WELLS FARGO & COMPANY/MN0000072971false2022Q112/31NYSE5.85% Fixed-to-Floating Rate Non-Cumulative Perpetual Class A Preferred Stock, Series Q6.625% Fixed-to-Floating Rate Non-Cumulative Perpetual Class A Preferred Stock, Series R1.66661.6666http://fasb.org/us-gaap/2021-01-31#OtherAssetshttp://fasb.org/us-gaap/2021-01-31#OtherAssetshttp://fasb.org/us-gaap/2021-01-31#OtherLiabilitieshttp://fasb.org/us-gaap/2021-01-31#OtherLiabilities0.108110.691.6800.3340.7481.4600.5095.65.65.61.14.02.62.03.32.88.08.08.0If issued, preference shares would be limited to one vote per sharenilnil0000072971wfc:NonmarketableEquitySecuritiesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:MarketApproachValuationTechniqueMemberwfc:MeasurementInputMultiplesMember2021-12-310000072971us-gaap:LongTermDebtMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:ForeignExchangeContractMemberus-gaap:FairValueHedgingMember2023-03-310000072971us-gaap:DebtSecuritiesMemberus-gaap:SecuritiesAssetsMemberwfc:NonconformingMortgageLoanSecuritizationMemberus-gaap:VariableInterestEntityNotPrimaryBeneficiaryMemberwfc:ExcludingResecuritizationMember2022-12-31

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended March 31, ~~2022~~2023


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

For the transition period from __________ to __________

Commission file number 001-2979

WELLS FARGO & COMPANY

(Exact name of registrant as specified in its charter)

Delaware

No.

41-0449260

(State of incorporation)

(I.R.S. Employer Identification No.)

420 Montgomery Street, San Francisco, California 94104

(Address of principal executive offices) (Zip code)

Registrant’s telephone number, including area code: 1-866-249-3302

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, par value $1-2/3	WFC	New York Stock Exchange (NYSE)
7.5% Non-Cumulative Perpetual Convertible Class A Preferred Stock, Series L	WFC.PRL	NYSE
Depositary Shares, each representing a 1/1000th interest in a share of 5.85% Fixed-to-Floating Rate Non-Cumulative Perpetual Class A Preferred Stock, Series Q	WFC.PRQ	NYSE
Depositary Shares, each representing a 1/1000th interest in a share of 6.625% Fixed-to-Floating Rate Non-Cumulative Perpetual Class A Preferred Stock, Series R	WFC.PRR	NYSE
Depositary Shares, each representing a 1/1000th interest in a share of Non-Cumulative Perpetual Class A Preferred Stock, Series Y	WFC.PRY	NYSE
Depositary Shares, each representing a 1/1000th interest in a share of Non-Cumulative Perpetual Class A Preferred Stock, Series Z	WFC.PRZ	NYSE
Depositary Shares, each representing a 1/1000th interest in a share of Non-Cumulative Perpetual Class A Preferred Stock, Series AA	WFC.PRA	NYSE
Depositary Shares, each representing a 1/1000th interest in a share of Non-Cumulative Perpetual Class A Preferred Stock, Series CC	WFC.PRC	NYSE
Depositary Shares, each representing a 1/1000th interest in a share of Non-Cumulative Perpetual Class A Preferred Stock, Series DD	WFC.PRD	NYSE
Guarantee of Medium-Term Notes, Series A, due October 30, 2028 of Wells Fargo Finance LLC	WFC/28A	NYSE

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer þ Accelerated filer ¨

Non-accelerated filer ¨ Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


						Shares Outstanding
						April ~~22, 2022~~21, 2023
Common stock, $1-2/3 par value						~~3,790,352,243~~3,752,223,519


FORM 10-Q	FORM 10-Q					FORM 10-Q
CROSS-REFERENCE INDEX	CROSS-REFERENCE INDEX					CROSS-REFERENCE INDEX
PART I	PART I	Financial Information				PART I	Financial Information
Item 1.	Item 1.	Financial Statements			Page	Item 1.	Financial Statements			Page
		Consolidated Statement of Income			59
		Consolidated Statement of Comprehensive Income			60
		Consolidated Balance Sheet			61		Consolidated Statement of Income			56
		Consolidated Statement of Changes in Equity			62		Consolidated Statement of Comprehensive Income			57
		Consolidated Statement of Cash Flows			63		Consolidated Balance Sheet			58
		Notes to Financial Statements					Consolidated Statement of Changes in Equity			59
		1	—	Summary of Significant Accounting Policies	64		Consolidated Statement of Cash Flows			60
		2	—	Trading Activities	66		Notes to Financial Statements
		3	—	Available-for-Sale and Held-to-Maturity Debt Securities	67		1	—	Summary of Significant Accounting Policies	61
		4	—	Loans and Related Allowance for Credit Losses	73		2	—	Trading Activities	64
		5	—	Leasing Activity	88		3	—	Available-for-Sale and Held-to-Maturity Debt Securities	65
		6	—	Equity Securities	89		4	—	Equity Securities	71
		7	—	Other Assets	91		5	—	Loans and Related Allowance for Credit Losses	73
		8	—	Securitizations and Variable Interest Entities	92		6	—	Mortgage Banking Activities	87
		9	—	Mortgage Banking Activities	97		7	—	Intangible Assets and Other Assets	89
		10	—	Intangible Assets	99		8	—	Leasing Activity	90
		11	—	Guarantees and Other Commitments	100		9	—	Preferred Stock	91
		12	—	Pledged Assets and Collateral	102		10	—	Legal Actions	92
		13	—	Legal Actions	105		11	—	Derivatives	94
		14	—	Derivatives	108		12	—	Fair Values of Assets and Liabilities	101
		15	—	Fair Values of Assets and Liabilities	115		13	—	Securitizations and Variable Interest Entities	109
		16	—	Preferred Stock	122		14	—	Guarantees and Other Commitments	114
		17	—	Revenue from Contracts with Customers	124		15	—	Pledged Assets and Collateral	116
		18	—	Employee Benefits and Other Expenses	125		16	—	Operating Segments	119
		19	—	Restructuring Charges	126		17	—	Revenue and Expenses	121
		20	—	Earnings and Dividends Per Common Share	127		18	—	Employee Benefits	122
		21	—	Other Comprehensive Income	128		19	—	Earnings and Dividends Per Common Share	123
		22	—	Operating Segments	130		20	—	Other Comprehensive Income	124
		23	—	Regulatory Capital Requirements and Other Restrictions	132		21	—	Regulatory Capital Requirements and Other Restrictions	126
Item 2.	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations (Financial Review)				Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations (Financial Review)
		Summary Financial Data			2		Summary Financial Data			2
		Overview			3		Overview			3
		Earnings Performance			6		Earnings Performance			6
		Balance Sheet Analysis			23		Balance Sheet Analysis			23
		Off-Balance Sheet Arrangements			26		Off-Balance Sheet Arrangements			25
		Risk Management			27		Risk Management			26
		Capital Management			46		Capital Management			43
		Regulatory Matters			52		Regulatory Matters			49
		Critical Accounting Policies			53		Critical Accounting Policies			50
		Current Accounting Developments			54		Current Accounting Developments			51
		Forward-Looking Statements			55		Forward-Looking Statements			52
		Risk Factors			57		Risk Factors			54
		Glossary of Acronyms			134		Glossary of Acronyms			128
Item 3.	Item 3.	Quantitative and Qualitative Disclosures About Market Risk			40	Item 3.	Quantitative and Qualitative Disclosures About Market Risk			37
Item 4.	Item 4.	Controls and Procedures			58	Item 4.	Controls and Procedures			55

PART II	PART II	Other Information				PART II	Other Information
Item 1.	Item 1.	Legal Proceedings			135	Item 1.	Legal Proceedings			129
Item 1A.	Item 1A.	Risk Factors			135	Item 1A.	Risk Factors			129
Item 2.	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds			135	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds			129
Item 6.	Item 6.	Exhibits			136	Item 6.	Exhibits			130

Signature	Signature				137	Signature				131


			Wells Fargo & Company			1

FINANCIAL REVIEW

Summary Financial Data
Quarter ended Mar 31, 2022
% Change from
($ in millions, except per share amounts) Mar 31,
2022 Dec 31,
2021 Mar 31,
2021 Dec 31,
2021 Mar 31,
2021
Selected Income Statement Data
Total revenue $ 17,592 20,856 18,532 (16) % (5)
Noninterest expense 13,870 13,198 13,989 5 (1)
Pre-tax pre-provision profit (PTPP) (1) 3,722 7,658 4,543 (51) (18)
Provision for credit losses (787) (452) (1,048) (74) 25
Wells Fargo net income 3,671 5,750 4,636 (36) (21)
Wells Fargo net income applicable to common stock 3,393 5,470 4,256 (38) (20)
Common Share Data
Diluted earnings per common share 0.88 1.38 1.02 (36) (14)
Dividends declared per common share 0.25 0.20 0.10 25 150
Common shares outstanding 3,789.9 3,885.8 4,141.1 (2) (8)
Average common shares outstanding 3,831.1 3,927.6 4,141.3 (2) (7)
Diluted average common shares outstanding 3,868.9 3,964.7 4,171.0 (2) (7)
Book value per common share (2) $ 42.21 43.32 40.27 (3) 5
Tangible book value per common share (2)(3) 35.13 36.35 33.49 (3) 5
Selected Equity Data (period-end)
Total equity 181,689 190,110 188,034 (4) (3)
Common stockholders’ equity 159,968 168,331 166,748 (5) (4)
Tangible common equity (3) 133,144 141,254 138,702 (6) (4)
Performance Ratios
Return on average assets (ROA) (4) 0.78 % 1.17 0.97
Return on average equity (ROE) (5) 8.4 12.8 10.3
Return on average tangible common equity (ROTCE) (3) 10.0 15.3 12.4
Efficiency ratio (6) 79 63 75
Net interest margin on a taxable-equivalent basis 2.16 2.11 2.05
Selected Balance Sheet Data (average)
Loans $ 898,005 875,036 873,439 3 3
Assets 1,919,392 1,943,430 1,934,425 (1) (1)
Deposits 1,464,072 1,470,027 1,393,472 — 5
Selected Balance Sheet Data (period-end)
Debt securities 535,916 537,531 505,826 — 6
Loans 911,807 895,394 861,572 2 6
Allowance for credit losses for loans 12,681 13,788 18,043 (8) (30)
Equity securities 70,755 72,886 57,702 (3) 23
Assets 1,939,709 1,948,068 1,957,264 — (1)
Deposits 1,481,354 1,482,479 1,437,119 — 3
Headcount (#) (period-end) 246,577 249,435 264,513 (1) (7)
Capital and other metrics
Risk-based capital ratios and components (7):
Standardized Approach:
Common equity tier 1 (CET1) 10.45 % 11.35 11.85
Tier 1 capital 11.96 12.89 13.54
Total capital 14.72 15.84 16.75
Risk-weighted assets (RWAs) (in billions) $ 1,265.5 1,239.0 1,179.0 2 7
Advanced Approach:
Common equity tier 1 (CET1) 11.82 % 12.60 12.60
Tier 1 capital 13.52 14.31 14.39
Total capital 15.87 16.72 16.92
Risk-weighted assets (RWAs) (in billions) $ 1,119.5 1,116.1 1,109.4 — 1
Tier 1 leverage ratio 8.00 % 8.34 8.36
Supplementary Leverage Ratio (SLR) 6.61 6.89 7.91
Total Loss Absorbing Capacity (TLAC) Ratio (8) 22.31 23.03 25.18
Liquidity Coverage Ratio (LCR) (9) 119 118 127

~~NM – Not meaningful~~


Summary Financial Data (1)
	Quarter ended					Mar 31, 2023 % Change from
($ in millions, except per share amounts)	Mar 31, 2023			Dec 31, 2022	Mar 31, 2022	Dec 31, 2022		Mar 31, 2022
Selected Income Statement Data
Total revenue	$	20,729		20,034	17,728	3	%	17
Noninterest expense	13,676			16,186	13,851	(16)		(1)
Pre-tax pre-provision profit (PTPP) (2)	7,053			3,848	3,877	83		82
Provision for credit losses (3)	1,207			957	(787)	26		253
Wells Fargo net income	4,991			3,155	3,788	58		32
Wells Fargo net income applicable to common stock	4,713			2,877	3,509	64		34
Common Share Data
Diluted earnings per common share	1.23			0.75	0.91	64		35
Dividends declared per common share	0.30			0.30	0.25	—		20
Common shares outstanding	3,763.2			3,833.8	3,789.9	(2)		(1)
Average common shares outstanding	3,785.6			3,799.9	3,831.1	—		(1)
Diluted average common shares outstanding	3,818.7			3,832.7	3,868.9	—		(1)
Book value per common share (4)	$	43.02		41.98	42.18	2		2
Tangible book value per common share (4)(5)	35.87			34.98	35.11	3		2
Selected Equity Data (period-end)
Total equity	183,220			182,213	181,597	1		1
Common stockholders’ equity	161,893			160,952	159,876	1		1
Tangible common equity (5)	134,992			134,090	133,052	1		1
Performance Ratios
Return on average assets (ROA) (6)	1.09		%	0.67	0.80
Return on average equity (ROE) (7)	11.7			7.1	8.7
Return on average tangible common equity (ROTCE) (5)	14.0			8.5	10.4
Efficiency ratio (8)	66			81	78
Net interest margin on a taxable-equivalent basis	3.20			3.14	2.16
Selected Balance Sheet Data (average)
Loans	$	948,651		948,517	898,005	—		6
Assets	1,863,676			1,875,191	1,919,397	(1)		(3)
Deposits	1,356,694			1,380,459	1,464,072	(2)		(7)
Selected Balance Sheet Data (period-end)
Debt securities	511,597			496,808	535,916	3		(5)
Loans	947,991			955,871	911,807	(1)		4
Allowance for credit losses for loans	13,705			13,609	12,681	1		8
Equity securities	60,610			64,414	70,755	(6)		(14)
Assets	1,886,400			1,881,020	1,939,709	—		(3)
Deposits	1,362,629			1,383,985	1,481,354	(2)		(8)

Headcount (#) (period-end)	235,591			238,698	246,577	(1)		(4)
Capital and Other Metrics
Risk-based capital ratios and components (9):
Standardized Approach:
Common equity Tier 1 (CET1)	10.81		%	10.60	10.45
Tier 1 capital	12.34			12.11	11.96
Total capital	15.09			14.82	14.72
Risk-weighted assets (RWAs) (in billions)	$	1,243.8		1,259.9	1,265.5	(1)		(2)
Advanced Approach:
Common equity Tier 1 (CET1)	12.03		%	12.00	11.82
Tier 1 capital	13.73			13.72	13.52
Total capital	15.92			15.94	15.87
Risk-weighted assets (RWAs) (in billions)	$	1,117.9		1,112.3	1,119.5	1		—
Tier 1 leverage ratio	8.36		%	8.26	8.00
Supplementary Leverage Ratio (SLR)	6.96			6.86	6.61
Total Loss Absorbing Capacity (TLAC) Ratio (10)	23.34			23.27	22.31
Liquidity Coverage Ratio (LCR) (11)	122			122	119

(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)Pre-tax pre-provision profit (PTPP) is total revenue less noninterest expense. Management believes that PTPP is a useful financial measure because it enables investors and others to assess the Company’s ability to generate capital to cover credit losses through a credit cycle.

~~(2)~~(3)Includes provision for credit losses for loans, debt securities, and interest-earning deposits with banks.

(4)Book value per common share is common stockholders’ equity divided by common shares outstanding. Tangible book value per common share is tangible common equity divided by common shares outstanding.

~~(3)~~(5)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 and tangible book value per common share, which utilize tangible common equity, are useful financial measures because they enable 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)~~(6)Represents Wells Fargo net income divided by average assets.

~~(5)~~(7)Represents Wells Fargo net income applicable to common stock divided by average common stockholders’ equity.

~~(6)~~(8)The efficiency ratio is noninterest expense divided by total revenue (net interest income and noninterest income).

~~(7)~~(9)For additional information, see the “Capital Management” section and Note 2321 (Regulatory Capital Requirements and Other Restrictions) to Financial Statements in this Report.

~~(8)~~(10)Represents TLAC divided by RWAs, which is our binding TLAC ratio, determined by using the greater of RWAs under the Standardized and Advanced Approaches.

~~(9)~~(11)Represents average high-quality liquid assets divided by average projected net cash outflows, as each is defined under the LCR rule.


2			Wells Fargo & Company

This Quarterly Report, including the Financial Review and the Financial Statements and related Notes, contains forward-looking statements, which may include forecasts of our financial results and condition, expectations for our operations and business, and our assumptions for those forecasts and expectations. Do not unduly rely on forward-looking statements. Actual results may differ materially from our forward-looking statements due to several factors. Factors that could cause our actual results to differ materially from our forward-looking statements are described in this Report, including in the “Forward-Looking Statements” section, and in the “Risk Factors” and “Regulation and Supervision” sections of our Annual Report on Form 10-K for the year ended December 31, ~~2021 (2021~~2022 (2022 Form 10-K).

When we refer to “Wells Fargo,” “the Company,” “we,” “our,” or “us” in this Report, we mean Wells Fargo & Company and Subsidiaries (consolidated). When we refer to the “Parent,” we mean Wells Fargo & Company. See the ~~Glossary~~“Glossary of ~~Acronyms~~Acronyms” for definitions of terms used throughout this Report.

Financial Review


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. 3741 on Fortune’s ~~2021~~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 March 31, ~~2022.~~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, 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 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. 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

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 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.

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 (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 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. 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

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~~


			Wells Fargo & Company			3

Overview (continued)

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 ~~and Other Customer Remediation Activities~~

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.

For additional information regarding retail sales practices matters, including related legal and regulatory risk, see the “Risk Factors” section in our 2022 Form 10-K.

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,~~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 ~~retail sales practices matters and other customer remediation~~these activities, including related legal and regulatory risk, see the “Risk Factors” section in our ~~2021~~2022 Form ~~10-K and Note 13 (Legal Actions) to Financial Statements in this Report.~~

10-K.

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. Additionally, the Federal Reserve, the OCC and the Federal Deposit Insurance Corporation (FDIC) have issued guidance strongly encouraging banking organizations to cease using USD LIBOR as a reference rate in new contracts.

~~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.

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~~the Secured Overnight Financing Rate (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 became effective on February 27, 2023. We expect that the LIBOR Act will ~~allow for the~~ transition of certain of our ~~commercial credit facilities and other~~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.

In preparation for the cessation of USD LIBOR on a representative basis, we no longer offer new contracts referencing LIBOR, subject to limited exceptions based on regulatory guidance. We also continue to execute our LIBOR transition activities to enhance our operational readiness.

For certain contracts, including commercial credit facilities and related derivatives, we continue to proactively engage with our clients and contract parties to replace ~~LIBOR.~~LIBOR with SOFR-based rates or other alternative reference rates in advance of the June 30, 2023 transition 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 on the amounts of certain of our LIBOR-linked contracts, as well as our transition plans for these contracts, see the “Overview – Recent Developments – LIBOR Transition” section in our 2021 Form 10-K. 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 our ~~2021~~2022 Form 10-K.

Financial Performance

Adoption of Accounting Standards Update 2018-12

In first quarter 2023, we adopted FASB ASU 2018-12 – Financial Services – Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts. The most significant impact of adoption related to reinsurance of variable annuity products for a limited number of our insurance clients. 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 policyholder's account values are exhausted. Our reinsurance business is no longer entering into new contracts. The ASU requires these guaranteed minimum benefits (referred to as market risk benefits) to be measured at fair value through earnings (recognized in other noninterest income), except for changes in fair value attributable to our own credit risk, which are recognized in other comprehensive income.

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.


4			Wells Fargo & Company


Consolidated Financial Highlights
	Quarter ended Mar 31,
($ in millions)		2023		2022	$ Change	% Change
Selected income statement data
Net interest income		$	13,336	9,221	4,115	45	%
Noninterest income		7,393		8,507	(1,114)	(13)
Total revenue		20,729		17,728	3,001	17
Net charge-offs		564		305	259	85
Change in the allowance for credit losses		643		(1,092)	1,735	159
Provision for credit losses (1)		1,207		(787)	1,994	253
Noninterest expense		13,676		13,851	(175)	(1)
Income tax expense		966		746	220	29
Wells Fargo net income		4,991		3,788	1,203	32
Wells Fargo net income applicable to common stock		4,713		3,509	1,204	34

~~Financial Performance~~(1)
Consolidated Financial Highlights
Quarter ended Mar 31,
($ in millions) 2022 2021 $ Change % Change
Selected income statement data
Net interest income $ 9,221 8,808 413 5 %
Noninterest income 8,371 9,724 (1,353) (14)
Total revenue 17,592 18,532 (940) (5)
Net charge-offs 305 523 (218) (42)
Change in the allowance for credit losses (1,092) (1,571) 479 30
Provision for credit losses (787) (1,048) 261 25
Noninterest expense 13,870 13,989 (119) (1)
Income tax expense 707 901 (194) (22)
Wells Fargo net income 3,671 4,636 (965) (21)
Wells Fargo net income applicable to common stock 3,393 4,256 (863) (20)
Includes provision for credit losses for loans, debt securities, and interest-earning deposits with banks.

In first quarter ~~2022,~~2023, we generated ~~$3.7~~$5.0 billion of net income and diluted earnings per common share (EPS) of ~~$0.88,~~$1.23, compared with ~~$4.6~~$3.8 billion of net income and diluted EPS of ~~$1.02~~$0.91 in the same period a year ago. Financial performance for first quarter ~~2022,~~2023, compared with the same period a year ago, included the following:

•total revenue ~~decreased~~increased due to ~~lower mortgage banking income, other~~higher net interest income and ~~investment advisory and other asset-based fee income,~~higher net gains from trading activities, partially offset by ~~higher~~lower net ~~interest~~gains from equity securities and lower mortgage banking income;

•provision for credit losses reflected ~~lower net charge-offs, reduced uncertainty around the economic impact of the COVID-19 pandemic on our loan portfolios,~~increases for commercial real estate loans, primarily office loans, as well as for credit card and ~~increased uncertainty related to the risks of high inflation;~~auto loans;

•noninterest expense decreased due to lower ~~personnel expense, professional and outside services expense, and other expense,~~operating losses, partially offset by higher ~~operating losses;~~personnel expense;

•average loans increased ~~due to~~driven by loan growth inacross both our commercial ~~credit card~~ and ~~auto loans, partially offset by a decrease in residential mortgage loans as paydowns exceeded originations;~~consumer loan portfolios; and

•average deposits ~~increased~~decreased driven by ~~growth~~reductions in ~~the Consumer Banking and Lending, Commercial Banking, and Wealth and Investment Management (WIM)~~all operating segments, ~~due to higher levels of liquidity and savings for consumer and commercial customers,~~ partially offset by ~~actions taken to manage under the asset cap which reduced deposits~~growth in ~~the Corporate and Investment Banking operating segment and~~ Corporate.

Capital and Liquidity

We maintained a strong capital position in first quarter ~~2022, with total~~2023. Total equity of ~~$181.7~~$183.2 billion at March 31, ~~2022,~~2023, increased compared with ~~$190.1~~$182.2 billion at December 31, ~~2021.~~2022. Our liquidity and regulatory capital ratios remained strong at March 31, ~~2022,~~2023, including:

•our Common Equity Tier 1 (CET1) ratio was ~~10.45%~~10.81% under the Standardized Approach (our binding ratio), which continued to exceed the regulatory ~~requirement~~minimum and buffers of ~~9.10%~~9.20%;

•our total loss absorbing capacity (TLAC) as a percentage of total risk-weighted assets was ~~22.31%~~23.34%, compared with the regulatory ~~requirement~~minimum of 21.50%; and

•our liquidity coverage ratio (LCR) was ~~119%~~122%, 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 ~~$12.7~~$13.7 billion at March 31, ~~2022, decreased $1.1 billion~~2023, increased $96 million from December 31, ~~2021.~~2022.

•Our provision for credit losses for loans was ~~$(775) million~~$1.1 billion in first quarter ~~2022, up from $(1.1) billion~~2023, compared with $(775) million in the same period a year ago. The ACL for loans and the provision for credit losses for loans reflected ~~lower net charge-offs, reduced uncertainty around the economic impact of the COVID-19 pandemic on our loan portfolios,~~increases for commercial real estate loans, primarily office loans, as well as for credit card and ~~increased uncertainty related to the risks of high inflation.~~auto loans.

•The allowance coverage for total loans was ~~1.39%~~1.45% at March 31, ~~2022,~~2023, compared with ~~1.54%~~1.42% at December 31, ~~2021.~~2022.

•Commercial portfolio net loan charge-offs were ~~$(29)~~$63 million, or ~~(2)~~5 basis points of average commercial loans, in first quarter ~~2022,~~2023, compared with net loan charge-offs of ~~$149~~$(29) million, or 13 basis points, in the same period a year ago, due to lower losses in our commercial and industrial portfolio driven by higher recoveries in the oil, gas and pipeline industry, and lower losses in our real estate mortgage portfolio.

•~~Consumer portfolio net loan charge-offs were $334 million, or 35 basis points of average consumer loans, in first quarter 2022, compared with net loan charge-offs of $364 million, or 37~~(2) basis points, in the same period a year ago, driven by ~~lower~~higher losses across all commercial portfolios, primarily in our commercial and industrial portfolio.

•Consumer portfolio net loan charge-offs were $541 million, or 56 basis points of average consumer loans, in first quarter 2023, compared with net loan charge-offs of $334 million, or 35 basis points, in the same period a year ago, driven by higher losses in all consumer portfolios, primarily in our credit card ~~and other consumer portfolios, partially offset by higher losses in our auto loan~~ portfolio.

•Nonperforming assets (NPAs) of ~~$7.0~~$6.1 billion at March 31, ~~2022, decreased $323~~2023, increased $379 million, or 4%7%, from December 31, ~~2021,~~2022, driven by ~~decreases in all~~higher commercial real estate nonaccrual ~~loan portfolios,~~loans, partially offset by ~~increases in our~~lower residential mortgage nonaccrual ~~loans primarily resulting from certain customers exiting COVID-19 accommodation programs.~~loans. NPAs represented ~~0.77%~~0.65% of total loans at March 31, ~~2022.~~

2023.


			Wells Fargo & Company			5


Earnings Performance

Wells Fargo net income for first quarter ~~2022~~2023 was ~~$3.7~~$5.0 billion ($~~0.88~~1.23 diluted EPS), compared with ~~$4.6~~$3.8 billion ($~~1.02~~0.91 diluted EPS) in the same period a year ago. Net income ~~decreased~~increased in first quarter ~~2022,~~2023, compared with the same period a year ago, predominantly due to a ~~$1.4~~$4.1 billion ~~decrease~~increase in ~~noninterest~~net interest income, partially offset by a ~~$413 million~~$2.0 billion increase in ~~net interest~~provision for credit losses and a $1.1 billion decrease in noninterest income.

Net Interest Income

Net interest income and net interest margin increased in first quarter ~~2022,~~2023, compared with the same period a year ago, due to the impact of higher interest rates on earning assets, higher loan balances, and lower mortgage-backed securities (MBS) premium amortization, ~~lower costs and balances of long-term debt, and higher loan balances,~~ partially offset by ~~lower~~higher expenses for interest ~~income from loans purchased from securitization pools~~bearing deposits and ~~Paycheck Protection Program (PPP) loans~~long-term debt. ~~Inter~~est income from PPP loans was $49 million in first quarter 2022, compared with $102 million in the same period a year ago. Additionally, interest income associated with loans we purchased from Government National Mortgage Association (GNMA) loan securitization pools was $221 million in first quarter 2022, compared with $263 million in the same period a year ago. 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 1 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 1 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 March 31, ~~2022~~2023 and ~~2021.~~2022.

For additional information about net interest income and net interest margin, see the “Earnings Performance – Net Interest Income” section in our ~~2021~~2022 Form 10-K.


6			Wells Fargo & Company

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


		Quarter ended March 31,													Quarter ended March 31,
						2022						2021							2023						2022
(in millions)	(in millions)	Average balance		Interest income/ expense		Interest rates		Average balance		Interest income/ expense		Interest rates		(in millions)	Average balance		Interest income/ expense		Interest rates		Average balance		Interest income/ expense		Interest rates
Assets	Assets													Assets
Interest-earning deposits with banks	Interest-earning deposits with banks	$	179,051	96		0.22	%	$	223,437	57		0.10	%	Interest-earning deposits with banks	$	114,858	1,167		4.12	%	$	179,051	96		0.22	%
Federal funds sold and securities purchased under resale agreements	Federal funds sold and securities purchased under resale agreements	64,845		(9)		(0.05)		72,148		7		0.04		Federal funds sold and securities purchased under resale agreements	68,633		696		4.12		64,845		(9)		(0.05)
Debt securities:	Debt securities:													Debt securities:
Trading debt securities	Trading debt securities	90,677		553		2.44		87,383		534		2.45		Trading debt securities	96,405		801		3.33		90,677		553		2.44
Available-for-sale debt securities	Available-for-sale debt securities	169,048		723		1.72		206,946		841		1.63		Available-for-sale debt securities	145,894		1,282		3.54		169,048		723		1.72
Held-to-maturity debt securities	Held-to-maturity debt securities	279,245		1,379		1.98		216,826		1,027		1.90		Held-to-maturity debt securities	279,955		1,780		2.55		279,245		1,379		1.98
Total debt securities	Total debt securities	538,970		2,655		1.97		511,155		2,402		1.89		Total debt securities	522,254		3,863		2.97		538,970		2,655		1.97
Loans held for sale (2)	Loans held for sale (2)	19,513		140		2.86		34,554		331		3.85		Loans held for sale (2)	6,611		97		5.90		19,513		140		2.86
Loans:	Loans:													Loans:
Commercial loans:
Commercial and industrial – U.S.	Commercial and industrial – U.S.	276,070		1,700		2.50		252,892		1,596		2.56		Commercial and industrial – U.S.	307,176		4,772		6.30		276,070		1,700		2.50
Commercial and industrial – Non-U.S.	Commercial and industrial – Non-U.S.	77,759		403		2.10		65,419		338		2.10		Commercial and industrial – Non-U.S.	76,101		1,134		6.04		77,759		403		2.10
Real estate mortgage		127,464		833		2.65		120,734		812		2.73
Real estate construction		20,259		165		3.31		21,755		166		3.10
Commercial real estate mortgage														Commercial real estate mortgage	130,845		1,949		6.04		127,464		833		2.65
Commercial real estate construction														Commercial real estate construction	24,229		438		7.33		20,259		165		3.31
Lease financing	Lease financing	14,586		155		4.24		15,799		184		4.62		Lease financing	14,832		172		4.63		14,586		155		4.24
Total commercial loans	Total commercial loans	516,138		3,256		2.56		476,599		3,096		2.63		Total commercial loans	553,183		8,465		6.20		516,138		3,256		2.56
Consumer loans:
Residential mortgage – first lien	Residential mortgage – first lien	242,883		1,907		3.14		266,251		2,068		3.11		Residential mortgage – first lien	255,018		2,088		3.28		242,883		1,907		3.14
Residential mortgage – junior lien	Residential mortgage – junior lien	16,017		165		4.17		22,321		228		4.13		Residential mortgage – junior lien	12,966		210		6.53		16,017		165		4.17
Credit card	Credit card	38,164		1,065		11.32		35,205		1,033		11.90		Credit card	45,842		1,440		12.74		38,164		1,065		11.32
Auto	Auto	56,701		584		4.17		48,680		560		4.66		Auto	53,065		597		4.56		56,701		584		4.17
Other consumer	Other consumer	28,102		256		3.69		24,383		233		3.87		Other consumer	28,577		545		7.74		28,102		256		3.69
Total consumer loans	Total consumer loans	381,867		3,977		4.20		396,840		4,122		4.18		Total consumer loans	395,468		4,880		4.98		381,867		3,977		4.20
Total loans (2)	Total loans (2)	898,005		7,233		3.25		873,439		7,218		3.34		Total loans (2)	948,651		13,345		5.69		898,005		7,233		3.25
Equity securities	Equity securities	33,282		170		2.05		29,434		137		1.87		Equity securities	28,651		170		2.39		33,282		170		2.05
Other	Other	11,498		3		0.12		9,498		1		0.03		Other	11,043		125		4.60		11,498		3		0.12
Total interest-earning assets	Total interest-earning assets	$	1,745,164	10,288		2.38	%	$	1,753,665	10,153		2.33	%	Total interest-earning assets	$	1,700,701	19,463		4.62	%	$	1,745,164	10,288		2.38	%
Cash and due from banks	Cash and due from banks	24,976		—				24,598		—				Cash and due from banks	28,147		—				24,976		—
Goodwill	Goodwill	25,180		—				26,383		—				Goodwill	25,173		—				25,180		—
Other	Other	124,072		—				129,779		—				Other	109,655		—				124,077		—
Total noninterest-earning assets	Total noninterest-earning assets	$	174,228	—				180,760		—				Total noninterest-earning assets	$	162,975	—				174,233		—
Total assets	Total assets	$	1,919,392	10,288				1,934,425		10,153				Total assets	$	1,863,676	19,463				1,919,397		10,288
Liabilities	Liabilities													Liabilities
Deposits:	Deposits:													Deposits:
Demand deposits	Demand deposits	$	455,350	38		0.03	%	$	444,764	33		0.03	%	Demand deposits	$	420,835	1,379		1.33	%	$	455,350	38		0.03	%
Savings deposits	Savings deposits	440,680		24		0.02		411,596		32		0.03		Savings deposits	402,285		547		0.55		440,680		24		0.02
Time deposits	Time deposits	27,849		19		0.28		44,025		47		0.43		Time deposits	78,866		725		3.72		27,849		19		0.28
Deposits in non-U.S. offices	Deposits in non-U.S. offices	21,456		2		0.03		30,731		—		0.01		Deposits in non-U.S. offices	18,240		110		2.45		21,456		2		0.03
Total interest-bearing deposits	Total interest-bearing deposits	945,335		83		0.04		931,116		112		0.05		Total interest-bearing deposits	920,226		2,761		1.22		945,335		83		0.04
Short-term borrowings:	Short-term borrowings:													Short-term borrowings:
Federal funds purchased and securities sold under agreements to repurchase	Federal funds purchased and securities sold under agreements to repurchase	20,431		(3)		(0.05)		47,357		2		—		Federal funds purchased and securities sold under agreements to repurchase	39,235		416		4.30		20,431		(3)		(0.05)
Other short-term borrowings	Other short-term borrowings	12,327		(11)		(0.36)		11,725		(11)		(0.37)		Other short-term borrowings	19,261		154		3.25		12,327		(11)		(0.36)
Total short-term borrowings	Total short-term borrowings	32,758		(14)		(0.17)		59,082		(9)		(0.06)		Total short-term borrowings	58,496		570		3.95		32,758		(14)		(0.17)
Long-term debt	Long-term debt	153,803		761		1.98		198,340		1,026		2.07		Long-term debt	172,567		2,511		5.83		153,803		761		1.98
Other liabilities	Other liabilities	31,092		130		1.68		28,875		109		1.50		Other liabilities	33,427		178		2.16		31,092		130		1.68
Total interest-bearing liabilities	Total interest-bearing liabilities	$	1,162,988	960		0.33	%	$	1,217,413	1,238		0.41	%	Total interest-bearing liabilities	$	1,184,716	6,020		2.05	%	$	1,162,988	960		0.33	%
Noninterest-bearing demand deposits	Noninterest-bearing demand deposits	518,737		—				462,356		—				Noninterest-bearing demand deposits	436,468		—				518,737		—
Other noninterest-bearing liabilities	Other noninterest-bearing liabilities	51,330		—				65,582		—				Other noninterest-bearing liabilities	58,195		—				51,555		—
Total noninterest-bearing liabilities	Total noninterest-bearing liabilities	$	570,067	—				527,938		—				Total noninterest-bearing liabilities	$	494,663	—				570,292		—
Total liabilities	Total liabilities	$	1,733,055	960				1,745,351		1,238				Total liabilities	$	1,679,379	6,020				1,733,280		960
Total equity	Total equity	186,337		—				189,074		—				Total equity	184,297		—				186,117		—
Total liabilities and equity	Total liabilities and equity	$	1,919,392	960				1,934,425		1,238				Total liabilities and equity	$	1,863,676	6,020				1,919,397		960

Interest rate spread on a taxable-equivalent basis (3)	Interest rate spread on a taxable-equivalent basis (3)					2.05	%					1.92	%	Interest rate spread on a taxable-equivalent basis (3)					2.57	%					2.05	%
Net interest margin and net interest income on a taxable-equivalent basis (3)	Net interest margin and net interest income on a taxable-equivalent basis (3)			$	9,328	2.16	%			$	8,915	2.05	%	Net interest margin and net interest income on a taxable-equivalent basis (3)			$	13,443	3.20	%			$	9,328	2.16	%

(1)The average balance amounts represent amortized ~~costs.~~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. 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 $107 million ~~for~~in both quarters ended March 31, ~~2022~~2023 and ~~2021,~~2022, predominantly related to tax-exempt income on certain loans and securities.


			Wells Fargo & Company			7

Earnings Performance (continued)

Noninterest Income

Table 2: Noninterest Income


		Quarter ended Mar 31,									Quarter ended Mar 31,
(in millions)	(in millions)		2022		2021	$ Change	% Change			(in millions)			2023			2022		$ Change		% Change
Deposit-related fees	Deposit-related fees		$	1,473	1,255	218	17	%		Deposit-related fees			$	1,148		1,473		(325)		(22)	%
Lending-related fees	Lending-related fees		342		361	(19)	(5)			Lending-related fees			356			342		14		4
Investment advisory and other asset-based fees	Investment advisory and other asset-based fees		2,498		2,756	(258)	(9)			Investment advisory and other asset-based fees			2,114			2,498		(384)		(15)
Commissions and brokerage services fees	Commissions and brokerage services fees		537		636	(99)	(16)			Commissions and brokerage services fees			619			537		82		15
Investment banking fees	Investment banking fees		447		568	(121)	(21)			Investment banking fees			326			447		(121)		(27)
Card fees	Card fees		1,029		949	80	8			Card fees			1,033			1,029		4		—
Net servicing income	Net servicing income		154		(99)	253	256			Net servicing income			112			154		(42)		(27)
Net gains on mortgage loan originations/sales	Net gains on mortgage loan originations/sales		539		1,425	(886)	(62)			Net gains on mortgage loan originations/sales			120			539		(419)		(78)
Mortgage banking	Mortgage banking		693		1,326	(633)	(48)			Mortgage banking			232			693		(461)		(67)
Net gains from trading activities	Net gains from trading activities		218		348	(130)	(37)			Net gains from trading activities			1,342			218		1,124		516
Net gains from debt securities	Net gains from debt securities		2		151	(149)	(99)			Net gains from debt securities			—			2		(2)		(100)
Net gains from equity securities			576		392	184	47
Net gains (losses) from equity securities									Net gains (losses) from equity securities			(357)			576		(933)		NM
Lease income	Lease income		327		315	12	4			Lease income			347			327		20		6
Other	Other		229		667	(438)	(66)			Other			233			365		(132)		(36)
Total	Total		$	8,371	9,724	(1,353)	(14)			Total			$	7,393		8,507		(1,114)		(13)

NM – Not meaningful

First quarter ~~2022~~2023 vs. first quarter ~~2021~~2022

Deposit-related fees ~~increased~~decreased reflecting:

•the elimination of non-sufficient funds fees and our efforts to help customers avoid overdraft fees; and

•lower fees on commercial accounts driven by ~~lower fee waivers and reversals as first quarter 2021 included various accommodations~~a higher earnings credit rate due to ~~support customers during the COVID-19 pandemic, as well as other temporary fee waivers.~~

~~In January 2022, we announced enhancements and changes to help our consumer customers avoid overdraft-related fees, which we began to implement~~an increase in ~~March 2022. We expect this will lower certain deposit-related fees for the remainder of 2022.~~interest rates.

Investment advisory and other asset-based fees decreased ~~reflecting:~~

•reflecting lower ~~asset-based and trust fees due to divestitures in fourth quarter 2021;~~

~~partially offset by:~~

•~~higher~~average market ~~valuations on WIM advisory assets.~~valuations.

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.

Commissions and brokerage services fees ~~decreased driven by lower transactional revenue.~~increased due to higher service fee rates.

Investment banking fees decreased ~~driven by lower debt and equity underwriting fees as a result of~~due to lower market activity.

~~Card fees~~ ~~increased reflecting higher interchange fees, net of rewards, driven by increased purchase and transaction volumes.~~

Net servicing income ~~increased reflecting:~~decreased driven by:

•lower servicing fees due to a lower balance of mortgage loans serviced for others;

partially offset by:

•lower amortization of the fair value mortgage servicing right (MSR) due to lower prepayment rates driven by increases in interest ~~rates; and~~

•~~lower unreimbursed servicing costs due to fewer payoffs and favorable recoveries from loss mitigation activities;~~

~~partially offset by:~~

•~~lower contractually specified servicing fees due to a lower balance of loans serviced for others.~~rates.

Net gains on mortgage loan originations/sales decreased

driven by:

•lower residential mortgage ~~held for sale (HFS)~~ origination ~~volumes and lower margins~~volume driven by our exit from the correspondent business in ~~our retail and correspondent production channels;~~first quarter 2023; and

•~~a shift~~lower gains related to the resecuritization of loans we purchased from Government National Mortgage Association (GNMA) loan securitization pools.

In first quarter 2023, we executed letters of intent to sell MSRs on approximately $50 billion of loans serviced for others that we expect to close later this year. These expected sales have been considered in ~~production to more correspondent loans, which have a lower production margin compared with retail loans.~~

the valuation of our MSRs.

For additional information on servicing income and net gains on mortgage loan originations/sales, see Note 96 (Mortgage Banking Activities) to Financial Statements in this Report.

Net gains from trading activities ~~decreased reflecting:~~

•~~lower trading activity in residential mortgage-backed securities and high yield products;~~

~~partially offset by:~~

•increased driven by higher ~~foreign exchange, rates, and commodities~~ trading ~~revenue.~~results across all asset classes.

Net gains ~~from debt securities~~ ~~decreased due to lower gains on sales of agency mortgage-backed securities (MBS) as a result of decreased sales volumes~~.

~~Net gains~~(losses) from equity securities ~~increased~~decreased reflecting:

•~~higher~~ unrealized ~~gains~~losses on nonmarketable equity securities driven by our affiliated venture capital and private equity businesses; and

•~~higher~~lower realized gains on the sales of equity ~~securities;~~securities driven by our affiliated venture capital and private equity businesses.

~~partially offset by:~~

•O~~higher impairment~~ther income decreased driven by the change in fair value of ~~equity securities.~~liabilities associated with our reinsurance business, which was recognized as a result of our adoption of ASU 2018-12. For additional information on our adoption of ASU 2018-12, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.


8			Wells Fargo & Company

O~~ther income~~ ~~decreased~~ ~~due to:~~

•~~a gain on the sale of a portion of our student loan portfolio in first quarter 2021;~~

•~~higher losses due to growth in wind energy investments (offset by benefits and credits in income tax expense); and~~

•~~lower gains on the sales of certain residential mortgage loans which were reclassified to HFS.~~

Noninterest Expense

Table 3: Noninterest Expense


		Quarter ended Mar 31,								Quarter ended Mar 31,
(in millions)	(in millions)		2022		2021	$ Change	% Change		(in millions)		2023		2022	$ Change	% Change
Personnel	Personnel		$	9,271	9,558	(287)	(3)	%	Personnel		$	9,415	9,271	144	2	%
Technology, telecommunications and equipment	Technology, telecommunications and equipment		876		844	32	4		Technology, telecommunications and equipment		922		876	46	5
Occupancy	Occupancy		722		770	(48)	(6)		Occupancy		713		722	(9)	(1)
Operating losses	Operating losses		673		213	460	216		Operating losses		267		673	(406)	(60)
Professional and outside services	Professional and outside services		1,286		1,388	(102)	(7)		Professional and outside services		1,229		1,286	(57)	(4)
Leases (1)	Leases (1)		188		226	(38)	(17)		Leases (1)		177		188	(11)	(6)
Advertising and promotion	Advertising and promotion		99		90	9	10		Advertising and promotion		154		99	55	56
Restructuring charges	Restructuring charges		5		13	(8)	(62)		Restructuring charges		—		5	(5)	(100)
Other	Other		750		887	(137)	(15)		Other		799		731	68	9
Total	Total		$	13,870	13,989	(119)	(1)		Total		$	13,676	13,851	(175)	(1)

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

First quarter ~~2022~~2023 vs. first quarter ~~2021~~

2022

Personnel expense ~~decreased~~increased driven by:

•~~lower~~higher salaries ~~as a result of reduced headcount driven by efficiency initiatives~~expense; and ~~divestitures; and~~

•higher severance expense;

partially offset by:

•lower incentive compensation ~~expense.~~expense; and

•the impact of efficiency initiatives.

~~Occupancy~~Technology, telecommunications and equipment expense ~~decreased driven by efficiency initiatives.~~increased due to higher expense for the amortization of internally developed software.

Operating losses ~~increased~~decreased driven by ~~higher~~lower expense for customer remediation ~~expense related to expansions of the population of affected customers, remediation payments, and/or remediation time frames predominantly for a variety of historical~~and litigation 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~~Advertising and promotion expense ~~decreased driven by lower depreciation expense from a reduction in the size of our operating lease asset portfolio.~~increased due to higher marketing and brand campaign volumes.

Other ~~expenses~~expense ~~decreased~~increased due to higher Federal Deposit Insurance Corporation (FDIC) deposit assessment expense driven ~~by:~~by a higher assessment rate.

•We expect our FDIC deposit assessment expense will further increase as a ~~write-down~~result of ~~goodwill in first quarter 2021 related~~the FDIC's announcement to recover by special assessment losses to the ~~sale~~FDIC deposit insurance fund as a result of ~~a portion of our student loan portfolio, and~~

•~~lower donation expense due to the donation of PPP processing fees in first quarter 2021;~~

~~partially offset by:~~

•~~higher pension plan settlement expense.~~recent bank failures.

Income Tax Expense

Table 4:Income Tax Expense



	Quarter ended Mar 31,
(in millions)		2023			2022	$ Change	% Change
Income before income tax expense		$	5,846		4,664	1,182	25	%
Income tax expense		966			746	220	29
Effective income tax rate (1)		16.2		%	16.5

(1)Represents Income tax expense ~~was $707 million in first quarter 2022, compared with $901 million in the same period a year ago, driven~~(benefit) divided by ~~lower pre-tax income and net discrete~~Income (loss) before income tax ~~benefits primarily related~~expense (benefit) less Net income (loss) from noncontrolling interests.

For additional information on income taxes, see Note 22 (Income Taxes) to ~~stock-based compensation. Theeffective income tax rate was 16.1% for first quarter~~Financial Statements in our 2022 ~~compared with 16.3% for the same period a year ago.~~Form 10-K.


			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. For additional information, see Table 4.5. 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 bywith our Chief Executive Officer and ~~Operating Committee.~~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 ~~revenues~~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.

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 revised. 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 4:5: 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


10			Wells Fargo & Company

Table 56 and the following discussion present our results by reportable operating segment. For additional information, see Note 2216 (Operating Segments) to Financial Statements in this Report.

Table 5:6: Operating Segment Results – Highlights


(in millions)	(in millions)	Consumer Banking and Lending		Commercial Banking	Corporate and Investment Banking	Wealth and Investment Management	Corporate (1)	Reconciling Items (2)	Consolidated Company	(in millions)	Consumer Banking and Lending		Commercial Banking	Corporate and Investment Banking	Wealth and Investment Management	Corporate (1)	Reconciling Items (2)	Consolidated Company
Quarter ended March 31, 2022
Net interest income		$	5,996	1,361	1,990	799	(818)	(107)	9,221
Noninterest income		2,567		966	1,480	2,958	806	(406)	8,371
Total revenue		8,563		2,327	3,470	3,757	(12)	(513)	17,592
Provision for credit losses		(190)		(344)	(196)	(37)	(20)	—	(787)
Noninterest expense		6,395		1,531	1,983	3,175	786	—	13,870
Income (loss) before income tax expense (benefit)		2,358		1,140	1,683	619	(778)	(513)	4,509
Income tax expense (benefit)		588		280	425	154	(227)	(513)	707
Net income (loss) before noncontrolling interests		1,770		860	1,258	465	(551)	—	3,802
Less: Net income from noncontrolling interests		—		3	—	—	128	—	131
Net income (loss)		$	1,770	857	1,258	465	(679)	—	3,671
Quarter ended March 31, 2021
Net interest income		$	5,615	1,254	1,779	657	(390)	(107)	8,808
Noninterest income		3,039		827	1,825	2,887	1,417	(271)	9,724
Total revenue		8,654		2,081	3,604	3,544	1,027	(378)	18,532
Provision for credit losses		(419)		(399)	(284)	(43)	97	—	(1,048)
Noninterest expense		6,267		1,630	1,833	3,028	1,231	—	13,989
Income (loss) before income tax expense (benefit)		2,806		850	2,055	559	(301)	(378)	5,591
Income tax expense (benefit)		702		212	500	140	(275)	(378)	901
Net income (loss) before noncontrolling interests		2,104		638	1,555	419	(26)	—	4,690
Less: Net income from noncontrolling interests		—		1	—	—	53	—	54
Net income (loss)		$	2,104	637	1,555	419	(79)	—	4,636

Quarter ended March 31, 2023										Quarter ended March 31, 2023
Net interest income										Net interest income	$	7,433	2,489	2,461	1,044	16	(107)	13,336
Noninterest income										Noninterest income	1,931		818	2,441	2,637	5	(439)	7,393
Total revenue										Total revenue	9,364		3,307	4,902	3,681	21	(546)	20,729
Provision for credit losses										Provision for credit losses	867		(43)	252	11	120	—	1,207
Noninterest expense										Noninterest expense	6,038		1,752	2,217	3,061	608	—	13,676
Income (loss) before income tax expense (benefit)										Income (loss) before income tax expense (benefit)	2,459		1,598	2,433	609	(707)	(546)	5,846
Income tax expense (benefit)										Income tax expense (benefit)	618		399	615	152	(272)	(546)	966
Net income (loss) before noncontrolling interests										Net income (loss) before noncontrolling interests	1,841		1,199	1,818	457	(435)	—	4,880
Less: Net income (loss) from noncontrolling interests										Less: Net income (loss) from noncontrolling interests	—		3	—	—	(114)	—	(111)
Net income (loss)										Net income (loss)	$	1,841	1,196	1,818	457	(321)	—	4,991
Quarter ended March 31, 2022										Quarter ended March 31, 2022
Net interest income										Net interest income	$	5,996	1,361	1,990	799	(818)	(107)	9,221
Noninterest income										Noninterest income	2,567		966	1,480	2,958	942	(406)	8,507
Total revenue										Total revenue	8,563		2,327	3,470	3,757	124	(513)	17,728
Provision for credit losses										Provision for credit losses	(190)		(344)	(196)	(37)	(20)	—	(787)
Noninterest expense										Noninterest expense	6,395		1,531	1,983	3,175	767	—	13,851
Income (loss) before income tax expense (benefit)										Income (loss) before income tax expense (benefit)	2,358		1,140	1,683	619	(623)	(513)	4,664
Income tax expense (benefit)										Income tax expense (benefit)	588		280	425	154	(188)	(513)	746
Net income (loss) before noncontrolling interests										Net income (loss) before noncontrolling interests	1,770		860	1,258	465	(435)	—	3,918
Less: Net income from noncontrolling interests										Less: Net income from noncontrolling interests	—		3	—	—	127	—	130
Net income (loss)										Net income (loss)	$	1,770	857	1,258	465	(562)	—	3,788

(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.


