external TLAC leverage buffer would be replaced with a buffer equal to one-half of our applicable G-SIB capital surcharge, and the leverage component for calculating the minimum amount of eligible unsecured long-term debt would be modified from 4.50% of total leverage exposure to 2.50% of total leverage exposure plus one-half of our applicable G-SIB capital surcharge.

Table 47 provides our TLAC and eligible unsecured long-term debt and related ratios as of December 31, 2021, and December 31, 2020.

Table 47: TLAC and Eligible Unsecured Long-Term Debt

($ in millions)	TLAC (1)				Regulatory Minimum
	December 31, 2021
Total eligible amount	$	285,312		120,943
Percentage of RWAs (3)	23.03	%	21.50		9.76	8.00
Percentage of total leverage exposure	12.32		9.50		5.22	4.50
	December 31, 2020
Total eligible amount	$	307,226		140,703
Percentage of RWAs (3)	25.74	%	22.00		11.79	8.00
Percentage of total leverage exposure (4)	15.64		9.50		7.16	4.50

(1)TLAC ratios are calculated using the CECL transition provision issued by federal banking regulators.

(2)Represents the minimum required to avoid restrictions on capital distributions and discretionary bonus payments.

(3)Our minimum TLAC and eligible unsecured long-term debt requirements are calculated based on the greater of RWAs determined under the Standardized and Advanced Approaches.

(4)Total leverage exposure at December 31, 2020, reflected an interim final rule issued by the FRB that temporarily allowed a bank holding company to exclude on-balance sheet amounts of U.S. Treasury securities and deposits at Federal Reserve Banks from the calculation of its total leverage exposure.

Capital Planning and Stress Testing

Our planned long-term capital structure is designed to meet regulatory and market expectations. We believe that our long-term targeted capital structure enables us to invest in and grow our business, satisfy our customers’ financial needs in varying environments, access markets, and maintain flexibility to return capital to our shareholders. Our long-term targeted capital structure also considers capital levels sufficient to exceed capital requirements including the G-SIB capital surcharge. Accordingly, we currently target a long-term CET1 capital ratio that is 100 basis points above our regulatory requirement plus an incremental buffer of 25 to 50 basis points. Our capital targets are subject to change based on various factors, including changes to the regulatory requirements for our capital ratios, planned capital actions, changes in our risk profile and other factors.

Federal banking regulators also require large BHCs and banks to conduct their own stress tests to evaluate whether the

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Capital Management (continued)

institution has sufficient capital to continue to operate during periods of adverse economic and financial conditions.

Securities Repurchases

From time to time the Board authorizes the Company to repurchase shares of our common stock. Although we announce when the Board authorizes share repurchases, we typically do not give any public notice before we repurchase our shares. Various factors determine the amount of our share repurchases, including our capital requirements, the number of shares we expect to issue for employee benefit plans and acquisitions, market conditions (including the trading price of our stock), and

regulatory and legal considerations, including under the FRB’s capital plan rule. Due to the various factors that may impact the amount of our share repurchases and the fact that we tend to be in the market regularly to satisfy repurchase considerations under our capital plan, our share repurchases occur at various price levels. We may suspend share repurchase activity at any time.

At December 31, 2021, we had remaining Board authority to repurchase approximately 361 million shares, subject to regulatory and legal conditions. For additional information about share repurchases during fourth quarter 2021, see Part II, Item 5 in our 2021 Form 10-K.

Regulatory Matters

The U.S. financial services industry is subject to significant regulation and regulatory oversight initiatives. This regulation and oversight may continue to impact how U.S. financial services companies conduct business and may continue to result in increased regulatory compliance costs. The following highlights the more significant regulations and regulatory oversight initiatives that have affected or may affect our business. For additional information about the regulatory matters discussed below and other regulations and regulatory oversight matters, see Part I, Item 1 “Regulation and Supervision” of our 2021 Form 10-K, and the “Overview,” “Capital Management,” “Forward-Looking Statements” and “Risk Factors” sections and Note 28 (Regulatory Capital Requirements and Other Restrictions) to Financial Statements in this Report.

