WELLS FARGO & COMPANY/MN (WFC) FY 2025 MD&A

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%.

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.

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.

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

NM – Not meaningful

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

Overview (continued)

Table 2: Ratios and Per Common Share Data

(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.

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

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)

(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.

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

(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.

Earnings Performance (continued)

Noninterest Income

Table 6: Noninterest Income

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.

Noninterest Expense

Table 7: Noninterest Expense

(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

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.

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.

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

(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.

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

(continued on following page)

(continued from previous page)

(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.

Earnings Performance (continued)

Table 9b: Consumer Banking and Lending – Balance Sheet

(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.

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