			Wells Fargo & Company			11

Earnings Performance (continued)

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 5a6a and Table 5b6b provide additional information for Consumer Banking and Lending.

Table ~~5a:~~6a: Consumer Banking and Lending – Income Statement and Selected Metrics

Quarter ended Mar 31,
($ in millions, unless otherwise noted) 2022 2021 $ Change % Change
Income Statement
Net interest income $ 5,996 5,615 381 7 %
Noninterest income:
Deposit-related fees 845 661 184 28
Card fees 961 892 69 8
Mortgage banking 654 1,259 (605) (48)
Other 107 227 (120) (53)
Total noninterest income 2,567 3,039 (472) (16)
Total revenue 8,563 8,654 (91) (1)
Net charge-offs 375 370 5 1
Change in the allowance for credit losses (565) (789) 224 28
Provision for credit losses (190) (419) 229 55
Noninterest expense 6,395 6,267 128 2
Income before income tax expense 2,358 2,806 (448) (16)
Income tax expense 588 702 (114) (16)
Net income $ 1,770 2,104 (334) (16)
Revenue by Line of Business
Consumer and Small Business Banking $ 5,071 4,550 521 11
Consumer Lending:
Home Lending 1,490 2,227 (737) (33)
Credit Card (1) 1,265 1,188 77 6
Auto 444 403 41 10
Personal Lending (1) 293 286 7 2
Total revenue $ 8,563 8,654 (91) (1)
Selected Metrics
Consumer Banking and Lending:
Return on allocated capital (2) 14.4 % 17.2
Efficiency ratio (3) 75 72
Headcount (#) (period-end) 113,273 123,547 (8)
Retail bank branches (#) 4,705 4,944 (5)
Digital active customers (# in millions) (4) 33.7 32.9 2
Mobile active customers (# in millions) (4) 27.8 26.7 4
Consumer and Small Business Banking:
Deposit spread (5) 1.6 % 1.6
Debit card purchase volume ($ in billions) (6) $ 115.0 108.5 6.5 6
Debit card purchase transactions (# in millions) (6) 2,338 2,266 3


	Quarter ended Mar 31,
($ in millions, unless otherwise noted)	2023			2022	$ Change	% Change
Income Statement
Net interest income	$	7,433		5,996	1,437	24	%
Noninterest income:
Deposit-related fees	672			845	(173)	(20)
Card fees	958			961	(3)	—
Mortgage banking	160			654	(494)	(76)
Other	141			107	34	32
Total noninterest income	1,931			2,567	(636)	(25)
Total revenue	9,364			8,563	801	9
Net charge-offs	589			375	214	57
Change in the allowance for credit losses	278			(565)	843	149
Provision for credit losses	867			(190)	1,057	556
Noninterest expense	6,038			6,395	(357)	(6)
Income before income tax expense	2,459			2,358	101	4
Income tax expense	618			588	30	5
Net income	$	1,841		1,770	71	4
Revenue by Line of Business
Consumer and Small Business Banking	$	6,486		5,071	1,415	28
Consumer Lending:
Home Lending	863			1,490	(627)	(42)
Credit Card	1,305			1,265	40	3
Auto	392			444	(52)	(12)
Personal Lending	318			293	25	9
Total revenue	$	9,364		8,563	801	9

Selected Metrics
Consumer Banking and Lending:
Return on allocated capital (1)	16.5		%	14.4
Efficiency ratio (2)	64			75

Retail bank branches (#)	4,525			4,705		(4)
Digital active customers (# in millions) (3)	34.3			33.7		2
Mobile active customers (# in millions) (3)	28.8			27.8		4

Consumer and Small Business Banking:
Deposit spread (4)	2.5		%	1.6
Debit card purchase volume ($ in billions) (5)	$	117.3		115.0	2.3	2
Debit card purchase transactions (# in millions) (5)	2,369			2,338		1

(continued on following page)


12			Wells Fargo & Company

(continued from previous page)

Quarter ended Mar 31,
($ in millions, unless otherwise noted) 2022 2021 $ Change % Change
Home Lending:
Mortgage banking:
Net servicing income $ 116 (123) 239 194 %
Net gains on mortgage loan originations/sales 538 1,382 (844) (61)
Total mortgage banking $ 654 1,259 (605) (48)
Originations ($ in billions):
Retail $ 24.1 33.6 (9.5) (28)
Correspondent 13.8 18.2 (4.4) (24)
Total originations $ 37.9 51.8 (13.9) (27)
% of originations held for sale (HFS) 51.4 % 75.8
Third-party mortgage loans serviced (period-end)($ in billions) (7) $ 704.2 801.0 (96.8) (12)
Mortgage servicing rights (MSR) carrying value (period-end) 8,511 7,536 975 13
Ratio of MSR carrying value (period-end) to third-party mortgage loans serviced (period-end) (7) 1.21 % 0.94
Home lending loans 30+ days delinquency rate (8)(9)(10) 0.29 0.56
Credit Card: (1)
Point of sale (POS) volume ($ in billions) $ 26.0 19.6 6.4 33
New accounts (# in thousands) 484 266 82
Credit card loans 30+ days delinquency rate (10) 1.58 % 2.13
Auto:
Auto originations ($ in billions) $ 7.3 7.0 0.3 4
Auto loans 30+ days delinquency rate (9)(10) 1.68 % 1.22
Personal Lending: (1)
New volume ($ in billions) $ 2.6 1.9 0.7 37

~~NM – Not meaningful~~


	Quarter ended Mar 31,
($ in millions, unless otherwise noted)	2023			2022	$ Change	% Change
Home Lending:
Mortgage banking:
Net servicing income	$	84		116	(32)	(28)	%
Net gains on mortgage loan originations/sales	76			538	(462)	(86)
Total mortgage banking	$	160		654	(494)	(76)

Originations ($ in billions):
Retail	$	5.6		24.1	(18.5)	(77)
Correspondent	1.0			13.8	(12.8)	(93)
Total originations	$	6.6		37.9	(31.3)	(83)

% of originations held for sale (HFS)	46.8		%	51.4
Third-party mortgage loans serviced (period-end) ($ in billions) (6)	$	666.8		704.2	(37.4)	(5)
Mortgage servicing rights (MSR) carrying value (period-end)	8,819			8,511	308	4
Ratio of MSR carrying value (period-end) to third-party mortgage loans serviced (period-end) (6)	1.32		%	1.21
Home lending loans 30+ days delinquency rate (7)(8)	0.26			0.29


Credit Card:
Point of sale (POS) volume ($ in billions)	$	30.1		26.0	4.1	16
New accounts (# in thousands)	567			484		17
Credit card loans 30+ days delinquency rate	2.26		%	1.58
Credit card loans 90+ days delinquency rate	1.16			0.78

Auto:
Auto originations ($ in billions)	$	5.0		7.3	(2.3)	(32)
Auto loans 30+ days delinquency rate (8)	2.25		%	1.68


Personal Lending:
New volume ($ in billions)	$	2.9		2.6	0.3	12

(1)~~In first quarter 2022, we transferred our Retail Services business from Credit Card to Personal Lending. Prior period balances have been revised to conform with the current period presentation.~~

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

~~(4)~~(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.

~~(5)~~(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.

~~(6)~~(5)Debit card purchase volume and transactions reflect combined activity for both consumer and business debit card purchases.

~~(7)~~(6)Excludes residential mortgage loans subserviced for others.

~~(8)~~(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.

~~(9)~~(8)Excludes nonaccrual loans.

~~(10)~~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.

First quarter ~~2022~~2023 vs. first quarter ~~2021~~2022

Revenue ~~decreased~~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 ~~HFS~~ origination volumes and ~~margins, partially offset by higher servicing income;~~lower revenue related to the resecuritization of loans we purchased from GNMA loan securitization pools; and

•lower ~~other income driven by lower gains on the sales of certain residential mortgage loans which were reclassified to held for sale;~~

~~partially offset by:~~

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

•~~higher~~ deposit-related fees ~~primarily~~ reflecting ~~lower fee waivers~~ the elimination of non-sufficient funds fees and ~~reversals as first quarter 2021 included various accommodations~~our efforts to ~~support~~help customers ~~during the COVID-19 pandemic, as well as other temporary fee waivers; and~~

•avoid overdraft fees~~higher card fees reflecting higher interchange fees, net of rewards, driven by increased purchase and transaction volumes.~~.

Provision for credit losses ~~reflected reduced uncertainty around~~included a $843 million increase in the allowance for credit losses reflecting a less favorable economic ~~impact of the COVID-19 pandemic on our loan portfolios~~outlook and ~~increased uncertainty related to the risks of high inflation.~~

portfolio credit normalization, as well as higher net charge-offs.

Noninterest expense ~~increased~~decreased driven by:

•~~higher~~lower operating losses ~~due to higher~~reflecting lower expense for customer remediation ~~expense related to expansions of the population of affected customers, remediation payments, and/or remediation time frames predominantly for a variety of historical~~and litigation matters; and

~~partially offset by:~~

•lower personnel expense driven by lower ~~branch and operations staffing expense related to efficiency initiatives in Consumer and Small Business Banking, as well as lower~~ revenue-related incentive compensation in Home ~~Lending;~~Lending due to lower production, and the impact of efficiency initiatives;

partially offset by:

•~~lower occupancy expense and professional and outside services expense related to efficiency initiatives; and~~

•~~lower donation expense due to the donation of PPP processing fees in first quarter 2021.~~higher operating costs.


			Wells Fargo & Company			13

Earnings Performance (continued)

Table ~~5b:~~6b: Consumer Banking and Lending – Balance Sheet

Quarter ended Mar 31,
(in millions) 2022 2021 $ Change % Change
Selected Balance Sheet Data (average)
Loans by Line of Business:
Consumer and Small Business Banking (1) $ 10,605 20,137 (9,532) (47) %
Consumer Lending:
Home Lending 213,714 243,036 (29,322) (12)
Credit Card (2) 31,503 28,891 2,612 9
Auto 57,278 49,518 7,760 16
Personal Lending (2) 11,955 11,499 456 4
Total loans $ 325,055 353,081 (28,026) (8)
Total deposits (1) 881,339 789,439 91,900 12
Allocated capital 48,000 48,000 — —
Selected Balance Sheet Data (period-end)
Loans by Line of Business:
Consumer and Small Business Banking (1) $ 11,006 20,820 (9,814) (47)
Consumer Lending:
Home Lending 215,858 230,478 (14,620) (6)
Credit Card (2) 31,974 28,035 3,939 14
Auto 57,652 50,007 7,645 15
Personal Lending (2) 12,068 11,209 859 8
Total loans $ 328,558 340,549 (11,991) (4)
Total deposits (1) 909,896 837,765 72,131 9

~~(1)~~In first quarter 2022, we prospectively transferred certain customer accounts from the Commercial Banking operating segment to Small Business Banking in the Consumer Banking and Lending operating segment.

~~(2)In first quarter 2022, we transferred our Retail Services business from Credit Card to Personal Lending. Prior period balances have been revised to conform with the current period presentation.~~


	Quarter ended Mar 31,
(in millions)	2023		2022	$ Change	% Change
Selected Balance Sheet Data (average)
Loans by Line of Business:
Consumer and Small Business Banking	$	9,363	10,605	(1,242)	(12)	%
Consumer Lending:
Home Lending	222,561		213,714	8,847	4
Credit Card	38,190		31,503	6,687	21
Auto	53,676		57,278	(3,602)	(6)
Personal Lending	14,518		11,955	2,563	21
Total loans	$	338,308	325,055	13,253	4
Total deposits	841,265		881,339	(40,074)	(5)
Allocated capital	44,000		48,000	(4,000)	(8)

Selected Balance Sheet Data (period-end)
Loans by Line of Business:
Consumer and Small Business Banking	$	9,457	11,006	(1,549)	(14)
Consumer Lending:
Home Lending	222,012		215,858	6,154	3
Credit Card	38,201		31,974	6,227	19
Auto	53,244		57,652	(4,408)	(8)
Personal Lending	14,597		12,068	2,529	21
Total loans	$	337,511	328,558	8,953	3
Total deposits	851,304		909,896	(58,592)	(6)

First quarter ~~2022~~2023 vs. first quarter ~~2021~~2022

Total loans ~~(average)~~(average and period-end) ~~decreased as paydowns exceeded originations~~increased driven by:

•higher loan balances in Home Lending;

•the impact of new products and higher customer purchase volume in our ~~Home~~Credit Card business; and

•higher origination volumes 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 Paycheck Protection Program loans in Consumer and Small Business Banking businesses, partially offset by originations exceeding paydowns in our Auto and Credit Card businesses. Home Lending loan balances were impacted by the resecuritization of loans we purchased from GNMA loan securitization pools, as well as actions taken to suspend home equity originations. Consumer and Small Business Banking loan balances were impacted by a decline in PPP loans.Banking.

Total deposits (average and period-end) ~~increased driven by~~decreased due to continued consumer spending and lower servicing escrow deposits, as well as customers continuing to reallocate cash into higher ~~levels of customer liquidity and savings reflecting an improved economic environment.~~yielding alternatives.


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 5c6c and Table 5d6d provide additional information for Commercial Banking.

Table ~~5c:~~6c: Commercial Banking – Income Statement and Selected Metrics

Quarter ended Mar 31,
($ in millions) 2022 2021 $ Change % Change
Income Statement
Net interest income $ 1,361 1,254 107 9 %
Noninterest income:
Deposit-related fees 328 317 11 3
Lending-related fees 121 136 (15) (11)
Lease income 179 174 5 3
Other 338 200 138 69
Total noninterest income 966 827 139 17
Total revenue 2,327 2,081 246 12
Net charge-offs (29) 39 (68) NM
Change in the allowance for credit losses (315) (438) 123 28
Provision for credit losses (344) (399) 55 14
Noninterest expense 1,531 1,630 (99) (6)
Income before income tax expense 1,140 850 290 34
Income tax expense 280 212 68 32
Less: Net income from noncontrolling interests 3 1 2 200
Net income $ 857 637 220 35
Revenue by Line of Business
Middle Market Banking $ 1,246 1,159 87 8
Asset-Based Lending and Leasing 1,081 922 159 17
Total revenue $ 2,327 2,081 246 12
Revenue by Product
Lending and leasing $ 1,255 1,202 53 4
Treasury management and payments 779 721 58 8
Other 293 158 135 85
Total revenue $ 2,327 2,081 246 12
Selected Metrics
Return on allocated capital 16.9 % 12.3
Efficiency ratio 66 78
Headcount (#) (period-end) 17,360 20,486 (15)

~~NM – Not meaningful~~


	Quarter ended Mar 31,
($ in millions)	2023			2022	$ Change	% Change
Income Statement
Net interest income	$	2,489		1,361	1,128	83	%
Noninterest income:
Deposit-related fees	236			328	(92)	(28)
Lending-related fees	129			121	8	7
Lease income	169			179	(10)	(6)
Other	284			338	(54)	(16)
Total noninterest income	818			966	(148)	(15)
Total revenue	3,307			2,327	980	42
Net charge-offs	(39)			(29)	(10)	(34)
Change in the allowance for credit losses	(4)			(315)	311	99
Provision for credit losses	(43)			(344)	301	88
Noninterest expense	1,752			1,531	221	14
Income (loss) before income tax expense (benefit)	1,598			1,140	458	40
Income tax expense	399			280	119	43
Less: Net income from noncontrolling interests	3			3	—	—
Net income	$	1,196		857	339	40

Revenue by Line of Business
Middle Market Banking	$	2,155		1,246	909	73
Asset-Based Lending and Leasing	1,152			1,081	71	7
Total revenue	$	3,307		2,327	980	42

Revenue by Product
Lending and leasing	$	1,324		1,255	69	5
Treasury management and payments	1,562			779	783	101
Other	421			293	128	44
Total revenue	$	3,307		2,327	980	42

Selected Metrics
Return on allocated capital	18.1		%	16.9
Efficiency ratio	53			66

First quarter ~~2022~~2023 vs. first quarter ~~2021~~2022

Revenue increased driven by:

•higher net interest income reflecting higher interest rates and deposit spreads as well as higher loan ~~and deposit~~ balances;

partially offset by:

•lower deposit-related fees driven by the impact of higher earnings credit rates, which result in lower fees for commercial customers; and

•~~higher~~lower other noninterest income ~~due to higher unrealized~~driven by lower net gains onfrom equity ~~securities and higher income from renewable energy investments.~~securities.

Provision for credit losses reflected ~~lower net charge-offs, reduced uncertainty around the economic impact of the COVID-19 pandemic on our~~ loan ~~portfolios, and increased uncertainty related to the risks of high inflation.~~growth.

Noninterest expense ~~decreased~~increased driven ~~by:~~

•~~lower spending due to efficiency initiatives, including lower~~by higher operating costs and personnel expense, ~~from reduced headcount, as well as lower occupancy expense;~~

•~~lower lease expense driven~~partially offset by ~~lower depreciation expense from a reduction in~~ the ~~size~~impact of ~~our operating lease asset portfolio; and~~

•~~lower operating losses due to lower litigation expense and customer remediation expense.~~

efficiency initiatives.


			Wells Fargo & Company			15

Earnings Performance (continued)

Table ~~5d:~~6d: Commercial Banking – Balance Sheet

Quarter ended Mar 31,
(in millions) 2022 2021 $ Change % Change
Selected Balance Sheet Data (average)
Loans:
Commercial and industrial (1) $ 135,792 120,929 14,863 12 %
Commercial real estate (1) 45,053 48,574 (3,521) (7)
Lease financing and other 13,550 13,640 (90) (1)
Total loans $ 194,395 183,143 11,252 6
Loans by Line of Business:
Middle Market Banking (1) $ 108,583 104,379 4,204 4
Asset-Based Lending and Leasing 85,812 78,764 7,048 9
Total loans $ 194,395 183,143 11,252 6
Total deposits (1) 200,699 189,364 11,335 6
Allocated capital 19,500 19,500 — —
Selected Balance Sheet Data (period-end)
Loans:
Commercial and industrial (1) $ 140,932 119,322 21,610 18
Commercial real estate (1) 44,428 47,832 (3,404) (7)
Lease financing and other 13,473 13,534 (61) —
Total loans $ 198,833 180,688 18,145 10
Loans by Line of Business:
Middle Market Banking (1) $ 110,258 102,372 7,886 8
Asset-Based Lending and Leasing 88,575 78,316 10,259 13
Total loans $ 198,833 180,688 18,145 10
Total deposits (1) 195,549 191,948 3,601 2


	Quarter ended Mar 31,
(in millions)	2023		2022	$ Change	% Change
Selected Balance Sheet Data (average)
Loans:
Commercial and industrial	$	163,210	135,792	27,418	20	%
Commercial real estate	45,862		45,053	809	2
Lease financing and other	13,754		13,550	204	2
Total loans	$	222,826	194,395	28,431	15
Loans by Line of Business:
Middle Market Banking	$	121,625	108,583	13,042	12
Asset-Based Lending and Leasing	101,201		85,812	15,389	18
Total loans	$	222,826	194,395	28,431	15
Total deposits	170,467		200,699	(30,232)	(15)
Allocated capital	25,500		19,500	6,000	31

Selected Balance Sheet Data (period-end)
Loans:
Commercial and industrial	$	166,853	140,932	25,921	18
Commercial real estate	45,895		44,428	1,467	3
Lease financing and other	13,851		13,473	378	3
Total loans	$	226,599	198,833	27,766	14
Loans by Line of Business:
Middle Market Banking	$	121,626	110,258	11,368	10
Asset-Based Lending and Leasing	104,973		88,575	16,398	19
Total loans	$	226,599	198,833	27,766	14
Total deposits	169,827		195,549	(25,722)	(13)

First quarter ~~2022~~2023 vs. first quarter ~~2021~~2022

Total loans (average and period-end) increased driven by ~~higher loan demand, including~~new customer growth and higher line ~~utilization, and customer growth.~~utilization.

Total deposits (average and period-end) ~~increased due~~decreased as customers continued to reallocate cash into higher ~~levels of customer liquidity and rising interest rates, partially offset by the transfer of certain customer accounts to the Consumer Banking and Lending operating segment in first quarter 2022.~~yielding alternatives.


16			Wells Fargo & Company

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. Table 5e6e and Table 5f6f provide additional information for Corporate and Investment Banking.

Table ~~5e:~~6e: Corporate and Investment Banking – Income Statement and Selected Metrics

Quarter ended Mar 31,
($ in millions) 2022 2021 $ Change % Change
Income Statement
Net interest income $ 1,990 1,779 211 12 %
Noninterest income:
Deposit-related fees 293 266 27 10
Lending-related fees 185 183 2 1
Investment banking fees 462 611 (149) (24)
Net gains from trading activities 228 331 (103) (31)
Other 312 434 (122) (28)
Total noninterest income 1,480 1,825 (345) (19)
Total revenue 3,470 3,604 (134) (4)
Net charge-offs (31) 37 (68) NM
Change in the allowance for credit losses (165) (321) 156 49
Provision for credit losses (196) (284) 88 31
Noninterest expense 1,983 1,833 150 8
Income before income tax expense 1,683 2,055 (372) (18)
Income tax expense 425 500 (75) (15)
Net income $ 1,258 1,555 (297) (19)
Revenue by Line of Business
Banking:
Lending $ 521 453 68 15
Treasury Management and Payments 432 370 62 17
Investment Banking 331 416 (85) (20)
Total Banking 1,284 1,239 45 4
Commercial Real Estate 995 912 83 9
Markets:
Fixed Income, Currencies, and Commodities (FICC) 877 1,144 (267) (23)
Equities 267 252 15 6
Credit Adjustment (CVA/DVA) and Other 25 36 (11) (31)
Total Markets 1,169 1,432 (263) (18)
Other 22 21 1 5
Total revenue $ 3,470 3,604 (134) (4)
Selected Metrics
Return on allocated capital 13.2 % 17.6
Efficiency ratio 57 51
Headcount (#) (period-end) 8,416 8,249 2

~~NM – Not meaningful~~


	Quarter ended Mar 31,
($ in millions)	2023			2022	$ Change	% Change
Income Statement
Net interest income	$	2,461		1,990	471	24	%
Noninterest income:
Deposit-related fees	236			293	(57)	(19)
Lending-related fees	194			185	9	5
Investment banking fees	314			462	(148)	(32)
Net gains from trading activities	1,257			228	1,029	451
Other	440			312	128	41
Total noninterest income	2,441			1,480	961	65
Total revenue	4,902			3,470	1,432	41
Net charge-offs	17			(31)	48	155
Change in the allowance for credit losses	235			(165)	400	242
Provision for credit losses	252			(196)	448	229
Noninterest expense	2,217			1,983	234	12
Income before income tax expense	2,433			1,683	750	45
Income tax expense	615			425	190	45

Net income	$	1,818		1,258	560	45

Revenue by Line of Business
Banking:
Lending	$	692		521	171	33
Treasury Management and Payments	785			432	353	82
Investment Banking	280			331	(51)	(15)
Total Banking	1,757			1,284	473	37
Commercial Real Estate	1,311			995	316	32
Markets:
Fixed Income, Currencies, and Commodities (FICC)	1,285			877	408	47
Equities	437			267	170	64
Credit Adjustment (CVA/DVA) and Other	71			25	46	184
Total Markets	1,793			1,169	624	53
Other	41			22	19	86
Total revenue	$	4,902		3,470	1,432	41

Selected Metrics
Return on allocated capital	15.9		%	13.2
Efficiency ratio	45			57

First quarter ~~2022~~2023 vs. first quarter ~~2021~~2022

Revenue ~~decreased~~increased driven by:

•higher net gains from trading activities driven by higher trading results across all asset classes; and

•higher net interest income reflecting higher interest rates as well as higher loan balances;

partially offset by:

•lower investment banking fees due to lower ~~debt and equity underwriting fees as a result of lower~~ market activity; and

•lower ~~net gains from trading activities~~deposit-related fees driven by the impact of higher earnings credit rates, which result in lower fees for corporate banking customers.

Provision for credit losses ~~client trading activity~~included a $400 million increase in ~~residential mortgage-backed securities~~the allowance for credit losses reflecting an increase for commercial real estate loans, primarily office loans.

Noninterest expense increased driven by higher operating costs and ~~high yield products,~~personnel expense, partially offset by ~~higher foreign exchange, rates, and commodities trading revenue; and~~

•~~lower other noninterest income driven by lower commercial mortgage banking income due to lower gain on sale volumes and margins, partially offset by higher income in our low-income housing business;~~

~~partially offset by:~~

•~~higher net interest income reflecting higher loan balances and deposit spreads, partially offset by lower deposit balances.~~the impact of efficiency initiatives.


			Wells Fargo & Company			17

Earnings Performance (continued)

~~Provision for credit losses~~ ~~reflected lower net charge-offs, reduced uncertainty around the economic impact of the COVID-19 pandemic on our loan portfolios, and increased uncertainty related to the risks of high inflation.~~

~~Noninterest expense~~ ~~increased driven by higher personnel expense due to higher incentive compensation expense.~~

Table ~~5f:~~6f: Corporate and Investment Banking – Balance Sheet


		Quarter ended Mar 31,						Quarter ended Mar 31,
(in millions)	(in millions)	2022		2021	$ Change	% Change			(in millions)	2023		2022	$ Change	% Change
Selected Balance Sheet Data (average)	Selected Balance Sheet Data (average)								Selected Balance Sheet Data (average)
Loans:	Loans:								Loans:
Commercial and industrial	Commercial and industrial	$	191,152	162,290	28,862	18	%		Commercial and industrial	$	193,770	191,152	2,618	1	%
Commercial real estate	Commercial real estate	93,346		83,858	9,488	11			Commercial real estate	100,972		93,346	7,626	8
Total loans	Total loans	$	284,498	246,148	38,350	16			Total loans	$	294,742	284,498	10,244	4
Loans by Line of Business:	Loans by Line of Business:								Loans by Line of Business:
Banking	Banking	$	102,485	86,536	15,949	18			Banking	$	99,078	102,485	(3,407)	(3)
Commercial Real Estate	Commercial Real Estate	126,248		107,609	18,639	17			Commercial Real Estate	136,806		126,248	10,558	8
Markets	Markets	55,765		52,003	3,762	7			Markets	58,858		55,765	3,093	6
Total loans	Total loans	$	284,498	246,148	38,350	16			Total loans	$	294,742	284,498	10,244	4
Trading-related assets:	Trading-related assets:								Trading-related assets:
Trading account securities	Trading account securities	$	115,687	106,358	9,329	9			Trading account securities	$	112,628	115,687	(3,059)	(3)
Reverse repurchase agreements/securities borrowed	Reverse repurchase agreements/securities borrowed	54,832		63,965	(9,133)	(14)			Reverse repurchase agreements/securities borrowed	57,818		54,832	2,986	5
Derivative assets	Derivative assets	26,244		27,102	(858)	(3)			Derivative assets	17,928		26,244	(8,316)	(32)
Total trading-related assets	Total trading-related assets	$	196,763	197,425	(662)	—			Total trading-related assets	$	188,374	196,763	(8,389)	(4)
Total assets	Total assets	551,404		511,528	39,876	8			Total assets	548,808		551,404	(2,596)	—
Total deposits	Total deposits	169,181		194,501	(25,320)	(13)			Total deposits	157,551		169,181	(11,630)	(7)
Allocated capital	Allocated capital	36,000		34,000	2,000	6			Allocated capital	44,000		36,000	8,000	22

Selected Balance Sheet Data (period-end)	Selected Balance Sheet Data (period-end)								Selected Balance Sheet Data (period-end)
Loans:	Loans:								Loans:
Commercial and industrial	Commercial and industrial	$	194,201	163,808	30,393	19			Commercial and industrial	$	191,020	194,201	(3,181)	(2)
Commercial real estate	Commercial real estate	96,426		84,836	11,590	14			Commercial real estate	100,797		96,426	4,371	5
Total loans	Total loans	$	290,627	248,644	41,983	17			Total loans	$	291,817	290,627	1,190	—
Loans by Line of Business:	Loans by Line of Business:								Loans by Line of Business:
Banking	Banking	$	107,081	88,042	19,039	22			Banking	$	97,178	107,081	(9,903)	(9)
Commercial Real Estate	Commercial Real Estate	129,375		108,508	20,867	19			Commercial Real Estate	135,728		129,375	6,353	5
Markets	Markets	54,171		52,094	2,077	4			Markets	58,911		54,171	4,740	9
Total loans	Total loans	$	290,627	248,644	41,983	17			Total loans	$	291,817	290,627	1,190	—
Trading-related assets:	Trading-related assets:								Trading-related assets:
Trading account securities	Trading account securities	$	113,763	100,586	13,177	13			Trading account securities	$	115,198	113,763	1,435	1
Reverse repurchase agreements/securities borrowed	Reverse repurchase agreements/securities borrowed	57,579		71,282	(13,703)	(19)			Reverse repurchase agreements/securities borrowed	57,502		57,579	(77)	—
Derivative assets	Derivative assets	26,695		24,228	2,467	10			Derivative assets	16,968		26,695	(9,727)	(36)
Total trading-related assets	Total trading-related assets	$	198,037	196,096	1,941	1			Total trading-related assets	$	189,668	198,037	(8,369)	(4)
Total assets	Total assets	564,976		512,045	52,931	10			Total assets	542,168		564,976	(22,808)	(4)
Total deposits	Total deposits	168,467		188,920	(20,453)	(11)			Total deposits	158,564		168,467	(9,903)	(6)

First quarter ~~2022~~2023 vs. first quarter ~~2021~~2022

Total assets (average and period-end) ~~increased~~decreased reflecting ~~higher loan balances driven by growth in commercial loan originations and usage of lines of credit~~lower trading-related derivative assets due to ~~increased corporate spending.~~declines in derivative balances for commodities and equities.

Total deposits (average and period-end) decreased ~~reflecting~~as customers continued ~~actions~~ to ~~manage under the asset cap.~~reallocate cash into higher yielding alternatives.


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 5g6g and Table 5h6h provide additional information for Wealth and Investment ~~Management.~~Management (WIM).

Table ~~5g:~~6g: Wealth and Investment Management

Quarter ended Mar 31,
($ in millions, unless otherwise noted) 2022 2021 $ Change % Change
Income Statement
Net interest income $ 799 657 142 22 %
Noninterest income:
Investment advisory and other asset-based fees 2,476 2,306 170 7
Commissions and brokerage services fees 454 555 (101) (18)
Other 28 26 2 8
Total noninterest income 2,958 2,887 71 2
Total revenue 3,757 3,544 213 6
Net charge-offs (4) — (4) NM
Change in the allowance for credit losses (33) (43) 10 23
Provision for credit losses (37) (43) 6 14
Noninterest expense 3,175 3,028 147 5
Income before income tax expense 619 559 60 11
Income tax expense 154 140 14 10
Net income $ 465 419 46 11
Selected Metrics
Return on allocated capital 21.0 % 18.9
Efficiency ratio 85 85
Headcount (#) (period-end) 25,165 27,993 (10)
Advisory assets ($ in billions) $ 912 885 27 3
Other brokerage assets and deposits ($ in billions) 1,168 1,177 (9) (1)
Total client assets ($ in billions) $ 2,080 2,062 18 1
Annualized revenue per advisor ($ in thousands) (1) 1,221 1,058 163 15
Total financial and wealth advisors (#) (period-end) 12,250 13,277 (8)
Selected Balance Sheet Data (average)
Total loans $ 84,765 80,839 3,926 5
Total deposits 185,814 173,678 12,136 7
Allocated capital 8,750 8,750 — —
Selected Balance Sheet Data (period-end)
Total loans $ 84,688 81,175 3,513 4
Total deposits 183,727 175,999 7,728 4

~~NM – Not meaningful~~

~~(1)Represents annualized segment total revenue divided by average total financial and wealth advisors for the period.~~


	Quarter ended Mar 31,
($ in millions, unless otherwise noted)	2023			2022	$ Change	% Change
Income Statement
Net interest income	$	1,044		799	245	31	%
Noninterest income:
Investment advisory and other asset-based fees	2,061			2,476	(415)	(17)
Commissions and brokerage services fees	541			454	87	19
Other	35			28	7	25
Total noninterest income	2,637			2,958	(321)	(11)
Total revenue	3,681			3,757	(76)	(2)
Net charge-offs	(1)			(4)	3	75
Change in the allowance for credit losses	12			(33)	45	136
Provision for credit losses	11			(37)	48	130
Noninterest expense	3,061			3,175	(114)	(4)
Income before income tax expense	609			619	(10)	(2)
Income tax expense	152			154	(2)	(1)

Net income	$	457		465	(8)	(2)

Selected Metrics
Return on allocated capital	28.9		%	21.0
Efficiency ratio	83			85

Advisory assets ($ in billions)	$	825		912	(87)	(10)
Other brokerage assets and deposits ($ in billions)	1,104			1,168	(64)	(5)
Total client assets ($ in billions)	$	1,929		2,080	(151)	(7)



Selected Balance Sheet Data (average)
Total loans	$	83,621		84,765	(1,144)	(1)
Total deposits	126,604			185,814	(59,210)	(32)
Allocated capital	6,250			8,750	(2,500)	(29)

Selected Balance Sheet Data (period-end)
Total loans	$	82,817		84,688	(1,871)	(2)
Total deposits	117,252			183,727	(66,475)	(36)

First quarter ~~2022~~2023 vs. first quarter ~~2021~~2022

Revenue ~~increased~~decreased driven by:

•~~higher~~lower investment advisory and other asset-based fees due to ~~higher~~lower average market valuations ~~on WIM~~and net outflows of advisory assets; ~~and~~

partially offset by:

•higher net interest income reflecting higher interest rates, ~~as well as higher deposit and loan balances;~~

partially offset ~~by:~~by lower deposit balances; and

•~~lower~~higher commissions and brokerage services fees due to ~~lower transactional revenue.~~higher service fee rates.

Noninterest expense ~~increased~~decreased driven by:

•lower personnel expense driven by ~~higher personnel expense due to higher~~lower revenue-related ~~compensation expense.~~

~~Total loans (average)~~ ~~increased due to higher securities-based loan balances.~~incentive compensation; and

•the impact of efficiency initiatives.

Total deposits ~~(average)~~(average and period-end) ~~increased due~~decreased as customers continued to reallocate cash into higher ~~levels of customer liquidity.~~

yielding alternatives.


			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 5h6h 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 both first quarter ~~2022~~2023 and ~~2021,~~2022, the average fee rate by account type ranged from 50 to 120 basis points.

Table ~~5h:~~6h: WIM Advisory Assets


		Quarter ended						Quarter ended
(in billions)	(in billions)	Balance, beginning of period		Inflows (1)	Outflows (2)	Market impact (3)	Balance, end of period		(in billions)	Balance, beginning of period		Inflows (1)	Outflows (2)	Market impact (3)	Balance, end of period
March 31, 2022
March 31, 2023									March 31, 2023
Client-directed (4)	Client-directed (4)	$	205.6	8.8	(10.2)	(10.5)	193.7		Client-directed (4)	$	165.2	8.2	(8.4)	6.9	171.9
Financial advisor-directed (5)	Financial advisor-directed (5)	255.5		12.6	(9.9)	(11.0)	247.2		Financial advisor-directed (5)	222.9		9.4	(9.2)	10.0	233.1
Separate accounts (6)	Separate accounts (6)	203.3		7.5	(7.0)	(11.0)	192.8		Separate accounts (6)	176.5		5.9	(6.1)	6.4	182.7
Mutual fund advisory (7)	Mutual fund advisory (7)	102.1		3.2	(4.0)	(6.2)	95.1		Mutual fund advisory (7)	78.6		2.0	(3.1)	3.1	80.6
Total Wells Fargo Advisors	Total Wells Fargo Advisors	$	766.5	32.1	(31.1)	(38.7)	728.8		Total Wells Fargo Advisors	$	643.2	25.5	(26.8)	26.4	668.3
The Private Bank (8)	The Private Bank (8)	198.0		7.4	(11.7)	(10.1)	183.6		The Private Bank (8)	153.6		7.3	(9.3)	5.2	156.8
Total WIM advisory assets	Total WIM advisory assets	$	964.5	39.5	(42.8)	(48.8)	912.4		Total WIM advisory assets	$	796.8	32.8	(36.1)	31.6	825.1
March 31, 2021
March 31, 2022									March 31, 2022
Client-directed (4)	Client-directed (4)	$	186.3	10.6	(9.8)	5.6	192.7		Client-directed (4)	$	205.6	8.8	(10.2)	(10.5)	193.7
Financial advisor-directed (5)	Financial advisor-directed (5)	211.0		12.3	(9.0)	9.1	223.4		Financial advisor-directed (5)	255.5		12.6	(9.9)	(11.0)	247.2
Separate accounts (6)	Separate accounts (6)	174.6		8.5	(7.0)	7.0	183.1		Separate accounts (6)	203.3		7.5	(7.0)	(11.0)	192.8
Mutual fund advisory (7)	Mutual fund advisory (7)	91.4		4.0	(3.5)	2.8	94.7		Mutual fund advisory (7)	102.1		3.2	(4.0)	(6.2)	95.1
Total Wells Fargo Advisors	Total Wells Fargo Advisors	$	663.3	35.4	(29.3)	24.5	693.9		Total Wells Fargo Advisors	$	766.5	32.1	(31.1)	(38.7)	728.8
The Private Bank (8)	The Private Bank (8)	189.4		8.9	(12.5)	5.7	191.5		The Private Bank (8)	198.0		7.4	(11.7)	(10.1)	183.6
Total WIM advisory assets	Total WIM advisory assets	$	852.7	44.3	(41.8)	30.2	885.4		Total WIM advisory assets	$	964.5	39.5	(42.8)	(48.8)	912.4

(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.


20			Wells Fargo & Company

~~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 5i6i and

Table 5j6j provide additional information for Corporate.

Table ~~5i:~~6i: Corporate – Income Statement ~~and Selected Metrics~~


		Quarter ended Mar 31,						Quarter ended Mar 31,
($ in millions, unless otherwise noted)		2022		2021	$ Change	% Change
(in millions)									(in millions)		2023			2022		$ Change		% Change
Income Statement	Income Statement									Income Statement
Net interest income	Net interest income	$	(818)	(390)	(428)	NM				Net interest income		$	16		(818)		834		102	%
Noninterest income	Noninterest income	806		1,417	(611)	(43)	%			Noninterest income		5			942		(937)		(99)
Total revenue	Total revenue	(12)		1,027	(1,039)	NM				Total revenue		21			124		(103)		(83)
Net charge-offs	Net charge-offs	(6)		77	(83)	NM				Net charge-offs		(2)			(6)		4		67
Change in the allowance for credit losses	Change in the allowance for credit losses	(14)		20	(34)	NM				Change in the allowance for credit losses		122			(14)		136		971
Provision for credit losses	Provision for credit losses	(20)		97	(117)	NM				Provision for credit losses		120			(20)		140		700
Noninterest expense	Noninterest expense	786		1,231	(445)	(36)				Noninterest expense		608			767		(159)		(21)
Loss before income tax benefit	Loss before income tax benefit	(778)		(301)	(477)	NM				Loss before income tax benefit		(707)			(623)		(84)		(13)
Income tax benefit	Income tax benefit	(227)		(275)	48	17				Income tax benefit		(272)			(188)		(84)		(45)
Less: Net income from noncontrolling interests (1)		128		53	75	142
Less: Net income (loss) from noncontrolling interests (1)									Less: Net income (loss) from noncontrolling interests (1)		(114)			127		(241)		NM
Net loss	Net loss	$	(679)	(79)	(600)	NM				Net loss		$	(321)		(562)		241		43

Selected Metrics
Headcount (#) (period-end)		82,363		84,238		(2)

NM – Not meaningful

(1)Reflects results attributable to noncontrolling interests predominantly associated with the Company’s consolidated venture capital investments.

First quarter ~~2022~~2023 vs. first quarter ~~2021~~2022

Revenue decreased driven by:

•~~lower~~ net ~~interest income due to higher deposit crediting rates paid to the operating segments, as well as the sales of our student loan portfolio and our Corporate Trust Services business in 2021;~~

•~~lower investment advisory and other asset-based fees due to divestitures in fourth quarter 2021;~~

•~~a gain on the sale of a portion of our student loan portfolio in first quarter 2021; and~~

•~~lower gains from debt securities due to lower gains on sales of agency MBS as a result of decreased sales volumes;~~

~~partially offset by:~~

•~~higher unrealized gains~~losses on nonmarketable equity securities from our affiliated venture capital and private equity ~~businesses and higher realized gains on the sales of equity securities,~~ businesses;

partially offset by by:

•higher ~~impairment.~~net interest income reflecting higher interest rates.

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

Noninterest expense decreased ~~due to:~~

•driven by the impact of ~~business divestitures; and~~divestitures.

•~~a write-down of goodwill in first quarter 2021 related to the sale of a portion of our student loan portfolio.~~

Corporate includes our rail car leasing business, which had long-lived operating lease assets, ~~(as a lessor) of $5.0 billion, which was~~ net ~~of $2.2 billion~~ of accumulated depreciation, of $4.6 billion and $4.7 billion as of March 31, ~~2022.~~2023, and December 31, 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 ~~three~~four largest concentrations, which represented ~~55%~~67% of our rail car fleet as of March 31, ~~2022,~~2023, were rail cars used for the transportation of cement/sand, agricultural grain, plastics, and coal ~~and cement/sand~~ products. ~~Impairment~~We may ~~result~~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 our ~~2021~~2022 Form 10-K.

As of March 31, 2022, we completed the transition of substantially all of the assets under management and assets under administration for Institutional Retirement and Trust client assets to the buyer pursuant to a transition services agreement.


			Wells Fargo & Company			21

Earnings Performance (continued)

Table ~~5j:~~6j: Corporate – Balance Sheet


		Quarter ended Mar 31,						Quarter ended Mar 31,
(in millions)	(in millions)	2022		2021	$ Change	% Change				(in millions)		2023		2022		$ Change		% Change
Selected Balance Sheet Data (average)	Selected Balance Sheet Data (average)									Selected Balance Sheet Data (average)
Cash, cash equivalents, and restricted cash		$	178,747	222,799	(44,052)	(20)	%
Cash and due from banks, and interest-earning deposits with banks									Cash and due from banks, and interest-earning deposits with banks		$	117,419	178,747		(61,328)		(34)		%
Available-for-sale debt securities(1)	Available-for-sale debt securities(1)	156,756		200,421	(43,665)	(22)				Available-for-sale debt securities(1)		128,770		156,756		(27,986)		(18)
Held-to-maturity debt securities(1)	Held-to-maturity debt securities(1)	275,510		217,346	58,164	27				Held-to-maturity debt securities(1)		272,718		275,510		(2,792)		(1)
Equity securities	Equity securities	15,760		10,904	4,856	45				Equity securities		15,519		15,760		(241)		(2)
Total loans	Total loans	9,292		10,228	(936)	(9)				Total loans		9,154		9,292		(138)		(1)
Total assets	Total assets	687,341		727,628	(40,287)	(6)				Total assets		596,087		687,346		(91,259)		(13)
Total deposits	Total deposits	27,039		46,490	(19,451)	(42)				Total deposits		60,807		27,039		33,768		125

Selected Balance Sheet Data (period-end)	Selected Balance Sheet Data (period-end)									Selected Balance Sheet Data (period-end)
Cash, cash equivalents, and restricted cash		$	175,201	257,887	(82,686)	(32)
Cash and due from banks, and interest-earning deposits with banks									Cash and due from banks, and interest-earning deposits with banks		$	136,093	175,201		(39,108)		(22)
Available-for-sale debt securities(1)	Available-for-sale debt securities(1)	157,164		188,724	(31,560)	(17)				Available-for-sale debt securities(1)		133,311		157,164		(23,853)		(15)
Held-to-maturity debt securities(1)	Held-to-maturity debt securities(1)	277,965		231,352	46,613	20				Held-to-maturity debt securities(1)		274,202		277,965		(3,763)		(1)
Equity securities	Equity securities	16,137		11,093	5,044	45				Equity securities		15,200		16,137		(937)		(6)
Total loans	Total loans	9,101		10,516	(1,415)	(13)				Total loans		9,247		9,101		146		2
Total assets	Total assets	682,912		753,899	(70,987)	(9)				Total assets		620,241		682,912		(62,671)		(9)
Total deposits	Total deposits	23,715		42,487	(18,772)	(44)				Total deposits		65,682		23,715		41,967		177

(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.

First quarter ~~2022~~2023 vs. first quarter ~~2021~~2022

Total assets (average and period-end) decreased ~~due to:~~reflecting:

•a decrease in cash ~~cash equivalents,~~ and ~~restricted cash~~due from banks, and interest-earning deposits with banks that are managed by corporate treasury as a result of a decrease in deposits in the operating segments and an increase in loans ~~and a decrease~~originated in ~~long-term debt and short-term borrowings, partially offset by an increase in deposits from~~ the operating segments;

•~~a decline in available-for-sale debt securities related to portfolio rebalancing to manage liquidity and interest rate risk;~~ and

•~~a decline in loans as a result of the sale of our student loan portfolio in 2021;~~

lower available-for-sale debt securities due to sales and net unrealized losses, partially offset ~~by:~~

•~~an increase in held-to-maturity~~by the reclassification of HTM debt securities ~~related~~ to ~~portfolio rebalancing to manage liquidity and interest rate risk; and~~

•~~an increase~~AFS debt securities in ~~equity securities related to our affiliated venture capital business.~~connection with the adoption of ASU 2022-01.

Total deposits (average and period-end) ~~decreased reflecting actions taken to manage under the asset cap.~~increased driven by issuances of certificates of deposit (CDs).


22			Wells Fargo & Company


Balance Sheet Analysis

At March 31, ~~2022,~~2023, our assets totaled ~~$1.94~~$1.89 trillion, ~~down $8.4~~up $5.4 billion from December 31, ~~2021.~~2022.

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 6:7: Available-for-Sale and Held-to-Maturity Debt Securities


		March 31, 2022					December 31, 2021					March 31, 2023					December 31, 2022
($ in millions)	($ 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)	($ 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)	Available-for-sale (2)	173,118		(4,682)	168,436	5.9	175,463	1,781	177,244	5.2	Available-for-sale (2)	$	151,861	(7,463)	144,398	4.7	$	121,725	(8,131)	113,594	5.4
Held-to-maturity (3)	Held-to-maturity (3)	280,808		(16,167)	264,641	7.6	272,022	364	272,386	6.3	Held-to-maturity (3)	277,147		(36,459)	240,688	8.1	297,059		(41,538)	255,521	8.1
Total	Total	$	453,926	(20,849)	433,077	n/a	447,485	2,145	449,630	n/a	Total	$	429,008	(43,922)	385,086	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 ~~$9 million and $8~~$6 million related to available-for-sale debt securities at both March 31, 2023, and ~~$84~~December 31, 2022, and $77 million and ~~$96~~$85 million related to held-to-maturity debt securities at March 31, ~~2022~~2023, and December 31, ~~2021,~~2022, respectively.

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

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

Table 67 presents a summary of our portfolio of investments in available-for-sale (AFS) and held-to-maturity (HTM) debt securities. See the “Balance Sheet Analysis – Available-for-Sale and Held-to-Maturity Debt Securities” section in our ~~2021~~2022 Form 10-K for information on our investment management objectives and practices and the “Risk Management – Asset/Liability Management” section in this Report for 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, ~~2021. We continued to purchase~~2022. Purchases of AFS and HTM debt securities ~~including HTM debt securities through securitizations of LHFS, which more than offset~~exceeded portfolio ~~runoff and AFS debt security sales.~~ runoff.

In addition, we transferred ~~$14.7 billion of~~ AFS debt securities with a fair value of $3.7 billion to HTM debt securities in first quarter ~~2022~~2023 due to actions taken to reposition the overall portfolio for capital management purposes. Debt securities transferred from AFS to HTM in first quarter 2023 had $320 million of pre-tax unrealized losses at the time of the transfers.

Additionally, in first quarter 2023, we also 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 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 total net unrealized ~~gains (losses)~~losses on AFS and HTM debt securities ~~decreased from December~~at March 31, ~~2021,~~2023, were driven by higher interest rates and ~~wider~~changes in credit spreads.

At March 31, ~~2022, 98%~~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.


			Wells Fargo & Company			23

Balance Sheet Analysis (continued)

Loan Portfolios

Table 78 provides a summary of total outstanding loans by portfolio segment. Commercial loans ~~increased~~decreased from December 31, ~~2021, predominantly~~2022, primarily due to ~~an increase~~a decrease in the commercial and industrial loan portfolio ~~driven by higher loan demand resulting in increased originations and loan draws,~~ as a result of paydowns,

partially offset by ~~paydowns.~~seasonally higher loan draws and new originations within the commercial and industrial loan portfolio. Consumer loans ~~increased~~decreased from

December 31, ~~2021, predominantly driven by an increase~~2022, a significant portion of which was due to paydowns exceeding originations in the residential mortgage – first lien portfolio due to loan originations of $18.4 billion, partially offset by loan paydowns and the transfer 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.portfolio.

Table 7:8: Loan Portfolios


(in millions)		March 31, 2022		December 31, 2021
($ in millions)					($ in millions)	March 31, 2023		December 31, 2022	$ Change	% Change
Commercial	Commercial	$	526,714	513,120	Commercial	$	554,217	557,516	(3,299)	(1)	%
Consumer	Consumer	385,093		382,274	Consumer	393,774		398,355	(4,581)	(1)
Total loans	Total loans	$	911,807	895,394	Total loans	$	947,991	955,871	(7,880)	(1)
Change from prior year-end		$	16,413	7,757

Average loan balances and a comparative detail of average loan balances is included in Table 1 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 45 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.

See the “Balance Sheet Analysis – Loan Portfolios” section in our ~~2021~~2022 Form 10-K for additional information regarding contractual loan maturities and the distribution of loans to changes in interest rates.


24			~~Wells Fargo & Company~~

Deposits

Deposits decreased from December 31, ~~2021,~~2022, reflecting:

•~~lower interest-bearing demand deposits driven by the transition of client assets related~~customers continuing to ~~the sale of trust deposits,~~reallocate cash into higher yielding alternatives; and

•~~actions taken to manage under the asset cap resulting in declines in time deposits, such as brokered certificates of deposit (CDs);~~continued consumer spending;

partially offset by:

•higher ~~savings~~time deposits driven by ~~seasonality for items such as income tax refunds.~~issuances of certificates of deposit (CDs).