Dodd-Frank Act

•Enhanced supervision and regulation of systemically important firms. The Dodd-Frank Act grants broad authority to federal banking regulators to establish enhanced supervisory and regulatory requirements for systemically important firms. The FRB has finalized a number of regulations implementing enhanced prudential requirements for large bank holding companies (BHCs) like Wells Fargo regarding risk-based capital and leverage, risk and liquidity management, single counterparty credit limits, and imposing debt-to-equity limits on any BHC that regulators determine poses a grave threat to the financial stability of the United States. The FRB and OCC have also finalized rules implementing stress testing requirements for large BHCs and national banks. In addition, the FRB has proposed a rule to establish remediation requirements for large BHCs experiencing financial distress. Furthermore, in order to promote a BHC’s safety and soundness and the financial and operational resilience of its operations, the FRB has finalized guidance regarding effective boards of directors of large BHCs and has proposed related guidance identifying core principles for effective senior management. The OCC, under separate authority, has finalized guidelines establishing heightened governance and risk management standards for large national banks such as Wells Fargo Bank, N.A. The OCC guidelines require covered banks to establish and adhere to a written risk governance framework to manage and control their risk-taking activities. The guidelines also formalize roles and responsibilities for risk management practices within covered banks and create certain risk oversight

responsibilities for their boards of directors. In addition to the authorization of enhanced supervisory and regulatory requirements for systemically important firms, the Dodd-Frank Act also established the Financial Stability Oversight Council and the Office of Financial Research, which may recommend new systemic risk management requirements and require new reporting of systemic risks.

•Regulation of consumer financial products. The Dodd-Frank Act established the Consumer Financial Protection Bureau (CFPB) to ensure that consumers receive clear and accurate disclosures regarding financial products and are protected from unfair, deceptive or abusive practices. The CFPB has issued a number of rules impacting consumer financial products, including rules regarding the origination, servicing, notification, disclosure and other requirements with respect to residential mortgage lending, as well as rules impacting prepaid cards, credit cards, and other financial products and banking-related activities. In addition to these rulemaking activities, the CFPB is continuing its ongoing supervisory examination activities of the financial services industry with respect to a number of consumer businesses and products, including mortgage lending and servicing, fair lending requirements, and auto finance.

•Regulation of swaps and other derivatives activities. The Dodd-Frank Act established a comprehensive framework for regulating over-the-counter derivatives, and, pursuant to authority granted by the Dodd-Frank Act, the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) have adopted comprehensive sets of rules regulating swaps and security-based swaps, respectively, and the OCC and other federal regulatory agencies have adopted margin requirements for uncleared swaps and security-based swaps. As a provisionally-registered swap dealer and a conditionally-registered security-based swap dealer, Wells Fargo Bank, N.A., is subject to these rules. These rules, as well as others adopted or under consideration by regulators in the United States and other jurisdictions, may negatively impact customer demand for over-the-counter derivatives, impact our ability to offer customers new derivatives or amendments to existing derivatives, and may increase our costs for engaging in swaps, security-based swaps, and other derivatives activities.

Regulatory Capital, Leverage, and Liquidity Requirements

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62	Wells Fargo & Company

based capital requirements for U.S. banking organizations. The Company and its IDIs are also required to maintain specified leverage and supplementary leverage ratios. In addition, the Company is required to have a minimum amount of total loss absorbing capacity for purposes of resolvability and resiliency. Federal banking regulators have also issued final rules requiring a liquidity coverage ratio and a net stable funding ratio. For additional information on the final risk-based capital, leverage and liquidity rules, and additional capital requirements applicable to us, see the “Capital Management” and “Risk Management – Asset/Liability Management – Liquidity Risk and Funding – Liquidity Standards” sections in this Report.

“Living Will” Requirements and Related Matters

Rules adopted by the FRB and the FDIC under the Dodd-Frank Act require large financial institutions, including Wells Fargo, to prepare and periodically submit resolution plans, also known as “living wills,” that would facilitate their rapid and orderly resolution in the event of material financial distress or failure. Under the rules, rapid and orderly resolution means a reorganization or liquidation of the covered company under the U.S. Bankruptcy Code that can be accomplished in a reasonable period of time and in a manner that substantially mitigates the risk that failure would have serious adverse effects on the financial stability of the United States. In addition to the Company’s resolution plan, our national bank subsidiary, Wells Fargo Bank, N.A. (the “Bank”), is also required to prepare and periodically submit a resolution plan. If the FRB and/or FDIC determine that our resolution plan has deficiencies, they may impose more stringent capital, leverage or liquidity requirements on us or restrict our growth, activities or operations until we adequately remedy the deficiencies. If the FRB and/or FDIC ultimately determine that we have been unable to remedy any deficiencies, they could require us to divest certain assets or operations. On June 29, 2021, we submitted our most recent resolution plan to the FRB and FDIC.

If Wells Fargo were to fail, it may be resolved in a bankruptcy proceeding or, if certain conditions are met, under the resolution regime created by the Dodd-Frank Act known as the “orderly liquidation authority.” The orderly liquidation authority allows for the appointment of the FDIC as receiver for a systemically important financial institution that is in default or in danger of default if, among other things, the resolution of the institution under the U.S. Bankruptcy Code would have serious adverse effects on financial stability in the United States. If the FDIC is appointed as receiver for Wells Fargo & Company (the “Parent”), then the orderly liquidation authority, rather than the U.S. Bankruptcy Code, would determine the powers of the receiver and the rights and obligations of our security holders. The FDIC’s orderly liquidation authority requires that security holders of a company in receivership bear all losses before U.S. taxpayers are exposed to any losses. There are substantial differences in the rights of creditors between the orderly liquidation authority and the U.S. Bankruptcy Code, including the right of the FDIC to disregard the strict priority of creditor claims under the U.S. Bankruptcy Code in certain circumstances and the use of an administrative claims procedure instead of a judicial procedure to determine creditors’ claims.

announced that a single point of entry strategy may be a desirable strategy under its implementation of the orderly liquidation authority, but not all aspects of how the FDIC might exercise this authority are known and additional rulemaking is possible.

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Regulatory Matters (continued)

portfolios or businesses. The Bank must also prepare and periodically submit to the OCC a recovery plan that sets forth the Bank’s plan to remain a going concern when the Bank is experiencing considerable financial or operational stress, but has not yet deteriorated to the point where liquidation or resolution is imminent. If either the FRB or the OCC determines that our recovery plan is deficient, they may impose fines, restrictions on our business or ultimately require us to divest assets.

Other Regulatory Related Matters

◦Consent Orders Discussed in the “Overview” Section in this Report. For a discussion of certain consent orders applicable to the Company, see the “Overview” section in this Report.

•Regulatory Developments Related to COVID-19. In response to the COVID-19 pandemic and related events, federal banking regulators undertook a number of measures to help stabilize the banking sector, support the broader economy, and facilitate the ability of banking organizations like Wells Fargo to continue lending to consumers and businesses. For example, in order to facilitate the Coronavirus Aid, Relief and Economic Security Act (CARES Act), federal banking regulators issued rules designed to encourage financial institutions to participate in stimulus measures, such as the Small Business Administration’s Paycheck Protection Program. Similarly, the FRB launched a number of lending facilities designed to enhance liquidity and the functioning of markets, including facilities covering money market mutual funds and term asset-backed securities loans. Certain of these measures, including the acceptance of applications under the Paycheck Protection Program and the extension of credit under certain FRB lending facilities, ended in 2021. Federal banking regulators also issued rules amending the regulatory capital and TLAC rules and other prudential regulations to temporarily ease certain restrictions on banking organizations and encourage the use of certain FRB-established facilities in order to further promote lending to consumers and businesses.

In addition, the OCC and the FRB issued guidelines for banks and BHCs related to working with customers affected by the COVID-19 pandemic, including guidance with respect to waiving fees, offering repayment accommodations, and providing payment deferrals. Any current or future rules, regulations, and guidance related to the COVID-19 pandemic and its impacts could require us to change certain of our business practices, reduce our revenue and earnings, impose additional costs on us, or otherwise adversely affect our business operations and/or competitive position.