Table 89 provides additional information regarding ~~deposits.~~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 1 earlier in this Report. In response to higher interest rates, our average deposit cost in first quarter 2023 increased to 0.83%, compared with 0.46% in fourth quarter 2022.

Table 8:9: Deposits


($ in millions)	($ in millions)	Mar 31, 2022		% of total deposits		Dec 31, 2021		% of total deposits		% Change	($ in millions)	Mar 31, 2023		% of total deposits		Dec 31, 2022		% of total deposits		$ Change		% Change
Noninterest-bearing demand deposits	Noninterest-bearing demand deposits	$	529,957	36	%	$	527,748	36	%	—	Noninterest-bearing demand deposits	$	434,912	32	%	$	458,010	33	%	$	(23,098)	(5)	%
Interest-bearing demand deposits	Interest-bearing demand deposits	457,238		31		465,887		31		(2)	Interest-bearing demand deposits	422,868		31		428,877		31		(6,009)		(1)
Savings deposits	Savings deposits	447,096		30		439,600		30		2	Savings deposits	396,909		29		410,139		30		(13,230)		(3)
Time deposits	Time deposits	26,089		2		29,461		2		(11)	Time deposits	89,436		7		66,197		5		23,239		35
Interest-bearing deposits in non-U.S. offices	Interest-bearing deposits in non-U.S. offices	20,974		1		19,783		1		6	Interest-bearing deposits in non-U.S. offices	18,504		1		20,762		1		(2,258)		(11)
Total deposits	Total deposits	$	1,481,354	100	%	$	1,482,479	100	%	—	Total deposits	$	1,362,629	100	%	$	1,383,985	100	%	$	(21,356)	(2)


24			Wells Fargo & Company			25


Off-Balance Sheet Arrangements

In the ordinary course of business, we engage in financial transactions that are not recorded on ~~the~~our consolidated balance sheet, or may be recorded on ~~the~~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 ~~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.

Unfunded Credit Commitments ~~to Lend~~

~~We enter into~~Unfunded credit commitments are legally binding agreements to lend to customers ~~which are usually at a stated~~with terms covering usage of funds, contractual interest ~~rate, if funded,~~rates, expiration dates, and ~~for specific purposes and time periods. When we enter into commitments, we are exposed to credit risk.~~any required collateral. The maximum credit risk for these commitments will generally be lower than the contractual amount because ~~a significant portion~~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 are not funded.~~commitments. For additional information, see Note 45 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.

Transactions with Unconsolidated Entities

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 1114 (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 1114 (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~~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 ~~the~~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 1411 (Derivatives) to Financial Statements in this Report.


26			Wells Fargo & Company			25


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. We continue to monitor our business, including our loan portfolios, for potential direct, indirect, and macro-economic impacts stemming from the conflict in Ukraine and any associated economic sanctions.

For additional information about how we manage risk, see the “Risk Management” section in our ~~2021~~2022 Form 10-K. The discussion that follows supplements our discussion of the management of certain risks contained in the “Risk Management” section in our ~~2021~~2022 Form 10-K.

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,~~security holdings, certain derivatives, and ~~certain derivatives.~~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 Chief Risk Officer 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 910 presents our total loans outstanding by portfolio segment and class of financing receivable.

Table 9:10: Total Loans Outstanding by Portfolio Segment and Class of Financing Receivable


(in millions)	(in millions)	Mar 31, 2022		Dec 31, 2021	(in millions)	Mar 31, 2023		Dec 31, 2022
Commercial:
Commercial and industrial	Commercial and industrial	$	362,137	350,436	Commercial and industrial	$	384,690	386,806
Real estate mortgage		129,495		127,733
Real estate construction		20,613		20,092

Commercial real estate					Commercial real estate	154,707		155,802
Lease financing	Lease financing	14,469		14,859	Lease financing	14,820		14,908
Total commercial	Total commercial	526,714		513,120	Total commercial	554,217		557,516
Consumer:
Residential mortgage – first lien		245,242		242,270
Residential mortgage – junior lien		15,392		16,618

Residential mortgage					Residential mortgage	267,138		269,117
Credit card	Credit card	38,639		38,453	Credit card	45,766		46,293
Auto	Auto	57,083		56,659	Auto	52,631		53,669
Other consumer	Other consumer	28,737		28,274	Other consumer	28,239		29,276
Total consumer	Total consumer	385,093		382,274	Total consumer	393,774		398,355
Total loans	Total loans	$	911,807	895,394	Total loans	$	947,991	955,871

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 associated with multiple risk factors affecting loans we hold including:

•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.

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 ~~Credit~~Table 11 provides credit quality ~~in first quarter 2022 reflected:~~

•Nonaccrual loans were $6.9 billion at March 31, 2022, down from $7.2 billion at December 31, 2021. Commercial nonaccrual loans decreased to $2.0 billion at March 31, 2022, compared with $2.4 billion at December 31, 2021, and consumer nonaccrual loans increased to $4.9 billion at March 31, 2022, compared with $4.8 billion at December 31, 2021. Nonaccrual loans represented 0.75% of total loans at March 31, 2022, compared with 0.81% at December 31, 2021.

•Net loan charge-offs (recoveries) as a percentage of our average commercial and consumer loan portfolios were (0.02)% and 0.35%, respectively, in first quarter 2022, compared with 0.13% and 0.37%, respectively, in first quarter 2021.

•Loans that are not government insured/guaranteed and 90 days or more past due and still accruing were $267 million and $409 million in our commercial and consumer portfolios, respectively, at March 31, 2022, compared with $235 million and $424 million at December 31, 2021.

•~~Our provision for credit losses for loans was~~ ~~$(775) million~~ ~~in first quarter 2022, compared with~~ ~~$(1.1) billion in first quarter 2021~~trends.

•Table 11:~~The ACL for loans decreased to $12.7 billion, or 1.39% of total loans, at March 31, 2022, compared with $13.8 billion, or 1.54%, at December 31, 2021.~~Credit Quality Overview


($ in millions)	Mar 31, 2023			Dec 31, 2022
Nonaccrual loans
Commercial loans	$	2,275		1,823
Consumer loans	3,735			3,803
Total nonaccrual loans	$	6,010		5,626
Nonaccrual loans as a % of total loans	0.63		%	0.59





Allowance for credit losses (ACL) for loans	$	13,705		13,609
ACL for loans as a % of total loans	1.45		%	1.42

	Mar 31, 2023			Mar 31, 2022
Net loan charge-offs as a % of:
Average commercial loans	0.05		%	(0.02)
Average consumer loans	0.56			0.35

Additional information on our loan portfolios and our credit quality trends follows.


			~~Wells Fargo & Company~~			27

~~Risk Management – Credit Risk Management~~ ~~(continued)~~

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 45 (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.


26			Wells Fargo & Company

We had ~~$11.8~~$13.3 billion of the commercial and industrial loans and lease financing portfolio internally classified as criticized in accordance with regulatory guidance at March 31, ~~2022,~~2023, compared with ~~$13.0~~$12.6 billion at December 31, ~~2021.~~2022. The ~~change~~increase was driven by ~~decreases in~~ the ~~real estate and construction,~~ technology, telecom and media, ~~oil, gas~~ and ~~pipelines,~~entertainment and ~~retail industries, as these industries continue to recover from the effects of the COVID-19 pandemic.~~recreation 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 ~~increased~~decreased at March 31, ~~2022,~~2023, compared with December 31, ~~2021, driven by higher loan demand resulting in increased originations and loan draws,~~2022, as a result of paydowns, partially offset by ~~paydowns.~~seasonally higher loan draws and new originations. Table 1012 provides our commercial and industrial loans and lease financing by industry. The industry categories are based on the North American Industry Classification System.

Table ~~10:~~12: Commercial and Industrial Loans and Lease Financing by Industry


		March 31, 2022							December 31, 2021								March 31, 2023							December 31, 2022
($ in millions)	($ in millions)	Nonaccrual loans		Total portfolio	% of total loans		Total commitments (1)		Nonaccrual loans		Total portfolio	% of total loans		Total commitments (1)		($ in millions)	Nonaccrual loans		Loans outstanding balance	% of total loans		Total commitments (1)		Nonaccrual loans	Loans outstanding balance	% of total loans		Total commitments (1)(2)
Financials except banks	Financials except banks	$	59	140,267	15	%	$	243,673	$	104	142,283	16	%	$	236,435	Financials except banks	$	13	144,954	15	%	$	225,689	44	147,171	15	%	$	229,822
Technology, telecom and media	Technology, telecom and media	63		24,382	3		61,899		64		23,345	3		63,551		Technology, telecom and media	43		27,807	3		66,024		31	27,767	3		66,340
Real estate and construction	Real estate and construction	72		24,961	3		56,783		78		25,035	3		56,278		Real estate and construction	53		24,353	3		55,341		73	24,478	3		56,393
Retail																Retail	45		20,468	2		49,625		47	19,487	2		49,334
Equipment, machinery and parts manufacturing	Equipment, machinery and parts manufacturing	17		19,763	2		44,640		24		18,130	2		43,778		Equipment, machinery and parts manufacturing	177		24,569	3		46,773		83	23,675	2		47,507
Retail		21		17,529	2		40,651		27		17,645	2		41,447
Materials and commodities	Materials and commodities	28		16,141	2		38,491		32		14,684	2		36,704		Materials and commodities	82		16,960	2		40,199		86	16,610	2		39,667
Food and beverage manufacturing	Food and beverage manufacturing	6		14,935	2		31,794		7		13,242	1		30,903		Food and beverage manufacturing	5		16,890	2		33,480		17	17,393	2		33,951
Oil, gas and pipelines																Oil, gas and pipelines	48		9,782	1		30,991		55	9,991	1		31,077
Health care and pharmaceuticals	Health care and pharmaceuticals	25		13,279	1		29,827		24		12,847	1		29,057		Health care and pharmaceuticals	20		14,914	2		30,360		21	14,861	2		30,294
Oil, gas and pipelines		85		8,447	*		29,626		197		8,828	*		29,010
Auto related	Auto related	22		10,762	1		26,051		31		10,629	1		25,772		Auto related	8		13,926	1		28,485		10	13,168	1		27,451
Commercial services	Commercial services	69		10,632	1		25,284		78		10,492	1		24,804		Commercial services	32		11,536	1		27,067		50	11,418	1		26,693
Utilities	Utilities	78		8,303	*		24,429		77		6,982	*		22,428		Utilities	18		8,342	*		25,953		18	9,457	*		26,899
Diversified or miscellaneous	Diversified or miscellaneous	21		8,233	*		20,103		3		7,493	*		19,395		Diversified or miscellaneous	3		8,587	*		20,508		2	8,161	*		21,498
Entertainment and recreation	Entertainment and recreation	43		11,438	1		19,426		23		9,907	1		17,943		Entertainment and recreation	26		13,648	1		19,820		28	13,085	1		18,741
Transportation services																Transportation services	196		8,357	*		15,542		237	8,389	*		16,064
Insurance and fiduciaries	Insurance and fiduciaries	1		4,366	*		18,879		1		3,387	*		17,521		Insurance and fiduciaries	1		4,714	*		14,718		1	4,691	*		15,592
Banks	Banks	—		18,336	2		18,829		—		16,178	2		16,615		Banks	—		12,373	1		12,954		—	14,403	2		16,537
Transportation services		246		8,116	*		15,173		288		8,162	*		14,775
Government and education																Government and education	36		6,131	*		12,064		25	6,482	*		12,590
Agribusiness	Agribusiness	32		6,058	*		11,642		35		6,086	*		11,701		Agribusiness	7		6,215	*		11,516		24	6,180	*		11,457
Government and education		4		5,717	*		11,230		5		5,863	*		11,358
Other ~~(2)~~(3)	Other ~~(2)~~(3)	24		4,941	*		20,821		30		4,077	*		20,112		Other ~~(2)~~(3)	12		4,984	*		11,981		13	4,847	*		12,301
Total	Total	$	916	376,606	41	%	$	789,251	$	1,128	365,295	41	%	$	769,587	Total	$	825	399,510	42	%	$	779,090	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. For additional information on issued letters of credit, see Note 1114 (Guarantees and Other Commitments) to Financial Statements in this Report.

(2)The balances of unfunded credit commitments at December 31, 2022, were revised to exclude discretionary amounts where our approval or consent is required prior to any loan funding or commitment increase, which is consistent with March 31, 2023.

(3)No other single industry had total loans in excess of ~~$3.0 billion and $3.1~~$3.4 billion at both March 31, ~~2022,~~2023, and December 31, ~~2021, respectively.~~2022.


28			Wells Fargo & Company			27

Risk Management – Credit Risk Management (continued)

Table ~~10a~~12a 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 ~~10a:~~12a: Financials Except Banks Industry Category


		March 31, 2022							December 31, 2021								March 31, 2023							December 31, 2022
($ in millions)	($ in millions)	Nonaccrual loans		Total portfolio	% of total loans		Total commitments (1)		Nonaccrual loans		Total portfolio	% of total loans		Total commitments (1)		($ in millions)	Nonaccrual loans		Loans outstanding balance	% of total loans		Total commitments (1)		Nonaccrual loans	Loans outstanding balance	% of total loans		Total commitments (1)(2)
Asset managers and funds ~~(2)~~(3)	Asset managers and funds ~~(2)~~(3)	$	1	59,404	6	%	$	102,214	$	1	60,518	7	%	$	101,311	Asset managers and funds ~~(2)~~(3)	$	1	50,242	5	%	$	92,385	1	52,254	5	%	$	97,998
Commercial finance ~~(3)~~(4)	Commercial finance ~~(3)~~(4)	39		44,665	5		73,162		82		46,043	5		69,941		Commercial finance ~~(3)~~(4)	2		53,669	6		78,085		31	53,269	5		76,016
Real estate finance (4)		9		23,978	3		41,583		9		23,231	3		38,003
Consumer finance (5)	Consumer finance (5)	10		12,220	1		26,714		12		12,491	1		27,180		Consumer finance (5)	2		16,665	2		28,532		4	17,028	2		29,047
Real estate finance (6)																Real estate finance (6)	8		24,378	2		26,687		8	24,620	3		26,761
Total	Total	$	59	140,267	15	%	$	243,673	$	104	142,283	16	%	$	236,435	Total	$	13	144,954	15	%	$	225,689	44	147,171	15	%	$	229,822

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

~~(3)~~(4)Includes asset-based lending and leasing, including loans to special purpose ~~entities;~~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~~$7.7 billion and ~~$8.1~~$7.8 billion at March 31, ~~2022,~~2023, and December 31, ~~2021,~~2022, 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.

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

Our commercial and industrial loans and lease financing portfolio ~~also~~ included non-U.S. loans of ~~$81.1~~$76.5 billion and ~~$78.0~~$79.7 billion at March 31, ~~2022,~~2023, and December 31, ~~2021,~~2022, respectively. Significant industry concentrations of non-U.S. loans at March 31, ~~2022,~~2023, and December 31, ~~2021,~~2022, respectively, included:

•$~~46.3~~43.1 billion and ~~$46.7~~$45.7 billion in the financials except banks ~~category;~~industry;

•$~~18.0~~12.2 billion and ~~$15.9~~$14.1 billion in the banks ~~category;~~industry; and

•$~~1.5 billion and $1.7~~1.2 billion in the oil, gas and pipelines ~~category.~~industry, for both periods.


28			Wells Fargo & Company

COMMERCIAL REAL ESTATE (CRE) Our CRE loan portfolio is comprised of CRE mortgage and CRE construction loans. The total CRE loan portfolio decreased $1.1 billion from December 31, 2022, primarily driven by a decrease in loans for mixed use properties and office property types, partially offset by an increase in loans for the apartments property type. 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 48% of the total CRE portfolio. The largest property type concentrations are apartments at 26% and office at 23% of the portfolio. Unfunded credit commitments were $9.2 billion and $8.8 billion at March 31, 2023, and December 31, 2022, respectively, for CRE mortgage loans and $18.9 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

$13.2 billion of CRE mortgage loans classified as criticized at March 31, 2023, compared with $11.3 billion at December 31, 2022, and $1.3 billion of CRE construction loans classified as criticized at March 31, 2023, compared with $1.1 billion at December 31, 2022. The increase in criticized CRE loans was predominantly driven by the office property type. 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. At March 31, 2023, nearly one-third of the CRE loans in the office property type had recourse to a guarantor, typically through a repayment guarantee, in addition to the related collateral. Loans in California and New York represented approximately 40% of the office property type at March 31, 2023.

Table 13 provides our CRE loans by state and property type.

Table 13:CRE Loans by State and Property Type


									March 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		$	313	28,898		1	4,550		314	33,448	4%		$	38,524		34,285	39,594
New York		133		14,585		—	2,433		133	17,018	2		19,375			17,294	19,360
Texas		21		11,672		—	1,288		21	12,960	1		14,952			12,807	14,941
Florida		9		9,693		—	1,850		9	11,543	1		14,531			11,418	14,690
North Carolina		6		4,123		—	1,064		6	5,187	*		6,826			5,227	6,650
Washington		86		4,247		—	1,437		86	5,684	*		6,745			5,603	6,868
Georgia		116		4,594		—	819		116	5,413	*		6,616			5,428	6,651
Arizona		13		4,730		—	601		13	5,331	*		6,254			5,302	6,288
New Jersey		7		2,727		—	1,480		7	4,207	*		5,519			4,119	5,660
Massachusetts		4		2,728		42	1,105		46	3,833	*		5,070			4,094	5,324
Other (2)		698		42,532		1	7,551		699	50,083	5		58,407			50,225	59,294
Total		$	1,406	130,529		44	24,178		1,450	154,707	16%		$	182,819		155,802	185,320
By property:
Apartments		$	8	30,636		—	9,396		8	40,032	4%		$	51,266		39,743	51,567
Office		725		31,788		—	3,883		725	35,671	4		39,867			36,144	40,827
Industrial/warehouse		36		16,914		—	3,573		36	20,487	2		24,415			20,634	24,546
Hotel/motel		151		11,464		—	1,337		151	12,801	1		13,889			12,751	13,758
Retail (excl shopping center)		198		11,478		2	122		200	11,600	1		12,310			11,753	12,486
Shopping center		197		8,957		—	418		197	9,375	*		10,003			9,534	10,131
Institutional		31		5,350		—	2,341		31	7,691	*		9,027			7,725	9,178
Mixed use properties		45		4,453		42	943		87	5,396	*		6,555			5,887	7,139
Collateral pool		—		3,078		—	41		—	3,119	*		3,477			3,062	3,662
1-4 family structure		—		7		—	1,242		—	1,249	*		3,325			1,324	3,589
Other		15		6,404		—	882		15	7,286	*		8,685			7,245	8,437
Total		$	1,406	130,529		44	24,178		1,450	154,707	16	%	$	182,819		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 14 (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 $4.0 billion and $4.1 billion at March 31, 2023, and December 31, 2022, respectively. Non-U.S. loans were $7.7 billion and $7.6 billion at March 31, 2023, and December 31, 2022, respectively.


			Wells Fargo & Company			29

Risk Management – Credit Risk Management (continued)

~~COMMERCIAL REAL ESTATE (CRE)~~ We generally subject CRE loans to individual risk assessment using our internal borrower and collateral quality ratings. We had $12.0 billion of CRE mortgage loans classified as criticized at March 31, 2022, compared with $13.1 billion at December 31, 2021, and $1.7 billion of CRE construction loans classified as criticized at both March 31, 2022 and December 31, 2021. The decrease in criticized CRE mortgage loans was driven by the hotel/motel, retail (excluding shopping center) and shopping center property types as these property types continued to recover from the economic impacts of the COVID-19 pandemic. The credit quality of certain property types within our CRE loan portfolio, such as office buildings, could continue to be adversely affected due to uncertainty in their recovery from the economic impacts of the COVID-19 pandemic.

The total CRE loan portfolio increased $2.3 billion from December 31, 2021, predominantly driven by an increase in mixed use properties and apartments property types. The CRE loan portfolio included $8.6 billion of non-U.S. CRE loans at March 31, 2022. 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 48% of the total CRE portfolio. The largest property type concentrations are office buildings at 24% and apartments at 22% of the portfolio.

~~Table 11 summarizes CRE loans by state and property type with the related nonaccrual totals at March 31, 2022.~~

~~Table 11:CRE Loans by State and Property Type~~

March 31, 2022
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 $ 175 30,403 1 3,840 176 34,243 4 %
New York 129 13,364 — 2,072 129 15,436 2
Texas 49 10,884 — 1,202 49 12,086 1
Florida 37 9,172 1 1,248 38 10,420 1
Washington 84 4,020 — 1,399 84 5,419 *
Georgia 12 4,719 — 412 12 5,131 *
Arizona 38 4,622 — 414 38 5,036 *
North Carolina 3 3,989 — 682 3 4,671 *
Illinois 16 3,654 — 553 16 4,207 *
New Jersey 23 2,705 — 924 23 3,629 *
Other (1) 467 41,963 2 7,867 469 49,830 5
Total $ 1,033 129,495 4 20,613 1,037 150,108 16 %
By property:
Office buildings $ 130 33,476 — 3,075 130 36,551 4 %
Apartments 13 26,317 — 7,184 13 33,501 4
Industrial/warehouse 70 16,047 — 1,882 70 17,929 2
Hotel/motel 200 10,897 — 1,542 200 12,439 1
Retail (excluding shopping center) 115 12,198 2 110 117 12,308 1
Shopping center 342 9,438 — 857 342 10,295 1
Institutional 38 5,385 1 2,501 39 7,886 *
Mixed use properties 71 6,341 — 1,162 71 7,503 *
Collateral pool — 3,371 — 232 — 3,603 *
Storage facility — 2,390 — 139 — 2,529 *
Other 54 3,635 1 1,929 55 5,564 *
Total $ 1,033 129,495 4 20,613 1,037 150,108 16 %

* 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 March 31, ~~2022,~~2023, non-U.S. loans totaled ~~$90.0~~$84.4 billion, representing approximately ~~10%~~9% of our total consolidated loans outstanding, compared with ~~$86.9~~$87.5 billion, or approximately ~~10%~~9% of our total consolidated loans outstanding, at December 31, ~~2021.~~2022. Non-U.S. loans were approximately 5%4% and 4%5% of our total consolidated assets at March 31, ~~2022,~~2023, and December 31, ~~2021,~~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 ~~the~~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 ~~the~~a borrower’s primary address.


30			~~Wells Fargo & Company~~

Our largest single country exposure outside the U.S. at March 31, ~~2022,~~2023, was the United Kingdom, which totaled ~~$40.2~~

$30.5 billion, or approximately 2% of our total assets, and included ~~$9.6~~$4.6 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 1214 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 ~~12:~~14:

•Lending and deposits 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 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.

Table ~~12:~~14: Select Country Exposures


		March 31, 2022											March 31, 2023
		Lending and deposits			Securities		Derivatives and other		Total exposure				Lending and deposits			Securities		Derivatives and other		Total exposure
($ in millions)	($ in millions)	Sovereign		Non-sovereign	Sovereign	Non-sovereign	Sovereign	Non-sovereign	Sovereign	Non- sovereign (1)	Total	($ in millions)	Sovereign		Non-sovereign	Sovereign	Non-sovereign	Sovereign	Non-sovereign	Sovereign	Non-sovereign (1)	Total
Top 20 country exposures:	Top 20 country exposures:											Top 20 country exposures:
United Kingdom	United Kingdom	$	9,561	26,111	—	1,087	1	3,451	9,562	30,649	40,211	United Kingdom	$	4,639	23,202	—	1,119	3	1,551	4,642	25,872	30,514
Canada	Canada	1		18,295	27	163	14	480	42	18,938	18,980	Canada	9		15,958	(1)	178	72	224	80	16,360	16,440
Cayman Islands	Cayman Islands	—		7,472	—	—	—	144	—	7,616	7,616	Cayman Islands	—		7,424	—	—	—	248	—	7,672	7,672
Luxembourg	Luxembourg	—		5,906	—	51	—	101	—	6,058	6,058	Luxembourg	—		6,531	—	132	—	225	—	6,888	6,888
Japan												Japan	3,838		627	—	604	—	96	3,838	1,327	5,165
France												France	53		3,948	539	161	101	53	693	4,162	4,855
Ireland	Ireland	559		5,121	—	249	—	63	559	5,433	5,992	Ireland	6		4,472	—	135	—	226	6	4,833	4,839
Japan		3,604		1,129	—	95	—	73	3,604	1,297	4,901
Guernsey		—		3,885	—	1	—	72	—	3,958	3,958
China		—		3,206	1	128	337	33	338	3,367	3,705
Bermuda	Bermuda	—		3,511	—	35	—	52	—	3,598	3,598	Bermuda	—		3,891	—	17	—	40	—	3,948	3,948
France		126		2,934	—	151	351	36	477	3,121	3,598
Germany	Germany	—		2,973	—	29	—	208	—	3,210	3,210	Germany	—		3,053	—	149	11	262	11	3,464	3,475
South Korea	South Korea	—		2,452	(1)	181	6	15	5	2,648	2,653	South Korea	—		2,722	3	351	—	4	3	3,077	3,080
Guernsey												Guernsey	—		3,208	—	—	—	12	—	3,220	3,220
Netherlands	Netherlands	—		2,156	—	91	—	81	—	2,328	2,328	Netherlands	—		2,745	—	109	—	89	—	2,943	2,943
Chile												Chile	—		1,879	—	253	—	1	—	2,133	2,133
Australia												Australia	—		1,721	—	150	—	17	—	1,888	1,888
China												China	12		1,594	—	179	55	30	67	1,803	1,870
Brazil												Brazil	—		1,288	—	(5)	—	1	—	1,284	1,284
Switzerland	Switzerland	—		1,595	—	(8)	—	171	—	1,758	1,758	Switzerland	—		1,053	—	(23)	—	176	—	1,206	1,206
Chile		—		1,673	—	2	—	2	—	1,677	1,677
India	India	—		1,467	—	103	—	—	—	1,570	1,570	India	275		909	(40)	(42)	—	—	235	867	1,102
Australia		—		1,305	—	228	—	14	—	1,547	1,547
United Arab Emirates		—		1,375	—	45	—	—	—	1,420	1,420
Brazil		—		1,171	—	(1)	85	—	85	1,170	1,255
Belgium												Belgium	—		945	—	—	—	—	—	945	945
Norway	Norway	—		1,141	—	24	—	7	—	1,172	1,172	Norway	—		738	—	116	—	21	—	875	875
Total top 20 country exposures	Total top 20 country exposures	$	13,851	94,878	27	2,654	794	5,003	14,672	102,535	117,207	Total top 20 country exposures	$	8,832	87,908	501	3,583	242	3,276	9,575	94,767	104,342

(1)Total non-sovereign exposure comprised ~~$54.3~~$47.2 billion exposure to financial institutions and ~~$48.2~~$47.6 billion to non-financial corporations at March 31, ~~2022.~~2023.

RESIDENTIAL MORTGAGE LOANS Our residential mortgage loan portfolio is comprised of ~~1-4~~1–4 family first and junior lien mortgage loans. Residential mortgage – first lien loans comprised ~~94%~~95% of the total residential mortgage loan portfolio at both March 31, ~~2022,~~2023, and December 31, ~~2021.~~2022.

The outstanding balance of residential mortgage lines of credit was $21.2 billion at March 31, 2022. The unfunded credit commitments for these lines of credit totaled $42.9 billion at March 31, 2022.

The residential mortgage loan portfolio includes ~~some~~ 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 ~~and some with an interest-only feature as part~~that limit the amount of the ~~loan terms. Interest-only~~increase in the contractual interest rate. The default risk of these loans is considered in our ACL for loans.

ARM loans were ~~approximately 3%~~7% of total loans at both March 31, ~~2022,~~2023, and December 31, ~~2021. We believe our origination process appropriately addresses our adjustable-rate mortgage (ARM)~~2022, with an initial reset ~~risk across our residential mortgage loans and our ACL~~date in 2025 or later for ~~loans considers~~the majority of this ~~risk.~~portfolio at March 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.

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


30			Wells Fargo & Company

payments, balloon payments, adjustable rates and similar

features. The outstanding balance of residential mortgage lines of credit was $17.2 billion at March 31, 2023, compared with $18.3 billion at December 31, 2022. The unfunded credit commitments for these lines of credit totaled $33.9 billion at March 31, 2023, compared with $35.5 billion at December 31, 2022. For additional information on our residential ~~mortgage~~ loan portfolio, see the “Risk Management – Credit Risk Management – Residential Mortgage Loans” section in our ~~2021~~2022 Form 10-K.

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. For additional information about our use of appraisals ~~AVMs,~~ and ~~our policy for their use,~~AVMs, see Note 45 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report and the “Risk Management – Credit Risk Management – Residential Mortgage Loans” section in our ~~2021~~2022 Form 10-K.

Part of our credit monitoring includes tracking delinquency, current ~~FICO~~Fair Isaac Corporation (FICO) credit 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 45 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.


			~~Wells Fargo & Company~~			31

We continue to modify residential mortgage loans to assist homeowners and other borrowers experiencing financial difficulties. For additional information on loan modifications, see Note 5 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report and the “Risk Management – Credit Risk Management – Residential Mortgage Loans” section in our ~~2021~~2022 Form 10-K. Customer payment deferral activities instituted in response to the COVID-19 pandemic could continue to delay the recognition of delinquencies. For 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 our 2021 Form 10-K.

Residential Mortgage – First Lien Portfolio Our residential mortgage – first lien portfolio ~~increased $3.0~~decreased $1.3 billion from

December 31, ~~2021, driven by originations of $18.4 billion,~~2022, due to loan paydowns, partially offset by loan paydowns and the transfer of $2.8 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.originations.

Table 1315 shows certain delinquency and loss information for the residential mortgage – first lien portfolio and lists the top five states by outstanding balance.

Table ~~13:~~15: Residential Mortgage – First Lien Portfolio Performance


		Outstanding balance			% of total loans			% of loans 30 days or more past due		Net loan charge-off rate quarter ended (1)(2)			Outstanding balance			% of total loans			% of loans 30 days or more past due		Net loan charge-off rate quarter ended (1)
($ in millions)	($ in millions)	Mar 31, 2022		Dec 31, 2021	Mar 31, 2022		Dec 31, 2021	Mar 31, 2022	Dec 31, 2021	Mar 31, 2022	Dec 31, 2021	($ in millions)	Mar 31, 2023		Dec 31, 2022	Mar 31, 2023		Dec 31, 2022	Mar 31, 2023	Dec 31, 2022	Mar 31, 2023	Dec 31, 2022

California ~~(3)~~(2)	California ~~(3)~~(2)	$	104,552	100,933	11.47	%	11.27	0.76	0.95	(0.01)	0.01	California ~~(3)~~(2)	$	110,551	110,877	11.66	%	11.60	0.43	0.45	0.01	—
New York	New York	30,498		30,039	3.34		3.35	1.01	1.34	(0.03)	0.50	New York	31,583		31,753	3.33		3.32	0.68	0.80	—	(0.02)
Washington												Washington	10,603		10,523	1.12		1.10	0.26	0.30	(0.06)	0.02
Florida												Florida	10,430		10,535	1.10		1.10	1.05	1.13	(0.12)	(0.14)
New Jersey	New Jersey	10,184		10,205	1.12		1.14	1.55	1.95	0.01	0.40	New Jersey	10,332		10,416	1.09		1.09	1.12	1.24	0.01	(0.01)
Florida		10,077		9,978	1.11		1.11	1.60	1.93	(0.06)	0.64
Washington		9,097		8,636	1.00		0.96	0.36	0.47	—	0.02
Other ~~(4)~~(3)	Other ~~(4)~~(3)	70,264		69,321	7.71		7.74	1.17	1.48	0.01	0.25	Other ~~(4)~~(3)	72,451		72,843	7.64		7.62	0.81	0.93	—	—
Total	Total	234,672		229,112	25.75		25.57	0.97	1.23	—	0.18	Total	245,950		246,947	25.94		25.83	0.62	0.69	—	(0.01)
Government insured/guaranteed loans ~~(5)~~(4)	Government insured/guaranteed loans ~~(5)~~(4)	10,570		13,158	1.16		1.47					Government insured/guaranteed loans ~~(5)~~(4)	8,578		8,860	0.90		0.93
Total first lien mortgage portfolio	Total first lien mortgage portfolio	$	245,242	242,270	26.91		27.04					Total first lien mortgage portfolio	$	254,528	255,807	26.84	%	26.76

(1)Quarterly net charge-offs as a percentage of average respective loans are annualized.

(2)The net loan charge-off rate for the quarter 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.

~~(3)~~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.

~~(4)~~(3)Consists of 45 states; no state in Other had loans in excess of ~~$7.3~~$7.6 billion and ~~$7.2~~$7.7 billion at March 31, ~~2022,~~2023, and December 31, ~~2021,~~2022, respectively.

~~(5)~~(4)Represents loans, substantially all of which were ~~repurchased~~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.


			Wells Fargo & Company			31

Risk Management – Credit Risk Management (continued)

Residential Mortgage – Junior Lien Portfolio Our residential mortgage – junior lien portfolio decreased ~~$1.2 billion~~$700 million from December 31, ~~2021,~~2022, driven by loan paydowns.

Table 1416 shows certain delinquency and loss information for the residential mortgage – junior lien portfolio and lists the top five states by outstanding balance.

Table ~~14:~~16: Residential Mortgage – Junior Lien Portfolio Performance


		Outstanding balance			% of total loans			% of loans 30 days or more past due		Net loan charge-off rate quarter ended (1)(2)			Outstanding balance			% of total loans			% of loans 30 days or more past due		Net loan charge-off rate quarter ended (1)
($ in millions)	($ in millions)	Mar 31, 2022		Dec 31, 2021	Mar 31, 2022		Dec 31, 2021	Mar 31, 2022	Dec 31, 2021	Mar 31, 2022	Dec 31, 2021	($ in millions)	Mar 31, 2023		Dec 31, 2022	Mar 31, 2023		Dec 31, 2022	Mar 31, 2023	Dec 31, 2022	Mar 31, 2023	Dec 31, 2022

California	California	$	3,984	4,310	0.44	%	0.48	3.23	3.52	(0.48)	(0.24)	California	$	3,396	3,550	0.36	%	0.37	1.78	2.02	(0.04)	(0.16)
New Jersey	New Jersey	1,625		1,728	0.18		0.19	2.98	2.98	(0.11)	0.54	New Jersey	1,305		1,383	0.14		0.14	2.82	2.76	(0.03)	0.21
Florida	Florida	1,396		1,533	0.15		0.17	2.33	2.54	(0.59)	0.87	Florida	1,092		1,165	0.12		0.12	2.53	2.69	(0.21)	(0.92)
Pennsylvania	Pennsylvania	972		1,039	0.11		0.12	2.16	2.19	—	0.12	Pennsylvania	780		832	0.08		0.09	2.87	2.76	0.03	(0.01)
New York	New York	913		975	0.10		0.11	3.82	4.05	(0.22)	2.71	New York	749		794	0.08		0.08	3.27	2.86	(0.35)	0.05
Other ~~(3)~~(2)	Other ~~(3)~~(2)	6,502		7,033	0.71		0.79	2.40	2.25	(0.59)	(0.11)	Other ~~(3)~~(2)	5,288		5,586	0.56		0.58	2.05	2.05	(0.49)	(0.36)
Total junior lien mortgage portfolio	Total junior lien mortgage portfolio	$	15,392	16,618	1.69	%	1.86	2.74	2.91	(0.46)	0.19	Total junior lien mortgage portfolio	$	12,610	13,310	1.34	%	1.38	2.22	2.27	(0.26)	(0.25)

(1)Quarterly net charge-offs as a percentage of average respective loans are annualized.

(2)The net loan charge-off rate for the quarter 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.

~~(3)~~Consists of 45 states; no state in Other had loans in excess of ~~$910~~$750 million and ~~$980~~$790 million at March 31, ~~2022~~2023, and December 31, ~~2021,~~2022, respectively.

CREDIT CARD, AUTO, AND OTHER CONSUMER LOANSTable 17 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 17: Credit Card, Auto, and Other Consumer Loans


	March 31, 2023				December 31, 2022
($ in millions)	Outstanding balance		% of total loans		Outstanding balance		% of total loans
Credit card	$	45,766	4.83	%	$	46,293	4.84	%
Auto	52,631		5.55		53,669		5.61
Other consumer (1)	28,239		2.98		29,276		3.06
Total	$	126,636	13.36	%	$	129,238	13.51	%

(1)Includes $18.4 billion and $19.4 billion at March 31, 2023, and December 31, 2022, respectively, of commercial and consumer securities-based loans originated by the WIM operating segment.

Credit Card The decrease in the outstanding balance at March 31, 2023, compared with December 31, 2022, was due to seasonally lower purchase volume.

Auto The decrease in the outstanding balance at March 31, 2023, compared with December 31, 2022, was due to lower origination volumes reflecting credit tightening actions and continued price competition due to rising interest rates.

Other Consumer The decrease in the outstanding balance at March 31, 2023, compared with December 31, 2022, was due to lower originations reflecting seasonality.


32			Wells Fargo & Company

~~CREDIT CARD, AUTO AND OTHER CONSUMER LOANS~~Table 15 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 15:~~ ~~Credit Card, Auto, and Other Consumer Loans~~

March 31, 2022 December 31, 2021
($ in millions) Outstanding
balance % of
total
loans Outstanding
balance % of
total
loans
Credit card $ 38,639 4.24 % $ 38,453 4.29 %
Auto 57,083 6.26 56,659 6.33
Other consumer (1) 28,737 3.15 28,274 3.16
Total $ 124,459 13.65 % $ 123,386 13.78 %

~~(1)Other consumer loans primarily include securities-based loans.~~

NONPERFORMING ASSETS (NONACCRUAL LOANS AND FORECLOSED ASSETS) For information about when we generally place loans on nonaccrual status, see Note 1 (Summary of Significant

Accounting Policies) to Financial Statements in our ~~2021~~2022 Form 10-K. 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 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 our 2021 Form 10-K.

Table 1618 summarizes nonperforming assets (NPAs).

Table ~~16:~~18: Nonperforming Assets (Nonaccrual Loans and Foreclosed Assets)


($ in millions)	($ in millions)	Mar 31, 2022			Dec 31, 2021	($ in millions)	Mar 31, 2023			Dec 31, 2022
Nonaccrual loans:	Nonaccrual loans:					Nonaccrual loans:
Commercial:
Commercial and industrial	Commercial and industrial	$	799		980	Commercial and industrial	$	739		746
Real estate mortgage		1,033			1,235
Real estate construction		4			13

Commercial real estate						Commercial real estate	1,450			958
Lease financing	Lease financing	117			148	Lease financing	86			119
Total commercial	Total commercial	1,953			2,376	Total commercial	2,275			1,823
Consumer:
Residential mortgage – first lien (1)		3,873			3,803
Residential mortgage – junior lien (1)		802			801

Residential mortgage (1)						Residential mortgage (1)	3,552			3,611
Auto	Auto	208			198	Auto	145			153
Other consumer	Other consumer	35			34	Other consumer	38			39
Total consumer	Total consumer	4,918			4,836	Total consumer	3,735			3,803
Total nonaccrual loans	Total nonaccrual loans	$	6,871		7,212	Total nonaccrual loans	$	6,010		5,626
As a percentage of total loans	As a percentage of total loans	0.75		%	0.81	As a percentage of total loans	0.63		%	0.59
Foreclosed assets:	Foreclosed assets:					Foreclosed assets:
Government insured/guaranteed (2)	Government insured/guaranteed (2)	$	16		16	Government insured/guaranteed (2)	$	18		22
Non-government insured/guaranteed	Non-government insured/guaranteed	114			96	Non-government insured/guaranteed	114			115
Total foreclosed assets	Total foreclosed assets	130			112	Total foreclosed assets	132			137
Total nonperforming assets	Total nonperforming assets	$	7,001		7,324	Total nonperforming assets	$	6,142		5,763
As a percentage of total loans	As a percentage of total loans	0.77		%	0.82	As a percentage of total loans	0.65		%	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~~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 our ~~2021~~2022 Form 10-K.

Commercial nonaccrual loans ~~decreased $423~~increased $452 million from December 31, ~~2021, predominantly due to a decline~~2022, driven by an increase in commercial ~~and industrial~~real estate nonaccrual loans, ~~primarily in~~predominantly within the ~~oil, gas, and pipelines industry, and a decline in real estate mortgage nonaccrual loans.~~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 ~~increased $82~~decreased $68 million from December 31, ~~2021, driven by an increase in~~2022, due to lower residential mortgage nonaccrual loans primarily resulting from certain customers exiting COVID-19-related accommodation programs. Customers requiring further payment assistance after exiting from these programs may have their loans modified or may be eligible to receive modifications.loans.


			Wells Fargo & Company			33

Risk Management – Credit Risk Management (continued)

Table 1719 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 ~~17:~~19: Analysis of Changes in Nonaccrual Loans


		Quarter ended March 31,			Quarter ended March 31,

(in millions)	(in millions)	2022		2021		(in millions)	2023		2022
Commercial nonaccrual loans	Commercial nonaccrual loans					Commercial nonaccrual loans
Balance, beginning of period	Balance, beginning of period	$	2,376	4,779		Balance, beginning of period	$	1,823	2,376
Inflows	Inflows	191		773		Inflows	1,046		191
Outflows:	Outflows:					Outflows:
Returned to accruing	Returned to accruing	(194)		(177)		Returned to accruing	(146)		(194)
Foreclosures	Foreclosures	(19)		(6)		Foreclosures	—		(19)
Charge-offs	Charge-offs	(35)		(202)		Charge-offs	(115)		(35)
Payments, sales and other	Payments, sales and other	(366)		(937)		Payments, sales and other	(333)		(366)
Total outflows	Total outflows	(614)		(1,322)		Total outflows	(594)		(614)
Balance, end of period	Balance, end of period	1,953		4,230		Balance, end of period	2,275		1,953
Consumer nonaccrual loans	Consumer nonaccrual loans					Consumer nonaccrual loans
Balance, beginning of period	Balance, beginning of period	4,836		3,949		Balance, beginning of period	3,803		4,836
Inflows	Inflows	594		454		Inflows	347		594
Outflows:	Outflows:					Outflows:
Returned to accruing	Returned to accruing	(186)		(152)		Returned to accruing	(192)		(186)
Foreclosures	Foreclosures	(18)		(19)		Foreclosures	(26)		(18)
Charge-offs	Charge-offs	(74)		(26)		Charge-offs	(38)		(74)
Payments, sales and other	Payments, sales and other	(234)		(381)		Payments, sales and other	(159)		(234)
Total outflows	Total outflows	(512)		(578)		Total outflows	(415)		(512)
Balance, end of period	Balance, end of period	4,918		3,825		Balance, end of period	3,735		4,918
Total nonaccrual loans	Total nonaccrual loans	$	6,871	8,055		Total nonaccrual loans	$	6,010	6,871

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 March 31, ~~2022:~~2023:

•~~94%~~97% of total commercial nonaccrual loans are secured, the majority of which are secured by real estate.

•~~80%~~86% of commercial nonaccrual loans were current on interest and 78% 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%~~98% have a ~~combined LTV (CLTV)~~CLTV ratio of 80% or less.

•$~~664~~578 million of the ~~$858~~$721 million of consumer loans in bankruptcy or discharged in bankruptcy, and classified as nonaccrual, were current.

Table 20 provides a summary of foreclosed assets and an analysis of changes in foreclosed assets.

Table 20:Foreclosed Assets


(in millions)				Mar 31, 2023		Dec 31, 2022



Summary by loan segment
Government insured/guaranteed	$	18	22
Commercial	67		65
Consumer	47		50
Total foreclosed assets	$	132	137
(in millions)			Quarter ended March 31,
				2023		2022
Analysis of changes in foreclosed assets
Balance, beginning of period				137		112
Net change in government insured/guaranteed (1)				(4)		—
Additions to foreclosed assets (2)				123		102
Reductions from sales and write-downs				(124)		(84)
Balance, end of period				$	132	130

(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.


34			Wells Fargo & Company

~~Table 18 provides a summary of foreclosed assets and an analysis of changes in foreclosed assets.~~

~~Table 18:Foreclosed Assets~~

(in millions) Mar 31,
2022 Dec 31,
2021
Summary by loan segment
Government insured/guaranteed $ 16 16
Commercial 71 54
Consumer 43 42
Total foreclosed assets $ 130 112
(in millions) Quarter ended March 31,
2022 2021
Analysis of changes in foreclosed assets
Balance, beginning of period $ 112 159
Net change in government insured/guaranteed (1) — (2)
Additions to foreclosed assets (2) 102 88
Reductions from sales and write-downs (84) (105)
Balance, end of period $ 130 140

~~(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 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 4 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.


			~~Wells Fargo & Company~~			35

TROUBLED DEBT RESTRUCTURINGS (TDRs) ~~Table 19 provides~~In January 2023, we adopted ASU 2022-02, which eliminated the accounting and reporting guidance for TDRs. For additional information, ~~regarding the recorded investment~~see Note 1 (Summary of ~~loans modified~~Significant Accounting Policies) to Financial Statements in ~~TDRs. TDRs decreased from~~this Report.

At December 31, 2021, predominantly driven by a decrease in residential mortgage – first lien loans, partially offset by an increase in trial modifications. 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.

2022, TDRs totaled $9.2 billion. The amount of our TDRs ~~at March 31, 2022,~~for COVID-related loan modification programs would have otherwise been higher without the TDR relief provided by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act)

and the I~~nteragency~~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.~~modifications. For additional information on customer accommodations, including loan modifications, in response to the ~~CARES Act and the Interagency Statement,~~COVID-19 pandemic, see ~~the “Risk Management – Credit Risk Management – COVID-Related Lending Accommodations” section in our 2021 Form 10-K.~~

~~Table 19:TDR Balances~~

March 31, December 31,
(in millions) 2022 2021
Commercial:
Commercial and industrial $ 672 793
Real estate mortgage 530 543
Real estate construction 2 2
Lease financing 8 10
Total commercial TDRs 1,212 1,348
Consumer:
Residential mortgage – first lien 6,757 7,282
Residential mortgage – junior lien 906 946
Credit card 329 309
Auto 179 169
Other consumer 52 57
Trial modifications 277 71
Total consumer TDRs 8,500 8,834
Total TDRs $ 9,712 10,182
TDRs on nonaccrual status $ 3,270 3,142
TDRs on accrual status:
Government insured/guaranteed 2,068 2,462
Non-government insured/guaranteed 4,374 4,578
Total TDRs $ 9,712 10,182


36			~~Wells Fargo & Company~~

For information on our nonaccrual policies when a restructuring is involved, see the “Risk Management – Credit Risk Management – Troubled Debt Restructurings (TDRs)” section in our 2021 Form 10-K. See Note ~~4 (Loans and Related Allowance for Credit Losses)~~1 (Summary of Significant Accounting Policies) to Financial Statements in ~~this Report for additional information regarding TDRs.~~

our 2022 Form 10-K.

Table 20 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 20:Analysis of Changes in TDRs~~

Quarter ended March 31,
(in millions) 2022 2021
Commercial TDRs
Balance, beginning of period $ 1,348 2,731
Inflows (1) 87 155
Outflows
Charge-offs (1) (49)
Foreclosure — (5)
Payments, sales and other (2) (222) (819)
Balance, end of period 1,212 2,013
Consumer TDRs
Balance, beginning of period 8,834 11,792
Inflows (1) 458 633
Outflows
Charge-offs (33) (43)
Foreclosure (12) (14)
Payments, sales and other (2) (953) (1,024)
Net change in trial modifications (3) 206 (9)
Balance, end of period 8,500 11,335
Total TDRs $ 9,712 13,348

~~(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.


			~~Wells Fargo & Company~~			37

NET CHARGE-OFFS Table 21 presents net loan charge-offs.

Table 21: Net Loan Charge-offs

Quarter ended March 31,
2022 2021
($ in millions) Net loan
charge-
offs % of
avg.
loans (1) Net loan
charge-
offs % of
avg.
loans (1)
Commercial:
Commercial and industrial $ (23) (0.03) % $ 88 0.11 %
Real estate mortgage (5) (0.02) 46 0.16
Real estate construction — — — —
Lease financing (1) (0.02) 15 0.40
Total commercial (29) (0.02) 149 0.13
Consumer:
Residential mortgage – first lien (3) — (24) (0.04)
Residential mortgage – junior lien (18) (0.46) (19) (0.35)
Credit card 176 1.87 236 2.71
Auto 96 0.68 52 0.44
Other consumer 83 1.20 119 1.97
Total consumer 334 0.35 364 0.37
Total $ 305 0.14 % $ 513 0.24 %


		Quarter ended March 31,
		2023				2022
($ in millions)		Net loan charge- offs		% of avg. loans (1)		Net loan charge- offs		% of avg. loans (1)




Commercial and industrial		$	43	0.05	%	$	(23)	(0.03)	%


Commercial real estate		17		0.04		(5)		(0.01)
Lease financing		3		0.07		(1)		(0.02)
	Total commercial	63		0.05		(29)		(0.02)


Residential mortgage		(11)		(0.02)		(21)		(0.03)
Credit card		344		3.05		176		1.87
Auto		121		0.93		96		0.68
Other consumer		87		1.21		83		1.20
	Total consumer	541		0.56		334		0.35
	Total	$	604	0.26	%	$	305	0.14	%

(1)~~Quarterly net~~Net loan charge-offs as a percentage of average respective loans are annualized.

The ~~decrease~~increase in commercial net loan charge-offs in first quarter ~~2022,~~2023, compared with the same period a year ago, was driven by higher losses across all commercial portfolios, primarily in ~~2021, was due to lower losses in the~~our commercial and industrial ~~portfolio, driven by higher recoveries in the oil, gas, and pipeline industry, and lower losses in the real estate mortgage~~ portfolio.

The ~~decrease~~increase in consumer net loan charge-offs in first quarter ~~2022,~~2023, compared with the same period ~~in 2021,~~a year ago, was driven by ~~lower~~higher losses in all consumer portfolios, primarily in our credit card due to elevated losses in first quarter 2021 and lower losses in other consumer due to the sale of a portion of our student loan portfolio in first quarter 2021, partially offset by an increase in auto losses reflecting reduced benefits for customers from government stimulus programs instituted in response to the COVID-19 pandemic.

~~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 information on customer accommodations in response to the COVID-19 pandemic, see the “Risk Management – Credit Risk Management – COVID-Related Lending Accommodations” section in our 2021 Form 10-K.

ALLOWANCE FOR CREDIT LOSSES We maintain an allowance for credit losses (ACL) for loans, which is management’s estimate of the expected ~~life-time~~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.

~~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 our ~~2021~~2022 Form 10-K. For additional information on our ACL for loans, see Note 45 (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 22 presents the allocation of the ACL for loans by loan portfolio segment and class.