•Regulatory Developments in Response to Climate Change. Federal and state governments and government agencies have demonstrated increased attention to the impacts and potential risks associated with climate change. For example, federal banking regulators are reviewing the implications of climate change on the financial stability of the United States and the identification and management by BHCs of climate-related financial risks. The approaches taken by various governments and government agencies can vary significantly, evolve over time, and sometimes conflict. Any current or future rules, regulations, and guidance related to climate change and its impacts could require us to change certain of our business practices, reduce our revenue and earnings, impose additional costs on us, or otherwise adversely affect our business operations and/or competitive position.

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Critical Accounting Policies

•the allowance for credit losses;

•the valuation of residential MSRs;

•the fair value of financial instruments;

•income taxes;

•liability for contingent litigation losses; and

•goodwill impairment.

Management has discussed these critical accounting policies and the related estimates and judgments with the Board’s Audit Committee.

Allowance for Credit Losses

We maintain an ACL for loans, which is management’s estimate of the expected credit losses in the loan portfolio and unfunded credit commitments, at the balance sheet date, excluding loans and unfunded credit commitments carried at fair value or held for sale. Additionally, we maintain an ACL for debt securities classified as either HTM or AFS, other financial assets measured at amortized cost, net investments in leases, and other off-balance sheet credit exposures. For additional information, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

Changes in the ACL and, therefore, in the related provision for credit losses can materially affect net income. In applying the judgment and review required to determine the ACL, management considerations include the evaluation of past events, historical experience, changes in economic forecasts and conditions, customer behavior, collateral values, the length of the initial loss forecast period, and other influences. From time to time, changes in economic factors or assumptions, business strategy, products or product mix, or debt security investment strategy, may result in a corresponding increase or decrease in our ACL. While our methodology attributes portions of the ACL to specific financial asset classes (loan and debt security portfolios) or loan portfolio segments (commercial and consumer), the entire ACL is available to absorb credit losses of the Company.

Judgment is specifically applied in:

variables are evaluated at the macro-economy level, some economic variables are forecasted at more granular levels, for example, using the metro statistical area (MSA) level for unemployment rates, home prices and commercial real estate prices. Quarterly, we assess the length of the initial loss forecast period and have currently set the period to two years. For the initial loss forecast period, we forecast multiple economic scenarios that generally include a base scenario with an optimistic (upside) and one or more pessimistic (downside) scenarios. Management exercises judgment when assigning weight to the economic scenarios that are used to estimate future credit losses.

•Usage of credit loss estimation models. We use internally developed models that incorporate credit attributes and economic variables to generate estimates of credit losses. Management uses a combination of judgment and quantitative analytics in the determination of segmentation, modeling approach, and variables that are leveraged in the models. These models are validated in accordance with the Company’s policies by an internal model validation group. We routinely assess our model performance and apply adjustments when necessary to improve the accuracy of loss estimation. We also assess our models for limitations against the company-wide risk inventory to help ensure that we appropriately capture known and emerging risks in our estimate of expected credit losses and apply overlays as needed.

•Valuation of collateral. The current fair value of collateral is utilized to assess the expected credit losses when a financial asset is considered to be collateral dependent. We apply judgment when valuing the collateral either through appraisals, evaluation of the cash flows of the property, or other quantitative techniques. Decreases in collateral valuations support incremental charge-downs and increases in collateral valuation are included in the ACL as a negative allowance when the financial asset has been previously written-down below current recovery value.

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Critical Accounting Policies (continued)

options. We also incorporate any scenarios where we reasonably expect to provide an extension through a TDR. Credit card loans have indeterminate maturities, which requires that we determine a contractual life by estimating the application of future payments to the outstanding loan amount.

Sensitivity The ACL for loans is sensitive to changes in key assumptions which requires significant judgment to be used by management. Future amounts of the ACL for loans will be based on a variety of factors, including loan balance changes, portfolio credit quality, and general economic conditions. General economic conditions are forecasted using economic variables, which could have varying impacts on different financial assets or portfolios. Additionally, throughout numerous credit cycles, there are observed changes in economic variables such as the unemployment rate, GDP and real estate prices which may not move in a correlated manner as variables may move in opposite directions or differ across portfolios or geography.

Our sensitivity analysis does not represent management’s view of expected credit losses at the balance sheet date. We applied 100% weight to the downside scenario in our sensitivity analysis to reflect the potential for further economic deterioration from a COVID-19 resurgence. The outcome of the scenario was influenced by the duration, severity, and timing of changes in economic variables within the scenario. The sensitivity analysis resulted in a hypothetical increase in the ACL for loans of approximately $4.4 billion at December 31, 2021. The hypothetical increase in our ACL for loans does not incorporate the impact of management judgment for qualitative factors applied in the current ACL for loans, which may have a positive or negative effect on the results. It is possible that others performing similar sensitivity analyses could reach different conclusions or results.

Valuation of Residential Mortgage Servicing Rights (MSRs)

We carry our MSRs related to residential mortgage loans at fair value. Periodic changes in our residential MSRs and the economic hedges used to hedge our residential MSRs are reflected in earnings.

significant inputs and assumptions generally are not observable in the market and require judgment to determine. If observable market indications do become available, these are factored into the estimates as appropriate:

•The discount rate used to present value estimated future net servicing income. The discount rate is the required rate of return investors in the market would expect for an asset with similar risk. To determine the discount rate, we consider the risk premium for uncertainties in the cash flow estimates such as from servicing operations (e.g., possible changes in future servicing costs, ancillary income and earnings on escrow accounts).

•The expected cost to service loans used to estimate future net servicing income. The cost to service loans includes estimates for unreimbursed expenses, such as delinquency and foreclosure costs, which considers the number of defaulted loans as well as the incremental cost to service loans in default and foreclosure. We use a market participant's view for our estimated cost to service and our actual costs may vary from that estimate.

Both prepayment rate and discount rate assumptions can, and generally will, change quarterly as market conditions and mortgage interest rates change. For example, an increase in either the prepayment rate or discount rate assumption results in a decrease in the fair value of the MSRs, while a decrease in either assumption would result in an increase in the fair value of the MSRs. In recent years, there have been significant market-driven fluctuations in loan prepayment rate and the discount rate. These fluctuations can be rapid and may be significant in the future. Additionally, future regulatory or investor changes in servicing standards, as well as changes in individual state foreclosure legislation or changes in market participant information regarding servicing cost assumptions, may have an impact on our servicing cost assumption and our MSR valuation in future periods. We periodically benchmark our MSR fair value estimate to independent appraisals.

For a description of our valuation and sensitivity of MSRs, see Note 1 (Summary of Significant Accounting Policies), Note 8 (Securitizations and Variable Interest Entities), Note 9 (Mortgage Banking Activities) and Note 17 (Fair Values of Assets and Liabilities) to Financial Statements in this Report.

Fair Value of Financial Instruments

We use fair value measurements to record fair value adjustments to certain financial instruments and to fulfill fair value disclosure requirements. For example, assets and liabilities held for trading purposes, marketable equity securities, AFS debt securities, derivatives and a majority of our LHFS are carried at fair value each period. Other financial instruments, such as certain LHFS, a majority of nonmarketable equity securities, and loans held for investment, are not carried at fair value each period but may require nonrecurring fair value adjustments due to application of lower-of-cost-or-market

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accounting, measurement alternative accounting or write-downs of individual assets. We also disclose our estimate of fair value for financial instruments not recorded at fair value, such as loans held for investment or issuances of long-term debt.

When developing fair value measurements, we maximize the use of observable inputs and minimize the use of unobservable inputs. When available, we use quoted prices in active markets to measure fair value. If quoted prices in active markets are not available, fair value measurement is based upon models that generally use market-based or independently sourced market parameters, including interest rate yield curves, prepayment rates, option volatilities and currency rates. However, when observable market data is limited or not available, fair value estimates are typically determined using internal models based on unobservable inputs. Internal models used to determine fair value are validated in accordance with Company policies by an internal model validation group. Additionally, we use third-party pricing services to obtain fair values, which are used to either record the price of an instrument or to corroborate internal prices. Third-party price validation procedures are performed over the reasonableness of the fair value measurements.