38			Wells Fargo & Company			35

Risk Management – Credit Risk Management (continued)

Table 22: Allocation of the ACL for Loans


		Mar 31, 2022					Dec 31, 2021					Mar 31, 2023							Dec 31, 2022
($ in millions)	($ in millions)	ACL		Loans as % of total loans			ACL		Loans as % of total loans		($ 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:
Commercial and industrial	Commercial and industrial	$	4,625	40		%	$	4,873	39	%	Commercial and industrial	$	4,287	1.11	%	40			$	4,507	1.17	%	40
Real estate mortgage		1,883		14			2,085		14
Real estate construction		366		2			431		2

Commercial real estate											Commercial real estate	2,724		1.76		16			2,231		1.43		16
Lease financing	Lease financing	274		2			402		2		Lease financing	213		1.44		2			218		1.46		2
Total commercial	Total commercial	7,148		58			7,791		57		Total commercial	7,224		1.30		58			6,956		1.25		58
Consumer:
Residential mortgage – first lien		927		27			1,156		28
Residential mortgage – junior lien		2		2			130		2

Residential mortgage (1)											Residential mortgage (1)	751		0.28		28			1,096		0.41		28
Credit card	Credit card	3,094		4			3,290		4		Credit card	3,641		7.96		5			3,567		7.71		5
Auto	Auto	1,030		6			928		6		Auto	1,449		2.75		6			1,380		2.57		6
Other consumer	Other consumer	480		3			493		3		Other consumer	640		2.27		3			610		2.08		3
Total consumer	Total consumer	5,533		42			5,997		43		Total consumer	6,481		1.65		42			6,653		1.67		42
Total	Total	$	12,681	100		%	$	13,788	100	%	Total	$	13,705	1.45	%	100			$	13,609	1.42	%	100

Components:	Components:										Components:
Allowance for loan losses	Allowance for loan losses			$	11,504				12,490		Allowance for loan losses					$	13,120						12,985
Allowance for unfunded credit commitments	Allowance for unfunded credit commitments			1,177					1,298		Allowance for unfunded credit commitments					585							624
Allowance for credit losses	Allowance for credit losses			$	12,681				13,788		Allowance for credit losses					$	13,705						13,609
Ratio of allowance for loan losses to total net loan charge-offs (2)											Ratio of allowance for loan losses to total net loan charge-offs (2)					5.35x							8.08

Ratio of allowance for loan losses to total net loan charge-offs (annualized)				9.31x					7.94
Ratio of allowance for loan losses to total nonaccrual loans	Ratio of allowance for loan losses to total nonaccrual loans			1.67					1.73		Ratio of allowance for loan losses to total nonaccrual loans					2.18							2.31
Allowance for loan losses as a percentage of total loans	Allowance for loan losses as a percentage of total loans			1.26		%			1.39		Allowance for loan losses as a percentage of total loans					1.38		%					1.36
Allowance for credit losses for loans as a percentage of total loans				1.39					1.54

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

(2)Total net loan charge-offs are annualized for the quarter ended March 31, 2023.

The ratios for the allowance for loan losses and the ACL for loans presented in Table 22 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 $1.1 billion,~~increased $96 million, or 8%1%, from December 31, ~~2021,~~2022, reflecting ~~reduced uncertainty around the economic impact of the COVID-19 pandemic on our loan portfolios~~increases for commercial real estate loans, primarily office loans, as well as for credit card and ~~increased uncertainty~~auto loans, partially offset by a decrease for residential mortgage loans related to the ~~risks~~adoption of ~~high inflation.~~ASU 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. 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 45 (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. InWe weighted the base scenario and the downside scenarios in our estimate of the ACL for loans at March 31, 2022, we weighted the base scenario and the downside scenarios to reflect our expectations for reduced uncertainty around the economic impact of the COVID-19 pandemic and increased uncertainty related to inflationary and geopolitical risks.2023. The base scenario assumed ~~solid~~elevated inflation and economic ~~conditions with elevated inflation~~contraction in the near ~~term.~~term, reflecting increased unemployment rates from historically low levels and declining property values. The downside scenarios assumed a more substantial economic ~~contractions, including higher geopolitical risks~~contraction due to high inflation, declining property values, and ~~inflation levels exceeding those in the base scenario.~~lower business and consumer confidence.

Additionally, we consider qualitative factors that represent ~~risks~~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 March 31, ~~2022,~~2023, and December 31, ~~2021,~~2022, are presented in Table 23.

Table 23: Forecasted Key Economic Variables

2Q 2022 4Q 2022 2Q 2023
Weighted blend of economic scenarios:
U.S. unemployment rate (1):
December 31, 2021 4.8 % 5.4 5.9
March 31, 2022 4.1 4.7 5.6
U.S. real GDP (2):
December 31, 2021 1.4 (0.3) 1.4
March 31, 2022 1.2 (0.6) 0.2
Home price index (3):
December 31, 2021 5.9 (4.3) (6.0)
March 31, 2022 12.2 2.1 (3.1)
Commercial real estate asset prices (3):
December 31, 2021 5.0 (4.2) (6.0)
March 31, 2022 13.0 2.8 (2.7)


	2Q 2023		4Q 2023	2Q 2024
Weighted blend of economic scenarios:
U.S. unemployment rate (1):


March 31, 2023	3.8	%	4.7	5.6
December 31, 2022	4.3		5.5	6.2

U.S. real GDP (2):


March 31, 2023	(1.2)		(0.3)	0.5
December 31, 2022	(2.5)		(1.0)	1.1

Home price index (3):


March 31, 2023	(2.9)		(5.5)	(7.7)
December 31, 2022	(4.7)		(7.0)	(6.2)

Commercial real estate asset prices (3):


March 31, 2023	(1.2)		(5.2)	(8.0)
December 31, 2022	(3.8)		(6.7)	(5.8)

(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 real GDP), among other factors.


36			Wells Fargo & Company

We believe the ACL for loans of ~~$12.7~~$13.7 billion at March 31, ~~2022,~~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


			~~Wells Fargo & Company~~			39

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 our ~~2021~~2022 Form 10-K.

MORTGAGE BANKING ACTIVITIES We sell residential and commercial mortgage loans to various parties. In connection with our sales and securitization of residential mortgage loans, we have established a mortgage repurchase liability. For information on our repurchase liability, see the “Risk Management – Credit Risk Management – Mortgage Banking Activities” section in our ~~2021~~2022 Form 10-K.

In addition to servicing loans in our portfolio, we act as servicer and/or master servicer of residential and commercial mortgage loans included in ~~government sponsored entity (GSE)-guaranteed~~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.

As a servicer, we are required to advance certain delinquent payments of principal and interest on mortgage loans we service. The amount and timing of reimbursement for advances of delinquent payments vary by investor and the applicable servicing agreements. See Note 96 (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. Uponupon 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~~may repurchase these loans for cash and as a result, our total consolidated assets do not change. These repurchased loan balances were $14.2 billion and $17.3 billion at March 31, 2022 and December 31, 2021, respectively, which included $10.3 billion and $12.9 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,~~At March 31, 2023, and December 31, 2022, these loans, which we have repurchased or have the option to repurchase, were $9.3 billion and $9.8 billion, respectively, which included $8.3 billion and $8.6 billion, respectively, in ~~accordance~~loans held for investment, with ~~guidance issued by GNMA, certain~~the remainder in loans ~~repurchased after June 30, 2020, are ineligible~~held 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.~~sale. See

Note 813 (Securitizations and Variable Interest Entities) to Financial Statements in this Report for additional information about our involvement with mortgage loan securitizations.

For additional information about the risks related to our servicing activities, see the “Risk Management – Credit Risk Management – Mortgage Banking Activities” section in our ~~2021~~2022 Form 10-K. For additional information on mortgage banking activities, see Note 96 (Mortgage Banking Activities) to Financial Statements in this Report.

Asset/Liability Management

Asset/liability management involves evaluating, monitoring and managing interest rate risk, market risk, liquidity and funding. For information on our oversight of asset/liability risks, see the “Risk Management – Asset/Liability Management” section in our ~~2021~~2022 Form 10-K.

INTEREST RATE RISK Interest rate risk is ~~created~~the risk that market fluctuations in ~~our role as~~interest rates, credit spreads, or foreign exchange can cause a ~~financial intermediary for customers based on investments~~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 ~~loans~~lending and ~~other extensions of credit and debt securities. Interest rate risk can have a significant impact to our earnings.~~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, ~~MBS held in the debt securities portfolio~~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 24, 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 24:

•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.


			Wells Fargo & Company			37

Risk Management – Asset/Liability Management (continued)

•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~~and the alternative scenarios. In higher interest rate scenarios, customer deposit activity that shifts balances into ~~higher-~~


40			~~Wells Fargo & Company~~

higher yielding products could impact expected net interest income.

•~~Deposit rates paid may change with market interest rate changes. Our~~The interest rate sensitivity of deposits ~~referred to as deposit betas,~~ is modeled using the historical behavior of our deposits portfolio ~~including certain customer account migration. The~~and reflects the expectations of deposit products repricing as market interest rates change (referred to as deposit betas). Our actual ~~deposit rates paid~~experience in base and alternative scenarios may differ from ~~the assumed deposit rates paid in these scenarios~~expectations due to ~~lags~~the lag or acceleration of deposit repricing, changes in ~~repricing, customer~~consumer behavior, and other factors.

•We hold the size of the projected debt and equity securities portfolios constant across scenarios.

Table 24: Net Interest Income Sensitivity Over the Next 12 Months Using Instantaneous Movements


($ in billions)	($ in billions)	Mar 31, 2022		Dec 31, 2021	($ in billions)	Mar 31, 2023		Dec 31, 2022
Parallel Shift:
Parallel shift:					Parallel shift:
+100 bps shift in interest rates	+100 bps shift in interest rates	$	5.7	7.1	+100 bps shift in interest rates	$	2.1	2.3
-100 bps shift in interest rates	-100 bps shift in interest rates	(6.1)		(3.3)	-100 bps shift in interest rates	(2.1)		(1.7)

Steeper yield curve:	Steeper yield curve:				Steeper yield curve:
+50 bps shift in long-term interest rates		0.9		1.2
+100 bps shift in long-term interest rates					+100 bps shift in long-term interest rates	1.0		0.8
-100 bps shift in short-term interest rates					-100 bps shift in short-term interest rates	(1.2)		(1.0)

Flatter yield curve:	Flatter yield curve:				Flatter yield curve:
+50 bps shift in short-term interest rates		2.3		2.6
-50 bps shift in long-term interest rates		(0.7)		(1.0)
+100 bps shift in short-term interest rates					+100 bps shift in short-term interest rates	1.1		1.5
-100 bps shift in long-term interest rates					-100 bps shift in long-term interest rates	(0.9)		(0.7)

The changes in our interest rate sensitivity from December 31, ~~2021~~2022, to March 31, ~~2022~~2023, in Table 24 reflected updates to our base scenario, ~~which included higher~~including expectations for balance sheet composition and interest ~~rates and changes to our assets and liabilities.~~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 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~~impacted by mortgage banking activities ~~and~~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 our ~~2021~~2022 Form 10-K 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.

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 ~~cumulative~~accumulated other comprehensive income (AOCI), which lowers the amount of our ~~risk-based~~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 the following main ways:

•to convert the cash flows from selected asset and/or liability instruments/portfolios including certain interest-earning deposits, commercial loans and long-term debt, from floating-rate payments to fixed-rate payments, or vice versa;

•to reduce AOCI sensitivity of our AFS debt securities portfolio; and

•to 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 ~~our 2021 Form 10-K for additional information.~~this Report.

MORTGAGE BANKING INTEREST RATE AND MARKET RISK We originate, fund and service mortgage loans, which subjects us to various risks, including ~~credit, liquidity and~~market, interest rate, ~~risks.~~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, 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. For additional information on mortgage banking, ~~interest rate~~including key assumptions and ~~market risk,~~the sensitivity of the fair value of MSRs, see ~~Note 9 (Mortgage Banking Activities) to~~

~~Financial Statements in this Report and~~ the “Risk Management – Asset/Liability Management – Mortgage Banking Interest Rate and Market Risk” section and Note 6 (Mortgage Banking Activities), Note 11 (Derivatives), and Note 12 (Fair Values of Assets and Liabilities) to Financial Statements in our ~~2021~~2022 Form 10-K.

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,~~loans held at fair value, and impairment of private equity investments. For information on our oversight of market risk, see the “Risk


38			Wells Fargo & Company

Management – Asset/Liability Management – Market Risk” section in our ~~2021~~2022 Form 10-K.

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.

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. For additional information on our monitoring activities, sensitivity analysis and stress testing, see the “Risk Management – Asset/Liability Management – Market Risk – Trading Activities” section in our ~~2021~~2022 Form 10-K.

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 25 shows the Company’s Trading General VaR by risk category. The ~~decrease~~increase in average Company Trading General VaR for the quarter ended March 31, ~~2022,~~2023, compared with the same


			~~Wells Fargo & Company~~			41

~~Risk Management – Asset/Liability Management~~ ~~(continued)~~

period a year ago, was primarily driven by ~~reduced market volatility in thelookback window used to calculate average Company Trading General VaR for the quarter ended March 31, 2022. Market volatility present in average Company Trading General VaR for~~

~~the quarter ended March 31, 2021, was driven by the impact of the COVID-19 pandemic, primarily resulting in~~ changes in ~~interest rate curves and a significant widening of credit spreads.~~portfolio composition.

Table 25: Trading 1-Day 99% General VaR by Risk Category


		Quarter ended												Quarter ended
		March 31, 2022					December 31, 2021				March 31, 2021				March 31, 2023					December 31, 2022					March 31, 2022
(in millions)	(in millions)	Period end		Average	Low	High	Period end	Average	Low	High	Period end	Average	Low	High			(in millions)	Period end		Average	Low	High	Period end	Average	Low	High	Period end	Average	Low	High
Company Trading General VaR Risk Categories	Company Trading General VaR Risk Categories															Company Trading General VaR Risk Categories
Credit	Credit	$	33	28	20	35	19	21	16	27	22	94	21	112			Credit	34		27	20	37	29	37	27	85	33	28	20	35
Interest rate	Interest rate	26		15	9	30	15	12	9	15	36	73	26	120			Interest rate	40		32	19	48	25	35	20	88	26	15	9	30
Equity	Equity	26		21	13	28	15	19	13	29	35	36	28	72			Equity	24		24	19	31	27	25	20	30	26	21	13	28
Commodity	Commodity	6		5	2	20	10	8	2	23	11	5	2	12			Commodity	3		4	3	8	4	5	4	8	6	5	2	20
Foreign exchange	Foreign exchange	1		1	0	1	1	0	0	1	1	1	1	1			Foreign exchange	0		1	0	3	1	1	1	2	1	1	0	1
Diversification benefit (1)	Diversification benefit (1)	(63)		(43)			(40)	(37)			(64)	(111)					Diversification benefit (1)	(67)		(49)			(47)	(60)			(63)	(43)
Company Trading General VaR	Company Trading General VaR	29		27			20	23			41	98					Company Trading General VaR	$	34	39			39	43			29	27

(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.

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. For additional information, see the “Risk Management – Asset/Liability Management – Market Risk – Equity Securities” section in our ~~2021~~2022 Form 10-K.

We also have marketable equity securities that include investments relating to our venture capital activities. The fair value changes in these marketable equity securities are recognized in net income. For additional information, see Note 64 (Equity Securities) to Financial Statements in this Report.

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.

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 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.

To help achieve this objective, ~~we monitor~~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 management-level Corporate Asset/Liability Committee and on a quarterly basis by the Board. These guidelines are established and monitored for both the ~~consolidated company~~Company and the Parent on a stand-alone basis ~~to ensure~~so 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 liquidity risk and funding management, see the “Risk Management – Liquidity Risk and Funding” section in our ~~2021~~2022 Form 10-K. ~~For additional information on the IHC, see the “Regulatory Matters – ‘Living Will’ Requirements and Related Matters” section in our 2021 Form 10-K.~~


			Wells Fargo & Company			39

Risk Management – Asset/Liability Management (continued)

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 ~~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 March 31, ~~2022,~~2023, we were compliant with the NSFR requirement.

Liquidity Coverage Ratio As of March 31, ~~2022,~~2023, 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 26 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.


42			~~Wells Fargo & Company~~

Table 26: Liquidity Coverage Ratio


		Average for Quarter ended						Average for quarter ended
(in millions, except ratio)	(in millions, except ratio)	Mar 31, 2022			Dec 31, 2021	Mar 31, 2021	(in millions, except ratio)	Mar 31, 2023			Dec 31, 2022	Mar 31, 2022
HQLA (1):	HQLA (1):						HQLA (1):
Eligible cash	Eligible cash	$	170,867		210,527	216,403	Eligible cash	$	108,725		123,446	170,867
Eligible securities (2)	Eligible securities (2)	203,622			172,761	186,270	Eligible securities (2)	239,123			231,337	203,622
Total HQLA	Total HQLA	374,489			383,288	402,673	Total HQLA	347,848			354,783	374,489
Projected net cash outflows(3)	Projected net cash outflows(3)	314,691			325,015	316,116	Projected net cash outflows(3)	284,290			292,001	314,691
LCR	LCR	119		%	118	127	LCR	122		%	122	119

(1)Excludes excess HQLA at certain subsidiaries that isare 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, ~~cash equivalents~~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 27 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~~We believe the debt securities included ~~as part of our primary sources of liquidity are comprised of U.S. Treasury~~in Table 27 provide quick and ~~federal agency debt, and MBS issued by federal agencies within our debt securities portfolio. We believe these debt securities provide quick~~reliable sources of liquidity through sales or by pledging to obtain financing, regardless of market conditions. ~~Some of these debt~~Debt securities ~~are~~ within our HTM portfolio ~~and, as such,~~ are not intended for sale but may be pledged to obtain financing.

Table 27: Primary Sources of Liquidity


		March 31, 2022				December 31, 2021				March 31, 2023				December 31, 2022
(in millions)	(in millions)	Total		Encumbered	Unencumbered	Total	Encumbered	Unencumbered	(in millions)	Total		Encumbered	Unencumbered	Total	Encumbered	Unencumbered
Interest-earning deposits with banks(1)	Interest-earning deposits with banks(1)	$	174,441	—	174,441	209,614	—	209,614	Interest-earning deposits with banks(1)	$	124,473	—	124,473	124,561	—	124,561
Debt securities of U.S. Treasury and federal agencies	Debt securities of U.S. Treasury and federal agencies	61,984		5,414	56,570	56,486	4,066	52,420	Debt securities of U.S. Treasury and federal agencies	60,491		7,782	52,709	59,570	12,080	47,490
Federal agency mortgage-backed securities ~~(1)~~	Federal agency mortgage-backed securities ~~(1)~~	276,450		49,248	227,202	293,870	58,955	234,915	Federal agency mortgage-backed securities ~~(1)~~	245,761		24,701	221,060	230,881	34,151	196,730
Total	Total	$	512,875	54,662	458,213	559,970	63,021	496,949	Total	$	430,725	32,483	398,242	415,012	46,231	368,781

(1)~~Included~~Excludes time deposits, which are included in ~~encumbered securities at March 31, 2022, were securities~~interest-earning deposits with ~~a fair value of $836 million, which were purchased~~banks in ~~March 2022, but settled in April 2022.~~our consolidated balance sheet.

In addition to our primary sources of liquidity shown in

Table 27, 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

Funding Sources The Parent acts as a source of ~~March 31,~~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 our 2022 ~~we also maintained approximately $213.7 billion of available borrowing capacity at various Federal Home Loan Banks~~Form 10-K. Additional subsidiary funding is provided by deposits, short-term borrowings and ~~the Federal Reserve Discount Window.~~long-term debt.

Deposits have historically provided a sizable source of relatively low-cost funds. Deposits were ~~162%~~144% and ~~166%~~145% of total

loans at March 31, ~~2022,~~2023, and December 31, ~~2021,~~2022, respectively. ~~Additional funding is provided by long-term debt~~

As of March 31, 2023, we had approximately $219.1 billion of available borrowing capacity at various Federal Home Loan


40			Wells Fargo & Company

Banks and ~~short-term borrowings.~~ 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 28 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 our 2022 Form 10-K. 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 1215 (Pledged Assets and Collateral) to Financial Statements in this Report.

Table 28: Short-Term Borrowings

(in millions) March 31, 2022 December 31, 2021
Federal funds purchased and securities sold under agreements to repurchase $ 19,969 21,191
Other short-term borrowings 13,632 13,218
Total $ 33,601 34,409


			~~Wells Fargo & Company~~			43


(in millions)	March 31, 2023		December 31, 2022
Federal funds purchased and securities sold under agreements to repurchase	$	62,235	30,623

Other short-term borrowings (1)	18,772		20,522
Total	$	81,007	51,145

~~Risk Management – Asset/Liability Management~~ (1)~~(continued)~~Includes $5.0 billion and $7.0 billion of Federal Home Loan Bank (FHLB) advances at March 31, 2023, and December 31, 2022, respectively.

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, 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. ~~In addition, we issued $8.1 billion of long-term debt in April 2022.~~ Table 29 provides the aggregate carrying value of long-term debt maturities (based on contractual payment dates) for the remainder of ~~2022~~2023 and the following years thereafter, as of March 31, ~~2022.~~2023.

Table 29: Maturity of Long-Term Debt


		March 31, 2022									March 31, 2023
(in millions)	(in millions)	Remaining 2022		2023	2024	2025	2026	Thereafter	Total	(in millions)	Remaining 2023		2024	2025	2026	2027	Thereafter	Total
Wells Fargo & Company (Parent Only)	Wells Fargo & Company (Parent Only)									Wells Fargo & Company (Parent Only)
Senior notes	Senior notes	$	8,904	5,947	11,551	13,960	18,303	54,934	113,599	Senior notes	$	3,659	11,235	14,247	23,602	7,581	53,851	114,175
Subordinated notes	Subordinated notes	—		2,659	720	1,049	2,784	17,689	24,901	Subordinated notes	1,558		707	959	2,658	2,379	12,619	20,880
Junior subordinated notes	Junior subordinated notes	—		—	—	—	—	1,290	1,290	Junior subordinated notes	—		—	—	—	346	849	1,195
Total long-term debt – Parent	Total long-term debt – Parent	8,904		8,606	12,271	15,009	21,087	73,913	139,790	Total long-term debt – Parent	5,217		11,942	15,206	26,260	10,306	67,319	136,250
Wells Fargo Bank, N.A. and other bank entities (Bank)	Wells Fargo Bank, N.A. and other bank entities (Bank)									Wells Fargo Bank, N.A. and other bank entities (Bank)
Senior notes(1)	Senior notes(1)	27		3	3	186	88	140	447	Senior notes(1)	7,003		17,003	177	81	3	133	24,400
Subordinated notes	Subordinated notes	—		999	—	156	—	3,830	4,985	Subordinated notes	923		—	149	—	27	3,333	4,432
Junior subordinated notes	Junior subordinated notes	—		—	—	—	—	391	391	Junior subordinated notes	—		—	—	—	404	—	404
Securitizations and other bank debt		2,037		1,377	1,087	251	124	1,424	6,300
Other bank debt (2)										Other bank debt (2)	2,364		1,705	561	233	154	2,104	7,121
Total long-term debt – Bank	Total long-term debt – Bank	2,064		2,379	1,090	593	212	5,785	12,123	Total long-term debt – Bank	10,290		18,708	887	314	588	5,570	36,357
Other consolidated subsidiaries	Other consolidated subsidiaries									Other consolidated subsidiaries
Senior notes	Senior notes	67		500	106	422	225	104	1,424	Senior notes	45		83	413	221	—	97	859

Total long-term debt – Other consolidated subsidiaries	Total long-term debt – Other consolidated subsidiaries	67		500	106	422	225	104	1,424	Total long-term debt – Other consolidated subsidiaries	45		83	413	221	—	97	859
Total long-term debt	Total long-term debt	$	11,035	11,485	13,467	16,024	21,524	79,802	153,337	Total long-term debt	$	15,552	30,733	16,506	26,795	10,894	72,986	173,466

(1)Includes $24.0 billion of FHLB advances at March 31, 2023.

(2)Primarily relates to unfunded commitments for low-income housing tax credit (LIHTC) investments. For additional information, see Note 16 (Securitizations and Variable Interest Entities) to Financial Statements in our 2022 Form 10-K.


44			Wells Fargo & Company			41

Risk Management – Asset/Liability Management (continued)

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 February 16, 2022, Moody's Investors Service (Moody’s) affirmed the Company’s ratings and changed the rating outlook~~

~~to stable from negative.~~ There were no ~~other~~ actions undertaken by the rating agencies with regard to our credit ratings during first quarter ~~2022.~~2023.

See the “Risk Factors” section in our ~~2021~~2022 Form 10-K 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 1411 (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 March 31, ~~2022,~~2023, are presented in Table 30.

Table 30: Credit Ratings as of March 31, ~~2022~~2023

Wells Fargo & Company

Wells Fargo Bank, N.A.

Senior debt

Short-term

borrowings

Long-term

deposits

Short-term

borrowings

Moody’s

P-1

Aa1

P-1

S&P Global Ratings

BBB+

A-2

A+

A-1

Fitch Ratings

A+

F1+

DBRS Morningstar

AA (low)

R-1 (middle)

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.


42			Wells Fargo & Company			45


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 March 31, ~~2022,~~2023, increased ~~$2.3~~$3.7 billion from December 31, ~~2021,~~2022, predominantly as a result of ~~$3.7~~$5.0 billion of Wells Fargo net income, partially offset by ~~$1.3~~$1.4 billion of common and preferred stock dividends. During first quarter ~~2022,~~2023, we issued ~~$580~~$676 million of common stock, substantially all of which was issued in connection with employee compensation and benefits. In first quarter ~~2022,~~2023, we repurchased ~~110~~86 million shares of common stock at a cost of $6$4.0 billion. In first quarter ~~2022,~~2023, our ~~cumulative other comprehensive income decreased $5.1 billion,~~AOCI increased $789 million, predominantly due to a decrease in net unrealized losses on AFS debt ~~securities. As interest rates increase, changes in the fair value of AFS debt~~ securities ~~may negatively affect cumulative other comprehensive income, which lowers the amount of our risk-based capital.~~and derivative and hedging activities. For additional information about capital planning, see the “Capital Planning and Stress Testing” section below.

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 31 and Table 32 present the risk-based capital requirements applicable to the Company under the Standardized Approach and Advanced Approach, respectively, as of March 31, ~~2022.~~2023.

Table 31: Risk-Based Capital Requirements – Standardized Approach as of March 31, ~~2022~~2023

Table 32: Risk-Based Capital Requirements – Advanced Approach as of March 31, ~~2022~~2023

In addition to the risk-based capital requirements described in Table 31 and Table 32, 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 March 31, ~~2022,~~2023, 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.


46			Wells Fargo & Company			43

Capital Management (continued)

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, ~~2021,~~2022, through September 30, ~~2022,~~2023, is ~~3.10%~~3.20%.

As a global systemically important bank (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. 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. ~~For 2022, our~~ Our

G-SIB capital surcharge iswill continue to be 1.50%. in 2023.

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).

~~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. The adoption of SA-CCR resulted in an increase of less than 1.00% in total RWAs under the Standardized Approach (our binding approach) in first quarter 2022.

The tables that follow provide information about our risk-based capital and related ratios as calculated under Basel III capital rules. Table 33 summarizes our CET1, ~~tier~~Tier 1 capital, total capital, RWAs and capital ~~ratios at March 31, 2022, and December 31, 2021.~~ratios.

Table 33: Capital Components and Ratios


			Standardized Approach						Advanced Approach					Standardized Approach						Advanced Approach
($ in millions)	($ in millions)		Required Capital Ratios (1)		Mar 31, 2022			Dec 31, 2021	Required Capital Ratios (1)	Mar 31, 2022	Dec 31, 2021	($ in millions)		Required Capital Ratios (1)		Mar 31, 2023			Dec 31, 2022	Required Capital Ratios (1)	Mar 31, 2023	Dec 31, 2022
Common Equity Tier 1	Common Equity Tier 1	(A)			$	132,298		140,643		132,298	140,643	Common Equity Tier 1	(A)			$	134,454		133,527		134,454	133,527
Tier 1 capital	Tier 1 capital	(B)			151,340			159,671		151,340	159,671	Tier 1 capital	(B)			153,485			152,567		153,485	152,567
Total capital	Total capital	(C)			186,316			196,281		177,686	186,553	Total capital	(C)			187,626			186,747		177,963	177,258
Risk-weighted assets	Risk-weighted assets	(D)			1,265,517			1,239,026		1,119,518	1,116,068	Risk-weighted assets	(D)			1,243,787			1,259,889		1,117,860	1,112,307
Common Equity Tier 1 capital ratio	Common Equity Tier 1 capital ratio	(A)/(D)	9.10	%	10.45		*	11.35	8.50	11.82	12.60	Common Equity Tier 1 capital ratio	(A)/(D)	9.20	%	10.81		*	10.60	8.50	12.03	12.00
Tier 1 capital ratio	Tier 1 capital ratio	(B)/(D)	10.60		11.96		*	12.89	10.00	13.52	14.31	Tier 1 capital ratio	(B)/(D)	10.70		12.34		*	12.11	10.00	13.73	13.72
Total capital ratio	Total capital ratio	(C)/(D)	12.60		14.72		*	15.84	12.00	15.87	16.72	Total capital ratio	(C)/(D)	12.70		15.09		*	14.82	12.00	15.92	15.94

*Denotes the binding ratio under the Standardized and Advanced Approaches at March 31, ~~2022.~~2023.

(1)Represents the minimum ratios required to avoid restrictions on capital distributions and discretionary bonus payments at March 31, ~~2022.~~2023.


44			Wells Fargo & Company			47

~~Capital Management~~ ~~(continued)~~

Table 34 provides information regarding the calculation and composition of our risk-based capital under the Standardized and Advanced ~~Approaches at March 31, 2022, and December 31, 2021.~~Approaches.

Table 34: Risk-Based Capital Calculation and Components


(in millions)	(in millions)		Mar 31, 2022		Dec 31, 2021	(in millions)		Mar 31, 2023		Dec 31, 2022
Total equity(1)	Total equity(1)		$	181,689	190,110	Total equity(1)		$	183,220	182,213
Effect of accounting policy change (1)						Effect of accounting policy change (1)		—		338
Total equity (as reported)						Total equity (as reported)		183,220		181,875
Adjustments:	Adjustments:					Adjustments:
Preferred stock	Preferred stock		(20,057)		(20,057)	Preferred stock		(19,448)		(19,448)
Additional paid-in capital on preferred stock	Additional paid-in capital on preferred stock		136		136	Additional paid-in capital on preferred stock		173		173
Unearned ESOP shares			646		646

Noncontrolling interests	Noncontrolling interests		(2,446)		(2,504)	Noncontrolling interests		(2,052)		(1,986)
Total common stockholders’ equity	Total common stockholders’ equity		$	159,968	168,331	Total common stockholders’ equity		$	161,893	160,614
Adjustments:	Adjustments:					Adjustments:
Goodwill	Goodwill		(25,181)		(25,180)	Goodwill		(25,173)		(25,173)
Certain identifiable intangible assets (other than MSRs)	Certain identifiable intangible assets (other than MSRs)		(210)		(225)	Certain identifiable intangible assets (other than MSRs)		(139)		(152)
Goodwill and other intangibles on investments in consolidated portfolio companies (included in other assets)	Goodwill and other intangibles on investments in consolidated portfolio companies (included in other assets)		(2,304)		(2,437)	Goodwill and other intangibles on investments in consolidated portfolio companies (included in other assets)		(2,486)		(2,427)
Applicable deferred taxes related to goodwill and other intangible assets (1)			870		765
CECL transition provision (2)			179		241
Applicable deferred taxes related to goodwill and other intangible assets (2)						Applicable deferred taxes related to goodwill and other intangible assets (2)		897		890
CECL transition provision (3)						CECL transition provision (3)		120		180
Other	Other		(1,024)		(852)	Other		(658)		(405)
Common Equity Tier 1 under the Standardized and Advanced Approaches	Common Equity Tier 1 under the Standardized and Advanced Approaches		$	132,298	140,643	Common Equity Tier 1 under the Standardized and Advanced Approaches		$	134,454	133,527
Preferred stock	Preferred stock		20,057		20,057	Preferred stock		19,448		19,448
Additional paid-in capital on preferred stock	Additional paid-in capital on preferred stock		(136)		(136)	Additional paid-in capital on preferred stock		(173)		(173)
Unearned ESOP shares			(646)		(646)

Other	Other		(233)		(247)	Other		(244)		(235)
Total Tier 1 capital under the Standardized and Advanced Approaches	Total Tier 1 capital under the Standardized and Advanced Approaches	(A)	$	151,340	159,671	Total Tier 1 capital under the Standardized and Advanced Approaches	(A)	$	153,485	152,567

Long-term debt and other instruments qualifying as Tier 2	Long-term debt and other instruments qualifying as Tier 2		22,318		22,740	Long-term debt and other instruments qualifying as Tier 2		20,319		20,503
Qualifying allowance for credit losses (3)			13,038		14,149
Qualifying allowance for credit losses (4)						Qualifying allowance for credit losses (4)		14,150		13,959
Other	Other		(380)		(279)	Other		(328)		(282)
Total Tier 2 capital under the Standardized Approach	Total Tier 2 capital under the Standardized Approach	(B)	$	34,976	36,610	Total Tier 2 capital under the Standardized Approach	(B)	$	34,141	34,180
Total qualifying capital under the Standardized Approach	Total qualifying capital under the Standardized Approach	(A)+(B)	$	186,316	196,281	Total qualifying capital under the Standardized Approach	(A)+(B)	$	187,626	186,747

Long-term debt and other instruments qualifying as Tier 2	Long-term debt and other instruments qualifying as Tier 2		$	22,318	22,740	Long-term debt and other instruments qualifying as Tier 2		20,319		20,503
Qualifying allowance for credit losses (3)			4,408		4,421
Qualifying allowance for credit losses (4)						Qualifying allowance for credit losses (4)		4,487		4,470
Other	Other		(380)		(279)	Other		(328)		(282)
Total Tier 2 capital under the Advanced Approach	Total Tier 2 capital under the Advanced Approach	(C)	$	26,346	26,882	Total Tier 2 capital under the Advanced Approach	(C)	$	24,478	24,691
Total qualifying capital under the Advanced Approach	Total qualifying capital under the Advanced Approach	(A)+(C)	$	177,686	186,553	Total qualifying capital under the Advanced Approach	(A)+(C)	$	177,963	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)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.~~period-end.

~~(2)~~(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.

~~(3)~~(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 35 provides the composition of our RWAs under the Standardized and Advanced ~~Approaches at March 31, 2022, and December 31, 2021.~~Approaches.

Table 35: Risk-Weighted Assets


		Standardized Approach			Advanced Approach			Standardized Approach				Advanced Approach (1)
(in millions)	(in millions)	Mar 31, 2022		Dec 31, 2021		Mar 31, 2022	Dec 31, 2021		(in millions)	Mar 31, 2023			Dec 31, 2022	Mar 31, 2023	Dec 31, 2022
Risk-weighted assets (RWAs) (1):
Risk-weighted assets (RWAs):									Risk-weighted assets (RWAs):
Credit risk	Credit risk	$	1,212,082	1,186,810		752,633	747,714		Credit risk	$	1,205,239		1,218,006	759,674	757,436
Market risk	Market risk	53,435		52,216		53,435	52,216		Market risk	38,548			41,883	38,548	41,883
Operational risk	Operational risk	—		—		313,450	316,138		Operational risk	—			—	319,638	312,988
Total RWAs	Total RWAs	$	1,265,517	1,239,026		1,119,518	1,116,068		Total RWAs	$	1,243,787		1,259,889	1,117,860	1,112,307

(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.


48			Wells Fargo & Company			45

Capital Management (continued)

Table 36 ~~presents the~~provides an analysis of changes in ~~CET1 for the three months ended March 31, 2022.~~CET1.

Table 36: Analysis of Changes in Common Equity Tier 1


(in millions)
Common Equity Tier 1 at December 31, ~~2021~~2022	$	~~140,643~~133,527
Cumulative effect from change in accounting policy (1)	323
Net income applicable to common stock	~~3,393~~4,713
Common stock dividends	~~(959)~~(1,138)
Common stock issued, repurchased, and stock compensation-related items	~~(5,725)~~(3,746)
Changes in ~~cumulative~~accumulated other comprehensive income (loss)	~~(5,065)~~789
Goodwill	~~(1)~~—
Certain identifiable intangible assets (other than MSRs)	1513
Goodwill and other intangibles on investments in consolidated portfolio companies (included in other assets)	~~133~~ (59)
Applicable deferred taxes related to goodwill and other intangible assets ~~(1)~~(2)	~~105~~7
CECL transition provision ~~(2)~~(3)	~~(62)~~(60)
Other (4)	~~(179)~~85
Change in Common Equity Tier 1	~~(8,345)~~927
Common Equity Tier 1 at March 31, ~~2022~~2023	$	~~132,298~~134,454

(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.

~~(2)~~(3)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.

(4)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.

Table 37 presents net changes in the components of RWAs under the Standardized and Advanced ~~Approaches for the three months ended March 31, 2022.~~Approaches.

Table 37: Analysis of Changes in RWAs


(in millions)	(in millions)	Standardized Approach		Advanced Approach	(in millions)	Standardized Approach		Advanced Approach
Risk-weighted assets (RWAs) at December 31, 2021		$	1,239,026	1,116,068
Risk-weighted assets (RWAs) at December 31, 2022					Risk-weighted assets (RWAs) at December 31, 2022	$	1,259,889	1,112,307
Net change in credit risk RWAs	Net change in credit risk RWAs	25,272		4,919	Net change in credit risk RWAs	(12,767)		2,238
Net change in market risk RWAs	Net change in market risk RWAs	1,219		1,219	Net change in market risk RWAs	(3,335)		(3,335)
Net change in operational risk RWAs	Net change in operational risk RWAs	—		(2,688)	Net change in operational risk RWAs	—		6,650
Total change in RWAs	Total change in RWAs	26,491		3,450	Total change in RWAs	(16,102)		5,553
RWAs at March 31, 2022		$	1,265,517	1,119,518
RWAs at March 31, 2023					RWAs at March 31, 2023	$	1,243,787	1,117,860


46			Wells Fargo & Company			49

~~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

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

Table 38: Tangible Common Equity


			Balance at period end				Average balance						Balance at period-end				Average balance
			Quarter ended				Quarter ended							Quarter ended						Quarter ended
(in millions, except ratios)	(in millions, except ratios)		Mar 31, 2022		Dec 31, 2021	Mar 31, 2021		Mar 31, 2022			Dec 31, 2021	Mar 31, 2021			(in millions, except ratios)			Mar 31, 2023		Dec 31, 2022	Mar 31, 2022	Mar 31, 2023			Dec 31, 2022	Mar 31, 2022
Total equity	Total equity		$	181,689	190,110	188,034		186,337			190,744	189,074			Total equity			$	183,220	182,213	181,597	184,297			182,621	186,117
Adjustments:	Adjustments:														Adjustments:
Preferred stock(1)	Preferred stock(1)		(20,057)		(20,057)	(21,170)		(20,057)			(20,267)	(21,840)			Preferred stock(1)			(19,448)		(19,448)	(20,057)	(19,448)			(19,553)	(20,057)
Additional paid-in capital on preferred stock(1)	Additional paid-in capital on preferred stock(1)		136		136	139		134			120	145			Additional paid-in capital on preferred stock(1)			173		173	136	173			166	134
Unearned ESOP shares(1)	Unearned ESOP shares(1)		646		646	875		646			872	875			Unearned ESOP shares(1)			—		—	646	—			112	646
Noncontrolling interests	Noncontrolling interests		(2,446)		(2,504)	(1,130)		(2,468)			(2,119)	(1,115)			Noncontrolling interests			(2,052)		(1,986)	(2,446)	(2,019)			(2,185)	(2,468)
Total common stockholders’ equity	Total common stockholders’ equity	(A)	159,968		168,331	166,748		164,592			169,350	167,139			Total common stockholders’ equity	(A)		161,893		160,952	159,876	163,003			161,161	164,372
Adjustments:	Adjustments:														Adjustments:
Goodwill	Goodwill		(25,181)		(25,180)	(26,290)		(25,180)			(25,569)	(26,383)			Goodwill			(25,173)		(25,173)	(25,181)	(25,173)			(25,173)	(25,180)
Certain identifiable intangible assets (other than MSRs)	Certain identifiable intangible assets (other than MSRs)		(210)		(225)	(322)		(218)			(246)	(330)			Certain identifiable intangible assets (other than MSRs)			(139)		(152)	(210)	(145)			(160)	(218)
Goodwill and other intangibles on investments in consolidated portfolio companies (included in other assets)	Goodwill and other intangibles on investments in consolidated portfolio companies (included in other assets)		(2,304)		(2,437)	(2,300)		(2,395)			(2,309)	(2,217)			Goodwill and other intangibles on investments in consolidated portfolio companies (included in other assets)			(2,486)		(2,427)	(2,304)	(2,440)			(2,378)	(2,395)
Applicable deferred taxes related to goodwill and other intangible assets ~~(1)~~(2)	Applicable deferred taxes related to goodwill and other intangible assets ~~(1)~~(2)		871		765	866		803			848	863			Applicable deferred taxes related to goodwill and other intangible assets ~~(1)~~(2)			897		890	871	895			890	803
Tangible common equity	Tangible common equity	(B)	$	133,144	141,254	138,702		137,602			142,074	139,072			Tangible common equity	(B)		$	134,992	134,090	133,052	136,140			134,340	137,382
Common shares outstanding	Common shares outstanding	(C)	3,789.9		3,885.8	4,141.1		N/A			N/A				Common shares outstanding	(C)		3,763.2		3,833.8	3,789.9	N/A			N/A
Net income applicable to common stock	Net income applicable to common stock	(D)	N/A		N/A			$	3,393		5,470	4,256			Net income applicable to common stock	(D)		N/A		N/A		$	4,713		2,877	3,509
Book value per common share	Book value per common share	(A)/(C)	$	42.21	43.32	40.27		N/A			N/A				Book value per common share	(A)/(C)		$	43.02	41.98	42.18	N/A			N/A
Tangible book value per common share	Tangible book value per common share	(B)/(C)	35.13		36.35	33.49		N/A			N/A				Tangible book value per common share	(B)/(C)		35.87		34.98	35.11	N/A			N/A
Return on average common stockholders’ equity (ROE)	Return on average common stockholders’ equity (ROE)	(D)/(A)	N/A		N/A			8.36		%	12.81	10.33			Return on average common stockholders’ equity (ROE)	(D)/(A)		N/A		N/A		11.73		%	7.08	8.66
Return on average tangible common equity (ROTCE)	Return on average tangible common equity (ROTCE)	(D)/(B)	N/A		N/A			10.00			15.27	12.41			Return on average tangible common equity (ROTCE)	(D)/(B)		N/A		N/A		14.04			8.50	10.36

(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. For additional information, see Note 11 (Preferred Stock) to Financial Statements in our 2022 Form 10-K.

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~~Tier 1 leverage ratio. Table 39 presents the leverage requirements applicable to the Company as of March 31, ~~2022.~~2023.

Table 39: Leverage Requirements Applicable to the 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~~Tier 1 leverage ratio of 4.00%.

The FRB and OCC have proposed amendments to the SLR rules. For information regarding the proposed amendments to the SLR rules, see the “Capital Management – Leverage Requirements” section in our ~~2021~~2022 Form 10-K.


50			Wells Fargo & Company			47

Capital Management (continued)

At March 31, ~~2022,~~2023, the Company’s SLR was ~~6.61%~~6.96%, and each of our IDIs exceeded their applicable SLR requirements. Table 40 presents information regarding the calculation and components of the Company’s SLR and ~~tier~~Tier 1 leverage ratio.

Table 40: Leverage Ratios for the Company


($ in millions)		Quarter ended March 31, ~~2022~~2023
Tier 1 capital	(A)	$	~~151,340~~153,485
Total average assets		~~1,919,572~~1,863,796
Less: Goodwill and other permitted Tier 1 capital deductions (net of deferred tax liabilities)		~~27,957~~28,348
Total adjusted average assets		~~1,891,615~~1,835,448
Plus adjustments for off-balance sheet exposures:
Derivatives (1)		~~66,322~~61,138
Repo-style transactions (2)		~~3,227~~3,582
Other (3)		~~327,950~~306,207
Total off-balance sheet exposures		~~397,499~~370,927
Total leverage exposure	(B)	$	~~2,289,114~~2,206,375
Supplementary leverage ratio	(A)/(B)	~~6.61~~6.96		%

Tier 1 leverage ratio (4)		~~8.00~~8.36		%

(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~~Tier 1 leverage ratio consists of ~~tier~~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~~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 March 31, ~~2022,~~2023, are presented in Table 41.

Table 41: 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

The FRB and OCC have proposed amendments to the TLAC

and eligible unsecured long-term debt requirements. For information regarding these proposed amendments, see the ~~“Capital~~

“Capital Management – Total Loss Absorbing Capacity” section in our ~~2021~~2022 Form 10-K.

Table 42 provides our TLAC and eligible unsecured long-term debt and related ~~ratios as of March 31, 2022, and December 31, 2021.~~ratios.

Table 42: TLAC and Eligible Unsecured Long-Term Debt


March 31, 2023							March 31, 2023
($ in millions)	($ in millions)	TLAC (1)		Regulatory Minimum (2)	Eligible Unsecured Long-term Debt	Regulatory Minimum	($ in millions)	TLAC (1)			Regulatory Minimum (2)	Eligible Unsecured Long-term Debt	Regulatory Minimum
		March 31, 2022
Total eligible amount	Total eligible amount	282,311			125,083		Total eligible amount	$	290,240			131,646

Percentage of RWAs (3)	Percentage of RWAs (3)	22.31	%	21.50	9.88	7.50	Percentage of RWAs (3)	23.34		%	21.50	10.58	7.50
Percentage of total leverage exposure	Percentage of total leverage exposure	12.33		9.50	5.46	4.50	Percentage of total leverage exposure	13.15			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 March 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. Accordingly, we currently target a long-term CET1~~surcharge and the stress 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~~as well as potential changes to ~~the~~ 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.

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. We submitted our ~~2022~~2023 capital plan to the FRB prior to the April 5, ~~2022,~~2023, deadline.

As part of the annual Comprehensive Capital Analysis and Review, ~~(CCAR),~~ the FRB ~~generated~~generates a supervisory stress test. The FRB ~~is expected to review~~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 is also ~~expected to review~~reviews the ~~Company's~~Company’s proposed capital actions. The FRB has indicated it will publish its supervisory stress test results by ~~July 1, 2022.~~June 30, 2023.

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.


48			Wells Fargo & Company			51

~~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 March 31, ~~2022,~~2023, we had remaining Board authority to repurchase approximately ~~251~~164 million shares, subject to regulatory and legal conditions. For additional information about share repurchases during first quarter ~~2022,~~2023, see Part II, Item 2 in this Report.


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.

For a discussion of certain consent orders applicable to the Company, see the “Overview” section in this Report. ~~The following supplements our~~For a discussion of ~~the~~ other significant regulations and regulatory oversight initiatives that have affected or may affect our business, ~~contained in~~see the “Regulatory Matters” and “Risk Factors” sections in our ~~2021~~2022 Form 10-K.

~~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.


52			Wells Fargo & Company			49


Critical Accounting Policies

Our significant accounting policies (see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in our ~~2021~~2022 Form 10-K) 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 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. For additional information on these policies, see the “Critical Accounting Policies” section and Note 1 (Summary of Significant Accounting Policies) to Financial Statements in our ~~2021~~2022 Form 10-K and Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this ~~Report .~~Report.


50			Wells Fargo & Company			53


Current Accounting Developments

Table 43 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 43: Current Accounting Developments – Issued Standards


Description and Effective Date						Financial statement impact
~~ASU 2018-12 – Financial Services – Insurance~~Accounting Standards Update (ASU) 2023-02 - Investments - Equity Method and Joint Ventures (Topic ~~944)~~323): ~~Targeted Improvements to the~~ Accounting for ~~Long-Duration Contracts~~ ~~and subsequent related updates~~Investments in Tax Credit Structures Using the Proportional Amortization Method
The Update, effective January 1, ~~2023,~~2024 (with early adoption permitted), permits entities to elect to account for additional tax credit investments using the proportional amortization method. The Update requires ~~market risk benefits (features of insurance contracts~~a separate accounting policy election for each tax credit program. For any tax credit program where the proportional amortization method is elected, all investments within that ~~protect~~program that meet eligibility criteria are required to apply 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.proportional amortization method. The Update also requires ~~more frequent updates~~additional disclosures for ~~insurance assumptions, mandates~~any tax credit program where the ~~use of a standardized discount rate for traditional long-duration contracts, and simplifies the~~proportional amortization ~~of deferred acquisition costs.~~method is elected.						The ~~most significant impact~~Update eliminates the low-income housing tax credit (LIHTC)-only scope limitation of ~~adoption relates~~the proportional amortization method and permits entities to ~~reinsurance of variable annuity products~~account 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 paymentsall tax credit investments made primarily for the ~~remainder~~purpose of receiving income tax credits and income tax benefits using a consistent accounting method. Under the proportional amortization method, tax credit investments are carried at amortized cost and amortized in proportion to the income tax credits and income tax benefits received. The amortization of the ~~policyholder's life once~~investment and the ~~account values~~related income tax credits and income tax benefits are ~~exhausted. These guaranteed minimum benefits meet~~recorded in income tax expense. The Update may be adopted on either a full retrospective or modified retrospective basis and early adoption is permitted. Upon adoption of the ~~definition~~Update, we will disaggregate our tax credit investment portfolio into tax credit programs and make a separate accounting policy election as to whether to apply the proportional amortization method for each program. For any investments that will apply the proportional amortization method upon adoption of ~~market risk benefits and will be measured at fair value. The~~the Update, the cumulative effect of the difference between ~~fair~~the current carrying value and the carrying value ~~upon adoption of~~under the ~~Update, net of income tax adjustments and excluding the impact of our own credit risk,~~proportional amortization method will be ~~recognized in~~recorded as an adjustment to the opening balance of retained earnings, in the ~~earliest~~ period presented and will affect our regulatory capital calculations. At March 31, 2022, our estimated liability related to these guaranteed minimum benefits was approximately $500 million and was associated with approximately $12.0 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.
~~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~~is dependent upon which transition 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.						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. is selected. 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. We are currently evaluating the impact of the Update on our consolidated financial statements.
~~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 guidance for troubled debt restructurings (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.						~~The Update will impact the measurement of the allowance for credit losses (ACL) and require new 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 certain TDRs and instead allows for the use of an expected loss approach for all loans. Upon adoption, we expect to discontinue using a DCF approach for consumer loans and retain a DCF approach for certain nonperforming commercial loans. Any changes to the ACL as a result of the change in TDR measurement will be included as an adjustment to opening retained earnings as of the beginning of the earliest period presented. •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~~Update is applicable to us but ~~are~~is not expected to have a material impact on our consolidated financial statements:

•ASU ~~2021-08~~2022-03 – ~~Business Combinations~~Fair Value Measurement (Topic ~~805)~~820): ~~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~~Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions


54			Wells Fargo & Company			51


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.