When using internal models based on unobservable inputs, management judgment is necessary as we make judgments about significant assumptions that market participants would use to estimate fair value. Determination of these assumptions includes consideration of many factors, including market conditions and liquidity levels. Changes in the market conditions, such as reduced liquidity in the capital markets or changes in secondary market activities, may reduce the availability and reliability of quoted prices or observable data used to determine fair value. In such cases, it may be appropriate to adjust available quoted prices or observable market data. For example, we may adjust a price received from a third-party pricing service using internal models based on discounted cash flows when the impact of illiquid markets has not already been incorporated in the fair value measurement. Additionally, for certain residential LHFS and certain debt and equity securities where the significant inputs have become unobservable due to illiquid markets and a third-party pricing service is not used, our discounted cash flow model uses a discount rate that reflects what we believe a market participant would require in light of the illiquid market.

and circumstances of each instrument or instrument category and judgments are made regarding the significance of unobservable inputs to each instrument’s fair value measurement in its entirety. If unobservable inputs are considered significant to the fair value measurement, the instrument is classified as Level 3.

Table 48 presents our (1) assets and liabilities recorded at fair value on a recurring basis and (2) Level 3 assets and liabilities recorded at fair value on a recurring basis, both presented as a percentage of our total assets and total liabilities.

Table 48: Fair Value Level 3 Summary

	December 31, 2021		December 31, 2020
($ in billions)	Total balance		Level 3 (1)		Total balance		Level 3 (1)
Assets recorded at fairvalue on a recurring basis	$	348.9			19.6			380.3			21.9
As a percentage of total assets	18	%		1			19			1
Liabilities recorded at fair value on a recurring basis	$	30.1			2.6			39.0			2.0
As a percentage of total liabilities	2	%		*		2			*

*Less than 1%.

(1)Before derivative netting adjustments.

See Note 17 (Fair Values of Assets and Liabilities) to Financial Statements in this Report for a complete discussion on our fair value of financial instruments, our related measurement techniques and the impact to our financial statements.

Income Taxes

We file income tax returns in the jurisdictions in which we operate and evaluate income tax expense in two components: current and deferred income tax expense. Current income tax expense represents our estimated taxes to be paid or refunded for the current period and includes income tax expense related to uncertain tax positions. Uncertain tax positions that meet the more likely than not recognition threshold are measured to determine the amount of benefit to recognize. An uncertain tax position is measured at the largest amount of benefit that management believes has a greater than 50% likelihood of realization upon settlement. Tax benefits not meeting our realization criteria represent unrecognized tax benefits.

Deferred income taxes are based on the balance sheet method and deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Under the balance sheet method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax basis of assets and liabilities, and recognizes enacted changes in tax rates and laws in the period in which they occur. Deferred tax assets are recognized subject to management’s judgment that realization is more likely than not. A valuation allowance reduces deferred tax assets to the realizable amount.

The income tax laws of the jurisdictions in which we operate are complex and subject to different interpretations by management and the relevant government taxing authorities. In establishing a provision for income tax expense, we must make judgments about the application of these inherently complex tax laws. We must also make estimates about when in the future certain items will affect taxable income in the various tax jurisdictions. Our interpretations may be subjected to review during examination by taxing authorities and disputes may arise over the respective tax positions. We attempt to resolve these

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Critical Accounting Policies (continued)

disputes during the tax examination and audit process and ultimately through the court systems when applicable.

See Note 23 (Income Taxes) to Financial Statements in this Report for a further description of our provision for income taxes and related income tax assets and liabilities.

Liability for Contingent Litigation Losses

We apply judgment when establishing an accrual for potential losses associated with legal actions and in establishing the range of reasonably possible losses in excess of the accrual. Our judgment in establishing accruals and the range of reasonably possible losses in excess of the Company’s accrual for probable and estimable losses is influenced by our understanding of information currently available related to the legal evaluation and potential outcome of actions, including input and advice on these matters from our internal counsel, external counsel and senior management. These matters may be in various stages of investigation, discovery or proceedings. They may also involve a wide variety of claims across our businesses, legal entities and jurisdictions. The eventual outcome may be a scenario that was not considered or was considered remote in anticipated occurrence. Accordingly, our estimate of potential losses will change over time and the actual losses may vary significantly.

See Note 15 (Legal Actions) to Financial Statements in this Report for additional information.

Goodwill Impairment

regulators, or company specific factors such as a decline in market capitalization.

We identify reporting units to be assessed for goodwill impairment at the reportable operating segment level or one level below. We calculate reporting unit carrying amounts as allocated capital plus assigned goodwill and other intangible assets. We allocate capital to the reporting units under a risk-sensitive framework driven by our regulatory capital requirements. We estimate fair value of the reporting units based on a balanced weighting of fair values estimated using both an income approach and a market approach and are intended to reflect Company performance and expectations as well as external market conditions. The methodologies for calculating carrying amounts and estimating fair values are periodically assessed by senior management and revised as necessary.

The income approach is a discounted cash flow (DCF) analysis, which estimates the present value of future cash flows associated with each reporting unit. A DCF analysis requires significant judgment to model financial forecasts for our lines of business. Significant assumptions include future expectations of economic conditions and balance sheet changes, and assumptions related to future business activities. The forecasts are reviewed by senior management. For periods after our financial forecasts, we incorporate a terminal value estimate based on an assumed long-term growth rate. We discount these forecasted cash flows using a rate derived from the capital asset pricing model which produces an estimated cost of equity specific to that reporting unit, which reflects risks and uncertainties in the financial markets and in our internally generated business projections.

The market approach utilizes observable market data from comparable publicly traded companies, such as price-to-earnings or price-to-tangible book value ratios, to estimate a reporting unit’s fair value. The results of the market approach include a control premium to represent our expectation of a hypothetical acquisition of the reporting unit. Management uses judgment in the selection of comparable companies and includes those with the most similar business activities.

The aggregate fair value of our reporting units exceeded our market capitalization for our fourth quarter 2021 assessment. Factors that we considered in our assessment and contributed to this difference included: (i) an overall premium that would be paid to gain control of the operating and financial decisions of the Company, (ii) synergies that we believe may not be reflected in the price of the Company’s common stock, (iii) a higher degree of complexity and execution risk at the Company level, compared with the individual reporting unit level, and (iv) risks or benefits at the Company level that may not be reflected in the fair value of the individual reporting units.

Based on our fourth quarter 2021 assessment, there was no impairment of goodwill at December 31, 2021. The fair value of each reporting unit exceeded its carrying amount by a substantial amount.

For additional information on goodwill and our reportable operating segments, see Note 1 (Summary of Significant Accounting Policies), Note 10 (Intangible Assets), and Note 26 (Operating Segments) to Financial Statements in this Report.

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Current Accounting Developments

Table 49 provides the significant accounting updates applicable to us that have been issued by the Financial Accounting Standards Board (FASB) but are not yet effective.

Table 49: Current Accounting Developments – Issued Standards

		Description and Effective Date		Financial statement impact
		ASU 2018-12 – Financial Services – Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts and subsequent related updates
		The Update, effective January 1, 2023, requires market risk benefits (features of insurance contracts that protect the policyholder from other-than-nominal capital market risk and expose the insurer to that risk) to be measured at fair value through earnings with changes in fair value attributable to our own credit risk recognized in other comprehensive income. The Update also requires more frequent updates for insurance assumptions, mandates the use of a standardized discount rate for traditional long-duration contracts, and simplifies the amortization of deferred acquisition costs.		The most significant impact of adoption relates to reinsurance of variable annuity products for a limited number of our insurance clients. Our reinsurance business is no longer entering into new contracts. These variable annuity products contain guaranteed minimum benefits that require us to make benefit payments for the remainder of the policyholder's life once the account values are exhausted. These guaranteed minimum benefits meet the definition of market risk benefits and will be measured at fair value. The cumulative effect of the difference between fair value and the carrying value upon adoption of the Update, net of income tax adjustments and excluding the impact of our own credit risk, will be recognized in the opening balance of retained earnings in the earliest period presented and will affect our regulatory capital calculations. At December 31, 2021, our estimated liability related to these guaranteed minimum benefits was approximately $500 million and was associated with approximately $13.1 billion of policyholder account values. We expect future earnings volatility from changes in the fair value of market risk benefits, which are sensitive to changes in equity and fixed income markets, as well as policyholder behavior and changes in mortality assumptions. We plan to economically hedge the market volatility, where feasible. Changes in the accounting for the liability of future policy benefits for traditional long-duration contracts and deferred acquisition costs are not expected to be material.