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, 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;

•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;

•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;~~standards or our strategic plans for the business;

•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, 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 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;

•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 our Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022.


52			Wells Fargo & Company

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


			~~Wells Fargo & Company~~			55

~~Forward-Looking Statements~~ ~~(continued)~~

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’s Board of Directors,~~Company, and may be subject to regulatory approval or conditions.

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 our Annual Report on Form 10-K for the year ended December 31, ~~2021,~~2022, as filed with the Securities and Exchange Commission 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 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.


56			Wells Fargo & Company			53


Risk Factors

An investment in the Company involves risk, including the possibility that the value of the investment could fall substantially and that dividends or other distributions on the investment could be reduced or eliminated. For a discussion of risk factors that could adversely affect our financial results and condition, and the value of, and return on, an investment in the Company, we refer you to the “Risk Factors” section in our ~~2021~~2022 Form 10-K.


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Controls and Procedures


Disclosure Controls and Procedures

The Company’s management evaluated the effectiveness, as of March 31, ~~2022,~~2023, of the Company’s disclosure controls and procedures. The Company’s chief executive officer and chief financial officer participated in the evaluation. Based on this evaluation, the Company’s chief executive officer and chief financial officer concluded that the Company’s disclosure controls and procedures were effective as of March 31, ~~2022.~~2023.


Internal Control Over Financial Reporting

Internal control over financial reporting is defined in Rule 13a-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the Company’s principal executive and principal financial officers and effected by the Company’s Board, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles (GAAP) and includes those policies and procedures that:

•pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of assets of the Company;

•provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

•provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. No change occurred during first quarter ~~2022~~2023 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.


			Wells Fargo & Company			55

Financial Statements


Wells Fargo & Company and Subsidiaries
Consolidated Statement of Income (Unaudited)
	Quarter ended March 31,
(in millions, except per share amounts)	2023		2022
Interest income
Debt securities	$	3,783	2,563
Loans held for sale	97		140
Loans	13,318		7,218
Equity securities	170		170
Other interest income	1,988		90
Total interest income	19,356		10,181
Interest expense
Deposits	2,761		83
Short-term borrowings	570		(14)
Long-term debt	2,511		761
Other interest expense	178		130
Total interest expense	6,020		960
Net interest income	13,336		9,221
Noninterest income
Deposit and lending-related fees	1,504		1,815
Investment advisory and other asset-based fees	2,114		2,498
Commissions and brokerage services fees	619		537
Investment banking fees	326		447
Card fees	1,033		1,029
Mortgage banking	232		693
Net gains from trading and securities	985		796
Other (1)	580		692
Total noninterest income	7,393		8,507
Total revenue	20,729		17,728
Provision for credit losses	1,207		(787)
Noninterest expense
Personnel	9,415		9,271
Technology, telecommunications and equipment	922		876
Occupancy	713		722
Operating losses	267		673
Professional and outside services	1,229		1,286
Advertising and promotion	154		99
Restructuring charges	—		5
Other (1)	976		919
Total noninterest expense	13,676		13,851
Income before income tax expense	5,846		4,664
Income tax expense (1)	966		746
Net income before noncontrolling interests	4,880		3,918
Less: Net income (loss) from noncontrolling interests	(111)		130
Wells Fargo net income (1)	$	4,991	3,788
Less: Preferred stock dividends and other	278		279
Wells Fargo net income applicable to common stock	$	4,713	3,509
Per share information
Earnings per common share	$	1.24	0.92
Diluted earnings per common share	1.23		0.91
Average common shares outstanding	3,785.6		3,831.1
Diluted average common shares outstanding	3,818.7		3,868.9

(1)In first quarter 2023, we adopted ASU 2018-12 – Financial Services – Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts. For additional information, see Note 1 (Summary of Significant Accounting Policies).

The accompanying notes are an integral part of these statements.


56			Wells Fargo & Company


Wells Fargo & Company and Subsidiaries
Consolidated Statement of Comprehensive Income (Unaudited)
	Quarter ended March 31,

(in millions)		2023		2022
Net income before noncontrolling interests (1)		$	4,880	3,918
Other comprehensive income (loss), after tax:
Net change in debt securities		362		(5,148)
Net change in derivatives and hedging activities		378		20
Defined benefit plans adjustments		21		72

Other (1)		28		4
Other comprehensive income (loss), after tax		789		(5,052)
Total comprehensive income (loss) before noncontrolling interests		5,669		(1,134)
Less: Other comprehensive income (loss) from noncontrolling interests		(1)		1
Less: Net income (loss) from noncontrolling interests		(111)		130
Wells Fargo comprehensive income (loss)		$	5,781	(1,265)

The accompanying notes are an integral part of these statements.


			Wells Fargo & Company			57


Wells Fargo & Company and Subsidiaries
Consolidated Balance Sheet
(in millions, except shares)	Mar 31, 2023		Dec 31, 2022
Assets	(Unaudited)
Cash and due from banks	$	31,958	34,596
Interest-earning deposits with banks	130,478		124,561

Federal funds sold and securities purchased under resale agreements	67,288		68,036
Debt securities:
Trading, at fair value (includes assets pledged as collateral of $49,295 and $26,932)	90,052		86,155
Available-for-sale, at fair value (amortized cost of $151,861 and $121,725, net of allowance for credit losses)	144,398		113,594
Held-to-maturity, at amortized cost, net of allowance for credit losses (fair value $240,688 and $255,521)	277,147		297,059
Loans held for sale (includes $3,427 and $4,220 carried at fair value)	6,199		7,104
Loans	947,991		955,871
Allowance for loan losses	(13,120)		(12,985)
Net loans	934,871		942,886
Mortgage servicing rights (includes $8,819 and $9,310 carried at fair value)	9,950		10,480
Premises and equipment, net	8,416		8,350
Goodwill	25,173		25,173
Derivative assets	17,117		22,774
Equity securities (includes $25,003 and $28,383 carried at fair value; and assets pledged as collateral of $645 and $747)	60,610		64,414
Other assets (1)	82,743		75,838
Total assets (2)	$	1,886,400	1,881,020
Liabilities
Noninterest-bearing deposits	$	434,912	458,010
Interest-bearing deposits	927,717		925,975
Total deposits	1,362,629		1,383,985
Short-term borrowings (includes $190 and $181 carried at fair value)	81,007		51,145
Derivative liabilities (1)	16,897		20,067
Accrued expenses and other liabilities (includes $22,937 and $20,290 carried at fair value) (1)	69,181		68,740
Long-term debt (includes $1,506 and $1,346 carried at fair value)	173,466		174,870
Total liabilities (3)	1,703,180		1,698,807
Equity
Wells Fargo stockholders’ equity:
Preferred stock – aggregate liquidation preference of $20,216 and $20,216	19,448		19,448
Common stock – $1-2/3 par value, authorized 9,000,000,000 shares; issued 5,481,811,474 shares	9,136		9,136
Additional paid-in capital	59,946		60,319
Retained earnings (1)	191,688		187,968
Accumulated other comprehensive loss (1)	(12,572)		(13,362)
Treasury stock, at cost – 1,718,587,875 shares and 1,648,007,022 shares	(86,049)		(82,853)
Unearned ESOP shares	(429)		(429)
Total Wells Fargo stockholders’ equity	181,168		180,227
Noncontrolling interests	2,052		1,986
Total equity	183,220		182,213
Total liabilities and equity	$	1,886,400	1,881,020

(2)Our consolidated assets at March 31, 2023, and December 31, 2022, include the following assets of certain variable interest entities (VIEs) that can only be used to settle the liabilities of those VIEs: Debt securities, $71 million and $71 million; Loans, $5.3 billion and $4.8 billion; All other assets, $196 million and $191 million; and Total assets, $5.6 billion and $5.1 billion, respectively.

(3)Our consolidated liabilities at March 31, 2023, and December 31, 2022, include $210 million and $201 million, respectively, of VIE liabilities for which the VIE creditors do not have recourse to Wells Fargo.

The accompanying notes are an integral part of these statements.


58			Wells Fargo & Company

~~Financial Statements~~

Wells Fargo & Company and Subsidiaries
Consolidated Statement of Income (Unaudited)
Quarter ended March 31,
(in millions, except per share amounts) 2022 2021
Interest income
Debt securities $ 2,563 2,312
Loans held for sale 140 331
Loans 7,218 7,201
Equity securities 170 137
Other interest income 90 65
Total interest income 10,181 10,046
Interest expense
Deposits 83 112
Short-term borrowings (14) (9)
Long-term debt 761 1,026
Other interest expense 130 109
Total interest expense 960 1,238
Net interest income 9,221 8,808
Noninterest income
Deposit and lending-related fees 1,815 1,616
Investment advisory and other asset-based fees 2,498 2,756
Commissions and brokerage services fees 537 636
Investment banking fees 447 568
Card fees 1,029 949
Mortgage banking 693 1,326
Net gains from trading and securities 796 891
Other 556 982
Total noninterest income 8,371 9,724
Total revenue 17,592 18,532
Provision for credit losses (787) (1,048)
Noninterest expense
Personnel 9,271 9,558
Technology, telecommunications and equipment 876 844
Occupancy 722 770
Operating losses 673 213
Professional and outside services 1,286 1,388
Advertising and promotion 99 90
Restructuring charges 5 13
Other 938 1,113
Total noninterest expense 13,870 13,989
Income before income tax expense 4,509 5,591
Income tax expense 707 901
Net income before noncontrolling interests 3,802 4,690
Less: Net income from noncontrolling interests 131 54
Wells Fargo net income $ 3,671 4,636
Less: Preferred stock dividends and other 278 380
Wells Fargo net income applicable to common stock $ 3,393 4,256
Per share information
Earnings per common share $ 0.89 1.03
Diluted earnings per common share 0.88 1.02
Average common shares outstanding 3,831.1 4,141.3
Diluted average common shares outstanding 3,868.9 4,171.0


Wells Fargo & Company and Subsidiaries
Consolidated Statement of Changes in Equity (Unaudited)
	Wells Fargo stockholders’ equity
	Preferred stock			Common stock
($ and shares in millions)	Shares	Amount		Shares	Amount		Additional paid-in capital	Retained earnings	Accumulated other comprehensive income (loss)	Treasury stock	Unearned ESOP shares	Noncontrolling interests	Total equity
Balance December 31, 2022 (1)	4.7	$	19,448	3,833.8	$	9,136	60,319	187,968	(13,362)	(82,853)	(429)	1,986	182,213
Cumulative effect from change in accounting policy (2)								323					323
Balance January 1, 2023	4.7	19,448		3,833.8	9,136		60,319	188,291	(13,362)	(82,853)	(429)	1,986	182,536

Net income (loss)								4,991				(111)	4,880
Other comprehensive income (loss), net of tax									790			(1)	789
Noncontrolling interests												178	178
Common stock issued				15.8			—	(154)		830			676
Common stock repurchased				(86.4)						(4,049)			(4,049)






Common stock dividends							24	(1,162)					(1,138)
Preferred stock dividends								(278)					(278)
Stock-based compensation							474						474
Net change in deferred compensation and related plans							(871)			23			(848)
Net change	—	—		(70.6)	—		(373)	3,397	790	(3,196)	—	66	684
Balance March 31, 2023	4.7	$	19,448	3,763.2	$	9,136	59,946	191,688	(12,572)	(86,049)	(429)	2,052	183,220
Balance December 31, 2021	5.3	$	20,057	3,885.8	$	9,136	60,196	180,322	(1,702)	(79,757)	(646)	2,504	190,110
Cumulative effect from change in accounting policy (1)								(176)	(44)			(1)	(221)
Balance January 1, 2022	5.3	20,057		3,885.8	9,136		60,196	180,146	(1,746)	(79,757)	(646)	2,503	189,889

Net income (1)								3,788				130	3,918
Other comprehensive income (loss), net of tax (1)									(5,053)			1	(5,052)
Noncontrolling interests												(188)	(188)
Common stock issued				14.2			—	(117)		697			580
Common stock repurchased				(110.1)						(6,018)			(6,018)






Common stock dividends							16	(975)					(959)
Preferred stock dividends								(279)					(279)
Stock-based compensation							494						494
Net change in deferred compensation and related plans							(807)			19			(788)
Net change	—	—		(95.9)	—		(297)	2,417	(5,053)	(5,302)	—	(57)	(8,292)
Balance March 31, 2022	5.3	$	20,057	3,789.9	$	9,136	59,899	182,563	(6,799)	(85,059)	(646)	2,446	181,597

(2)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).

The accompanying notes are an integral part of these statements.


			Wells Fargo & Company			59

Wells Fargo & Company and Subsidiaries
Consolidated Statement of Comprehensive Income (Unaudited)
Quarter ended March 31,
(in millions) 2022 2021
Net income before noncontrolling interests $ 3,802 4,690
Other comprehensive income (loss), after tax:
Net change in debt securities (5,148) (1,525)
Net change in derivatives and hedging activities 20 36
Defined benefit plans adjustments 72 35
Other (9) 11
Other comprehensive loss, after tax (5,065) (1,443)
Total comprehensive income (loss) before noncontrolling interests (1,263) 3,247
Less: Other comprehensive income from noncontrolling interests — 1
Less: Net income from noncontrolling interests 131 54
Wells Fargo comprehensive income (loss) $ (1,394) 3,192

~~The accompanying notes are an integral part of these statements.~~


60			~~Wells Fargo & Company~~

Wells Fargo & Company and Subsidiaries
Consolidated Balance Sheet
(in millions, except shares) Mar 31,
2022 Dec 31,
2021
Assets (Unaudited)
Cash and due from banks $ 27,454 24,616
Interest-earning deposits with banks 174,441 209,614
Total cash, cash equivalents, and restricted cash 201,895 234,230
Federal funds sold and securities purchased under resale agreements 67,764 66,223
Debt securities:
Trading, at fair value 86,672 88,265
Available-for-sale, at fair value (includes amortized cost of $173,118 and $175,463, net of allowance for credit losses) 168,436 177,244
Held-to-maturity, at amortized cost, net of allowance for credit losses (fair value $264,641 and $272,386) 280,808 272,022
Loans held for sale (includes $13,155 and $15,895 carried at fair value) 19,824 23,617
Loans 911,807 895,394
Allowance for loan losses (11,504) (12,490)
Net loans 900,303 882,904
Mortgage servicing rights (includes $8,511 and $6,920 carried at fair value) 9,753 8,189
Premises and equipment, net 8,473 8,571
Goodwill 25,181 25,180
Derivative assets 27,365 21,478
Equity securities (includes $36,362 and $39,098 carried at fair value) 70,755 72,886
Other assets 72,480 67,259
Total assets (1) $ 1,939,709 1,948,068
Liabilities
Noninterest-bearing deposits $ 529,957 527,748
Interest-bearing deposits 951,397 954,731
Total deposits 1,481,354 1,482,479
Short-term borrowings (includes $168 and $0 carried at fair value) 33,601 34,409
Derivative liabilities 15,499 9,424
Accrued expenses and other liabilities (includes $26,145 and $20,685 carried at fair value) 74,229 70,957
Long-term debt (includes $69 and $0 carried at fair value) 153,337 160,689
Total liabilities (2) 1,758,020 1,757,958
Equity
Wells Fargo stockholders’ equity:
Preferred stock 20,057 20,057
Common stock – $1-2/3 par value, authorized 9,000,000,000 shares; issued 5,481,811,474 shares 9,136 9,136
Additional paid-in capital 59,899 60,196
Retained earnings 182,623 180,322
Cumulative other comprehensive income (loss) (6,767) (1,702)
Treasury stock – 1,691,916,667 shares and 1,596,009,977 shares (85,059) (79,757)
Unearned ESOP shares (646) (646)
Total Wells Fargo stockholders’ equity 179,243 187,606
Noncontrolling interests 2,446 2,504
Total equity 181,689 190,110
Total liabilities and equity $ 1,939,709 1,948,068


Wells Fargo & Company and Subsidiaries
Consolidated Statement of Cash Flows (Unaudited)
	Quarter ended March 31,
(in millions)	2023		2022
Cash flows from operating activities:
Net income before noncontrolling interests (1)	$	4,880	3,918
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses	1,207		(787)
Changes in fair value of MSRs and LHFS carried at fair value	441		(891)
Depreciation, amortization and accretion	1,552		1,791
Deferred income tax expense (benefit) (1)	600		(140)
Other, net	3,703		(6,116)
Originations and purchases of loans held for sale	(8,924)		(24,206)
Proceeds from sales of and paydowns on loans originally classified as held for sale	7,776		18,324
Net change in:
Debt and equity securities, held for trading	1,663		11,771
Derivative assets and liabilities (1)	3,126		(763)
Other assets	(7,473)		(5,815)
Other accrued expenses and liabilities (1)	(1,145)		3,113
Net cash provided by operating activities	7,406		199
Cash flows from investing activities:
Net change in:
Federal funds sold and securities purchased under resale agreements	1,106		(1,541)
Available-for-sale debt securities:
Proceeds from sales	—		19
Paydowns and maturities	2,821		6,876
Purchases	(12,393)		(19,195)
Held-to-maturity debt securities:
Paydowns and maturities	3,910		8,626
Purchases	(4,225)		(2,295)
Equity securities, not held for trading:
Proceeds from sales and capital returns	476		1,911
Purchases	(947)		(1,481)
Loans:
Loans originated by banking subsidiaries, net of principal collected	4,073		(20,285)
Proceeds from sales of loans originally classified as held for investment	1,588		4,143
Purchases of loans	(415)		(100)
Principal collected on nonbank entities’ loans	2,385		1,465
Loans originated by nonbank entities	(189)		(1,219)
Other, net	(6,145)		115
Net cash used by investing activities	(7,955)		(22,961)
Cash flows from financing activities:
Net change in:
Deposits	(21,356)		(1,125)
Short-term borrowings	29,862		(980)
Long-term debt:
Proceeds from issuance	157		8,089
Repayment	(5,158)		(7,889)
Preferred stock:


Cash dividends paid	(220)		(220)
Common stock:
Repurchased	(4,016)		(6,018)
Cash dividends paid	(1,137)		(958)
Other, net	(309)		(472)
Net cash used by financing activities	(2,177)		(9,573)
Net change in cash, cash equivalents, and restricted cash	(2,726)		(32,335)
Cash, cash equivalents, and restricted cash at beginning of period (2)	159,157		234,230
Cash, cash equivalents, and restricted cash at end of period (2)	$	156,431	201,895
Supplemental cash flow disclosures:
Cash paid for interest	$	5,477	661
Net cash paid (refunded) for income taxes	(827)		76

(1)~~Our consolidated assets at March 31, 2022 and December 31, 2021, included~~In first quarter 2023, we adopted ASU 2018-12 – Financial Services – Insurance (Topic 944): Targeted Improvements to the ~~following assets~~Accounting for Long-Duration Contracts. For additional information, see Note 1 (Summary of certain variable interest entities (VIEs) that can only be used to settle the liabilities of those VIEs: Debt securities, $71 million and $71 million; Loans, $4.9 billion and $4.5 billion; All other assets, $229 million and $234 million; and Total assets, $5.2 billion and $4.8 billion, respectively.Significant Accounting Policies).

(2)~~Our~~Includes Cash and due from banks and Interest-earning deposits with banks on our consolidated ~~liabilities at March 31, 2022~~balance sheet and ~~December 31, 2021, include the following VIE liabilities for~~excludes time deposits, which the VIE creditors do not have recourse to Wells Fargo: Long-term debt, $133 million and $149 million ; All other liabilities, $265 million and $259 million; and Total liabilities, $398 million and $408 million, respectively.

~~The accompanying notes~~ are ~~an integral part of these statements.~~


			~~Wells Fargo & Company~~			61

Wells Fargo & Company and Subsidiaries
Consolidated Statement of Changes in Equity (Unaudited)
Wells Fargo stockholders’ equity
Preferred stock Common stock
($ and shares in millions) Shares Amount Shares Amount Additional
paid-in
capital Retained
earnings Cumulative
other
comprehensive
income (loss) Treasury
stock Unearned
ESOP
shares Noncontrolling
interests Total
equity
Balance December 31, 2021 5.3 $ 20,057 3,885.8 $ 9,136 60,196 180,322 (1,702) (79,757) (646) 2,504 190,110
Net income 3,671 131 3,802
Other comprehensive loss,
net of tax
(5,065) — (5,065)
Noncontrolling interests (189) (189)
Common stock issued 14.2 — (117) 697 580
Common stock repurchased (110.1) (6,018) (6,018)
Preferred stock issued — — — —
Preferred stock redeemed — — — — —
Common stock dividends 16 (975) (959)
Preferred stock dividends (278) (278)
Stock-based compensation 494 494
Net change in deferred compensation and related plans (807) 19 (788)
Net change — — (95.9) — (297) 2,301 (5,065) (5,302) — (58) (8,421)
Balance March 31, 2022 5.3 $ 20,057 3,789.9 $ 9,136 59,899 182,623 (6,767) (85,059) (646) 2,446 181,689
Balance December 31, 2020 5.5 $ 21,136 4,144.0 $ 9,136 60,197 162,683 194 (67,791) (875) 1,032 185,712
Net income 4,636 54 4,690
Other comprehensive income (loss),
net of tax
(1,444) 1 (1,443)
Noncontrolling interests 43 43
Common stock issued 14.3 — (61) 785 724
Common stock repurchased (17.2) (596) (596)
Preferred stock issued 0.2 4,560 (31) 4,529
Preferred stock redeemed (1) (0.1) (4,526) 44 (44) (4,526)
Common stock dividends 6 (420) (414)
Preferred stock dividends (336) (336)
Stock-based compensation 498 498
Net change in deferred compensation and related plans (860) 13 (847)
Net change 0.1 34 (2.9) — (343) 3,775 (1,444) 202 — 98 2,322
Balance March 31, 2021 5.6 $ 21,170 4,141.1 $ 9,136 59,854 166,458 (1,250) (67,589) (875) 1,130 188,034

~~(1)Represents the impact of the redemption of Preferred Stock, Series I, Series P and Series W, and partial redemption of Preferred Stock, Series N,~~included in ~~first quarter 2021.~~

~~The accompanying notes are an integral part of these statements.~~


62			~~Wells Fargo & Company~~

Wells Fargo & Company and Subsidiaries
Consolidated Statement of Cash Flows (Unaudited)
Quarter ended March 31,
(in millions) 2022 2021
Cash flows from operating activities:
Net income before noncontrolling interests $ 3,802 4,690
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses (787) (1,048)
Changes in fair value of MSRs and LHFS carried at fair value (891) (1,368)
Depreciation, amortization and accretion 1,791 2,150
Deferred income tax benefit (179) 386
Other, net (1) (6,116) (5,335)
Originations and purchases of loans held for sale (24,206) (45,179)
Proceeds from sales of and paydowns on loans originally classified as held for sale 18,324 24,757
Net change in:
Debt and equity securities, held for trading 11,771 11,122
Derivative assets and liabilities (766) (922)
Other assets (5,815) 8,481
Other accrued expenses and liabilities 3,271 (1,204)
Net cash provided (used) by operating activities 199 (3,470)
Cash flows from investing activities:
Net change in:
Federal funds sold and securities purchased under resale agreements (1,541) (13,830)
Available-for-sale debt securities:
Proceeds from sales 19 13,367
Prepayments and maturities 6,876 21,840
Purchases (19,195) (36,203)
Held-to-maturity debt securities:
Paydowns and maturities 8,626 20,643
Purchases (2,295) (19,899)
Equity securities, not held for trading:
Proceeds from sales and capital returns 1,911 545
Purchases (1,481) (1,626)
Loans:
Loans originated by banking subsidiaries, net of principal collected (20,285) 17,447
Proceeds from sales of loans originally classified as held for investment 4,143 11,358
Purchases of loans (100) (50)
Principal collected on nonbank entities’ loans 1,465 5,265
Loans originated by nonbank entities (1,219) (3,469)
Other, net (1) 115 140
Net cash provided (used) by investing activities (22,961) 15,528
Cash flows from financing activities:
Net change in:
Deposits (1,125) 33,222
Short-term borrowings (980) (79)
Long-term debt:
Proceeds from issuance 8,089 110
Repayment (7,889) (21,676)
Preferred stock:
Proceeds from issuance — 4,529
Redeemed — (4,525)
Cash dividends paid (220) (276)
Common stock:
Repurchased (6,018) (596)
Cash dividends paid (958) (383)
Other, net (1) (472) (263)
Net cash provided (used) by financing activities (9,573) 10,063
Net change in cash, cash equivalents, and restricted cash (32,335) 22,121
Cash, cash equivalents, and restricted cash at beginning of period 234,230 264,612
Cash, cash equivalents, and restricted cash at end of period $ 201,895 286,733
Supplemental cash flow disclosures:
Cash paid for interest $ 661 1,091
Cash paid for income taxes, net 76 358

~~(1)Prior period balances have been revised to conform~~Interest-earning deposits with ~~the current period presentation.~~banks.

The accompanying notes are an integral part of these statements. See Note 1 (Summary of Significant Accounting Policies) for noncash activities.


60			Wells Fargo & Company			63

Notes to Financial Statements

-See the ~~Glossary~~“Glossary of ~~Acronyms~~Acronyms“ at the end of this Report for terms used throughout the Financial Statements and related Notes.


Note 1: Summary of Significant Accounting Policies

Wells Fargo & Company is a diversified financial services company. We provide banking, investment and mortgage products and services, as well as consumer and commercial finance, through banking locations and offices, the internet and other distribution channels to individuals, businesses and institutions in all 50 states, the District of Columbia, and in countries outside the U.S. When we refer to “Wells Fargo,” “the Company,” “we,” “our” or “us,” we mean Wells Fargo & Company and Subsidiaries (consolidated). Wells Fargo & Company (the Parent) is a financial holding company and a bank holding company. We also hold a majority interest in a real estate investment trust, which has publicly traded preferred stock outstanding.

Our accounting and reporting policies conform with U.S. generally accepted accounting principles (GAAP) and practices in the financial services industry. For discussion of our significant accounting policies, see Note 1 (Summary of Significant Accounting Policies) in our Annual Report on Form 10-K for the year ended December 31, ~~2021 (2021~~2022 (2022 Form 10-K). There were no material changes to these policies in first quarter ~~2022.~~2023.

To prepare the financial statements in conformity with GAAP, management must make estimates based on assumptions about future economic and market conditions (for example, unemployment, market liquidity, real estate prices, etc.) that affect the reported amounts of assets and liabilities at the date of the financial statements, income and expenses during the reporting period and the related disclosures. Although our estimates contemplate current conditions and how we expect them to change in the future, it is reasonably possible that actual conditions could be worse than anticipated in those estimates, which could materially affect our results of operations and financial condition. Management has made significant estimates in several areas, including:

•allowance for credit losses (Note 45 (Loans and Related Allowance for Credit Losses));

•valuations of residential mortgage servicing rights (MSRs) (Note 86 (Mortgage Banking Activities) and Note 13 (Securitizations and Variable Interest Entities) ~~and Note 9 (Mortgage Banking Activities)~~);

•valuations of financial instruments (Note 1512 (Fair Values of Assets and Liabilities));

•liabilities for contingent litigation losses (Note 1310 (Legal Actions));

•income taxes; and

•goodwill impairment (Note 107 (Intangible Assets and Other Assets)).

Actual results could differ from those estimates.

These unaudited interim financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the results for the periods presented. These adjustments are of a normal recurring nature, unless otherwise disclosed in this Form 10-Q. The results of operations in the interim financial statements do not necessarily indicate the results that may be expected for the full year. The interim financial information should be read in conjunction with our ~~2021~~2022 Form 10-K.

Accounting Standards Adopted in ~~2022~~2023

In ~~2022,~~ 2023, we adopted the following new accounting guidance:

•Accounting Standards Update ~~(ASU or Update) 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)~~(ASU) 2022-02, Financial Instruments-Credit Losses (Topic 326): ~~Accounting for Convertible Instruments~~Troubled Debt Restructurings and ~~Contracts in an Entity’s Own Equity~~Vintage Disclosures

•ASU ~~2021-05 – Leases~~2022-01, Derivatives and Hedging (Topic ~~842)~~815): ~~Lessors~~Fair Value Hedging – ~~Certain Leases~~Portfolio Layer Method

•ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with ~~Variable Lease Payments~~Customers

•ASU 2018-12, Financial Services – Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts and subsequent related updates

ASU ~~2020-06~~2022-02 ~~simplifies~~eliminates the accounting and reporting for ~~convertible~~troubled debt restructurings (TDRs) by creditors and introduces new required disclosures for loan modifications made to borrowers experiencing financial ~~instruments that embody characteristics~~difficulty. The new required disclosures include information about modifications granted to borrowers experiencing financial difficulty in the form of debt and equity by (1) eliminating accounting models for convertible financial instruments with cash conversion and beneficial conversion features within Accounting Standards Codification (ASC) 470-20, (2) removing three equity classification requirements forprincipal forgiveness, interest rate reductions, other-than-insignificant payment delays, term extensions, or a ~~contract in an entity's own equity to qualify~~combination of these modifications. The ASU also requires new disclosures for the ~~derivative scope exception~~financial effects of these modifications and for loan performance in ~~ASC Subtopic 815-40,~~the twelve months following the modification. The Update also amends the guidance for vintage disclosures to require disclosure of current period gross charge-offs by year of origination. See Note 5 (Loans and ~~(3) prescribing~~Related Allowance for Credit Losses) for additional information related to the new disclosures for loan modifications to borrowers experiencing financial difficulty and for gross charge-offs by year of origination, which are provided on a prospective basis.

The Update eliminates the requirement to use a discounted cash flow (DCF) approach to measure the allowance for credit losses (ACL) for TDRs and instead allows for the use of a current expected credit loss approach for all loans. Under a current expected credit loss approach, the impact of loan modifications and the subsequent performance of modified loans, including defaults, is reflected in the historical loss data used to calculate expected lifetime credit losses. Upon adoption on January 1, 2023, we discontinued utilizing a DCF approach to measure credit impairment for consumer loans and certain commercial loans previously modified in a TDR and we removed the interest concession component recognized in the ACL. We elected to apply the modified-retrospective transition approach method, ~~used for computing~~resulting in a cumulative effect adjustment to retained earnings ~~per share. We adopted this Update prospectively~~upon adoption, which reflects the difference between the pre-modification and post-modification effective interest rates that would have been recognized over the remaining life of the loans as interest income. Upon adoption, we recognized a decrease in ~~first quarter 2022. This Update did not have a material impact~~our ACL of $429 million, pre-tax, and an increase to our ~~consolidated financial statements.~~retained earnings of $323 million, after tax. We continue to use a DCF approach for certain non-accruing, non-collateral dependent commercial loans.

ASU ~~2021-05~~2022-01 ~~amends ASC 842 Topic – Leases and~~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 ~~specific~~ guidance on the accounting for ~~lessors whose leases include variable lease payments that are not dependent on a reference index or rate and otherwise would have resulted in~~hedged item basis adjustments under the recognition of a loss at lease commencement (a day 1 loss). Prior to ASU 2016-02, variable lease payments were excluded from the definition of lease payments for lessors measuring their net investment loss in a sales-type lease or direct financing lease. This often resulted in a day 1 loss, even if the lessor expected the arrangement to be profitable overall. We adopted this Update prospectively in first quarter 2022. This Update did not have a material impact to our consolidated financial statements.portfolio layer method.


64			Wells Fargo & Company			61

Note 1: Summary of Significant Accounting Policies (continued)

We adopted ASU 2022-01 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 portfolio layer method 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 (AFS) 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. Unlike other fair value hedging relationships where basis adjustments adjust the carrying amount of the individual hedged item, basis adjustments related to active portfolio layer method hedges are maintained at a portfolio level and not allocated to the individual assets in the portfolio.

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 (HTM) to AFS 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 HTM to AFS 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 AFS debt securities being recorded to other comprehensive income, net of deferred taxes.

See Note 3 (Available-for-Sale and Held-to-Maturity Debt Securities) for additional information about the Company's portfolio layer method hedge basis adjustments and HTM to AFS transfers in connection with adoption of the Update and Note 11 (Derivatives) for disclosures regarding our portfolio layer method hedging relationships.

ASU 2021-08 amends Accounting Standards Codification (ASC) 805 – Business Combinations to require entities to recognize and measure contract assets and contract liabilities in a business combination in accordance with ASC 606 – Revenue Recognition. Prior to ASU 2021-08, there was diversity in practice related to recognition treatment, and acquirers generally measured such items at acquisition date fair value. We adopted this Update prospectively on January 1, 2023. This Update did not have a material impact to our consolidated financial statements.

ASU 2018-12 changes the accounting for long-duration insurance contracts or contract features that provide benefits to the policyholder in addition to the policyholder’s account value. These features, which the ASU defines as market risk benefits, protect the policyholder to some degree from capital markets risk and expose the insurer or reinsurer to that risk. The ASU requires all market risk benefits to be measured at fair value through earnings with changes in fair value attributable to our own credit risk recognized in other comprehensive income. We reinsure certain variable annuity products for a limited number of insurance clients with guaranteed minimum benefits which are accounted for as market risk benefits under the ASU. Our reinsurance business is no longer entering into new contracts.

We utilize a discounted cash flow model to value our market risk benefits. Market risk benefits are level 3 fair value liabilities because they are valued using significant unobservable inputs. The fair value of our market risk benefits is sensitive to changes in fixed income and equity markets, as well as policyholder behavior (e.g., withdrawals, lapses, utilization rate) and changes in mortality assumptions. Beginning first quarter 2023, we use derivative instruments, where feasible, to economically hedge the interest rate and equity markets volatility. The fair value of market risk benefits is measured at the contract level and is recognized in accrued expenses and other liabilities. We recognize changes in fair value for our market risk benefits, excluding the change in fair value related to our own credit risk, in noninterest income along with the changes in fair value of economic hedges. Changes in fair value attributable to our own credit risk are recorded in other comprehensive income. Upon adoption on January 1, 2023, as required under the ASU, we implemented the accounting changes for market risk benefits retrospectively, to the earliest period presented, which resulted in an after-tax cumulative effect adjustment to reduce retained earnings and accumulated other comprehensive income by $176 million and $44 million, respectively, as of January 1, 2022.

The ASU 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 accounting changes for the liability of future policyholder benefits for traditional long-duration contracts (included in accrued expenses and other liabilities) and deferred acquisition costs (included in other assets) did not have a material impact upon adoption.

Table 1.1 presents the impact of adoption to prior period financial statement line items within our consolidated statement of income and consolidated balance sheet for the quarter ended March 31, 2022, and as of December 31, 2022. These adjustments are also reflected in our consolidated statement of changes in equity and consolidated statement of cash flows.


62			Wells Fargo & Company

Table 1.1:Impact of Adoption of ASU 2018-12


	Quarter ended March 31, 2022
($ in millions, except per share amounts)	As reported		Effect of adoption	As revised
Selected Income Statement Data
Noninterest income	$	8,371	136	8,507
Noninterest expense	13,870		(19)	13,851
Income tax expense	707		39	746
Net income	3,671		117	3,788
Diluted earnings per common share	0.88		0.03	0.91

	At December 31, 2022
	As reported		Effect of adoption	As revised
Selected Balance Sheet Data
Other assets	75,834		4	75,838
Derivative liabilities	20,085		(18)	20,067
Accrued expenses and other liabilities	69,056		(316)	68,740
Retained earnings	187,649		319	187,968
Accumulated other comprehensive income (loss)	(13,381)		19	(13,362)

Table 1.2 presents the transition adjustments required upon the adoption of ASU 2018-12 as of January 1, 2021.

Table 1.2:Transition Adjustment of ASU 2018-12


	Dec 31, 2020		Transition adjustment upon adoption	Jan 1, 2021
Selected Balance Sheet Data
Other assets	$	87,337	159	87496
Derivative liabilities	16,509		(27)	16,482
Accrued expenses and other liabilities	74,360		903	75,263
Retained earnings	162,683		(738)	161,945
Accumulated other comprehensive income	194		20	214

Supplemental Cash Flow Information

Significant noncash activities are presented in Table ~~1.1.~~1.3.

Table ~~1.1:~~1.3: Supplemental Cash Flow Information


		Quarter ended March 31,			Quarter ended March 31,
(in millions)	(in millions)	2022		2021		(in millions)	2023		2022
Available-for-sale debt securities purchased from securitization of LHFS (1)	Available-for-sale debt securities purchased from securitization of LHFS (1)	$	1,053	—		Available-for-sale debt securities purchased from securitization of LHFS (1)	$	—	1,053
Held-to-maturity debt securities purchased from securitization of LHFS (1)	Held-to-maturity debt securities purchased from securitization of LHFS (1)	638		10,252		Held-to-maturity debt securities purchased from securitization of LHFS (1)	26		638
Transfers from loans to LHFS	Transfers from loans to LHFS	2,827		6,249		Transfers from loans to LHFS	408		2,827
Transfers from available-for-sale debt securities to held-to-maturity debt securities	Transfers from available-for-sale debt securities to held-to-maturity debt securities	14,651		16,617		Transfers from available-for-sale debt securities to held-to-maturity debt securities	3,687		14,651
Transfers from held-to-maturity debt securities to available-for-sale debt securities (2)						Transfers from held-to-maturity debt securities to available-for-sale debt securities (2)	23,919		—

(1)Predominantly represents agency mortgage-backed securities purchased upon settlement of the sale and securitization of our conforming residential mortgage loans. See Note 813 (Securitizations and Variable Interest Entities) for additional information.

(2)In first quarter 2023, we reclassified HTM debt securities to AFS debt securities in connection with the adoption of ASU 2022-01.

Subsequent Events

We have evaluated the effects of events that have occurred subsequent to March 31, ~~2022,~~2023, and except as disclosed in

Note 17 (Revenue and Expenses), there have been no material events that would require recognition in our first quarter ~~2022~~2023 consolidated financial statements or disclosure in the Notes to the consolidated financial statements.


			Wells Fargo & Company			6563


Note 2: Trading Activities

Table 2.1 presents a summary of our trading assets and liabilities measured at fair value through earnings.

Table 2.1: Trading Assets and Liabilities


(in millions)	(in millions)	Mar 31, 2022		Dec 31, 2021		(in millions)	Mar 31, 2023		Dec 31, 2022
Trading assets:	Trading assets:					Trading assets:
Debt securities	Debt securities	$	86,672	88,265		Debt securities	$	90,052	86,155
Equity securities ~~(1)~~	Equity securities ~~(1)~~	34,203		27,476		Equity securities ~~(1)~~	23,277		26,910
Loans held for sale	Loans held for sale	3,984		3,242		Loans held for sale	1,463		1,466
Gross trading derivative assets ~~(1)~~	Gross trading derivative assets ~~(1)~~	63,104		48,325		Gross trading derivative assets ~~(1)~~	60,508		77,148
Netting ~~(2)~~(1)	Netting ~~(2)~~(1)	(36,862)		(28,146)		Netting ~~(2)~~(1)	(43,843)		(54,922)
Total trading derivative assets	Total trading derivative assets	26,242		20,179		Total trading derivative assets	16,665		22,226
Total trading assets	Total trading assets	151,101		139,162		Total trading assets	131,457		136,757
Trading liabilities:	Trading liabilities:					Trading liabilities:
Short sale		26,145		20,685
Other liabilities		237		—
Short sale and other liabilities						Short sale and other liabilities	22,934		20,304
Long-term debt						Long-term debt	1,506		1,346
Gross trading derivative liabilities ~~(1)~~	Gross trading derivative liabilities ~~(1)~~	53,430		42,449		Gross trading derivative liabilities ~~(1)~~	63,483		77,698
Netting ~~(2)~~(1)	Netting ~~(2)~~(1)	(39,056)		(33,978)		Netting ~~(2)~~(1)	(47,897)		(59,232)
Total trading derivative liabilities	Total trading derivative liabilities	14,374		8,471		Total trading derivative liabilities	15,586		18,466
Total trading liabilities	Total trading liabilities	$	40,756	$	29,156	Total trading liabilities	$	40,026	40,116

(1)In first quarter 2022, we prospectively reclassified certain equity securities and related economic hedge derivatives from “not held for trading activities” to “held for trading activities” to better reflect the business activity of those financial instruments. For additional information on Trading Activities, see Note 1 (Summary of Significant Accounting Policies) in our 2021 Form 10-K.

~~(2)~~Represents balance sheet netting for trading derivative asset and liability balances, and trading portfolio level counterparty valuation adjustments.

Table 2.2 provides a summary of the net interest income earned from trading securities, and net gains and losses due to the realized and unrealized gains and losses from trading activities.

Net interest income also includes dividend income on trading securities and dividend expense on trading securities we have sold, but not yet purchased.

Table 2.2: Net Interest Income and Net Gains (Losses) from Trading Activities


		Quarter ended March 31,					Quarter ended March 31,
(in millions)	(in millions)		2022		2021	(in millions)		2023		2022
Interest income:	Interest income:					Interest income:
Debt securities	Debt securities		$	548	529	Debt securities		$	797	548
Equity securities ~~(1)~~	Equity securities ~~(1)~~		120		103	Equity securities ~~(1)~~		94		120
Loans held for sale	Loans held for sale		11		12	Loans held for sale		19		11
Total interest income	Total interest income		679		644	Total interest income		910		679
Less: Interest expense	Less: Interest expense		132		110	Less: Interest expense		143		132
Net interest income	Net interest income		547		534	Net interest income		767		547
Net gains (losses) from trading activities (2):
Net gains (losses) from trading activities (1):						Net gains (losses) from trading activities (1):
Debt securities	Debt securities		(3,648)		(2,106)	Debt securities		1,471		(3,648)
Equity securities ~~(1)~~	Equity securities ~~(1)~~		(824)		1,153	Equity securities ~~(1)~~		1,689		(824)
Loans held for sale	Loans held for sale		9		24	Loans held for sale		12		9
Other liabilities			12		—
Derivatives (1)(3)			4,669		1,277

Long-term debt						Long-term debt		(30)		12
Derivatives (2)						Derivatives (2)		(1,800)		4,669
Total net gains from trading activities	Total net gains from trading activities		218		348	Total net gains from trading activities		1,342		218
Total trading-related net interest and noninterest income	Total trading-related net interest and noninterest income		$	765	882	Total trading-related net interest and noninterest income		$	2,109	765

~~(2)~~Represents realized gains (losses) from our trading activities and unrealized gains (losses) due to changes in fair value of our trading positions.

~~(3)~~(2)Excludes economic hedging of mortgage banking and asset/liability management activities, for which hedge results (realized and unrealized) are reported with the respective hedged activities.


6664			Wells Fargo & Company


Note 3: Available-for-Sale and Held-to-Maturity Debt Securities

Table 3.1 provides the amortized cost, net of the allowance for credit losses (ACL) for debt securities, and fair value by major categories of available-for-sale (AFS) debt securities, which are carried at fair value, and held-to-maturity (HTM) debt securities, which are carried at amortized cost, net of the ACL. The net unrealized gains (losses) for AFS debt securities are reported as a component of ~~cumulative~~accumulated other comprehensive income ~~(OCI)~~(AOCI), net of the ACL and applicable income taxes. Information on debt

securities held for trading is included in Note 2 (Trading Activities).

Outstanding balances exclude accrued interest receivable on AFS and HTM debt securities, which are included in other assets. See Note 7 ~~(Other~~(Intangible Assets and Other Assets) for additional information on accrued interest receivable. Amounts considered to be uncollectible are reversed through interest income. The interest income reversed in first quarter ~~2022~~2023 and ~~2021~~2022 was insignificant.

Table 3.1: Available-for-Sale and Held-to-Maturity Debt Securities Outstanding


(in millions)	(in millions)	Amortized cost, net (1)		Gross unrealized gains	Gross unrealized losses	Fair value	(in millions)	Amortized cost, net (1)		Gross unrealized gains	Gross unrealized losses	Net unrealized gains (losses)	Fair value
March 31, 2022
March 31, 2023							March 31, 2023
Available-for-sale debt securities:							Available-for-sale debt securities:
Securities of U.S. Treasury and federal agencies							Securities of U.S. Treasury and federal agencies	$	60,397	26	(2,380)	(2,354)	58,043
Non-U.S. government securities							Non-U.S. government securities	163		—	(1)	(1)	162
Securities of U.S. states and political subdivisions (2)							Securities of U.S. states and political subdivisions (2)	22,499		37	(776)	(739)	21,760
Federal agency mortgage-backed securities							Federal agency mortgage-backed securities	59,396		44	(4,235)	(4,191)	55,205
Non-agency mortgage-backed securities (3)							Non-agency mortgage-backed securities (3)	3,269		1	(126)	(125)	3,144
Collateralized loan obligations							Collateralized loan obligations	3,980		—	(75)	(75)	3,905
Other debt securities							Other debt securities	2,163		59	(43)	16	2,179
Total available-for-sale debt securities, excluding portfolio level basis adjustments							Total available-for-sale debt securities, excluding portfolio level basis adjustments	151,867		167	(7,636)	(7,469)	144,398
Portfolio level basis adjustments (4)							Portfolio level basis adjustments (4)	(6)				6	—
Total available-for-sale debt securities							Total available-for-sale debt securities	151,861		167	(7,636)	(7,463)	144,398
Held-to-maturity debt securities:							Held-to-maturity debt securities:
Securities of U.S. Treasury and federal agencies							Securities of U.S. Treasury and federal agencies	3,788		—	(1,340)	(1,340)	2,448
Securities of U.S. states and political subdivisions							Securities of U.S. states and political subdivisions	19,110		4	(3,284)	(3,280)	15,830
Federal agency mortgage-backed securities							Federal agency mortgage-backed securities	221,553		218	(31,215)	(30,997)	190,556
Non-agency mortgage-backed securities (3)							Non-agency mortgage-backed securities (3)	1,267		1	(140)	(139)	1,128
Collateralized loan obligations							Collateralized loan obligations	29,703		2	(590)	(588)	29,115
Other debt securities							Other debt securities	1,726		—	(115)	(115)	1,611
Total held-to-maturity debt securities							Total held-to-maturity debt securities	277,147		225	(36,684)	(36,459)	240,688
Total							Total	$	429,008	392	(44,320)	(43,922)	385,086
December 31, 2022							December 31, 2022
Available-for-sale debt securities:	Available-for-sale debt securities:						Available-for-sale debt securities:
Securities of U.S. Treasury and federal agencies	Securities of U.S. Treasury and federal agencies	$	47,946	91	(1,604)	46,433	Securities of U.S. Treasury and federal agencies	$	47,536	9	(2,260)	(2,251)	45,285
Non-U.S. government securities	Non-U.S. government securities	116		—	—	116	Non-U.S. government securities	162		—	—	—	162
Securities of U.S. states and political subdivisions (2)	Securities of U.S. states and political subdivisions (2)	16,484		271	(269)	16,486	Securities of U.S. states and political subdivisions (2)	10,958		20	(533)	(513)	10,445
Federal agency mortgage-backed securities	Federal agency mortgage-backed securities	94,726		245	(3,534)	91,437	Federal agency mortgage-backed securities	53,302		2	(5,167)	(5,165)	48,137
Non-agency mortgage-backed securities (3)	Non-agency mortgage-backed securities (3)	4,641		12	(45)	4,608	Non-agency mortgage-backed securities (3)	3,423		1	(140)	(139)	3,284
Collateralized loan obligations	Collateralized loan obligations	5,231		—	(34)	5,197	Collateralized loan obligations	4,071		—	(90)	(90)	3,981
Other debt securities	Other debt securities	3,974		200	(15)	4,159	Other debt securities	2,273		75	(48)	27	2,300
Total available-for-sale debt securities	Total available-for-sale debt securities	173,118		819	(5,501)	168,436	Total available-for-sale debt securities	121,725		107	(8,238)	(8,131)	113,594
Held-to-maturity debt securities:	Held-to-maturity debt securities:						Held-to-maturity debt securities:
Securities of U.S. Treasury and federal agencies	Securities of U.S. Treasury and federal agencies	16,196		14	(659)	15,551	Securities of U.S. Treasury and federal agencies	16,202		—	(1,917)	(1,917)	14,285
Securities of U.S. states and political subdivisions	Securities of U.S. states and political subdivisions	32,969		69	(2,122)	30,916	Securities of U.S. states and political subdivisions	30,985		8	(4,385)	(4,377)	26,608
Federal agency mortgage-backed securities	Federal agency mortgage-backed securities	198,266		115	(13,368)	185,013	Federal agency mortgage-backed securities	216,966		30	(34,252)	(34,222)	182,744
Non-agency mortgage-backed securities (3)	Non-agency mortgage-backed securities (3)	1,174		5	(64)	1,115	Non-agency mortgage-backed securities (3)	1,253		—	(147)	(147)	1,106
Collateralized loan obligations	Collateralized loan obligations	30,475		62	(141)	30,396	Collateralized loan obligations	29,926		1	(727)	(726)	29,200
Other debt securities	Other debt securities	1,728		—	(78)	1,650	Other debt securities	1,727		—	(149)	(149)	1,578
Total held-to-maturity debt securities	Total held-to-maturity debt securities	280,808		265	(16,432)	264,641	Total held-to-maturity debt securities	297,059		39	(41,577)	(41,538)	255,521
Total	Total	$	453,926	1,084	(21,933)	433,077	Total	$	418,784	146	(49,815)	(49,669)	369,115
December 31, 2021
Available-for-sale debt securities:
Securities of U.S. Treasury and federal agencies		$	39,668	185	(192)	39,661
Non-U.S. government securities		71		—	—	71
Securities of U.S. states and political subdivisions (2)		16,618		350	(51)	16,917
Federal agency mortgage-backed securities		104,661		1,807	(582)	105,886
Non-agency mortgage-backed securities (3)		4,515		32	(15)	4,532
Collateralized loan obligations		5,713		2	(7)	5,708
Other debt securities		4,217		259	(7)	4,469
Total available-for-sale debt securities		175,463		2,635	(854)	177,244
Held-to-maturity debt securities:
Securities of U.S. Treasury and federal agencies		16,544		599	(318)	16,825
Securities of U.S. states and political subdivisions		32,689		847	(61)	33,475
Federal agency mortgage-backed securities		188,909		1,882	(2,807)	187,984
Non-agency mortgage-backed securities (3)		1,082		31	(18)	1,095
Collateralized loan obligations		31,067		194	(2)	31,259
Other debt securities		1,731		17	—	1,748
Total held-to-maturity debt securities		272,022		3,570	(3,206)	272,386
Total		$	447,485	6,205	(4,060)	449,630

(1)Represents amortized cost of the securities, net of the ACL of ~~$9 million and $8~~$6 million related to AFS debt securities at both March 31, 2023, and ~~$84~~December 31, 2022, and $77 million and ~~$96~~$85 million related to HTM debt securities at March 31, ~~2022,~~2023, and December 31, ~~2021,~~2022, respectively.