Other Accounting Developments

The following Updates are applicable to us but are not expected to have a material impact on our consolidated financial statements:

•ASU 2020-06 – Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity

•ASU 2021-05 – Leases (Topic 842): Lessors – Certain Leases with Variable Lease Payments

•ASU 2021-08 – Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers

•ASU 2021-10 – Government Assistance (Topic 832): Disclosures by Business Entities About Government Assistance

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Forward-Looking Statements

This document contains forward-looking statements. In addition, we may make forward-looking statements in our other documents filed or furnished with the Securities and Exchange Commission, and our management may make forward-looking statements orally to analysts, investors, representatives of the media and others. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “target,” “projects,” “outlook,” “forecast,” “will,” “may,” “could,” “should,” “can” and similar references to future periods. In particular, forward-looking statements include, but are not limited to, statements we make about: (i) the future operating or financial performance of the Company, including our outlook for future growth; (ii) our noninterest expense and efficiency ratio; (iii) future credit quality and performance, including our expectations regarding future loan losses, our allowance for credit losses, and the economic scenarios considered to develop the allowance; (iv) our expectations regarding net interest income and net interest margin; (v) loan growth or the reduction or mitigation of risk in our loan portfolios; (vi) future capital or liquidity levels, ratios or targets; (vii) the performance of our mortgage business and any related exposures; (viii) the expected outcome and impact of legal, regulatory and legislative developments, as well as our expectations regarding compliance therewith; (ix) future common stock dividends, common share repurchases and other uses of capital; (x) our targeted range for return on assets, return on equity, and return on tangible common equity; (xi) expectations regarding our effective income tax rate; (xii) the outcome of contingencies, such as legal proceedings; (xiii) environmental, social and governance related goals or commitments; and (xiv) the Company’s plans, objectives and strategies.

•the effect of the COVID-19 pandemic, including on our credit quality and business operations, as well as its impact on general economic and financial market conditions;

•current, pending or future legislation or regulation that could have a negative effect on our revenue and businesses,

including rules and regulations relating to bank products and financial services;

•significant turbulence or a disruption in the capital or financial markets, which could result in, among other things, reduced investor demand for mortgage loans, a reduction in the availability of funding or increased funding costs, and declines in asset values and/or recognition of impairments of securities held in our debt securities and equity securities portfolios;

•the effect of a fall in stock market prices on our investment banking business and our fee income from our brokerage and wealth management businesses;

•negative effects from the retail banking sales practices matter and from other instances where customers may have experienced financial harm, including on our legal, operational and compliance costs, our ability to engage in certain business activities or offer certain products or services, our ability to keep and attract customers, our ability to attract and retain qualified employees, and our reputation;

•a failure in or breach of our operational or security systems or infrastructure, or those of our third-party vendors or other service providers, including as a result of cyber attacks;

•the effect of changes in the level of checking or savings account deposits on our funding costs and net interest margin;

•fiscal and monetary policies of the Federal Reserve Board;

•changes to U.S. tax guidance and regulations, as well as the effect of discrete items on our effective income tax rate;

•our ability to develop and execute effective business plans and strategies; and

•the other risk factors and uncertainties described under “Risk Factors” in this Report.

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requirements (including under Basel capital standards), common stock issuance requirements, applicable law and regulations (including federal securities laws and federal banking regulations), and other factors deemed relevant by the Company’s Board of Directors, and may be subject to regulatory approval or conditions.

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