(2)Includes investments in tax-exempt preferred debt securities issued by investment funds or trusts that predominantly invest in tax-exempt municipal securities. The amortized cost, net of the ACL, and fair value of these types of securities, was ~~$5.3~~$5.0 billion at March 31, ~~2022,~~2023, and ~~$5.2~~$5.1 billion at December 31, ~~2021.~~2022.

(3)Predominantly consists of commercial mortgage-backed securities at both March 31, ~~2022,~~2023, and December 31, ~~2021.~~2022.

(4)Represents fair value hedge basis adjustments related to active portfolio layer method hedges of AFS debt securities, which are not allocated to individual securities in the portfolio. For additional information, see Note 11 (Derivatives).


			Wells Fargo & Company			6765

Note 3: Available-for-Sale and Held-to-Maturity Debt Securities (continued)

Table 3.2 details the breakout of purchases of and transfers to HTM debt securities by major category of security. The table excludes the transfer of HTM debt securitieswith a fair value of $23.2 billion to AFS debt securities in first quarter 2023 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).

Table 3.2: Held-to-Maturity Debt Securities Purchases and Transfers


		Quarter ended March 31,					Quarter ended March 31,
(in millions)	(in millions)		2022		2021	(in millions)		2023		2022
Purchases of held-to-maturity debt securities (1):	Purchases of held-to-maturity debt securities (1):					Purchases of held-to-maturity debt securities (1):

Securities of U.S. states and political subdivisions	Securities of U.S. states and political subdivisions		$	834	1,910	Securities of U.S. states and political subdivisions		—		834
Federal agency mortgage-backed securities	Federal agency mortgage-backed securities		2,051		24,867	Federal agency mortgage-backed securities		4,225		2,051
Non-agency mortgage-backed securities	Non-agency mortgage-backed securities		104		29	Non-agency mortgage-backed securities		26		104
Collateralized loan obligations			—		3,953

Total purchases of held-to-maturity debt securities	Total purchases of held-to-maturity debt securities		2,989		30,759	Total purchases of held-to-maturity debt securities		4,251		2,989
Transfers from available-for-sale debt securities to held-to-maturity debt securities:
Transfers from available-for-sale debt securities to held-to-maturity debt securities (2):						Transfers from available-for-sale debt securities to held-to-maturity debt securities (2):

Federal agency mortgage-backed securities	Federal agency mortgage-backed securities		14,651		16,617	Federal agency mortgage-backed securities		3,687		14,651

Total transfers from available-for-sale debt securities to held-to-maturity debt securities	Total transfers from available-for-sale debt securities to held-to-maturity debt securities		$	14,651	16,617	Total transfers from available-for-sale debt securities to held-to-maturity debt securities		$	3,687	14,651

(1)Inclusive of securities purchased but not yet settled and noncash purchases from securitization of loans held for sale (LHFS).

(2)Represents fair value as of the date of the transfers. Debt securities transferred from available-for-sale to held-to-maturity had pre-tax unrealized losses recorded in AOCI of $320 million for first quarter 2023 and $408 million for first quarter 2022, at the time of the transfers.

Table 3.3 shows the composition of interest income, provision for credit losses, and gross realized gains and losses

from sales and impairment write-downs included in earnings related to AFS and HTM debt securities (pre-tax).

Table 3.3: Income Statement Impacts for Available-for-Sale and Held-to-Maturity Debt Securities


		Quarter ended March 31,					Quarter ended March 31,
(in millions)	(in millions)		2022		2021	(in millions)		2023		2022
Interest income (1):	Interest income (1):					Interest income (1):
Available-for-sale	Available-for-sale		$	702	811	Available-for-sale		$	1,240	702
Held-to-maturity	Held-to-maturity		1,313		972	Held-to-maturity		1,746		1,313
Total interest income	Total interest income		2,015		1,783	Total interest income		2,986		2,015
Provision for credit losses:	Provision for credit losses:					Provision for credit losses:
Available-for-sale	Available-for-sale		1		22	Available-for-sale		(39)		1
Held-to-maturity	Held-to-maturity		(13)		47	Held-to-maturity		(8)		(13)
Total provision for credit losses	Total provision for credit losses		(12)		69	Total provision for credit losses		(47)		(12)
Realized gains and losses (2):	Realized gains and losses (2):					Realized gains and losses (2):
Gross realized gains	Gross realized gains		2		151	Gross realized gains		—		2

Net realized gains	Net realized gains		$	2	151	Net realized gains		$	—	2

(1)Excludes interest income from trading debt securities, which is disclosed in Note 2 (Trading Activities).

(2)Realized gains and losses relate to AFS debt securities. There were no realized gains or losses from HTM debt securities in all periods presented.

Credit Quality

We monitor credit quality of debt securities by evaluating various attributes and utilize such information in our evaluation of the appropriateness of the ACL for debt securities. The credit quality indicators that we most closely monitor include credit ratings and delinquency status and are based on information as of our financial statement date.

CREDIT RATINGS Credit ratings express opinions about the credit quality of a debt security. We determine the credit rating of a security according to the lowest credit rating made available by national recognized statistical rating organizations (NRSROs). Debt securities rated investment grade, that is those with ratings similar to BBB-/Baa3 or above, as defined by NRSROs, are generally considered by the rating agencies and market

participants to be low credit risk. Conversely, debt securities rated below investment grade, labeled as “speculative grade” by the rating agencies, are considered to be distinctively higher credit risk than investment grade debt securities. For debt securities not rated by NRSROs, we determine an internal credit grade of the debt securities (used for credit risk management purposes) equivalent to the credit ratings assigned by major credit agencies. Substantially all of our debt securities were rated by NRSROs at March 31, ~~2022,~~2023, and December 31, ~~2021.~~2022.

Table 3.4 shows the percentage of fair value of AFS debt securities and amortized cost of HTM debt securities determined to be rated investment grade, inclusive of securities rated based on internal credit grades.


6866			Wells Fargo & Company

Table 3.4: Investment Grade Debt Securities


		Available-for-Sale				Held-to-Maturity				Available-for-Sale				Held-to-Maturity
($ in millions)	($ in millions)	Fair value		% investment grade		Amortized cost	% investment grade		($ in millions)	Fair value		% investment grade		Amortized cost		% investment grade
March 31, 2022
March 31, 2023									March 31, 2023
Total portfolio (1)	Total portfolio (1)	$	168,436	99	%	280,892	99	%	Total portfolio (1)	$	144,398	99	%	$	277,224	99	%
Breakdown by category:	Breakdown by category:								Breakdown by category:
Securities of U.S. Treasury and federal agencies (2)	Securities of U.S. Treasury and federal agencies (2)	$	137,870	100	%	214,462	100	%	Securities of U.S. Treasury and federal agencies (2)	$	113,248	100	%	$	225,341	100	%
Securities of U.S. states and political subdivisions	Securities of U.S. states and political subdivisions	16,486		99		32,984	100		Securities of U.S. states and political subdivisions	21,760		99		19,121		100
Collateralized loan obligations (3)	Collateralized loan obligations (3)	5,197		100		30,518	100		Collateralized loan obligations (3)	3,905		100		29,740		100
All other debt securities (4)	All other debt securities (4)	8,883		89		2,928	62		All other debt securities (4)	5,485		90		3,022		62
December 31, 2021
December 31, 2022									December 31, 2022
Total portfolio (1)	Total portfolio (1)	$	177,244	99	%	272,118	99	%	Total portfolio (1)	$	113,594	99	%	$	297,144	99	%
Breakdown by category:	Breakdown by category:								Breakdown by category:
Securities of U.S. Treasury and federal agencies (2)	Securities of U.S. Treasury and federal agencies (2)	$	145,547	100	%	205,453	100	%	Securities of U.S. Treasury and federal agencies (2)	$	93,422	100	%	$	233,169	100	%
Securities of U.S. states and political subdivisions	Securities of U.S. states and political subdivisions	16,917		99		32,704	100		Securities of U.S. states and political subdivisions	10,445		99		31,000		100
Collateralized loan obligations (3)	Collateralized loan obligations (3)	5,708		100		31,128	100		Collateralized loan obligations (3)	3,981		100		29,972		100
All other debt securities (4)	All other debt securities (4)	9,072		88		2,833	64		All other debt securities (4)	5,746		89		3,003		63

(1)~~98%~~99% were rated AA- and above at both March 31, ~~2022,~~2023, and December 31, ~~2021, respectively.~~2022.

(2)Includes federal agency mortgage-backed securities.

(3)100% were rated AA- and above at both March 31, ~~2022,~~2023, and December 31, ~~2021, respectively.~~2022.

(4)Includes non-U.S. government, non-agency mortgage-backed, and all other debt securities.

DELINQUENCY STATUS AND NONACCRUAL DEBT SECURITIES Debt security issuers that are delinquent in payment of amounts due under contractual debt agreements have a higher probability of recognition of credit losses. As such, as part of our monitoring of the credit quality of the debt security portfolio, we consider whether debt securities we own are past due in payment of principal or interest payments and whether any securities have been placed into nonaccrual status.

Debt securities that are past due and still accruing or in nonaccrual status were insignificant at both March 31, ~~2022,~~2023, and December 31, ~~2021. The carrying value of debt securities in nonaccrual status was insignificant at both March 31, 2022, and December 31, 2021. Charge-offs~~2022. Net charge-offs on debt securities were insignificant in the first quarter of both ~~2022~~2023 and ~~2021.~~2022.

Purchased debt securities with credit deterioration (PCD) are not considered to be in nonaccrual status, as payments from issuers of these securities remain current. PCD securities were insignificant in the first quarter of both ~~2022~~2023 and ~~2021.~~2022.


			Wells Fargo & Company			6967

Note 3: Available-for-Sale and Held-to-Maturity Debt Securities (continued)

Unrealized Losses of Available-for-Sale Debt Securities

Table 3.5 shows the gross unrealized losses and fair value of AFS debt securities by length of time those individual securities in each category have been in a continuous loss position. Debt securities on which we have recorded credit impairment are

categorized as being “less than 12 months” or “12 months or more” in a continuous loss position based on the point in time that the fair value declined to below the amortized cost basis, net of allowance for credit losses.

Table 3.5: Gross Unrealized Losses and Fair Value – Available-for-Sale Debt Securities


		Less than 12 months			12 months or more		Total			Less than 12 months			12 months or more		Total
(in millions)	(in millions)	Gross unrealized losses		Fair value	Gross unrealized losses	Fair value	Gross unrealized losses	Fair value	(in millions)	Gross unrealized losses (1)		Fair value	Gross unrealized losses (1)	Fair value	Gross unrealized losses (1)	Fair value
March 31, 2022
March 31, 2023									March 31, 2023
Available-for-sale debt securities:									Available-for-sale debt securities:
Securities of U.S. Treasury and federal agencies									Securities of U.S. Treasury and federal agencies	$	(371)	13,866	(2,009)	33,465	(2,380)	47,331
Non-U.S. government securities									Non-U.S. government securities	—		—	(1)	63	(1)	63
Securities of U.S. states and political subdivisions									Securities of U.S. states and political subdivisions	(353)		11,016	(423)	2,925	(776)	13,941
Federal agency mortgage-backed securities									Federal agency mortgage-backed securities	(471)		19,406	(3,764)	32,514	(4,235)	51,920
Non-agency mortgage-backed securities									Non-agency mortgage-backed securities	(13)		376	(113)	2,745	(126)	3,121
Collateralized loan obligations									Collateralized loan obligations	(1)		86	(74)	3,767	(75)	3,853
Other debt securities									Other debt securities	(10)		810	(33)	852	(43)	1,662
Total available-for-sale debt securities									Total available-for-sale debt securities	$	(1,219)	45,560	(6,417)	76,331	(7,636)	121,891
December 31, 2022									December 31, 2022
Available-for-sale debt securities:	Available-for-sale debt securities:								Available-for-sale debt securities:
Securities of U.S. Treasury and federal agencies	Securities of U.S. Treasury and federal agencies	$	(1,559)	41,680	(45)	1,257	(1,604)	42,937	Securities of U.S. Treasury and federal agencies	$	(291)	9,870	(1,969)	27,899	(2,260)	37,769

Securities of U.S. states and political subdivisions	Securities of U.S. states and political subdivisions	(186)		3,036	(83)	610	(269)	3,646	Securities of U.S. states and political subdivisions	(72)		2,154	(461)	2,382	(533)	4,536
Federal agency mortgage-backed securities	Federal agency mortgage-backed securities	(2,276)		63,258	(1,258)	15,441	(3,534)	78,699	Federal agency mortgage-backed securities	(3,580)		39,563	(1,587)	8,481	(5,167)	48,044
Non-agency mortgage-backed securities	Non-agency mortgage-backed securities	(29)		3,027	(16)	534	(45)	3,561	Non-agency mortgage-backed securities	(43)		1,194	(97)	2,068	(140)	3,262
Collateralized loan obligations	Collateralized loan obligations	(28)		4,523	(6)	581	(34)	5,104	Collateralized loan obligations	(65)		3,195	(25)	786	(90)	3,981
Other debt securities	Other debt securities	(6)		763	(9)	521	(15)	1,284	Other debt securities	(31)		1,591	(17)	471	(48)	2,062
Total available-for-sale debt securities	Total available-for-sale debt securities	$	(4,084)	116,287	(1,417)	18,944	(5,501)	135,231	Total available-for-sale debt securities	$	(4,082)	57,567	(4,156)	42,087	(8,238)	99,654
December 31, 2021
Available-for-sale debt securities:
Securities of U.S. Treasury and federal agencies		$	(192)	24,418	—	—	(192)	24,418

Securities of U.S. states and political subdivisions		(36)		2,308	(15)	532	(51)	2,840
Federal agency mortgage-backed securities		(334)		40,695	(248)	9,464	(582)	50,159
Non-agency mortgage-backed securities		(4)		1,966	(11)	543	(15)	2,509
Collateralized loan obligations		(3)		1,619	(4)	1,242	(7)	2,861
Other debt securities		—		—	(7)	624	(7)	624
Total available-for-sale debt securities		$	(569)	71,006	(285)	12,405	(854)	83,411

(1)Excludes portfolio level basis adjustments.

We have assessed each debt security with gross unrealized losses included in the previous table for credit impairment. As part of that assessment we evaluated and concluded that we do not intend to sell any of the debt securities, and that it is more likely than not that we will not be required to sell, prior to recovery of the amortized cost basis. We evaluate, where necessary, whether credit impairment exists by comparing the present value of the expected cash flows to the debt securities’ amortized cost basis. Credit impairment is recorded as an ACL for debt securities.

For descriptions of the factors we consider when analyzing debt securities for impairment as well as methodology and significant inputs used to measure credit losses, see Note 1 (Summary of Significant Accounting Policies) in our ~~2021~~2022 Form 10-K.


7068			Wells Fargo & Company

Contractual Maturities

Table 3.6 and Table 3.7 show the remaining contractual maturities, amortized cost, net of the ACL, fair value and weighted average effective yields of AFS and HTM debt securities, respectively. The remaining contractual principal

maturities for mortgage-backed securities (MBS) do not consider prepayments. Remaining expected maturities will differ from contractual maturities because borrowers may have the right to prepay obligations before the underlying mortgages mature.

Table 3.6: Contractual Maturities – Available-for-Sale Debt Securities


By remaining contractual maturity ($ in millions)	By remaining contractual maturity ($ in millions)	Total			Within one year	After one year through five years	After five years through ten years	After ten years	By remaining contractual maturity ($ in millions)	Total			Within one year	After one year through five years	After five years through ten years	After ten years
March 31, 2022
Available-for-sale debt securities (1):
March 31, 2023									March 31, 2023
Available-for-sale debt securities (1)(2):									Available-for-sale debt securities (1)(2):
Securities of U.S. Treasury and federal agencies	Securities of U.S. Treasury and federal agencies								Securities of U.S. Treasury and federal agencies
Amortized cost, net	Amortized cost, net	$	47,946		251	18,089	27,778	1,828	Amortized cost, net	$	60,397		6,356	34,323	18,161	1,557
Fair value	Fair value	46,433			247	17,794	26,478	1,914	Fair value	58,043			6,190	33,412	16,928	1,513
Weighted average yield	Weighted average yield	1.01		%	0.25	0.34	1.42	1.44	Weighted average yield	1.37		%	0.99	1.29	1.64	1.44
Non-U.S. government securities	Non-U.S. government securities								Non-U.S. government securities
Amortized cost, net	Amortized cost, net	$	116		1	90	25	—	Amortized cost, net	$	163		2	137	24	—
Fair value	Fair value	116			1	90	25	—	Fair value	162			1	137	24	—
Weighted average yield	Weighted average yield	0.40		%	1.49	0.38	0.43	—	Weighted average yield	4.15		%	5.10	4.14	4.16	—
Securities of U.S. states and political subdivisions	Securities of U.S. states and political subdivisions								Securities of U.S. states and political subdivisions
Amortized cost, net	Amortized cost, net	$	16,484		752	2,177	5,757	7,798	Amortized cost, net	$	22,499		2,587	5,357	4,687	9,868
Fair value	Fair value	16,486			751	2,181	5,599	7,955	Fair value	21,760			2,580	5,333	4,381	9,466
Weighted average yield	Weighted average yield	2.03		%	1.41	1.41	1.51	2.65	Weighted average yield	2.76		%	2.73	3.33	2.82	2.43
Federal agency mortgage-backed securities	Federal agency mortgage-backed securities								Federal agency mortgage-backed securities
Amortized cost, net	Amortized cost, net	$	94,726		—	247	2,415	92,064	Amortized cost, net	$	59,396		—	246	842	58,308
Fair value	Fair value	91,437			—	249	2,381	88,807	Fair value	55,205			—	236	790	54,179
Weighted average yield	Weighted average yield	2.60		%	—	2.86	2.32	2.61	Weighted average yield	3.52		%	—	1.93	2.54	3.54
Non-agency mortgage-backed securities	Non-agency mortgage-backed securities								Non-agency mortgage-backed securities
Amortized cost, net	Amortized cost, net	$	4,641		—	—	110	4,531	Amortized cost, net	$	3,269		—	—	59	3,210
Fair value	Fair value	4,608			—	—	110	4,498	Fair value	3,144			—	—	46	3,098
Weighted average yield	Weighted average yield	2.06		%	—	—	2.63	2.04	Weighted average yield	4.81		%	—	—	3.24	4.84
Collateralized loan obligations	Collateralized loan obligations								Collateralized loan obligations
Amortized cost, net	Amortized cost, net	$	5,231		—	4	4,824	403	Amortized cost, net	$	3,980		—	8	3,546	426
Fair value	Fair value	5,197			—	4	4,794	399	Fair value	3,905			—	8	3,484	413
Weighted average yield	Weighted average yield	1.55		%	—	2.26	1.55	1.56	Weighted average yield	6.14		%	—	6.24	6.13	6.17
Other debt securities	Other debt securities								Other debt securities
Amortized cost, net	Amortized cost, net	$	3,974		55	400	1,030	2,489	Amortized cost, net	$	2,163		82	183	830	1,068
Fair value	Fair value	4,159			55	398	1,030	2,676	Fair value	2,179			80	180	830	1,089
Weighted average yield	Weighted average yield	2.00		%	1.99	1.65	1.87	2.10	Weighted average yield	5.74		%	6.07	6.25	5.03	6.17
Total available-for-sale debt securities	Total available-for-sale debt securities								Total available-for-sale debt securities
Amortized cost, net	Amortized cost, net	$	173,118		1,059	21,007	41,939	109,113	Amortized cost, net	$	151,867		9,027	40,254	28,149	74,437
Fair value	Fair value	168,436			1,054	20,716	40,417	106,249	Fair value	144,398			8,851	39,306	26,483	69,758
Weighted average yield	Weighted average yield	2.04		%	1.17	0.50	1.51	2.55	Weighted average yield	2.67		%	1.54	1.58	2.53	3.46

(1)Weighted average yields displayed by maturity bucket are weighted based on amortized cost without effect for any related hedging derivatives and are shown pre-tax.

(2)Amortized cost, net excludes portfolio level basis adjustments of $(6) million.


			Wells Fargo & Company			69

Note 3: Available-for-Sale and Held-to-Maturity Debt Securities (continued)

Table 3.7: Contractual Maturities – Held-to-Maturity Debt Securities


By remaining contractual maturity ($ in millions)	Total			Within one year	After one year through five years	After five years through ten years	After ten years
March 31, 2023
Held-to-maturity debt securities (1):
Securities of U.S. Treasury and federal agencies
Amortized cost, net	$	3,788		—	—	—	3,788
Fair value	2,448			—	—	—	2,448
Weighted average yield	1.58		%	—	—	—	1.58
Securities of U.S. states and political subdivisions
Amortized cost, net	$	19,110		213	540	815	17,542
Fair value	15,830			212	524	803	14,291
Weighted average yield	2.34		%	0.45	1.69	2.91	2.36
Federal agency mortgage-backed securities
Amortized cost, net	$	221,553		—	—	—	221,553
Fair value	190,556			—	—	—	190,556
Weighted average yield	2.36		%	—	—	—	2.36
Non-agency mortgage-backed securities
Amortized cost, net	$	1,267		5	22	64	1,176
Fair value	1,128			5	22	61	1,040
Weighted average yield	3.15		%	3.01	3.98	3.88	3.10
Collateralized loan obligations
Amortized cost, net	$	29,703		—	28	13,008	16,667
Fair value	29,115			—	28	12,867	16,220
Weighted average yield	6.22		%	—	6.01	6.29	6.16
Other debt securities
Amortized cost, net	$	1,726		—	757	969	—
Fair value	1,611			—	720	891	—
Weighted average yield	4.47		%	—	4.10	4.75	—
Total held-to-maturity debt securities
Amortized cost, net	$	277,147		218	1,347	14,856	260,726
Fair value	240,688			217	1,294	14,622	224,555
Weighted average yield	2.78		%	0.51	3.18	5.99	2.60

(1)Weighted average yields displayed by maturity bucket are weighted based on amortized cost, excluding unamortized basis adjustments related to the transfer of certain debt securities from AFS to HTM, and are shown pre-tax.


70			Wells Fargo & Company


Note 4: Equity Securities

Table 4.1 provides a summary of our equity securities by business purpose and accounting method.

Table 4.1: Equity Securities


(in millions)	Mar 31, 2023		Dec 31, 2022
Held for trading at fair value:
Marketable equity securities	$	12,764	17,180
Nonmarketable equity securities (1)	10,513		9,730
Total equity securities held for trading (2)	23,277		26,910
Not held for trading:
Fair value:
Marketable equity securities	1,654		1,436
Nonmarketable equity securities	72		37
Total equity securities not held for trading at fair value	1,726		1,473
Equity method:
Private equity	3,041		2,836
Tax-advantaged renewable energy (3)	6,406		6,535
New market tax credit and other	282		298
Total equity method	9,729		9,669
Other methods:
Low-income housing tax credit (LIHTC) investments (3)	12,151		12,186
Private equity (4)	9,028		9,276
Federal Reserve Bank stock and other at cost (5)	4,699		4,900
Total equity securities not held for trading	37,333		37,504
Total equity securities	$	60,610	64,414

(1)Represents securities economically hedged with equity derivatives.

(2)Represents securities held as part of our customer accommodation trading activities. For additional information on these activities, see Note 2 (Trading Activities).

(3)See Note 13 (Securitizations and Variable Interest Entities) for information about tax credit investments.

(4)Represents nonmarketable equity securities accounted for under the measurement alternative, which were predominantly securities associated with our affiliated venture capital business.

(5)Includes $3.5 billion of investments in Federal Reserve Bank stock at both March 31, 2023, and December 31, 2022, and $1.2 billion and $1.4 billion of investments in Federal Home Loan Bank stock at March 31, 2023, and December 31, 2022, respectively.

Net Gains and Losses Not Held for Trading

Table 4.2 provides a summary of the net gains and losses from equity securities not held for trading, which excludes equity method adjustments for our share of the investee’s earnings or

losses that are recognized in other noninterest income. Gains and losses for securities held for trading are reported in net gains from trading and securities.

Table 4.2:Net Gains (Losses) from Equity Securities Not Held for Trading



	Quarter ended March 31,
(in millions)		2023		2022
Net gains (losses) from equity securities carried at fair value:
Marketable equity securities		$	(37)	(2)
Nonmarketable equity securities		(1)		(22)
Total equity securities carried at fair value		(38)		(24)
Net gains (losses) from nonmarketable equity securities not carried at fair value (1):
Impairment write-downs		(490)		(438)
Net unrealized gains (2)		151		690
Net realized gains from sale		20		348

Total nonmarketable equity securities not carried at fair value		(319)		600

Total net gains (losses) from equity securities not held for trading		$	(357)	576

(1)Includes amounts related to private equity and venture capital investments in consolidated portfolio companies, which are not reported in equity securities on our consolidated balance sheet.

(2)Includes unrealized gains (losses) due to observable price changes from equity securities accounted for under the measurement alternative.


			Wells Fargo & Company			71

Note 3:4: ~~Available-for-Sale and Held-to-Maturity Debt~~Equity Securities (continued)

Measurement Alternative

Table 4.3 provides additional information about the impairment write-downs and observable price changes from nonmarketable

equity securities accounted for under the measurement alternative. Gains and losses related to these adjustments are also included in Table 4.2.

Table ~~3.7:~~4.3: ~~Contractual Maturities – Held-to-Maturity Debt~~Net Gains (Losses) from Measurement Alternative Equity Securities

By remaining contractual maturity ($ in millions) Total Within
one year After
one year
through
five years After
five years
through
ten years After
ten years
March 31, 2022
Held-to-maturity debt securities (1):
Securities of U.S. Treasury and federal agencies
Amortized cost, net $ 16,196 — 12,411 — 3,785
Fair value 15,551 — 12,386 — 3,165
Weighted average yield 2.18 % — 2.37 — 1.57
Securities of U.S. states and political subdivisions
Amortized cost, net $ 32,969 1,243 2,949 2,235 26,542
Fair value 30,916 1,246 2,914 2,234 24,522
Weighted average yield 2.12 % 2.11 1.32 2.51 2.18
Federal agency mortgage-backed securities
Amortized cost, net $ 198,266 — — — 198,266
Fair value 185,013 — — — 185,013
Weighted average yield 2.16 % — — — 2.16
Non-agency mortgage-backed securities
Amortized cost, net $ 1,174 15 18 30 1,111
Fair value 1,115 15 18 29 1,053
Weighted average yield 2.97 % 3.24 2.93 3.16 2.97
Collateralized loan obligations
Amortized cost, net $ 30,475 — — 13,361 17,114
Fair value 30,396 — — 13,396 17,000
Weighted average yield 1.65 % — — 1.73 1.59
Other debt securities
Amortized cost, net $ 1,728 — 762 966 —
Fair value 1,650 — 732 918 —
Weighted average yield 4.47 % — 4.13 4.74 —
Total held-to-maturity debt securities
Amortized cost, net $ 280,808 1,258 16,140 16,592 246,818
Fair value 264,641 1,261 16,050 16,577 230,753
Weighted average yield 2.12 % 2.12 2.26 2.01 2.12



	Quarter ended March 31,
(in millions)		2023		2022
Net gains (losses) recognized in earnings during the period:
Gross unrealized gains from observable price changes		$	161	690
Gross unrealized losses from observable price changes		(10)		—
Impairment write-downs		(482)		(395)
Net realized gains from sale		12		33
Total net gains (losses) recognized during the period		$	(319)	328

Table 4.4 presents cumulative carrying value adjustments to nonmarketable equity securities accounted for under the measurement alternative that were still held at the end of each reporting period presented.

~~(1)~~Table 4.4:~~Weighted average yields displayed by maturity bucket are weighted based on amortized cost and are shown pre-tax.~~Measurement Alternative Cumulative Gains (Losses)



(in millions)	Mar 31, 2023		Dec 31, 2022

Cumulative gains (losses):
Gross unrealized gains from observable price changes	$	7,271	7,141
Gross unrealized losses from observable price changes	(24)		(14)
Impairment write-downs	(3,339)		(2,896)


72			Wells Fargo & Company


Note 4:5: Loans and Related Allowance for Credit Losses

Table ~~4.1~~5.1 presents total loans outstanding by portfolio segment and class of financing receivable. Outstanding balances include unearned income, net deferred loan fees or costs, and unamortized discounts and premiums. These amounts were less

than 1% of our total loans outstanding at March 31, ~~2022,~~2023, and December 31, ~~2021.~~2022.

Outstanding balances exclude accrued interest receivable on loans, except for certain revolving loans, such as credit card loans.

See Note 7 ~~(Other~~(Intangible Assets and Other Assets) for additional information on accrued interest receivable. Amounts considered to be uncollectible are reversed through interest income. During first quarter ~~2022,~~2023, we reversed accrued interest receivable of ~~$12~~$9 million for our commercial portfolio segment and ~~$32~~$55 million for our consumer portfolio segment, compared with ~~$16~~$12 million and ~~$51~~$32 million, respectively, for the same period a year ago.

Table ~~4.1:~~5.1: Loans Outstanding


(in millions)	(in millions)	Mar 31, 2022		Dec 31, 2021	(in millions)	Mar 31, 2023		Dec 31, 2022

Commercial:
Commercial and industrial	Commercial and industrial	$	362,137	350,436	Commercial and industrial	$	384,690	386,806
Real estate mortgage		129,495		127,733
Real estate construction		20,613		20,092

Commercial real estate					Commercial real estate	154,707		155,802
Lease financing	Lease financing	14,469		14,859	Lease financing	14,820		14,908
Total commercial	Total commercial	526,714		513,120	Total commercial	554,217		557,516
Consumer:
Residential mortgage – first lien		245,242		242,270
Residential mortgage – junior lien		15,392		16,618

Residential mortgage					Residential mortgage	267,138		269,117
Credit card	Credit card	38,639		38,453	Credit card	45,766		46,293
Auto	Auto	57,083		56,659	Auto	52,631		53,669
Other consumer	Other consumer	28,737		28,274	Other consumer	28,239		29,276
Total consumer	Total consumer	385,093		382,274	Total consumer	393,774		398,355
Total loans	Total loans	$	911,807	895,394	Total loans	$	947,991	955,871

Our non-U.S. loans are reported by respective class of financing receivable in the table above. Substantially all of our non-U.S. loan portfolio is commercial loans. Table ~~4.2~~5.2 presents

total non-U.S. commercial loans outstanding by class of financing receivable.

Table ~~4.2:~~5.2: Non-U.S. Commercial Loans Outstanding


(in millions)	(in millions)	Mar 31, 2022		Dec 31, 2021	(in millions)	Mar 31, 2023		Dec 31, 2022

Non-U.S. commercial loans:
Commercial and industrial	Commercial and industrial	$	80,435	77,365	Commercial and industrial	$	75,851	78,981
Real estate mortgage		7,072		7,070
Real estate construction		1,577		1,582

Commercial real estate					Commercial real estate	7,698		7,619
Lease financing	Lease financing	690		680	Lease financing	673		670
Total non-U.S. commercial loans	Total non-U.S. commercial loans	$	89,774	86,697	Total non-U.S. commercial loans	$	84,222	87,270


			Wells Fargo & Company			73

Note 4:5: Loans and Related Allowance for Credit Losses (continued)

Loan Purchases, Sales, and Transfers

Table ~~4.3~~5.3 presents the proceeds paid or received for purchases and sales of loans and transfers from loans held for investment to mortgages/loans held for sale. The table excludes loans for

which we have elected the fair value option and government insured/guaranteed residential mortgage – first lien loans because their loan activity normally does not impact the ACL.

Table ~~4.3:~~5.3: Loan Purchases, Sales, and Transfers


		2022				2021				2023				2022
(in millions)	(in millions)	Commercial		Consumer	Total	Commercial	Consumer	Total	(in millions)	Commercial		Consumer	Total	Commercial	Consumer	Total
Quarter ended March 31,	Quarter ended March 31,								Quarter ended March 31,
Purchases	Purchases	$	100	—	100	48	1	49	Purchases	$	416	3	419	100	—	100
Sales		(582)		—	(582)	(273)	(188)	(461)
Transfers (to)/from LHFS		21		(9)	12	(435)	63	(372)
Sales and net transfers (to)/from LHFS									Sales and net transfers (to)/from LHFS	(1,115)		(1)	(1,116)	(561)	(9)	(570)

Unfunded Credit Commitments ~~to Lend~~

~~A commitment to lend is a~~Unfunded credit commitments are legally binding ~~agreement~~agreements to lend to ~~a customer, usually at a stated~~customers with terms covering usage of funds, contractual interest ~~rate, if funded,~~rates, expiration dates, and any required collateral. Our commercial lending commitments include, but are not limited to, (i) commitments for ~~specific~~working capital and general corporate purposes, (ii) financing to customers who warehouse financial assets secured by real estate, consumer, or corporate loans, (iii) financing that is expected to be syndicated or replaced with other forms of long-term financing, and ~~time periods.~~(iv) commercial real estate lending. We ~~generally require a fee~~also originate multipurpose lending commitments under which commercial customers have the option to ~~extend such commitments. Certain commitments either provide us with funding discretion or are subject to loan agreements with covenants regarding~~draw on the ~~financial performance~~facility in one of several forms, including the issuance of letters of credit, which reduces the unfunded commitment amounts of the ~~customer~~facility.

The maximum credit risk for these commitments will generally be lower than the contractual amount because these commitments may expire without being used or ~~borrowing base formulas on an ongoing basis that must~~may be ~~met before we are required to fund~~cancelled at the ~~commitment.~~customer’s request. We may reduce or cancel ~~consumer commitments, including home equity~~ lines ~~and~~of credit ~~card lines,~~ in accordance with the contracts and applicable law. ~~For unconditionally cancelable~~Our credit risk monitoring activities include managing the amount of commitments, ~~at our discretion, we~~both to individual customers and in total, and the size and maturity structure of these commitments. We do not recognize an ~~ACL.~~ACL for commitments that are unconditionally cancellable at our discretion.

We issue commercial letters of credit to assist customers in purchasing goods or services, typically for international trade. At March 31, 2023, and December 31, 2022, we had $1.3 billion and $1.8 billion, respectively, of outstanding issued commercial letters of credit. See Note 14 (Guarantees and Other Commitments) for additional information on issued standby letters of credit.

We may be a fronting bank, whereby we act as a representative for other lenders, and advance funds or provide for the issuance of letters of credit under syndicated loan or letter of credit agreements. Any advances are generally repaid in less than a week and would normally require default of both the customer and another lender to expose us to loss. ~~The unfunded amount of these temporary advance arrangements totaled approximately $90.6 billion at March 31, 2022.~~

We issue commercial letters of credit to assist customers in purchasing goods or services, typically for international trade. At March 31, 2022, and December 31, 2021, we had $1.9 billion and $1.5 billion, respectively, of outstanding issued commercial letters of credit. We also originate multipurpose lending commitments under which borrowers have the option to draw on the facility for different purposes in one of several forms, including a standby letter of credit. See Note 11 (Guarantees and Other Commitments) for additional information on standby letters of credit.

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. We manage the potential risk in commitments to lend by limiting the total amount of commitments, both by individual customer and in total, by monitoring the size and maturity structure of these commitments and by applying the same credit standards for these commitments as for all of our credit activities.

For loans and commitments to lend, we generally require collateral or a guarantee. We may require various types of collateral, including commercial and consumer real estate, autos, other short-term liquid assets such as accounts receivable or inventory and long-lived assets, such as equipment and other business assets. Collateral requirements for each loan or commitment may vary based on the loan product and our assessment of a customer’s credit risk according to the specific credit underwriting, including credit terms and structure.

The contractual amount of our unfunded credit commitments, including unissued ~~standby and commercial~~ letters of credit, is summarized ~~by portfolio segment and class of financing receivable~~ in Table ~~4.4.~~5.4. The table excludes ~~the~~ issued ~~standby and commercial~~ letters of credit and ~~temporary advance~~is presented net of commitments syndicated to others, including the fronting arrangements described above.

Table ~~4.4:~~5.4: Unfunded Credit Commitments

(in millions) Mar 31,
2022 Dec 31,
2021
Commercial:
Commercial and industrial $ 412,645 404,292
Real estate mortgage 9,499 11,515
Real estate construction 19,389 19,943
Total commercial 441,533 435,750
Consumer:
Residential mortgage – first lien 32,442 32,992
Residential mortgage – junior lien 25,924 27,447
Credit card 135,021 130,743
Other consumer 59,489 59,789
Total consumer 252,876 250,971
Total unfunded credit commitments $ 694,409 686,721


(in millions)	Mar 31, 2023		Dec 31, 2022
Commercial and industrial (1)	$	379,580	388,504


Commercial real estate	28,112		29,518

Total commercial	407,692		418,022


Residential mortgage (2)	37,811		39,155
Credit card	151,234		145,526
Other consumer (3)	73,294		69,244
Total consumer	262,339		253,925
Total unfunded credit commitments	$	670,031	671,947

(1)The balances of unfunded credit commitments at December 31, 2022, were revised to exclude discretionary amounts where our approval or consent is required prior to any loan funding or commitment increase, which is consistent with March 31, 2023.

(2)Includes lines of credit totaling $33.9 billion and $35.5 billion as of March 31, 2023, and December 31, 2022, respectively.

(3)Predominantly includes securities-based lines of credit.


74			Wells Fargo & Company

Allowance for Credit Losses

Table ~~4.5~~5.5 presents the allowance for credit losses (ACL) for loans, which consists of the allowance for loan losses and the allowance for unfunded credit commitments. The ACL for loans ~~decreased~~increased $96 million from December 31, 2022, reflecting increases for

~~$1.1 billion from December 31, 2021, reflecting reduced uncertainty around the economic impact of the COVID-19 pandemic on our loan portfolios~~commercial real estate loans, primarily office loans, as well as for credit card and ~~increased uncertainty~~auto loans, partially offset by a decrease for residential mortgage loans related to the ~~risks~~adoption of ~~high inflation.~~ASU 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures.

Table ~~4.5:~~5.5: Allowance for Credit Losses for Loans


		Quarter ended March 31,					Quarter ended March 31,
($ in millions)	($ in millions)		2022			2021		($ in millions)	2023			2022
Balance, beginning of period	Balance, beginning of period		$	13,788		19,713		Balance, beginning of period	$	13,609		13,788
Cumulative effect from change in accounting policy (1)								Cumulative effect from change in accounting policy (1)	(429)			—
Balance, beginning of period, adjusted								Balance, beginning of period, adjusted	13,180			13,788
Provision for credit losses								Provision for credit losses	1,129			(775)
Interest income on certain loans (2)								Interest income on certain loans (2)	—			(29)
Loan charge-offs:								Loan charge-offs:
Commercial and industrial								Commercial and industrial	(101)			(56)

Provision for credit losses			(775)			(1,117)
Interest income on certain loans (1)			(29)			(41)
Loan charge-offs:
Commercial:
Commercial and industrial			(56)			(159)
Real estate mortgage			—			(52)
Real estate construction			—			—

Commercial real estate								Commercial real estate	(27)			—
Lease financing	Lease financing		(4)			(21)		Lease financing	(7)			(4)
Total commercial	Total commercial		(60)			(232)		Total commercial	(135)			(60)
Consumer:
Residential mortgage – first lien			(25)			(17)
Residential mortgage – junior lien			(22)			(19)

Residential mortgage								Residential mortgage	(28)			(47)
Credit card	Credit card		(267)			(335)		Credit card	(424)			(267)
Auto	Auto		(165)			(129)		Auto	(217)			(165)
Other consumer	Other consumer		(108)			(147)		Other consumer	(105)			(108)
Total consumer	Total consumer		(587)			(647)		Total consumer	(774)			(587)
Total loan charge-offs	Total loan charge-offs		(647)			(879)		Total loan charge-offs	(909)			(647)
Loan recoveries:	Loan recoveries:							Loan recoveries:
Commercial:
Commercial and industrial	Commercial and industrial		79			71		Commercial and industrial	58			79
Real estate mortgage			5			6
Real estate construction			—			—

Commercial real estate								Commercial real estate	10			5
Lease financing	Lease financing		5			6		Lease financing	4			5
Total commercial	Total commercial		89			83		Total commercial	72			89
Consumer:
Residential mortgage – first lien			28			41
Residential mortgage – junior lien			40			38

Residential mortgage								Residential mortgage	39			68
Credit card	Credit card		91			99		Credit card	80			91
Auto	Auto		69			77		Auto	96			69
Other consumer	Other consumer		25			28		Other consumer	18			25
Total consumer	Total consumer		253			283		Total consumer	233			253
Total loan recoveries	Total loan recoveries		342			366		Total loan recoveries	305			342
Net loan charge-offs	Net loan charge-offs		(305)			(513)		Net loan charge-offs	(604)			(305)
Other	Other		2			1		Other	—			2
Balance, end of period	Balance, end of period		$	12,681		18,043		Balance, end of period	$	13,705		12,681

Components:	Components:							Components:
Allowance for loan losses	Allowance for loan losses		$	11,504		16,928		Allowance for loan losses	$	13,120		11,504
Allowance for unfunded credit commitments	Allowance for unfunded credit commitments		1,177			1,115		Allowance for unfunded credit commitments	585			1,177
Allowance for credit losses	Allowance for credit losses		$	12,681		18,043		Allowance for credit losses	$	13,705		12,681

Net loan charge-offs as a percentage of average total loans			0.14		%	0.24
Net loan charge-offs (annualized) as a percentage of average total loans								Net loan charge-offs (annualized) as a percentage of average total loans	0.26		%	0.14
Allowance for loan losses as a percentage of total loans	Allowance for loan losses as a percentage of total loans		1.26			1.96		Allowance for loan losses as a percentage of total loans	1.38			1.26
Allowance for credit losses for loans as a percentage of total loans	Allowance for credit losses for loans as a percentage of total loans		1.39			2.09		Allowance for credit losses for loans as a percentage of total loans	1.45			1.39

(1)~~Loans~~Represents the change in our allowance for credit losses for loans as a result of our adoption of ASU 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, on January 1, 2023. For additional information, see Note 1 (Summary of Significant Accounting Policies).

(2)Prior to the adoption of ASU 2022-02, loans with an allowance measured by discounting expected cash flows using the loan’s effective interest rate over the remaining life of the loan ~~recognize~~recognized changes in allowance attributable to the passage of time as interest income.


			Wells Fargo & Company			75

Note 4:5: Loans and Related Allowance for Credit Losses (continued)

Table ~~4.6~~5.6 summarizes the activity in the ACL by our commercial and consumer portfolio segments.

Table ~~4.6:~~5.6: Allowance for Credit Losses for Loans Activity by Portfolio Segment


		2022				2021				2023				2022
(in millions)	(in millions)	Commercial		Consumer	Total	Commercial	Consumer	Total	(in millions)	Commercial		Consumer	Total	Commercial	Consumer	Total

Quarter ended March 31,	Quarter ended March 31,								Quarter ended March 31,
Balance, beginning of period	Balance, beginning of period	$	7,791	5,997	13,788	11,516	8,197	19,713	Balance, beginning of period	$	6,956	6,653	13,609	7,791	5,997	13,788
Cumulative effect from change in accounting policy (1)									Cumulative effect from change in accounting policy (1)	27		(456)	(429)	—	—	—
Balance, beginning of period, adjusted									Balance, beginning of period, adjusted	6,983		6,197	13,180	7,791	5,997	13,788
Provision for credit losses	Provision for credit losses	(665)		(110)	(775)	(667)	(450)	(1,117)	Provision for credit losses	304		825	1,129	(665)	(110)	(775)
Interest income on certain loans (1)		(9)		(20)	(29)	(19)	(22)	(41)
Interest income on certain loans (2)									Interest income on certain loans (2)	—		—	—	(9)	(20)	(29)
Loan charge-offs	Loan charge-offs	(60)		(587)	(647)	(232)	(647)	(879)	Loan charge-offs	(135)		(774)	(909)	(60)	(587)	(647)
Loan recoveries	Loan recoveries	89		253	342	83	283	366	Loan recoveries	72		233	305	89	253	342
Net loan charge-offs	Net loan charge-offs	29		(334)	(305)	(149)	(364)	(513)	Net loan charge-offs	(63)		(541)	(604)	29	(334)	(305)
Other	Other	2		—	2	1	—	1	Other	—		—	—	2	—	2
Balance, end of period	Balance, end of period	$	7,148	5,533	12,681	10,682	7,361	18,043	Balance, end of period	$	7,224	6,481	13,705	7,148	5,533	12,681

Credit Quality

We monitor credit quality by evaluating various attributes and utilize such information in our evaluation of the appropriateness of the ACL for loans. The following sections provide the credit quality indicators we most closely monitor. The credit quality indicators are generally based on information as of our financial statement date.

COMMERCIAL CREDIT QUALITY INDICATORS We manage a consistent process for assessing commercial loan credit quality. Commercial loans are generally subject to individual risk assessment using our internal borrower and collateral quality

ratings, which is our primary credit quality indicator. Our ratings are aligned to regulatory definitions of pass and criticized categories with the criticized segmented among special mention, substandard, doubtful and loss categories.

Table ~~4.7~~5.7 provides the outstanding balances of our commercial loan portfolio by risk category and credit quality information by origination year for term loans. Revolving loans may convert to term loans as a result of a contractual provision in the original loan agreement or if modified infor a ~~troubled~~

~~debt restructuring (TDR).~~borrower experiencing financial difficulty. At March 31, ~~2022,~~2023, we had ~~$501.2~~$526.4 billion and ~~$25.5~~$27.8 billion of pass and criticized commercial loans, respectively.

Gross charge-offs by loan class are included in the following table for the quarter ended March 31, 2023, which we monitor as part of our credit risk management practices; however, charge-offs are not a primary credit quality indicator for our loan portfolio.


76			Wells Fargo & Company

Table ~~4.7:~~5.7: Commercial Loan Categories by Risk Categories and Vintage


		Term loans by origination year							Revolving loans	Revolving loans converted to term loans	Total		Term loans by origination year							Revolving loans	Revolving loans converted to term loans	Total
(in millions)	(in millions)	2022		2021	2020	2019	2018	Prior				(in millions)	2023		2022	2021	2020	2019	Prior
March 31, 2022
March 31, 2023												March 31, 2023
Commercial and industrial	Commercial and industrial											Commercial and industrial
Pass	Pass	$	25,954	49,141	16,084	19,801	6,756	11,769	221,270	643	351,418	Pass	$	13,124	49,208	29,262	10,296	14,292	6,867	249,092	465	372,606
Criticized	Criticized	330		1,470	819	946	1,121	928	5,094	11	10,719	Criticized	308		1,055	1,281	636	644	953	7,207	—	12,084
Total commercial and industrial	Total commercial and industrial	26,284		50,611	16,903	20,747	7,877	12,697	226,364	654	362,137	Total commercial and industrial	13,432		50,263	30,543	10,932	14,936	7,820	256,299	465	384,690
Real estate mortgage
Gross charge-offs (1)												Gross charge-offs (1)	3		11	14	1	3	2	67	—	101

Commercial real estate												Commercial real estate
Pass	Pass	9,636		36,066	15,336	17,767	11,912	21,815	5,009	—	117,541	Pass	3,666		37,782	37,271	15,434	15,253	24,541	6,114	150	140,211
Criticized	Criticized	450		3,260	1,083	2,616	1,497	2,804	244	—	11,954	Criticized	546		3,175	3,481	1,250	2,867	2,970	207	—	14,496
Total real estate mortgage		10,086		39,326	16,419	20,383	13,409	24,619	5,253	—	129,495
Real estate construction
Pass		913		6,255	3,866	4,216	2,055	561	1,043	1	18,910
Criticized		195		475	205	534	227	67	—	—	1,703
Total real estate construction		1,108		6,730	4,071	4,750	2,282	628	1,043	1	20,613
Total commercial real estate												Total commercial real estate	4,212		40,957	40,752	16,684	18,120	27,511	6,321	150	154,707
Gross charge-offs												Gross charge-offs	—		19	—	—	6	2	—	—	27
Lease financing	Lease financing											Lease financing
Pass	Pass	611		4,152	2,777	2,245	1,203	2,361	—	—	13,349	Pass	876		4,652	3,051	1,736	1,237	2,061	—	—	13,613
Criticized	Criticized	77		275	217	249	154	148	—	—	1,120	Criticized	88		346	298	193	158	124	—	—	1,207
Total lease financing	Total lease financing	688		4,427	2,994	2,494	1,357	2,509	—	—	14,469	Total lease financing	964		4,998	3,349	1,929	1,395	2,185	—	—	14,820
Gross charge-offs												Gross charge-offs	—		1	2	2	1	1	—	—	7
Total commercial loans	Total commercial loans	$	38,166	101,094	40,387	48,374	24,925	40,453	232,660	655	526,714	Total commercial loans	$	18,608	96,218	74,644	29,545	34,451	37,516	262,620	615	554,217
		Term loans by origination year							Revolving loans	Revolving loans converted to term loans	Total		Term loans by origination year							Revolving loans	Revolving loans converted to term loans	Total
		2021		2020	2019	2018	2017	Prior					2022		2021	2020	2019	2018	Prior
December 31, 2021
December 31, 2022												December 31, 2022
Commercial and industrial	Commercial and industrial											Commercial and industrial
Pass	Pass	$	65,562	15,193	20,553	7,400	3,797	13,985	211,452	679	338,621	Pass	$	61,646	31,376	11,128	13,656	3,285	5,739	247,594	842	375,266
Criticized	Criticized	1,657		884	1,237	1,256	685	551	5,528	17	11,815	Criticized	872		1,244	478	505	665	532	7,244	—	11,540
Total commercial and industrial	Total commercial and industrial	67,219		16,077	21,790	8,656	4,482	14,536	216,980	696	350,436	Total commercial and industrial	62,518		32,620	11,606	14,161	3,950	6,271	254,838	842	386,806
Real estate mortgage

Commercial real estate												Commercial real estate
Pass	Pass	38,196		15,929	19,013	12,618	7,451	16,026	5,411	3	114,647	Pass	38,022		38,709	16,564	16,409	10,587	16,159	6,765	150	143,365
Criticized	Criticized	3,462		1,119	2,975	1,834	875	2,421	400	—	13,086	Criticized	2,785		2,794	965	2,958	1,088	1,688	159	—	12,437
Total real estate mortgage		41,658		17,048	21,988	14,452	8,326	18,447	5,811	3	127,733
Real estate construction
Pass		5,895		4,058	4,549	2,167	379	329	1,042	2	18,421
Criticized		510		266	586	234	68	7	—	—	1,671
Total real estate construction		6,405		4,324	5,135	2,401	447	336	1,042	2	20,092
Total commercial real estate												Total commercial real estate	40,807		41,503	17,529	19,367	11,675	17,847	6,924	150	155,802

Lease financing	Lease financing											Lease financing
Pass	Pass	4,100		3,012	2,547	1,373	838	1,805	—	—	13,675	Pass	4,543		3,336	1,990	1,427	765	1,752	—	—	13,813
Criticized	Criticized	284		246	282	184	86	102	—	—	1,184	Criticized	330		275	190	169	94	37	—	—	1,095
Total lease financing	Total lease financing	4,384		3,258	2,829	1,557	924	1,907	—	—	14,859	Total lease financing	4,873		3,611	2,180	1,596	859	1,789	—	—	14,908

Total commercial loans	Total commercial loans	$	119,666	40,707	51,742	27,066	14,179	35,226	223,833	701	513,120	Total commercial loans	$	108,198	77,734	31,315	35,124	16,484	25,907	261,762	992	557,516

(1) Includes charge-offs on overdrafts, which are generally charged-off at 60 days past due.


			Wells Fargo & Company			77

Note 4:5: Loans and Related Allowance for Credit Losses (continued)

Table ~~4.8~~5.8 provides days past due (DPD) information for commercial loans, which we monitor as part of our credit risk ~~management~~

management practices; however, delinquency is not a primary credit quality indicator for commercial loans.

Table ~~4.8:~~5.8: Commercial Loan Categories by Delinquency Status

(in millions) Commercial
and
industrial Real
estate
mortgage Real
estate
construction Lease
financing Total
March 31, 2022
By delinquency status:
Current-29 days past due (DPD) and still accruing $ 360,333 127,757 20,513 14,221 522,824
30-89 DPD and still accruing 819 625 95 131 1,670
90+ DPD and still accruing 186 80 1 — 267
Nonaccrual loans 799 1,033 4 117 1,953
Total commercial loans $ 362,137 129,495 20,613 14,469 526,714
December 31, 2021
By delinquency status:
Current-29 DPD and still accruing $ 348,033 126,184 19,900 14,568 508,685
30-89 DPD and still accruing 1,217 285 179 143 1,824
90+ DPD and still accruing 206 29 — — 235
Nonaccrual loans 980 1,235 13 148 2,376
Total commercial loans $ 350,436 127,733 20,092 14,859 513,120


	Still accruing				Nonaccrual loans	Total commercial loans
(in millions)	Current-29 DPD		30-89 DPD	90+ DPD
March 31, 2023
Commercial and industrial	$	383,084	711	156	739	384,690


Commercial real estate	152,609		439	209	1,450	154,707
Lease financing	14,580		154	—	86	14,820
Total commercial loans	$	550,273	1,304	365	2,275	554,217
December 31, 2022
Commercial and industrial	$	384,164	1,313	583	746	386,806


Commercial real estate	153,877		833	134	958	155,802
Lease financing	14,623		166	—	119	14,908
Total commercial loans	$	552,664	2,312	717	1,823	557,516

CONSUMER CREDIT QUALITY INDICATORS We have various classes of consumer loans that present unique credit risks. Loan delinquency, ~~FICO~~Fair Isaac Corporation (FICO) credit scores and loan-to-value (LTV) for residential mortgage loans are the primary credit quality indicators that we monitor and utilize in our evaluation of the appropriateness of the ACL for the consumer loan portfolio segment. Gross charge-offs by loan class are included in the following tables for the quarter ended March 31, 2023, which we monitor as part of our credit risk management practices; however, charge-offs are not a primary credit quality indicator for our loan portfolio.

Many of our loss estimation techniques used for the ACL for loans rely on delinquency-based models; therefore, delinquency is an important indicator of credit quality in the establishment of our ACL for consumer loans.

~~Table 4.9 provides the outstanding balances of our consumer loan portfolio by delinquency status.~~ Credit quality information is provided with the year of origination for term loans. Revolving loans may convert to term loans as a result of a contractual provision in the original loan agreement or if modified infor a ~~TDR. The revolving loans converted to term loans in the credit card loan category represent credit card loans with modified terms that require payment over a specific term.~~borrower experiencing financial difficulty.

Payment deferral activities in the residential mortgage portfolio instituted in response to the COVID-19 pandemic could continue to delay the recognition of delinquencies for residential mortgage customers who otherwise would have moved into past due status.


78			~~Wells Fargo & Company~~

~~Table 4.9:Consumer Loan Categories by Delinquency Status and Vintage~~

Term loans by origination year Revolving loans Revolving loans converted to term loans
(in millions) 2022 2021 2020 2019 2018 Prior Total
March 31, 2022
Residential mortgage – first lien
By delinquency status:
Current-29 DPD $ 18,386 68,443 39,567 22,814 6,951 69,780 4,671 1,788 232,400
30-59 DPD 49 97 20 31 12 430 13 32 684
60-89 DPD — 13 5 1 5 122 5 17 168
90-119 DPD — 3 2 — 6 59 3 10 83
120-179 DPD — 2 11 1 1 77 6 13 111
180+ DPD — — 41 39 40 929 30 147 1,226
Government insured/guaranteed
loans (1)
1 25 124 167 283 9,970 — — 10,570
Total residential mortgage – first lien 18,436 68,583 39,770 23,053 7,298 81,367 4,728 2,007 245,242
Residential mortgage – junior lien
By delinquency status:
Current-29 DPD 5 31 19 28 24 652 9,695 4,516 14,970
30-59 DPD — — — 1 — 10 18 38 67
60-89 DPD — — — — — 4 7 20 31
90-119 DPD — — — — — 2 5 12 19
120-179 DPD — — — — — 4 5 17 26
180+ DPD — — — — — 35 51 193 279
Total residential mortgage – junior lien 5 31 19 29 24 707 9,781 4,796 15,392
Credit cards
By delinquency status:
Current-29 DPD — — — — — — 37,844 195 38,039
30-59 DPD — — — — — — 169 10 179
60-89 DPD — — — — — — 119 8 127
90-119 DPD — — — — — — 100 6 106
120-179 DPD — — — — — — 185 3 188
180+ DPD — — — — — — — — —
Total credit cards — — — — — — 38,417 222 38,639
Auto
By delinquency status:
Current-29 DPD 7,230 26,314 10,965 7,331 2,721 1,511 — — 56,072
30-59 DPD 9 251 158 125 60 67 — — 670
60-89 DPD — 94 57 45 20 25 — — 241
90-119 DPD — 41 24 17 7 9 — — 98
120-179 DPD — 1 1 — — — — — 2
180+ DPD — — — — — — — — —
Total auto 7,239 26,701 11,205 7,518 2,808 1,612 — — 57,083
Other consumer
By delinquency status:
Current-29 DPD 985 1,892 579 576 153 198 24,155 132 28,670
30-59 DPD — 5 2 3 1 1 10 3 25
60-89 DPD — 3 1 1 1 1 4 1 12
90-119 DPD — 3 1 1 1 — 3 1 10
120-179 DPD — — — — — — 7 3 10
180+ DPD — — — — — 1 1 8 10
Total other consumer 985 1,903 583 581 156 201 24,180 148 28,737
Total consumer loans $ 26,665 97,218 51,577 31,181 10,286 83,887 77,106 7,173 385,093

~~(continued on following page)~~


			~~Wells Fargo & Company~~			79

~~Note 4:~~ ~~Loans and Related Allowance for Credit Losses~~ ~~(continued)~~

~~(continued from previous page)~~

Term loans by origination year Revolving loans Revolving loans converted to term loans
(in millions) 2021 2020 2019 2018 2017 Prior Total
December 31, 2021
Residential mortgage – first lien
By delinquency status:
Current-29 DPD $ 69,994 41,527 24,887 7,660 13,734 61,576 5,248 1,673 226,299
30-59 DPD 129 27 30 12 24 418 14 29 683
60-89 DPD 10 7 2 — 3 126 7 15 170
90-119 DPD — 1 1 1 5 53 4 9 74
120-179 DPD 1 16 2 2 1 63 4 14 103
180+ DPD — 62 72 71 92 1,294 36 156 1,783
Government insured/guaranteed
loans (1)
14 134 209 349 364 12,088 — — 13,158
Total residential mortgage – first lien 70,148 41,774 25,203 8,095 14,223 75,618 5,313 1,896 242,270
Residential mortgage – junior lien
By delinquency status:
Current-29 DPD 28 20 30 26 21 700 10,883 4,426 16,134
30-59 DPD — — — — 1 10 29 46 86
60-89 DPD — — — — — 4 10 21 35
90-119 DPD — — — 1 — 3 4 12 20
120-179 DPD — — — — — 5 7 14 26
180+ DPD — — 1 — — 40 59 217 317
Total residential mortgage – junior lien 28 20 31 27 22 762 10,992 4,736 16,618
Credit cards
By delinquency status:
Current-29 DPD — — — — — — 37,686 192 37,878
30-59 DPD — — — — — — 176 7 183
60-89 DPD — — — — — — 118 5 123
90-119 DPD — — — — — — 98 5 103
120-179 DPD — — — — — — 165 1 166
180+ DPD — — — — — — — — —
Total credit cards — — — — — — 38,243 210 38,453
Auto
By delinquency status:
Current-29 DPD 29,246 12,412 8,476 3,271 1,424 714 — — 55,543
30-59 DPD 220 193 165 81 46 57 — — 762
60-89 DPD 69 67 53 25 14 21 — — 249
90-119 DPD 31 27 22 9 6 8 — — 103
120-179 DPD — 1 1 — — — — — 2
180+ DPD — — — — — — — — —
Total auto 29,566 12,700 8,717 3,386 1,490 800 — — 56,659
Other consumer
By delinquency status:
Current-29 DPD 2,221 716 703 203 107 125 23,988 143 28,206
30-59 DPD 3 2 3 1 — 2 10 4 25
60-89 DPD 2 1 2 1 — 1 5 1 13
90-119 DPD 1 1 2 1 — — 4 — 9
120-179 DPD — — — — — — 8 2 10
180+ DPD — — — — — 1 1 9 11
Total other consumer 2,227 720 710 206 107 129 24,016 159 28,274
Total consumer loans $ 101,969 55,214 34,661 11,714 15,842 77,309 78,564 7,001 382,274

~~(1)~~Represents loans whose repayments are predominantly insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA). Loans insured/guaranteed by the FHA/VA and 90+ DPD totaled $3.8 billion and $5.7 billion at March 31, 2022, and December 31, 2021, respectively.

~~Of the $2.2 billion of consumer loans not government insured/guaranteed that are 90 days or more past due at March 31, 2022, $409 million was accruing, compared with~~

~~$2.7 billion past due and $424 million accruing at December 31, 2021.~~


80			~~Wells Fargo & Company~~

We obtain ~~Fair Isaac Corporation (FICO)~~FICO scores at loan origination and the scores

are generally updated at least quarterly, except in limited circumstances, including compliance with the Fair Credit Reporting Act (FCRA). FICO scores are not available for certain loan types or may not be required if we deem it unnecessary due to strong collateral and other borrower attributes. ~~Substantially all loans not requiring a FICO score are~~

~~securities-based loans originated by our retail brokerage business.~~

Table ~~4.10~~5.9 provides the outstanding balances of our ~~consumer loan portfolio~~residential mortgage loans by ~~FICO score. Substantially allof the scored consumer portfolio has an updated FICO score of 680 or above.~~our primary credit quality indicators.

~~Table 4.10:Consumer Loan Categories by FICO and Vintage~~

Term loans by origination year Revolving loans Revolving loans converted to term loans
(in millions) 2022 2021 2020 2019 2018 Prior Total
March 31, 2022
By FICO:
Residential mortgage – first lien
800+ $ 6,959 41,019 27,546 15,795 4,757 43,819 2,327 533 142,755
760-799 8,055 18,449 8,173 4,520 1,219 11,509 927 280 53,132
720-759 2,485 6,500 2,683 1,699 593 6,619 595 256 21,430
680-719 707 1,811 795 558 250 3,739 359 208 8,427
640-679 164 490 243 149 93 1,819 167 142 3,267
600-639 32 103 62 57 32 1,012 80 84 1,462
< 600 1 23 22 14 18 1,007 103 129 1,317
No FICO available 32 163 122 94 53 1,873 170 375 2,882
Government insured/guaranteed loans (1) 1 25 124 167 283 9,970 — — 10,570
Total residential mortgage – first lien 18,436 68,583 39,770 23,053 7,298 81,367 4,728 2,007 245,242
Residential mortgage – junior lien
800+ — — — — — 170 4,987 1,561 6,718
760-799 — — — — — 102 1,884 809 2,795
720-759 — — — — — 114 1,290 777 2,181
680-719 — — — — — 105 752 634 1,491
640-679 — — — — — 56 293 323 672
600-639 — — — — — 33 141 192 366
< 600 — — — — — 42 147 210 399
No FICO available 5 31 19 29 24 85 287 290 770
Total residential mortgage – junior lien 5 31 19 29 24 707 9,781 4,796 15,392
Credit card
800+ — — — — — — 4,468 2 4,470
760-799 — — — — — — 6,070 8 6,078
720-759 — — — — — — 8,383 27 8,410
680-719 — — — — — — 9,129 49 9,178
640-679 — — — — — — 5,866 46 5,912
600-639 — — — — — — 2,284 32 2,316
< 600 — — — — — — 2,124 57 2,181
No FICO available — — — — — — 93 1 94
Total credit card — — — — — — 38,417 222 38,639
Auto
800+ 1,486 4,161 1,836 1,485 586 301 — — 9,855
760-799 1,323 4,418 1,850 1,323 471 220 — — 9,605
720-759 1,214 4,229 1,826 1,279 473 237 — — 9,258
680-719 1,227 4,316 1,953 1,217 427 226 — — 9,366
640-679 1,034 4,003 1,548 859 303 179 — — 7,926
600-639 641 2,741 952 524 198 144 — — 5,200
< 600 314 2,804 1,237 816 337 291 — — 5,799
No FICO available — 29 3 15 13 14 — — 74
Total auto 7,239 26,701 11,205 7,518 2,808 1,612 — — 57,083
Other consumer
800+ 222 393 147 103 25 46 1,171 25 2,132
760-799 244 407 114 89 23 23 715 18 1,633
720-759 209 383 103 89 29 20 629 20 1,482
680-719 153 295 80 79 28 19 586 18 1,258
640-679 68 156 37 43 16 12 306 16 654
600-639 14 46 11 15 7 6 111 10 220
< 600 3 29 12 19 9 7 108 11 198
No FICO available 72 194 79 144 19 68 1,167 30 1,773
FICO not required — — — — — — 19,387 — 19,387
Total other consumer 985 1,903 583 581 156 201 24,180 148 28,737
Total consumer loans $ 26,665 97,218 51,577 31,181 10,286 83,887 77,106 7,173 385,093

~~(continued on following page)~~


			~~Wells Fargo & Company~~			81

~~Note 4:~~ ~~Loans and Related Allowance for Credit Losses~~ ~~(continued)~~

~~(continued from previous page)~~

Term loans by origination year Revolving loans Revolving loans converted to term loans
(in millions) 2021 2020 2019 2018 2017 Prior Total
December 31, 2021
By FICO:
Residential mortgage – first lien
800+ $ 35,935 27,396 16,583 5,153 9,430 37,495 2,554 469 135,015
760-799 23,645 9,814 5,412 1,464 2,485 10,509 1,073 265 54,667
720-759 7,842 3,083 1,980 642 1,137 6,277 646 238 21,845
680-719 1,986 876 645 283 501 3,682 393 206 8,572
640-679 449 233 187 89 129 1,851 188 146 3,272
600-639 101 63 46 31 41 1,035 102 89 1,508
< 600 15 13 24 19 41 1,083 114 124 1,433
No FICO available 161 162 117 65 95 1,598 243 359 2,800
Government insured/guaranteed loans (1) 14 134 209 349 364 12,088 — — 13,158
Total residential mortgage – first lien 70,148 41,774 25,203 8,095 14,223 75,618 5,313 1,896 242,270
Residential mortgage – junior lien
800+ — — — — — 188 5,512 1,481 7,181
760-799 — — — — — 110 2,154 828 3,092
720-759 — — — — — 130 1,462 790 2,382
680-719 — — — — — 118 881 633 1,632
640-679 — — — — — 65 325 338 728
600-639 — — — — — 39 160 208 407
< 600 — — — — — 43 164 215 422
No FICO available 28 20 31 27 22 69 334 243 774
Total residential mortgage – junior lien 28 20 31 27 22 762 10,992 4,736 16,618
Credit card
800+ — — — — — — 4,247 1 4,248
760-799 — — — — — — 6,053 7 6,060
720-759 — — — — — — 8,475 26 8,501
680-719 — — — — — — 9,136 50 9,186
640-679 — — — — — — 5,850 47 5,897
600-639 — — — — — — 2,298 31 2,329
< 600 — — — — — — 2,067 47 2,114
No FICO available — — — — — — 117 1 118
Total credit card — — — — — — 38,243 210 38,453
Auto
800+ 4,688 1,983 1,680 690 318 108 — — 9,467
760-799 4,967 2,123 1,586 586 234 87 — — 9,583
720-759 4,789 2,104 1,503 583 241 106 — — 9,326
680-719 5,005 2,282 1,441 526 218 111 — — 9,583
640-679 4,611 1,824 1,025 369 160 99 — — 8,088
600-639 3,118 1,114 617 243 117 92 — — 5,301
< 600 2,372 1,236 853 376 193 187 — — 5,217
No FICO available 16 34 12 13 9 10 — — 94
Total auto 29,566 12,700 8,717 3,386 1,490 800 — — 56,659
Other consumer
800+ 450 162 128 34 8 47 1,343 22 2,194
760-799 502 147 117 33 7 22 819 19 1,666
720-759 461 134 115 38 9 18 714 22 1,511
680-719 349 95 99 37 9 15 630 22 1,256
640-679 170 44 55 21 6 8 328 17 649
600-639 42 13 19 9 3 4 117 9 216
< 600 18 12 22 11 3 5 114 12 197
No FICO available 235 113 155 23 62 10 1,236 36 1,870
FICO not required — — — — — — 18,715 — 18,715
Total other consumer 2,227 720 710 206 107 129 24,016 159 28,274
Total consumer loans $ 101,969 55,214 34,661 11,714 15,842 77,309 78,564 7,001 382,274

~~(1)Represents loans whose repayments are predominantly insured by the FHA or guaranteed by the VA.~~

LTV refers to the ratio comparing the loan’s ~~unpaid principal~~outstanding balance to the property’s collateral value. Combined LTV (CLTV) refers to the combination of first lien mortgage and junior lien mortgage (including unused line amounts for credit line products) ratios. We obtain LTVs and CLTVs using a cascade approach which first uses values provided by automated valuation models (AVMs) for the property. If an AVM is not

available, then the value is estimated using the original appraised value adjusted by the change in Home Price Index (HPI) for the property location. If an HPI is not available, the original appraised value is used. The HPI value is normally the only method considered for high value properties, generally with an original value of $1 million or more, as the AVM values have proven less accurate for these properties. Generally, we obtain available LTVs


82			~~Wells Fargo & Company~~

and CLTVs on a quarterly basis. Certain loans do not have an LTV or CLTV due to a lack of industry data availability and portfolios acquired from or serviced by other institutions.

~~Table 4.11 shows the most updated LTV and CLTV distribution of the residential mortgage – first lien and residential mortgage – junior lien loan portfolios.~~


78			Wells Fargo & Company

Table ~~4.11:~~5.9: ~~Consumer Loan Categories~~Credit Quality Indicators for Residential Mortgage Loans by ~~LTV/CLTV and~~ Vintage

Term loans by origination year Revolving loans Revolving loans converted to term loans
(in millions) 2022 2021 2020 2019 2018 Prior Total
March 31, 2022
Residential mortgage – first lien
By LTV:
0-60% $ 7,187 27,906 24,257 15,714 5,040 64,410 3,997 1,772 150,283
60.01-80% 10,940 39,437 14,916 6,725 1,808 6,340 549 177 80,892
80.01-100% 290 1,056 354 359 121 342 111 39 2,672
100.01-120% (1) — 25 26 18 8 45 22 5 149
> 120% (1) — 12 5 5 1 29 12 3 67
No LTV available 18 122 88 65 37 231 37 11 609
Government insured/guaranteed loans (2) 1 25 124 167 283 9,970 — — 10,570
Total residential mortgage – first lien 18,436 68,583 39,770 23,053 7,298 81,367 4,728 2,007 245,242
Residential mortgage – junior lien
By CLTV:
0-60% — — — — — 450 7,388 3,707 11,545
60.01-80% — — — — — 145 1,875 793 2,813
80.01-100% — — — — — 43 403 223 669
100.01-120% (1) — — — — — 9 73 34 116
> 120% (1) — — — — — 2 25 10 37
No CLTV available 5 31 19 29 24 58 17 29 212
Total residential mortgage – junior lien 5 31 19 29 24 707 9,781 4,796 15,392
Total $ 18,441 68,614 39,789 23,082 7,322 82,074 14,509 6,803 260,634
Term loans by origination year Revolving loans Revolving loans converted to term loans
2021 2020 2019 2018 2017 Prior Total
December 31, 2021
Residential mortgage – first lien
By LTV:
0-60% $ 26,618 22,882 16,063 5,310 11,030 57,880 4,348 1,644 145,775
60.01-80% 42,893 18,188 8,356 2,234 2,647 5,017 674 188 80,197
80.01-100% 486 437 474 147 134 339 157 42 2,216
100.01-120% (1) 10 31 24 11 7 48 33 8 172
> 120% (1) 5 10 10 4 3 35 14 3 84
No LTV available 122 92 67 40 38 211 87 11 668
Government insured/guaranteed loans (2) 14 134 209 349 364 12,088 — — 13,158
Total residential mortgage – first lien 70,148 41,774 25,203 8,095 14,223 75,618 5,313 1,896 242,270
Residential mortgage – junior lien
By CLTV:
0-60% — — — — — 475 7,949 3,588 12,012
60.01-80% — — — — — 172 2,329 823 3,324
80.01-100% — — — — — 55 554 241 850
100.01-120% (1) — — — — — 13 104 42 159
> 120% (1) — — — — — 3 35 13 51
No CLTV available 28 20 31 27 22 44 21 29 222
Total residential mortgage – junior lien 28 20 31 27 22 762 10,992 4,736 16,618
Total $ 70,176 41,794 25,234 8,122 14,245 76,380 16,305 6,632 258,888


	Term loans by origination year							Revolving loans	Revolving loans converted to term loans
(in millions)	2023		2022	2021	2020	2019	Prior			Total
March 31, 2023
By delinquency status:
Current-29 DPD	$	3,480	47,927	64,977	36,806	20,514	66,158	9,942	6,951	256,755
30-89 DPD	1		46	45	23	23	627	52	146	963
90+ DPD	—		16	19	12	23	485	32	255	842
Government insured/guaranteed loans (1)	—		12	57	120	139	8,250	—	—	8,578
Total residential mortgage	$	3,481	48,001	65,098	36,961	20,699	75,520	10,026	7,352	267,138
By FICO:
740+	$	3,215	43,911	60,969	34,845	19,117	55,653	7,811	4,145	229,666
700-739	180		2,739	2,776	1,303	904	4,851	1,067	1,009	14,829
660-699	33		940	896	426	321	2,523	522	665	6,326
620-659	15		204	192	115	83	1,212	212	351	2,384
<620	1		114	83	44	43	1,355	212	470	2,322
No FICO available	37		81	125	108	92	1,676	202	712	3,033
Government insured/guaranteed loans (1)	—		12	57	120	139	8,250	—	—	8,578
Total residential mortgage	$	3,481	48,001	65,098	36,961	20,699	75,520	10,026	7,352	267,138
By LTV/CLTV:
0-80%	$	3,393	36,585	63,067	36,578	20,336	66,892	9,856	7,209	243,916
80.01-100%	54		11,233	1,893	191	159	159	105	95	13,889
>100% (2)	—		118	21	9	7	24	26	18	223
No LTV available	34		53	60	63	58	195	39	30	532
Government insured/guaranteed loans (1)	—		12	57	120	139	8,250	—	—	8,578
Total residential mortgage	$	3,481	48,001	65,098	36,961	20,699	75,520	10,026	7,352	267,138
Gross charge-offs	$	—	—	—	—	—	14	1	13	28
	Term loans by origination year							Revolving loans	Revolving loans converted to term loans	Total
(in millions)	2022		2021	2020	2019	2018	Prior
December 31, 2022
By delinquency status:
Current-29 DPD	$	48,581	65,705	37,289	20,851	6,190	61,680	11,031	6,913	258,240
30-89 DPD	65		66	32	33	21	683	58	159	1,117
90+ DPD	6		17	15	25	15	530	32	260	900
Government insured/guaranteed loans (1)	9		59	133	148	200	8,311	—	—	8,860
Total residential mortgage	$	48,661	65,847	37,469	21,057	6,426	71,204	11,121	7,332	269,117
By FICO:
740+	$	43,976	61,450	35,221	19,437	5,610	51,551	8,664	4,139	230,048
700-739	3,245		2,999	1,419	941	314	4,740	1,159	1,021	15,838
660-699	1,060		851	438	306	169	2,388	567	656	6,435
620-659	211		248	106	82	50	1,225	223	349	2,494
<620	59		81	44	46	28	1,323	227	466	2,274
No FICO available	101		159	108	97	55	1,666	281	701	3,168
Government insured/guaranteed loans (1)	9		59	133	148	200	8,311	—	—	8,860
Total residential mortgage	$	48,661	65,847	37,469	21,057	6,426	71,204	11,121	7,332	269,117
By LTV/CLTV:
0-80%	$	40,869	64,613	37,145	20,744	6,155	62,593	10,923	7,188	250,230
80.01-100%	7,670		1,058	112	97	30	107	109	97	9,280
>100% (2)	48		20	13	6	3	23	28	16	157
No LTV available	65		97	66	62	38	170	61	31	590
Government insured/guaranteed loans (1)	9		59	133	148	200	8,311	—	—	8,860
Total residential mortgage	$	48,661	65,847	37,469	21,057	6,426	71,204	11,121	7,332	269,117

(1)Government insured or guaranteed loans represent loans whose repayments are predominantly insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA). Loans insured/guaranteed by the FHA/VA and 90+ DPD totaled $3.0 billion and $3.2 billion at March 31, 2023, and December 31, 2022, respectively.

(2)Reflects total loan balances with LTV/CLTV amounts in excess of 100%. In the event of default, the loss content would generally be limited to only the amount in excess of 100% LTV/CLTV.

~~(2)Represents loans whose repayments are predominantly insured by the FHA or guaranteed by the VA.~~


			Wells Fargo & Company			8379

Note 4:5: Loans and Related Allowance for Credit Losses (continued)

Table 5.10 provides the outstanding balances of our credit card loan portfolio by primary credit quality indicators.

The revolving loans converted to term loans in the credit card loan category represent credit card loans with modified terms that require payment over a specific term.

For the quarter ended March 31, 2023, we had gross charge-offs in the credit card portfolio of $404 million for revolving loans and $20 million for revolving loans converted to term loans.

Table 5.10: Credit Quality Indicators for Credit Card Loans


	March 31, 2023				December 31, 2022
	Revolving loans		Revolving loans converted to term loans		Revolving loans	Revolving loans converted to term loans
(in millions)				Total			Total
By delinquency status:
Current-29 DPD	$	44,519	250	44,769	45,131	223	45,354
30-89 DPD	455		31	486	457	27	484
90+ DPD	493		18	511	441	14	455
Total credit cards	$	45,467	299	45,766	46,029	264	46,293
By FICO:
740+	$	16,747	20	16,767	16,681	19	16,700
700-739	10,451		41	10,492	10,640	37	10,677
660-699	9,390		60	9,450	9,573	55	9,628
620-659	4,703		52	4,755	4,885	45	4,930
<620	4,074		125	4,199	4,071	107	4,178
No FICO available	102		1	103	179	1	180
Total credit cards	$	45,467	299	45,766	46,029	264	46,293

Table 5.11 provides the outstanding balances of our Auto loan portfolio by primary credit quality indicators.

Table 5.11: Credit Quality Indicators for Auto Loans by Vintage


	Term loans by origination year							Revolving loans	Revolving loans converted to term loans
(in millions)	2023		2022	2021	2020	2019	Prior			Total
March 31, 2023
By delinquency status:

Current-29 DPD	$	4,710	17,382	17,366	6,651	3,919	1,377	—	—	51,405
30-89 DPD	3		230	492	201	125	76	—	—	1,127
90+ DPD	—		23	47	15	9	5	—	—	99
Total auto	$	4,713	17,635	17,905	6,867	4,053	1,458	—	—	52,631





By FICO:

740+	$	3,079	8,400	7,461	2,799	1,790	591	—	—	24,120
700-739	756		2,737	2,673	1,112	651	219	—	—	8,148
660-699	519		2,502	2,567	1,002	538	180	—	—	7,308
620-659	221		1,810	1,901	686	355	132	—	—	5,105
<620	138		2,162	3,277	1,244	687	307	—	—	7,815
No FICO available	—		24	26	24	32	29	—	—	135
Total auto	$	4,713	17,635	17,905	6,867	4,053	1,458	—	—	52,631











Gross charge-offs	$	—	60	107	29	17	4	—	—	217
	Term loans by origination year							Revolving loans	Revolving loans converted to term loans
(in millions)	2022		2021	2020	2019	2018	Prior			Total
December 31, 2022
By delinquency status:
Current-29 DPD	$	19,101	19,126	7,507	4,610	1,445	421	—	—	52,210
30-89 DPD	218		585	253	167	69	45	—	—	1,337
90+ DPD	23		56	22	13	4	4	—	—	122
Total auto	$	19,342	19,767	7,782	4,790	1,518	470	—	—	53,669
By FICO:
740+	$	9,361	8,233	3,193	2,146	664	166	—	—	23,763
700-739	3,090		3,033	1,287	788	238	64	—	—	8,500
660-699	2,789		2,926	1,163	641	192	58	—	—	7,769
620-659	2,021		2,156	796	421	130	47	—	—	5,571
<620	2,062		3,389	1,316	756	263	126	—	—	7,912
No FICO available	19		30	27	38	31	9	—	—	154
Total auto	$	19,342	19,767	7,782	4,790	1,518	470	—	—	53,669


80			Wells Fargo & Company

Table 5.12 provides the outstanding balances of our Other consumer loans portfolio by primary credit quality indicators.

Table 5.12:Credit Quality Indicators for Other Consumer Loans by Vintage


	Term loans by origination year							Revolving loans	Revolving loans converted to term loans
(in millions)	2023		2022	2021	2020	2019	Prior			Total
March 31, 2023
By delinquency status:
Current-29 DPD	$	1,128	3,219	1,013	288	191	115	22,063	110	28,127
30-89 DPD	1		25	10	2	2	3	16	10	69
90+ DPD	—		8	5	1	—	1	14	14	43
Total other consumer	$	1,129	3,252	1,028	291	193	119	22,093	134	28,239
By FICO:
740+	$	653	1,626	462	150	86	49	1,462	31	4,519
700-739	239		615	181	45	34	19	529	18	1,680
660-699	143		481	151	28	25	15	408	18	1,269
620-659	31		197	68	11	11	9	159	13	499
<620	5		117	63	12	14	10	144	18	383
No FICO available	58		216	103	45	23	17	854	36	1,352
FICO not required (1)	—		—	—	—	—	—	18,537	—	18,537
Total other consumer	$	1,129	3,252	1,028	291	193	119	22,093	134	28,239
Gross charge-offs (2)	$	13	53	15	3	3	2	14	2	105
	Term loans by origination year							Revolving loans	Revolving loans converted to term loans	Total
(in millions)	2022		2021	2020	2019	2018	Prior
December 31, 2022
By delinquency status:
Current-29 DPD	$	3,718	1,184	341	240	63	83	23,431	117	29,177
30-89 DPD	17		12	2	3	1	2	14	8	59
90+ DPD	5		5	1	1	—	1	13	14	40
Total other consumer	$	3,740	1,201	344	244	64	86	23,458	139	29,276
By FICO:
740+	$	1,908	546	174	112	21	50	1,660	43	4,514
700-739	726		216	62	44	10	13	568	18	1,657
660-699	527		177	34	33	9	8	449	19	1,256
620-659	204		81	13	14	4	5	181	11	513
<620	89		64	14	16	5	5	154	18	365
No FICO available	286		117	47	25	15	5	920	30	1,445
FICO not required (1)	—		—	—	—	—	—	19,526	—	19,526
Total other consumer	$	3,740	1,201	344	244	64	86	23,458	139	29,276

(1)Substantially all loans not requiring a FICO score are securities-based loans originated by the Wealth and Investment Management operating segment.

(2)Includes charge-offs on overdrafts, which are generally charged-off at 60 days past due.


			Wells Fargo & Company			81

Note 5: Loans and Related Allowance for Credit Losses (continued)

NONACCRUAL LOANS Table ~~4.12~~5.13 provides loans on nonaccrual status. Nonaccrual loans may have an ACL or a negative

allowance for credit losses from expected recoveries of amounts previously written off. ~~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.

Table ~~4.12:~~5.13: Nonaccrual Loans


		Amortized cost					Recognized interest income			Amortized cost					Recognized interest income
		Nonaccrual loans			Nonaccrual loans without related allowance for credit losses (1)		Quarter ended March 31,			Nonaccrual loans			Nonaccrual loans without related allowance for credit losses (1)		Quarter ended March 31,
(in millions)	(in millions)	Mar 31, 2022		Dec 31, 2021	Mar 31, 2022	Dec 31, 2021	2022	2021	(in millions)	Mar 31, 2023		Dec 31, 2022	Mar 31, 2023	Dec 31, 2022	2023	2022
Commercial:
Commercial and industrial	Commercial and industrial	$	799	980	191	190	22	31	Commercial and industrial	$	739	746	125	174	5	22
Real estate mortgage		1,033		1,235	50	66	17	11
Real estate construction		4		13	2	5	—	—

Commercial real estate									Commercial real estate	1,450		958	131	134	8	17
Lease financing	Lease financing	117		148	7	9	—	—	Lease financing	86		119	4	5	—	—
Total commercial	Total commercial	1,953		2,376	250	270	39	42	Total commercial	2,275		1,823	260	313	13	39
Consumer:
Residential mortgage- first lien		3,873		3,803	2,764	2,722	41	37
Residential mortgage- junior lien		802		801	555	497	14	12

Residential mortgage									Residential mortgage	3,552		3,611	2,281	2,316	47	55
Auto	Auto	208		198	—	—	8	9	Auto	145		153	—	—	5	8
Other consumer	Other consumer	35		34	—	—	1	1	Other consumer	38		39	—	—	1	1
Total consumer	Total consumer	4,918		4,836	3,319	3,219	64	59	Total consumer	3,735		3,803	2,281	2,316	53	64
Total nonaccrual loans	Total nonaccrual loans	$	6,871	7,212	3,569	3,489	103	101	Total nonaccrual loans	$	6,010	5,626	2,541	2,629	66	103

(1)Nonaccrual loans may not have an allowance for credit losses if the loss expectations are zero given ~~solid~~the related collateral value.

LOANS IN PROCESS OF FORECLOSURE Our recorded investment in consumer mortgage loans collateralized by residential real estate property that are in process of foreclosure was ~~$997 million and $694 million~~$1.0 billion at both March 31, ~~2022,~~2023, and December 31, ~~2021, respectively,~~2022, which included ~~$834~~$762 million and ~~$583~~$771 million, respectively, of loans that are government insured/guaranteed. Under the Consumer Financial Protection Bureau guidelines, we do not commence the foreclosure process on residential mortgage loans until after the loan is 120 days delinquent. Foreclosure procedures and timelines vary depending on whether the property address resides in a judicial or non-judicial state. Judicial states require the foreclosure to be processed through the state’s courts while non-judicial states are processed without court intervention. Foreclosure timelines vary according to

state law.


84			~~Wells Fargo & Company~~

LOANS 90 DAYS OR MORE PAST DUE AND STILL ACCRUING Certain loans 90 days or more past due are still accruing, because they are (1) well-secured and in the process of collection or (2) residential mortgage or consumer loans exempt under regulatory rules from being classified as nonaccrual until later delinquency, usually 120 days past due.

Table ~~4.13~~5.14 shows loans 90 days or more past due and still accruing by class for loans not government insured/guaranteed.

Table ~~4.13:~~5.14: Loans 90 Days or More Past Due and Still Accruing


($ in millions)		Mar 31, 2022		Dec 31, 2021
(in millions)					(in millions)	Mar 31, 2023		Dec 31, 2022
Total:	Total:	$	4,011	5,358	Total:	$	3,822	4,340
Less: FHA insured/VA guaranteed (1)	Less: FHA insured/VA guaranteed (1)	3,335		4,699	Less: FHA insured/VA guaranteed (1)	2,809		3,005

Total, not government insured/guaranteed	Total, not government insured/guaranteed	$	676	659	Total, not government insured/guaranteed	$	1,013	1,335
By segment and class, not government insured/guaranteed:	By segment and class, not government insured/guaranteed:				By segment and class, not government insured/guaranteed:
Commercial:
Commercial and industrial	Commercial and industrial	$	186	206	Commercial and industrial	$	156	583
Real estate mortgage		80		29
Real estate construction		1		—

Commercial real estate					Commercial real estate	209		134
Total commercial	Total commercial	267		235	Total commercial	365		717
Consumer:
Residential mortgage – first lien		14		37
Residential mortgage – junior lien		6		12

Residential mortgage					Residential mortgage	29		28
Credit card	Credit card	294		269	Credit card	511		455
Auto	Auto	79		88	Auto	80		111
Other consumer	Other consumer	16		18	Other consumer	28		24
Total consumer	Total consumer	409		424	Total consumer	648		618
Total, not government insured/guaranteed	Total, not government insured/guaranteed	$	676	659	Total, not government insured/guaranteed	$	1,013	1,335

(1)Represents loans whose repayments are predominantly insured by the FHA or guaranteed by the VA.


82			Wells Fargo & Company

LOAN MODIFICATIONS TO BORROWERS EXPERIENCING FINANCIAL DIFFICULTY We may agree to modify the contractual terms of a loan to a borrower experiencing financial difficulty.

Our commercial loan modifications may include principal forgiveness, interest rate reductions, payment delays, term extensions, or a combination of these modifications. Commercial loan term extensions have terms that vary based on the borrower’s request and are evaluated by our credit teams on an individual basis.

Our consumer loan modifications vary based upon the loan product and the modification program offered to the borrower, and may include interest rate reductions, payment delays, term extensions, principal forbearance or forgiveness, or a combination of these modifications. Generally, our consumer loan modification programs modify the loan terms to achieve payment terms that are more affordable to the borrower and, as a result, increase the likelihood of full repayment of principal and interest.

Our residential mortgage loan modification programs may offer a short-term payment deferral based upon the borrower's demonstrated hardship, up to 12 months. If additional assistance is needed after 12 months, the borrower may request another loan modification. Modifications may also include a trial payment period of three months to determine if the borrower can perform in accordance with the proposed permanent loan modification terms. Loans in a trial payment period continue to advance through delinquency status and accrue interest according to their original terms. Loans in a trial payment period are excluded from our loan modification disclosures until the borrower has successfully completed the trial period and the loan modification is formally executed. Residential mortgage loans in a trial payment period totaled $161 million at March 31, 2023.

Credit card loan modifications result in a reduction in the credit card interest rate and may be offered on a short-term or long-term basis. A short-term interest rate reduction program reduces the borrower’s interest rate for 12 months. A long-term interest rate reduction program provides a reduction of the interest rate over a fixed five-year term. During the modification period, the borrower’s revolving charge privileges are revoked.

Auto loan modifications generally include insignificant (e.g., three months or less) payment deferrals over the loan term.

The following disclosures provide information on loan modifications granted to borrowers experiencing financial difficulty in the form of principal forgiveness, interest rate reductions, other-than-insignificant (e.g., greater than three months) payment delays, term extensions or a combination of these modifications, as well as the financial effects of these modifications, and loan performance in the twelve months following the modification. Loans that both modify and are paid off or charged-off during the period, resulting in an amortized cost balance of zero at the end of the period, are not included in the disclosures below. Additionally, where amortized cost balances are presented below, accrued interest receivable is excluded. See Note 7 (Intangible Assets and Other Assets) for additional information on accrued interest receivable. Borrowers experiencing financial difficulty with modified terms mandated by a bankruptcy court are considered contractually modified loans and are included in these disclosures. These disclosures do not include loans discharged by a bankruptcy court as the only concession, which were insignificant for the quarter ended March 31, 2023.

Table 5.15 presents the amortized cost of commercial loans that were modified during the quarter ended March 31, 2023, by class of financing receivable and by modification type.

Table 5.15:Commercial Loan Modifications


	Modification type							Modifications as a % of loan class
($ in millions)	Principal forgiveness		Interest rate reduction	Payment delay	Term extension	Interest rate reduction & term extension	All other modifications and combinations		Total
Quarter ended March 31, 2023
Commercial and industrial	$	15	5	3	112	1	1	137		0.04	%
Commercial real estate	—		8	1	56	7	—	72		0.05
Total commercial	$	15	13	4	168	8	1	209		0.04

Table 5.15a presents the financial effects of modifications made to commercial loans that were modified during the quarter ended March 31, 2023, presented by class of financing receivable.

Table 5.15a:Financial Effects of Commercial Loan Modifications


	Quarter ended
($ in millions)	Principal forgiven		Weighted average interest rate reduction		Weighted average payments deferred (months)	Weighted average term extension (months)
March 31, 2023
Commercial and industrial	$	5	13.66	%	6	6
Commercial real estate	0		2.80		6	20


			Wells Fargo & Company			83

Note 5: Loans and Related Allowance for Credit Losses (continued)

Commercial loans that received a modification during the quarter ended March 31, 2023, and subsequently defaulted were insignificant. Defaults that occur on commercial modifications are reported based on a payment default definition of 90 days past due.

Table 5.15b provides past due information for commercial loans that were modified during the quarter ended March 31,

2023. For loan modifications that include a payment deferral, payment performance is not included in the table below until the loan exits the deferral period and payments resume. The table also includes the amount of gross charge-offs that occurred during first quarter 2023 for loans that were modified in the quarter, inclusive of charge-offs to loans with no amortized cost remaining at period end.

Table 5.15b:Payment Performance of Commercial Loan Modifications


	By delinquency status					Gross charge-offs
(in millions)	Current-29 days past due (DPD)		30-89 DPD	90+ DPD	Total	Quarter ended
March 31, 2023
Commercial and industrial	$	115	19	—	134	10
Commercial real estate	70		1	—	71	—
Total commercial	$	185	20	—	205	10

Table 5.16 presents the amortized cost of consumer loans that were modified during the quarter ended March 31, 2023, by class of financing receivable and by modification type.

Table 5.16:Consumer Loan Modifications


	Modification type
($ in millions)	Interest rate reduction		Payment delay (1)	Term extension	Interest rate reduction & term extension	Term extension & payment delay	Interest rate reduction, term extension & payment delay	All other modifications and combinations (2)	Total	Modifications as a % of loan class
Quarter ended March 31, 2023
Residential mortgage	$	4	376	25	14	30	31	2	482	0.18	%
Credit card	122		—	—	—	—	—	—	122	0.27
Auto	1		9	—	—	—	—	1	11	0.02
Other consumer	3		1	—	6	—	—	—	10	0.04
Total consumer	$	130	386	25	20	30	31	3	625	0.16

(1)Includes residential mortgage loan modifications that defer a set amount of principal to the end of the loan term.

(2)Includes principal forgiveness and other combinations of modifications.

Table 5.16a presents the financial effects of modifications made to consumer loans that were modified during the quarter ended March 31, 2023, by class of financing receivable.

Table 5.16a:Financial Effects of Consumer Loan Modifications (1)


	Quarter ended
	Weighted average interest rate reduction		Weighted average payments deferred (months)	Weighted average term extension (years)
March 31, 2023
Residential mortgage (2)	1.58	%	3	10.2
Credit card	21.64		0	0.0
Auto	3.73		6	0.0
Other consumer	11.40		3	3.0

(1)Principal forgiven for the quarter ended March 31, 2023 was insignificant.

(2)Excludes the financial effects of residential mortgage loans with a set amount of principal deferred to the end of the loan term. The weighted average period of principal deferred was 27.1 years for the quarter ended March 31, 2023.


84			Wells Fargo & Company

Consumer loans that received a modification during the quarter ended March 31, 2023, and subsequently defaulted totaled $21 million, and predominantly related to payment delay modifications in the residential mortgage loan portfolio. Defaults that occur on consumer modifications are reported based on a payment default definition of 60 days past due.

Table 5.16b provides past due information for consumer loans that were modified during the quarter ended March 31,

2023. For loan modifications that include a payment delay, payment performance is not included in the table below until the loan exits the deferral period and payments resume. The table also includes the amount of gross charge-offs that occurred during the quarter ended March 31, 2023, for loans that were modified in the quarter, inclusive of charge-offs to loans with no amortized cost remaining at period end.

Table 5.16b: Payment Performance of Consumer Loan Modifications


	By delinquency status					Gross charge-offs
(in millions)	Current-29 days past due (DPD)		30-89 DPD	90+ DPD	Total	Quarter ended
March 31, 2023
Residential mortgage (1)	$	124	14	19	157	1
Credit card (2)	75		28	19	122	4
Auto	10		1	—	11	—
Other consumer	8		1	—	9	—
Total	$	217	44	38	299	5

(1)Includes loans that were past due prior to entering a payment delay modification. Delinquency advancement is paused during the deferral period and resumes upon exit.

(2)Credit card loans that are past due at the time of the modification do not become current until they have three months of consecutive payment performance.

Commitments to lend additional funds on commercial loans that were modified during the quarter ended March 31, 2023, were $30 million at March 31, 2023, substantially all of which were in the commercial and industrial portfolio. Commitments to lend additional funds on consumer loans that were modified during the quarter ended March 31, 2023, were insignificant at March 31, 2023.

TROUBLED DEBT RESTRUCTURINGS (TDRs) In January 2023, we adopted ASU 2022-02, which eliminated the accounting and reporting guidance for TDRs. For additional information, see Note 1 (Summary of Significant Accounting Policies). The following disclosures present TDR information for the periods ended December 31, 2022, and March 31, 2022. When, for economic or legal reasons related to a borrower’s financial difficulties, we grant a concession for other than an insignificant period of time to a borrower that we would not otherwise consider, the related loan is classified as a TDR, the balance of which totaled ~~$9.7 billion and $10.2~~$9.2 billion at ~~March 31, 2022 and~~ December 31, ~~2021, respectively.~~2022. We do not consider loan resolutions such as foreclosure or short sale to be a TDR. In addition, ~~COVID-related~~COVID-19-related modifications are generally not classified as TDRs due to the relief under the CARES Act and the Interagency Statement. For additional information on the TDR relief, see Note 1 (Summary of Significant Accounting Policies) in our ~~2021~~2022 Form 10-K.

We may require some consumer borrowers experiencing financial difficulty to make trial payments generally for a period of three to four months, according to the terms of a planned permanent modification, to determine if they can perform according to those terms. These arrangements represent trial modifications, which we ~~classify~~classified and ~~account~~accounted for as ~~TDRs.~~TDRs through December 31, 2022, prior to the adoption of ASU 2022-02. While loans are in trial payment programs, their original terms are not considered modified and they continue to advance through delinquency status and accrue interest according to their original terms.

Commitments to lend additional funds on loans whose terms have been modified in a TDR amounted to ~~$471 million and $431~~$434 million at ~~March 31, 2022, and~~ December 31, ~~2021, respectively.~~2022.

Table ~~4.14~~5.17 summarizes our TDR modifications ~~for the periods presented~~ by primary modification type and includes the financial effects of these modifications. For those loans that modify more than once, the table reflects each modification that occurred during the period. Loans that both modify and are paid off or written-off within the period, as well as changes in recorded investment during the period for loans modified in prior periods, are not included in the table.


			Wells Fargo & Company			85

Note 4:5: Loans and Related Allowance for Credit Losses (continued)

Table ~~4.14:~~5.17: TDR Modifications


		Primary modification type (1)					Financial effects of modifications						Primary modification type (1)					Financial effects of modifications
($ in millions)	($ in millions)	Principal forgiveness		Interest rate reduction	Other concessions (2)	Total	Charge- offs (3)	Weighted average interest rate reduction		Recorded investment related to interest rate reduction (4)		($ in millions)	Principal forgiveness		Interest rate reduction	Other concessions (2)	Total	Charge- offs (3)	Weighted average interest rate reduction		Recorded investment related to interest rate reduction (4)

Quarter ended March 31, 2022	Quarter ended March 31, 2022											Quarter ended March 31, 2022
Commercial:
Commercial and industrial	Commercial and industrial	$	—	6	73	79	—	9.94	%	$	6	Commercial and industrial	$	—	6	73	79	—	9.94	%	$	6
Real estate mortgage		—		5	27	32	—	1.45		5
Real estate construction		—		—	—	—	—	—		—

Commercial real estate												Commercial real estate	—		5	27	32	—	1.45		5
Lease financing	Lease financing	—		—	—	—	—	—		—		Lease financing	—		—	—	—	—	—		—
Total commercial	Total commercial	—		11	100	111	—	6.37		11		Total commercial	—		11	100	111	—	6.37		11
Consumer:
Residential mortgage – first lien		1		60	315	376	1	1.58		60
Residential mortgage – junior lien		—		8	21	29	—	2.34		8
Credit card		—		70	—	70	—	19.12		70
Auto		1		3	40	44	9	4.91		3
Other consumer		—		3	1	4	—	11.64		3
Trial modifications (5)		—		—	211	211	—	—		—
Total consumer		2		144	588	734	10	10.43		144
Total		$	2	155	688	845	10	10.15	%	$	155
Quarter ended March 31, 2021
Commercial:
Commercial and industrial		$	—	1	230	231	6	0.89	%	$	1
Real estate mortgage		—		4	100	104	—	0.93		4
Real estate construction		—		—	1	1	—	—		—
Lease financing		—		—	3	3	—	—		—
Total commercial		—		5	334	339	6	0.92		5
Consumer:
Residential mortgage – first lien		—		7	532	539	—	1.87		7
Residential mortgage – junior lien		—		5	13	18	1	2.41		5

Residential mortgage												Residential mortgage	1		68	336	405	1	1.67		68
Credit card	Credit card	—		32	—	32	—	18.87		32		Credit card	—		70	—	70	—	19.12		70
Auto	Auto	—		1	14	15	7	3.87		1		Auto	1		3	40	44	9	4.91		3
Other consumer	Other consumer	—		7	1	8	—	12.20		7		Other consumer	—		3	1	4	—	11.64		3
Trial modifications (5)	Trial modifications (5)	—		—	—	—	—	—		—		Trial modifications (5)	—		—	211	211	—	—		—
Total consumer	Total consumer	—		52	560	612	8	14.01		52		Total consumer	2		144	588	734	10	10.43		144
Total	Total	$	—	57	894	951	14	12.82	%	$	57	Total	$	2	155	688	845	10	10.15		$	155

(1)Amounts represent the recorded investment in loans after recognizing the effects of the TDR, if any. TDRs may have multiple types of concessions, but are presented only once in the first modification type based on the order presented in the table above. The reported amounts include loans remodified of $118 million ~~and $256 million~~ for first quarter ~~2022 and 2021, respectively.~~2022.

(2)Other concessions include loans with payment (principal and/or interest) deferral, loans discharged in bankruptcy, loan renewals, term extensions and other interest and noninterest adjustments, but exclude modifications that also forgive principal and/or reduce the contractual interest rate. The reported amounts include loans that are new TDRs that may have ~~COVID-related~~COVID-19-related payment deferrals and exclude ~~COVID-related~~COVID-19-related payment deferrals on loans previously reported as TDRs given limited current financial effects other than payment deferral.

(3)Charge-offs include write-downs of the investment in the loan in the period it is contractually modified. The amount of charge-off will differ from the modification terms if the loan has been charged down prior to the modification based on our policies. In addition, there may be cases where we have a charge-off/down with no legal principal modification.

(4)Recorded investment related to interest rate reduction reflects the effect of reduced interest rates on loans with an interest rate concession as one of their concession types, which includes loans reported as a principal primary modification type that also have an interest rate concession.

(5)Trial modifications are granted a delay in payments due under the original terms during the trial payment period. However, these loans continue to advance through delinquency status and accrue interest according to their original terms. Any subsequent permanent modification generally includes interest rate related concessions; however, the exact concession type and resulting financial effect are usually not known until the loan is permanently modified. Trial modifications for the period are presented net of previously reported trial modifications that became permanent in the current period.

Table 5.18 summarizes permanent modification TDRs that defaulted during the period presented within 12 months of their permanent modification date. We are reporting these defaulted TDRs based on a payment default definition of 90 days past due for the commercial portfolio segment and 60 days past due for the consumer portfolio segment.

Table 5.18:Defaulted TDRs


	Recorded investment of defaults
(in millions)			Quarter ended March 31, 2022
Commercial and industrial			$	49


Commercial real estate
2
Lease financing			—
Total commercial			51


Residential mortgage			7
Credit card			5
Auto			6
Other consumer			—
Total consumer			18
Total			$








































		69


86			Wells Fargo & Company


Note 6: Mortgage Banking Activities

Mortgage banking activities consist of residential and commercial mortgage originations, sales and servicing.

We apply the amortization method to commercial MSRs and apply the fair value method to residential MSRs. The amortized

cost of commercial MSRs was $1.1 billion and $1.2 billion, with an estimated fair value of $2.0 billion and $1.9 billion, at March 31, 2023 and 2022, respectively. Table 6.1 presents the changes in MSRs measured using the fair value method.

Table 6.1:Analysis of Changes in Fair Value MSRs


	Quarter ended March 31,
(in millions)	2023		2022
Fair value, beginning of period	$	9,310	6,920
Servicing from securitizations or asset transfers (1)	48		342
Sales and other (2)	7		1
Net additions	55		343
Changes in fair value:
Due to valuation inputs or assumptions:
Mortgage interest rates (3)	(181)		1,699
Servicing and foreclosure costs (4)	1		(3)
Discount rates	(25)		55
Prepayment estimates and other (5)	(20)		(146)
Net changes in valuation inputs or assumptions	(225)		1,605
Changes due to collection/realization of expected cash flows (6)	(321)		(357)
Total changes in fair value	(546)		1,248
Fair value, end of period	$	8,819	8,511

(1)Includes impacts associated with exercising cleanup calls on securitizations and our right to repurchase delinquent loans from Government National Mortgage Association (GNMA) loan securitization pools. MSRs may increase upon repurchase due to servicing liabilities associated with these delinquent GNMA loans.

(2)Includes sales and transfers of MSRs, which can result in an increase in MSRs if related to portfolios with servicing liabilities.

(3)Includes prepayment rate changes as well as other valuation changes due to changes in mortgage interest rates. To reduce exposure to changes in interest rates, MSRs are economically hedged with derivative instruments.

(4)Includes costs to service and unreimbursed foreclosure costs.

(5)Represents other changes in valuation model inputs or assumptions, including prepayment rate estimation changes that are independent of mortgage interest rate changes.

(6)Represents the reduction in the MSR fair value for the cash flows expected to be collected during the period, net of income accreted due to the passage of time.

Table ~~4.15 summarizes permanent modification TDRs that have defaulted~~6.2 provides key weighted-average assumptions used in the valuation of residential MSRs and sensitivity of the current ~~period within 12 months~~fair value of ~~their permanent modification date. We are reporting these defaulted~~residential MSRs to immediate adverse changes in those assumptions. Amounts for residential MSRs include

~~TDRs~~purchased servicing rights as well as servicing rights resulting from the transfer of loans. See Note 12 (Fair Values of Assets and Liabilities) for additional information on key assumptions for residential MSRs.

Table 6.2: Assumptions and Sensitivity of Residential MSRs


($ in millions, except cost to service amounts)	Mar 31, 2023			Dec 31, 2022
Fair value of interests held	$	8,819		9,310
Expected weighted-average life (in years)	6.1			6.3

Key assumptions:
Prepayment rate assumption (1)	9.7		%	9.4
Impact on fair value from 10% adverse change	$	287		288
Impact on fair value from 25% adverse change	684			688

Discount rate assumption	8.9		%	9.1
Impact on fair value from 100 basis point increase	$	346		368
Impact on fair value from 200 basis point increase	664			707

Cost to service assumption ($ per loan)	101			102
Impact on fair value from 10% adverse change	166			171
Impact on fair value from 25% adverse change	412			427

(1)Includes a blend of prepayment speeds and expected defaults. Prepayment speeds are influenced by mortgage interest rates as well as our estimation of drivers of borrower behavior.

The sensitivities in the preceding table are hypothetical and caution should be exercised when relying on this data. Changes in value based on variations in assumptions generally cannot be extrapolated because the relationship of the change in the assumption to the change in value may not be linear. Also, the effect of a ~~payment default definition~~variation in a particular assumption on the value of ~~90 days past due for~~ the ~~commercial portfolio segment and 60 days past due for the consumer portfolio segment.~~

other interests held is calculated independently without changing

~~Table 4.15:Defaulted TDRs~~

any other assumptions. In reality, changes in one factor may result in changes in others, which might magnify or counteract the sensitivities.

Recorded investment of defaults
Quarter ended March 31,
(in millions) 2022 2021
Commercial:
Commercial and industrial $ 49 41
Real estate mortgage 2 16
Real estate construction — —
Lease financing — —
Total commercial 51 57
Consumer:
Residential mortgage – first lien 7 3
Residential mortgage – junior lien — 1
Credit card 5 10
Auto 6 11
Other consumer — 1
Total consumer 18 26
Total $ 69 83


			Wells Fargo & Company			87


~~Note 5:~~ ~~Leasing Activity~~Note 6: Mortgage Banking Activities (continued)

~~The information below provides a summary~~We present the components of our ~~leasing activities as~~managed servicing portfolio in Table 6.3 at unpaid principal balance for loans serviced and subserviced for others and at carrying value for owned loans serviced.

Table 6.3:Managed Servicing Portfolio


(in billions)	Mar 31, 2023			Dec 31, 2022
Residential mortgage servicing:
Serviced and subserviced for others (1)	$	668		681
Owned loans serviced	270			273
Total residential servicing	938			954
Commercial mortgage servicing:
Serviced and subserviced for others	571			577
Owned loans serviced	131			133
Total commercial servicing	702			710
Total managed servicing portfolio	$	1,640		1,664
Total serviced for others, excluding subserviced for others	$	1,228		1,246
MSRs as a percentage of loans serviced for others	0.81		%	0.84
Weighted average note rate (mortgage loans serviced for others)	4.37			4.30

(1)In first quarter 2023, we executed letters of intent to sell mortgage servicing rights on approximately $50 billion of loans serviced for others that we expect to close later this year.

At March 31, 2023, and December 31, 2022, we had servicer advances, net of an allowance for uncollectible amounts, of $2.3 billion and $2.5 billion, respectively. As the servicer of loans for others, we advance certain payments of principal, interest, taxes, insurance, and default-related expenses which are generally reimbursed within a ~~lessor~~short timeframe from cash flows from the trust, government-sponsored entities (GSEs), insurer or borrower.

The credit risk related to these advances is limited since the reimbursement is generally senior to cash payments to investors. We also advance payments of taxes and ~~lessee.~~ insurance for our owned

loans which are collectible from the borrower. We maintain an allowance for uncollectible amounts for advances on loans serviced for others that may not be reimbursed if the payments were not made in accordance with applicable servicing agreements or if the insurance or servicing agreements contain limitations on reimbursements. Servicing advances on owned loans are charged-off when deemed uncollectible.

Table 6.4 presents the components of mortgage banking noninterest income.

Table 6.4:Mortgage Banking Noninterest Income


		Quarter ended March 31,
(in millions)			2023		2022
Servicing fees:
Contractually specified servicing fees, late charges and ancillary fees			$	567	635
Unreimbursed direct servicing costs (1)			(33)		(24)
Servicing fees			534		611
Amortization (2)			(61)		(59)
Changes due to collection/realization of expected cash flows (3)	(A)		(321)		(357)
Net servicing fees			152		195
Changes in fair value of MSRs due to valuation inputs or assumptions (4)	(B)		(225)		1,605
Net derivative gains (losses) from economic hedges (5)			185		(1,646)
Market-related valuation changes to MSRs, net of hedge results			(40)		(41)

Total net servicing income			112		154
Net gains on mortgage loan originations/sales (6)			120		539
Total mortgage banking noninterest income			$	232	693
Total changes in fair value of MSRs carried at fair value	(A)+(B)		$	(546)	1,248

(1)Includes costs associated with foreclosures, unreimbursed interest advances to investors, and other interest costs.

(2)There was no impairment on the commercial amortized MSRs in first quarter 2023, compared with a $4 million reversal of impairment in first quarter 2022.

(3)Represents the reduction in the MSR fair value for the cash flows expected to be collected during the period, net of income accreted due to the passage of time.

(4)Refer to the analysis of changes in fair value MSRs presented in Table 6.1 in this Note for more detail.

(5)See Note ~~5 (Leasing Activity) in our 2021 Form 10-K~~11 (Derivatives) for additional information ~~about our leasing activities.~~on economic hedges.

~~As a Lessor~~

~~Noninterest income on leases, included in Table 5.1, is included in other noninterest income on our consolidated statement~~(6)Includes net gains (losses) of ~~income. Lease expense, included in other noninterest expense on our consolidated statement of income, was $188~~$(39) million and ~~$226 million~~$1.3 billion in first quarter 2023 and 2022, respectively, related to derivatives used as economic hedges of mortgage loans held for sale and ~~2021, respectively.~~

derivative loan commitments.

~~Table 5.1:Leasing Revenue~~

Quarter ended March 31,
(in millions) 2022 2021
Interest income on lease financing $ 152 181
Other lease revenues:
Variable revenues on lease financing 30 26
Fixed revenues on operating leases 245 260
Variable revenues on operating leases 15 18
Other lease-related revenues (1) 37 11
Noninterest income on leases 327 315
Total leasing revenue $ 479 496

~~(1)Predominantly includes net gains (losses) on disposition of assets leased under operating leases or lease financings.~~

~~As a Lessee~~

~~Substantially all of our leases are operating leases. Table 5.2 presents balances for our operating leases.~~

~~Table 5.2:Operating Lease Right-of-Use (ROU) Assets and Lease Liabilities~~
(in millions) Mar 31, 2022 Dec 31, 2021
ROU assets $ 3,782 3,805
Lease liabilities 4,415 4,476

~~Table 5.3 provides the composition of our lease costs, which are predominantly included in net occupancy expense.~~

~~Table 5.3:Lease Costs~~

Quarter ended March 31,
(in millions) 2022 2021
Fixed lease expense – operating leases $ 253 265
Variable lease expense 73 78
Other (1) (10) (3)
Total lease costs $ 316 340

~~(1)Predominantly includes gains recognized from sale leaseback transactions and sublease rental income.~~


88			Wells Fargo & Company


Note 6:7: ~~Equity Securities~~Intangible Assets and Other Assets

Table ~~6.1~~7.1 presents the gross carrying value of intangible assets and accumulated amortization.

Table 7.1:Intangible Assets


	March 31, 2023				December 31, 2022
(in millions)	Gross carrying value		Accumulated amortization	Net carrying value	Gross carrying value	Accumulated amortization	Net carrying value
Amortized intangible assets (1):
MSRs	$	4,964	(3,833)	1,131	4,942	(3,772)	1,170
Customer relationship and other intangibles	754		(615)	139	754	(602)	152
Total amortized intangible assets	$	5,718	(4,448)	1,270	5,696	(4,374)	1,322
Unamortized intangible assets:
MSRs (carried at fair value)	$	8,819			9,310
Goodwill	25,173				25,173

(1)Balances are excluded commencing in the period following full amortization.

Table 7.2 provides ~~a summary~~the current year and estimated future amortization expense for amortized intangible assets. We based our projections of amortization expense shown below on existing

asset balances at March 31, 2023. Future amortization expense may vary from these projections.

Table 7.2:Amortization Expense for Intangible Assets


(in millions)	Amortized MSRs		Customer relationship and other intangibles	Total
Three months ended March 31, 2023 (actual)	$	61	13	74


Estimate for the remainder of 2023	$	181	38	219


Estimate for year ended December 31,
2024	208		41	249
2025	180		33	213
2026	144		27	171
2027	113		—	113
2028	94		—	94

Table 7.3 shows the allocation of goodwill to our ~~equity securities by business purpose and accounting method.~~reportable operating segments.

Table ~~6.1:~~7.3: ~~Equity Securities~~Goodwill

(in millions) Mar 31,
2022 Dec 31,
2021
Held for trading at fair value:
Marketable equity securities (1) $ 23,739 27,476
Nonmarketable equity securities (2)(3) 10,464 —
Total equity securities held for trading 34,203 27,476
Not held for trading:
Fair value:
Marketable equity securities 2,027 2,578
Nonmarketable equity securities (2) 132 9,044
Total equity securities not held for trading at fair value 2,159 11,622
Equity method:
Private equity 2,972 3,077
Tax-advantaged renewable energy 5,018 4,740
New market tax credit and other 369 379
Total equity method 8,359 8,196
Other methods:
Low-income housing tax credit investments 12,199 12,314
Private equity (4) 10,251 9,694
Federal Reserve Bank stock and other at cost (5) 3,584 3,584
Total equity securities not held for trading 36,552 45,410
Total equity securities $ 70,755 72,886

~~(1) Represents securities held as part of our customer accommodation trading activities. For additional information on these activities, see Note 2 (Trading Activities).~~

(2) In first quarter 2022, we prospectively reclassified certain equity securities and related economic hedge derivatives from “not held for trading activities” to “held for trading activities” to better reflect the business activity of those financial instruments. For additional information on Trading Activities, see Note 1 (Summary of Significant Accounting Policies) in our 2021 Form 10-K.

~~(3) Represents securities economically hedged with equity derivatives.~~

~~(4) Represents nonmarketable equity securities accounted for under the measurement alternative, which were predominantly securities associated with our affiliated venture capital business.~~

~~(5) Substantially all relates to investments in Federal Reserve Bank stock at both March 31, 2022, and December 31, 2021.~~

~~Realized Gains and Losses Not Held for Trading~~


(in millions)	Consumer Banking and Lending		Commercial Banking	Corporate and Investment Banking	Wealth and Investment Management	Corporate	Consolidated Company









December 31, 2022 and March 31, 2023	$	16,418	2,931	5,375	344	105	25,173

Table ~~6.2 provides a summary~~7.4 presents the components of ~~the net gains and losses from equity securities not held for trading, which excludes equity method adjustments for our share of the investee’s earnings or~~

~~losses that are recognized in~~ other ~~noninterest income. Gains and losses for securities held for trading are reported in net gains from trading and securities.~~

assets.

Table ~~6.2:~~7.4: ~~Net Gains (Losses) from Equity Securities Not Held for Trading~~Other Assets

Quarter ended March 31,
(in millions) 2022 2021
Net gains (losses) from equity securities carried at fair value:
Marketable equity securities $ (2) 60
Nonmarketable equity securities (1) (22) (358)
Total equity securities carried at fair value (24) (298)
Net gains (losses) from nonmarketable equity securities not carried at fair value (2):
Impairment write-downs (438) (15)
Net unrealized gains (3) 690 225
Net realized gains on sale 348 55
Total nonmarketable equity securities not carried at fair value 600 265
Net gains from economic hedge derivatives (1) — 425
Total net gains (losses) from equity securities not held for trading $ 576 392


(in millions)	Mar 31, 2023		Dec 31, 2022
Corporate/bank-owned life insurance (1)	$	20,836	20,807
Accounts receivable (2)	29,887		23,646
Interest receivable:
AFS and HTM debt securities	1,616		1,572
Loans	3,600		3,470
Trading and other	864		767
Operating lease assets (lessor)	5,633		5,790
Operating lease ROU assets (lessee)	3,782		3,837
Other (3)(4)	16,525		15,949
Total other assets	$	82,743	75,838

(2)~~Includes amounts related to~~Primarily includes derivatives clearinghouse receivables, trade date receivables, and servicer advances, which are recorded at amortized cost.

(3)Primarily includes income tax receivables, prepaid expenses, foreclosed assets, and private equity and venture capital investments in consolidated portfolio ~~companies, which are not reported in equity securities on our consolidated balance sheet.~~companies.

~~(3)~~(4)~~Includes unrealized gains (losses) due~~In first quarter 2023, we adopted ASU 2018-12 – Financial Services – Insurance (Topic 944): Targeted Improvements to ~~observable price changes from equity securities accounted~~the Accounting for ~~under the measurement alternative.~~Long-Duration Contracts

. For additional information, see Note 1 (Summary of Significant Accounting Policies).


			Wells Fargo & Company			89

~~Note 6:~~ ~~Equity Securities~~ ~~(continued)~~

~~Measurement Alternative~~

~~Table 6.3 provides additional information about the impairment write-downs and observable price changes from nonmarketable~~

~~equity securities accounted for under the measurement alternative. Gains and losses related to these adjustments are also included in Table 6.2.~~

~~Table 6.3:Net Gains (Losses) from Measurement Alternative Equity Securities~~

Quarter ended March 31,
(in millions) 2022 2021
Net gains (losses) recognized in earnings during the period:
Gross unrealized gains from observable price changes $ 690 225
Impairment write-downs (395) (12)
Realized net gains from sale 33 —
Total net gains recognized during the period $ 328 213

Table 6.4 presents cumulative carrying value adjustments to nonmarketable equity securities accounted for under the measurement alternative that were still held at the end of each reporting period presented.

~~Table 6.4:Measurement Alternative Cumulative Gains (Losses)~~

(in millions) Mar 31,
2022 Dec 31,
2021
Cumulative gains (losses):
Gross unrealized gains from observable price changes $ 6,957 6,278
Gross unrealized losses from observable price changes (3) (3)
Impairment write-downs (1,216) (821)


Note 8: Leasing Activity

The information below provides a summary of our leasing activities as a lessor and lessee. See Note 8 (Leasing Activity) in our 2022 Form 10-K for additional information about our leasing activities.

As a Lessor

Noninterest income on leases, included in Table 8.1, is included in other noninterest income on our consolidated statement of income. Lease expense, included in other noninterest expense on our consolidated statement of income, was $177 million and $188 million in first quarter 2023 and 2022, respectively.

Table 8.1:Leasing Revenue


	Quarter ended March 31,
(in millions)		2023		2022
Interest income on lease financing		$	169	152
Other lease revenue:
Variable revenue on lease financing		25		30
Fixed revenue on operating leases		249		245
Variable revenue on operating leases		11		15
Other lease-related revenue (1)		62		37
Noninterest income on leases		347		327
Total leasing revenue		$	516	479

(1) Predominantly includes net gains (losses) on disposition of assets leased under operating leases or lease financings.

As a Lessee

Substantially all of our leases are operating leases. Table 8.2 presents balances for our operating leases.

Table 8.2:Operating Lease Right-of-Use (ROU) Assets and Lease Liabilities


(in millions)	Mar 31, 2023		Dec 31, 2022
ROU assets	$	3,782	3,837
Lease liabilities	4,381		4,465

Table 8.3 provides the composition of our lease costs, which are predominantly included in net occupancy expense.

Table 8.3:Lease Costs


	Quarter ended March 31,
(in millions)		2023		2022
Fixed lease expense – operating leases		$	251	253
Variable lease expense		71		73
Other (1)		(16)		(10)
Total lease costs		$	306	316

(1)Predominantly includes gains recognized from sale leaseback transactions and sublease rental income.


90			Wells Fargo & Company


Note 7:9: ~~Other Assets~~Preferred Stock

We are authorized to issue 20 million shares of preferred stock, without par value. Outstanding preferred shares rank senior to common shares both as to the payment of dividends and liquidation preferences but have no general voting rights. All outstanding preferred stock with a liquidation preference value, except for Series L Preferred Stock, may be redeemed for the liquidation preference value, plus any accrued but unpaid dividends, on any dividend payment date on or after the earliest redemption date for that series. Additionally, these same series of preferred stock may be redeemed following a “regulatory

capital treatment event”, as described in the terms of each series. Capital actions, including redemptions of our preferred stock, may be subject to regulatory approval or conditions.

In addition, we are authorized to issue 4 million shares of preference stock, without par value. We have not issued any preference shares under this authorization. If issued, preference shares would be limited to one vote per share.

Table ~~7.1 presents the components of other assets.~~9.1 summarizes information about our preferred stock.

Table ~~7.1:~~9.1: ~~Other Assets~~Preferred Stock

(in millions) Mar 31, 2022 Dec 31, 2021
Corporate/bank-owned life insurance $ 20,667 20,619
Accounts receivable (1) 25,308 20,831
Interest receivable:
AFS and HTM debt securities 1,352 1,360
Loans 1,978 1,950
Trading and other 354 305
Operating lease assets (lessor) 6,040 6,182
Operating lease ROU assets (lessee) 3,782 3,805
Customer relationship and other amortized intangibles 196 211
Foreclosed assets 130 112
Due from customers on acceptances 125 155
Other (2) 12,548 11,729
Total other assets $ 72,480 67,259


		March 31, 2023					December 31, 2022
(in millions, except shares)	Earliest redemption date	Shares authorized and designated	Shares issued and outstanding	Liquidation preference value		Carrying value	Shares authorized and designated	Shares issued and outstanding	Liquidation preference value		Carrying value
DEP Shares
Dividend Equalization Preferred Shares (DEP)	Currently redeemable	97,000	96,546	$	—	—	97,000	96,546	$	—	—
Preferred Stock:
Series L (1)
7.50% Non-Cumulative Perpetual Convertible Class A	—	4,025,000	3,967,986	3,968		3,200	4,025,000	3,967,986	3,968		3,200
Series Q
5.85% Fixed-to-Floating Non-Cumulative Perpetual Class A	9/15/2023	69,000	69,000	1,725		1,725	69,000	69,000	1,725		1,725
Series R
6.625% Fixed-to-Floating Non-Cumulative Perpetual Class A	3/15/2024	34,500	33,600	840		840	34,500	33,600	840		840
Series S
5.90% Fixed-to-Floating Non-Cumulative Perpetual Class A	6/15/2024	80,000	80,000	2,000		2,000	80,000	80,000	2,000		2,000
Series U
5.875% Fixed-to-Floating Non-Cumulative Perpetual Class A	6/15/2025	80,000	80,000	2,000		2,000	80,000	80,000	2,000		2,000
Series Y
5.625% Non-Cumulative Perpetual Class A	Currently redeemable	27,600	27,600	690		690	27,600	27,600	690		690
Series Z
4.75% Non-Cumulative Perpetual Class A	3/15/2025	80,500	80,500	2,013		2,013	80,500	80,500	2,013		2,013
Series AA
4.70% Non-Cumulative Perpetual Class A	12/15/2025	46,800	46,800	1,170		1,170	46,800	46,800	1,170		1,170
Series BB
3.90% Fixed-Reset Non-Cumulative Perpetual Class A	3/15/2026	140,400	140,400	3,510		3,510	140,400	140,400	3,510		3,510
Series CC
4.375% Non-Cumulative Perpetual Class A	3/15/2026	46,000	42,000	1,050		1,050	46,000	42,000	1,050		1,050
Series DD
4.25% Non-Cumulative Perpetual Class A	9/15/2026	50,000	50,000	1,250		1,250	50,000	50,000	1,250		1,250
Total		4,776,800	4,714,432	$	20,216	19,448	4,776,800	4,714,432	$	20,216	19,448

(1)~~Primarily includes derivatives clearinghouse receivables, trade date receivables,~~At the option of the holder, each share of Series L Preferred Stock may be converted at any time into 6.3814 shares of common stock, plus cash in lieu of fractional shares, subject to anti-dilution adjustments. If converted within 30 days of certain liquidation or change of control events, the holder may receive up to 16.5916 additional shares, or, at our option, receive an equivalent amount of cash in lieu of common stock. We may convert some or all of the Series L Preferred Stock into shares of common stock if the closing price of our common stock exceeds 130 percent of the conversion price of the Series L Preferred Stock for 20 trading days during any period of 30 consecutive trading days. We declared dividends of $74 million on Series L Preferred Stock for both quarters ended March 31, 2023, and ~~servicer advances.~~March 31, 2022.

~~(2)~~
~~Primarily includes income tax receivables, prepaid expenses, and private equity and venture capital investments in consolidated portfolio companies.~~


			Wells Fargo & Company			91


Note 8:10: Legal Actions

Wells Fargo and certain of our subsidiaries are involved in a number of judicial, regulatory, governmental, arbitration, and other proceedings or investigations concerning matters arising from the conduct of our business activities, and many of those proceedings and investigations expose Wells Fargo to potential financial loss or other adverse consequences. These proceedings and investigations include actions brought against Wells Fargo and/or our subsidiaries with respect to corporate-related matters and transactions in which Wells Fargo and/or our subsidiaries were involved. In addition, Wells Fargo and our subsidiaries may be requested to provide information to or otherwise cooperate with government authorities in the conduct of investigations of other persons or industry groups.

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. There can be no assurance as to the ultimate outcome of legal actions, including the matters described below, and the actual costs of resolving legal actions may be substantially higher or lower than the amounts accrued for those actions.

AUTOMOBILE LENDING MATTERS On April 20, 2018, the Company entered into consent orders with the Office of the Comptroller of the Currency (OCC) and the Consumer Financial Protection Bureau (CFPB) to resolve, among other things, investigations by the agencies into the Company’s compliance risk management program and its past practices involving certain automobile collateral protection insurance (CPI) policies and certain mortgage interest rate lock extensions. Shareholders filed a putative securities fraud class action against the Company and its executive officers alleging material misstatements and omissions of CPI-related information in the Company’s public disclosures. In January 2020, the court dismissed this action as to all defendants except the Company and a former executive officer and limited the action to two alleged misstatements. Subject to court approval, the parties have entered into an agreement pursuant to which the Company will pay $300 million to resolve this action. Additionally, a number of other lawsuits were filed by non-governmental parties seeking damages or other remedies related to these CPI policies and related to the unused portion of guaranteed automobile protection (GAP) waiver or insurance agreements. As previously disclosed, the Company entered into various settlements to resolve these lawsuits, while others were dismissed. In addition, federal and state government agencies, including the CFPB, have undertaken formal or informal inquiries, investigations, or examinations regarding these and other issues related to the origination, servicing, and collection of consumer auto loans, including related insurance products. On December 20, 2022, the Company entered into a consent order with the CFPB to resolve the CFPB’s investigations related to automobile lending, consumer deposit accounts, and mortgage lending. The consent order requires, among other things, remediation to customers and the payment of a $1.7 billion civil penalty to the CFPB. As previously disclosed, the Company entered into an agreement to resolve investigations by state attorneys general.

COMPANY 401(K) PLAN MATTERS Federal government agencies, including the United States Department of Labor (Department of Labor), have undertaken reviews of certain transactions associated with the Employee Stock Ownership Plan feature of the Company’s 401(k) plan, including the manner in which the 401(k) plan purchased certain securities used in connection with the Company’s contributions to the 401(k) plan. As previously disclosed, the Company entered into an agreement to resolve the Department of Labor’s review. On September 26, 2022, participants in the Company’s 401(k) plan filed a putative class action in the United States District Court for the District of Minnesota alleging that the Company violated the Employee Retirement Income Security Act of 1974 in connection with certain of these transactions.

CONSENT ORDER DISCLOSURE LITIGATION Wells Fargo shareholders have brought a putative securities fraud class action in the United States District Court for the Southern District of New York alleging that the Company and certain of its current and former executive officers and directors made false or misleading statements regarding the Company’s efforts to comply with the February 2018 consent order with the Federal Reserve Board and the April 2018 consent orders with the CFPB and OCC. Allegations related to the Company’s efforts to comply with these three consent orders are also among the subjects of a shareholder derivative lawsuit filed in California state court.

HIRING PRACTICES MATTERS Government agencies, including the United States Department of Justice and the United States Securities and Exchange Commission, have undertaken formal or informal inquiries or investigations regarding the Company’s hiring practices related to diversity. A putative securities fraud class action has also been filed in the United States District Court for the Northern District of California alleging that the Company and certain of its executive officers made false or misleading statements about the Company’s hiring practices related to diversity. Allegations related to the Company’s hiring practices related to diversity are also among the subjects of shareholder derivative lawsuits filed in the United States District Court for the Northern District of California and in California state court.

INTERCHANGE LITIGATIONPlaintiffs representing a class of merchants have filed putative class actions, and individual merchants have filed individual actions, against Wells Fargo Bank, N.A., Wells Fargo & Company, Wachovia Bank, N.A., and Wachovia Corporation regarding the interchange fees associated with Visa and MasterCard payment card transactions. Visa, MasterCard, and several other banks and bank holding companies are also named as defendants in these actions. These actions have been consolidated in the United States District Court for the Eastern District of New York. The amended and consolidated complaint asserts claims against defendants based on alleged violations of federal and state antitrust laws and seeks damages as well as injunctive relief. Plaintiff merchants allege that Visa, MasterCard, and payment card issuing banks unlawfully colluded to set interchange rates. Plaintiffs also allege that enforcement of certain Visa and MasterCard rules and alleged tying and bundling of services offered to merchants are anticompetitive. Wells Fargo and Wachovia, along with other defendants and entities, are parties to Loss and Judgment Sharing Agreements, which provide that they, along with other entities, will share, based on a formula, in any losses from the


92			Wells Fargo & Company

Interchange Litigation. On July 13, 2012, Visa, MasterCard, and the financial institution defendants, including Wells Fargo, signed a memorandum of understanding with plaintiff merchants to resolve the consolidated class action and reached a separate settlement in principle of the consolidated individual actions. The settlement payments to be made by all defendants in the consolidated class and individual actions totaled approximately $6.6 billion before reductions applicable to certain merchants opting out of the settlement. The class settlement also provided for the distribution to class merchants of 10 basis points of default interchange across all credit rate categories for a period of eight consecutive months. The district court granted final approval of the settlement, which was appealed to the United States Court of Appeals for the Second Circuit by settlement objector merchants. Other merchants opted out of the settlement and are pursuing several individual actions. On June 30, 2016, the Second Circuit vacated the settlement agreement and reversed and remanded the consolidated action to the United States District Court for the Eastern District of New York for further proceedings. On November 23, 2016, prior class counsel filed a petition to the United States Supreme Court, seeking review of the reversal of the settlement by the Second Circuit, and the Supreme Court denied the petition on March 27, 2017. On November 30, 2016, the district court appointed lead class counsel for a damages class and an equitable relief class. The parties have entered into a settlement agreement to resolve the damages class claims pursuant to which defendants will pay a total of approximately $6.2 billion, which includes approximately $5.3 billion of funds remaining from the 2012 settlement and $900 million in additional funding. The Company’s allocated responsibility for the additional funding is approximately $94.5 million. The court granted final approval of the settlement on December 13, 2019, which was appealed to the United States Court of Appeals for the Second Circuit by settlement objector merchants. On March 15, 2023, the Second Circuit affirmed the damages class settlement. Settlement objector merchants filed a petition for a rehearing by the Second Circuit en banc. On September 27, 2021, the district court granted the plaintiffs’ motion for class certification in the equitable relief case. Several of the opt-out and direct action litigations have been settled while others remain pending.

OFAC RELATED INVESTIGATION The Company self-identified an issue whereby certain foreign banks utilized a Wells Fargo software-based solution to conduct import/export trade-related financing transactions with countries and entities prohibited by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury. We do not believe any funds related to these transactions flowed through accounts at Wells Fargo as a result of the aforementioned conduct. The Company made voluntary self-disclosures to OFAC and cooperated with investigations or inquiries arising out of this matter by federal government agencies. In March 2023, the Company entered into agreements pursuant to which it agreed to pay $67.8 million to the Federal Reserve and $30 million to OFAC in order to resolve their investigations.

RECORD-KEEPING INVESTIGATIONS The United States Securities and Exchange Commission and the United States Commodity Futures Trading Commission have undertaken investigations regarding the Company’s compliance with records retention requirements relating to business communications sent over unapproved electronic messaging channels.

RMBS TRUSTEE LITIGATION In December 2014, Phoenix Light SF Limited (Phoenix Light) and certain related entities filed a complaint in the United States District Court for the Southern District of New York alleging claims against Wells Fargo Bank, N.A., in its capacity as trustee for a number of residential mortgage-backed securities (RMBS) trusts. Complaints raising similar allegations have been filed by Commerzbank AG in the Southern District of New York and by IKB International and IKB Deutsche Industriebank in New York state court. In each case, the plaintiffs allege that Wells Fargo Bank, N.A., as trustee, caused losses to investors, and plaintiffs assert causes of action based upon, among other things, the trustee’s alleged failure to notify and enforce repurchase obligations of mortgage loan sellers for purported breaches of representations and warranties, notify investors of alleged events of default, and abide by appropriate standards of care following alleged events of default. In July 2022, the district court dismissed Phoenix Light’s claims and certain of the claims asserted by Commerzbank AG, and subsequently entered judgment in each case in favor of Wells Fargo Bank, N.A. In August 2022, Phoenix Light and Commerzbank AG appealed the district court’s decision to the United States Court of Appeals for the Second Circuit. The Company previously settled two class actions filed by institutional investors and an action filed by the National Credit Union Administration with similar allegations. In addition, Park Royal I LLC and Park Royal II LLC have filed substantially similar lawsuits in New York state court alleging Wells Fargo Bank, N.A., as trustee, failed to take appropriate actions upon learning of defective mortgage loan documentation.

SEMINOLE TRIBE TRUSTEE LITIGATION The Seminole Tribe of Florida filed a complaint in Florida state court alleging that Wells Fargo, as trustee, charged excess fees in connection with the administration of a minor’s trust and failed to invest the assets of the trust prudently. The complaint was later amended to include three individual current and former beneficiaries as plaintiffs and to remove the Tribe as a party to the case.

OUTLOOKAs described above, the Company establishes accruals for legal actions when potential losses associated with the actions become probable and the costs can be reasonably estimated. The high end of the range of reasonably possible losses in excess of the Company’s accrual for probable and estimable losses was approximately $1.4 billion as of March 31, 2023. 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. Based on information currently available, advice of counsel, available insurance coverage, and established reserves, Wells Fargo believes that the eventual outcome of the actions against Wells Fargo and/or its subsidiaries will not, individually or in the aggregate, have a material adverse effect on Wells Fargo’s consolidated financial condition. However, it is possible that the ultimate resolution of a matter, if unfavorable, may be material to Wells Fargo’s results of operations for any particular period.


			Wells Fargo & Company			93


Note 11: 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. We designate certain derivatives as hedging instruments in qualifying hedge accounting relationships (fair value or cash flow hedges). Our remaining derivatives consist of economic hedges that do not qualify for hedge accounting and derivatives held for customer accommodation trading or other purposes. For additional information on our derivatives activities, see Note 14 (Derivatives) in our 2022 Form 10-K.

Table 11.1 presents the total notional or contractual amounts and fair values for our derivatives. Derivative transactions can be measured in terms of the notional amount, but this 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. The notional amount is generally not exchanged, but is used only as the basis on which derivative cash flows are determined.

Table 11.1:Notional or Contractual Amounts and Fair Values of Derivatives


	March 31, 2023					December 31, 2022
	Notional or contractual amount		Fair value			Notional or contractual amount	Fair value
			Derivative assets		Derivative liabilities		Derivative assets	Derivative liabilities
(in millions)
Derivatives designated as hedging instruments
Interest rate contracts	$	296,341	773		456	263,876	670	579
Commodity contracts	4,166		32		51	1,681	9	25
Foreign exchange contracts	11,251		91		874	15,544	161	1,015
Total derivatives designated as qualifying hedging instruments			896		1,381		840	1,619
Derivatives not designated as hedging instruments
Economic hedges:
Interest rate contracts	79,712		374		275	65,727	410	253
Equity contracts (1)	4,568		61		44	3,326	—	242
Foreign exchange contracts	44,033		369		612	38,139	490	968
Credit contracts	265		15		—	290	14	—
Subtotal			819		931		914	1,463
Customer accommodation trading and other derivatives:
Interest rate contracts	10,899,705		32,487		35,425	10,156,300	40,006	42,641
Commodity contracts	92,472		3,716		3,000	96,001	5,991	3,420
Equity contracts	409,253		11,044		11,223	390,427	9,573	8,012
Foreign exchange contracts	1,553,355		13,237		14,841	1,475,224	21,562	24,703
Credit contracts	54,133		53		32	45,359	52	36

Subtotal			60,537		64,521		77,184	78,812
Total derivatives not designated as hedging instruments			61,356		65,452		78,098	80,275
Total derivatives before netting			62,252		66,833		78,938	81,894
Netting			(45,135)		(49,936)		(56,164)	(61,827)
Total			$	17,117	16,897		22,774	20,067

(1) In first quarter 2023, we adopted ASU 2018-12 – Financial Services – Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts. For additional information, see Note 1 (Summary of Significant Accounting Policies).

Balance Sheet Offsetting

We execute substantially all of our derivative transactions under master netting arrangements. Where legally enforceable, these master netting arrangements give the ability, in the event of default by the counterparty, to liquidate securities held as collateral and to offset receivables and payables with the same counterparty. We reflect all derivative balances and related cash collateral subject to enforceable master netting arrangements on a net basis on our consolidated balance sheet. We do not net non-cash collateral that we receive or pledge against derivative balances on our consolidated balance sheet.

For disclosure purposes, we present “Total Derivatives, net” which represents the aggregate of our net exposure to each counterparty after considering the balance sheet netting

adjustments and any non-cash collateral. We manage derivative exposure by monitoring the credit risk associated with each counterparty using counterparty-specific credit risk limits, using master netting arrangements and obtaining collateral.

Table 11.2 provides information on the fair values of derivative assets and liabilities subject to enforceable master netting arrangements, the balance sheet netting adjustments and the resulting net fair value amount recorded on our consolidated balance sheet, as well as the non-cash collateral associated with such arrangements. In addition to the netting amounts included in the table, we also have balance sheet netting related to resale and repurchase agreements that are disclosed within Note 15 (Pledged Assets and Collateral).


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Table 11.2:Fair Values of Derivative Assets and Liabilities


	March 31, 2023			December 31, 2022
(in millions)	Derivative Assets		Derivative Liabilities	Derivative Assets	Derivative Liabilities
Interest rate contracts
Over-the-counter (OTC)	$	31,386	32,130	37,000	37,598
OTC cleared	733		639	649	845
Exchange traded	234		207	262	193
Total interest rate contracts	32,353		32,976	37,911	38,636
Commodity contracts
OTC	2,601		2,177	4,833	2,010
Exchange traded	927		724	876	1,134
Total commodity contracts	3,528		2,901	5,709	3,144
Equity contracts
OTC	4,542		6,829	4,269	4,475
Exchange traded	4,172		2,843	3,742	2,409
Total equity contracts	8,714		9,672	8,011	6,884
Foreign exchange contracts
OTC	13,445		15,975	21,537	26,127

Total foreign exchange contracts	13,445		15,975	21,537	26,127
Credit contracts
OTC	43		22	39	22

Total credit contracts	43		22	39	22
Total derivatives subject to enforceable master netting arrangements, gross	58,083		61,546	73,207	74,813
Less: Gross amounts offset
Counterparty netting (1)	(40,603)		(40,590)	(49,115)	(49,073)
Cash collateral netting	(4,532)		(9,346)	(7,049)	(12,754)
Total derivatives subject to enforceable master netting arrangements, net	12,948		11,610	17,043	12,986
Derivatives not subject to enforceable master netting arrangements (2)	4,169		5,287	5,731	7,081
Total derivatives recognized in consolidated balance sheet, net	17,117		16,897	22,774	20,067
Non-cash collateral	(2,307)		(1,968)	(3,517)	(582)
Total Derivatives, net	$	14,810	14,929	19,257	19,485

(1)Represents amounts with counterparties subject to enforceable master netting arrangements that have been offset in our consolidated balance sheet, including portfolio level counterparty valuation adjustments related to customer accommodation and other trading derivatives. Counterparty valuation adjustments related to derivative assets were $346 million and $372 million and debit valuation adjustments related to derivative liabilities were $333 million and $331 million as of March 31, 2023, and December 31, 2022, respectively, and were primarily related to interest rate contracts.

(2)In first quarter 2023, we adopted ASU 2018-12 – Financial Services – Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts. For additional information, see Note 1 (Summary of Significant Accounting Policies).

Fair Value and Cash Flow Hedges

For fair value hedges, we use interest rate swaps to convert certain of our fixed-rate long-term debt and time certificates of deposit to floating rates to hedge our exposure to interest rate risk. We also enter into cross-currency swaps, cross-currency interest rate swaps and forward contracts to hedge our exposure to foreign currency risk and interest rate risk associated with the issuance of non-U.S. dollar denominated long-term debt. We also enter into futures contracts, forward contracts, and swap contracts to hedge our exposure to the price risk of physical commodities included in Other Assets. In addition, we use interest rate swaps, cross-currency swaps, cross-currency interest rate swaps and forward contracts to hedge against changes in fair value of certain investments in available-for-sale (AFS) debt securities due to changes in interest rates, foreign currency rates, or both. For certain fair value hedges of interest rate risk, we use the portfolio layer method to hedge stated amounts of closed portfolios of AFS debt securities. For certain fair value hedges of foreign currency risk, changes in fair value of cross-currency swaps attributable to changes in cross-currency basis spreads are excluded from the assessment of hedge effectiveness and recorded in other comprehensive income

(OCI). See Note 20 (Other Comprehensive Income) for the amounts recognized in other comprehensive income.

For cash flow hedges, we use interest rate swaps to hedge the variability in interest payments received on certain interest-earning deposits with banks and certain floating-rate commercial loans, and interest paid on certain floating-rate debt due to changes in the contractually specified interest rate. We also use cross-currency swaps to hedge variability in interest payments on fixed-rate foreign currency-denominated long-term debt due to changes in foreign exchange rates.

We estimate $693 million pre-tax of deferred net losses related to cash flow hedges in OCI at March 31, 2023, will be reclassified into net interest income during the next twelve months. For cash flow hedges as of March 31, 2023, we are hedging our interest rate and foreign currency exposure to the variability of future cash flows for all forecasted transactions for a maximum of 9 years. For additional information on our accounting hedges, see Note 1 (Summary of Significant Accounting Policies) in our 2022 Form 10-K.

Table 11.3 and Table 11.4 show the net gains (losses) related to derivatives in cash flow and fair value hedging relationships, respectively.


			Wells Fargo & Company			95

Note 11: Derivatives (continued)

Table 11.3:Gains (Losses) Recognized on Cash Flow Hedging Relationships


	Net interest income				Total recorded in net income	Total recorded in OCI
(in millions)	Loans		Other interest income	Long-term debt	Derivative gains (losses)	Derivative gains (losses)






















Quarter ended March 31, 2023

Total amounts presented in the consolidated statement of income and other comprehensive income	$	13,318	1,988	(2,511)	N/A	503
Interest rate contracts:
Realized gains (losses) (pre-tax) reclassified from OCI into net income	(53)		(58)	—	(111)	111
Net unrealized gains (losses) (pre-tax) recognized in OCI	N/A		N/A	N/A	N/A	383
Total gains (losses) (pre-tax) on interest rate contracts	(53)		(58)	—	(111)	494
Foreign exchange contracts:
Realized gains (losses) (pre-tax) reclassified from OCI into net income	—		—	(2)	(2)	2
Net unrealized gains (losses) (pre-tax) recognized in OCI	N/A		N/A	N/A	N/A	1
Total gains (losses) (pre-tax) on foreign exchange contracts	—		—	(2)	(2)	3
Total gains (losses) (pre-tax) recognized on cash flow hedges	$	(53)	(58)	(2)	(113)	497
Quarter ended March 31, 2022

Total amounts presented in the consolidated statement of income and other comprehensive income	$	7,218	90	(761)	N/A	27
Interest rate contracts:
Realized gains (losses) (pre-tax) reclassified from OCI into net income	(16)		4	—	(12)	12
Net unrealized gains (losses) (pre-tax) recognized in OCI	N/A		N/A	N/A	N/A	(48)
Total gains (losses) (pre-tax) on interest rate contracts	(16)		4	—	(12)	(36)
Foreign exchange contracts:
Realized gains (losses) (pre-tax) reclassified from OCI into net income	—		—	(2)	(2)	2
Net unrealized gains (losses) (pre-tax) recognized in OCI	N/A		N/A	N/A	N/A	(3)
Total gains (losses) (pre-tax) on foreign exchange contracts	—		—	(2)	(2)	(1)
Total gains (losses) (pre-tax) recognized on cash flow hedges	$	(16)	4	(2)	(14)	(37)


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Table 11.4:Gains (Losses) Recognized on Fair Value Hedging Relationships


	Net interest income				Noninterest income		Total recorded in net income		Total recorded in OCI
(in millions)	Debt securities		Deposits	Long-term debt		Other		Derivative gains (losses)		Derivative gains (losses)

Quarter ended March 31, 2023
Total amounts presented in the consolidated statement of income and other comprehensive income	$	3,783	(2,761)	(2,511)		580		N/A		503
Interest contracts
Amounts related to cash flows on derivatives	269		(30)	(682)		—		(443)		N/A
Recognized on derivatives	(700)		105	2,358		—		1,763		—
Recognized on hedged items	692		(108)	(2,360)		—		(1,776)		N/A
Total gains (losses) (pre-tax) on interest rate contracts	261		(33)	(684)		—		(456)		—
Foreign exchange contracts
Amounts related to cash flows on derivatives	—		—	(103)		—		(103)		N/A
Recognized on derivatives	—		—	52		35		87		6
Recognized on hedged items	—		—	(60)		(29)		(89)		N/A
Total gains (losses) (pre-tax) on foreign exchange contracts	—		—	(111)		6		(105)		6
Commodity contracts
Recognized on derivatives	—		—	—		(12)		(12)		—
Recognized on hedged items	—		—	—		25		25		N/A
Total gains (losses) (pre-tax) on commodity contracts	—		—	—		13		13		—
Total gains (losses) (pre-tax) recognized on fair value hedges	$	261	(33)	(795)		19		(548)		6

Quarter ended March 31, 2022
Total amounts presented in the consolidated statement of income and other comprehensive income	$	2,563	(83)	(761)		692		N/A		27
Interest contracts
Amounts related to cash flows on derivatives	(41)		41	481		—		481		N/A
Recognized on derivatives	1,262		(145)	(6,869)		—		(5,752)		—
Recognized on hedged items	(1,248)		143	6,813		—		5,708		N/A
Total gains (losses) (pre-tax) on interest rate contracts	(27)		39	425		—		437		—
Foreign exchange contracts
Amounts related to cash flows on derivatives	—		—	4		—		4		N/A
Recognized on derivatives	—		—	(456)		(242)		(698)		64
Recognized on hedged items	—		—	445		241		686		N/A
Total gains (losses) (pre-tax) on foreign exchange contracts	—		—	(7)		(1)		(8)		64
Commodity contracts
Recognized on derivatives	—		—	—		(92)		(92)		—
Recognized on hedged items	—		—	—		87		87		N/A
Total gains (losses) (pre-tax) on commodity contracts	—		—	—		(5)		(5)		—
Total gains (losses) (pre-tax) recognized on fair value hedges	$	(27)	39	418		(6)		424		64


			Wells Fargo & Company			97

Note 11: Derivatives (continued)

Table 11.5 shows the carrying amount and associated cumulative basis adjustment related to the application of hedge accounting that is included in the carrying amount of hedged assets and liabilities in fair value hedging relationships.

Table 11.5:Hedged Items in Fair Value Hedging Relationships


	Hedged items currently designated			Hedged items no longer designated
(in millions)	Carrying amount of assets/(liabilities) (1)(2)		Hedge accounting basis adjustment assets/(liabilities) (3)	Carrying amount of assets/(liabilities) (2)	Hedge accounting basis adjustment assets/(liabilities)
March 31, 2023
Available-for-sale debt securities (4)(5)	$	59,752	(3,160)	15,822	656
Other assets	1,652		100	—	—
Deposits	(51,456)		97	(10)	—
Long-term debt	(132,434)		11,421	(32)	5
December 31, 2022
Available-for-sale debt securities (4)	$	39,423	(3,859)	16,100	722
Other assets	1,663		38	—	—
Deposits	(41,687)		205	(10)	—
Long-term debt	(130,997)		13,862	(5)	—

(1)Does not include the carrying amount of hedged items where only foreign currency risk is the designated hedged risk. The carrying amount excluded for debt securities was $710 million and for long-term debt was $0 million as of March 31, 2023, and $739 million for debt securities and $0 million for long-term debt as of December 31, 2022.

(2)Represents the full carrying amount of the hedged asset or liability item as of the balance sheet date, except for circumstances in which only a portion of the asset or liability was designated as the hedged item in which case only the portion designated is presented.

(3)The balance includes $37 million and $586 million of debt securities and long-term debt cumulative basis adjustments as of March 31, 2023, respectively, and $39 million and $334 million of debt securities and long-term debt cumulative basis adjustments as of December 31, 2022, respectively, on terminated hedges whereby the hedged items have subsequently been re-designated into existing hedges.

(4)Carrying amount represents the amortized cost.

(5)The balance includes cumulative basis adjustments of $(6) million for hedged items currently designated as of March 31, 2023, related to certain AFS debt securities designated as the hedged item in a fair value hedge using the portfolio layer method. At March 31, 2023, the aggregated designated hedged items using the portfolio layer method had a carrying amount of $19.9 billion from closed portfolios of financial assets totaling $23.3 billion.

Derivatives Not Designated as Hedging Instruments

Derivatives not designated as hedging instruments include economic hedges and derivatives entered into for customer accommodation trading purposes.

We use economic hedge derivatives to manage our exposure to interest rate risk, equity price risk, foreign currency risk, and credit risk. We also use economic hedge derivatives to mitigate the periodic earnings volatility caused by mismatches between the changes in fair value of the hedged item and hedging instrument recognized on our fair value accounting hedges.

Changes in the fair values of derivatives used to economically hedge the deferred compensation plan are reported in personnel expense.

For additional information on our derivatives activities, see Note 14 (Derivatives) in our 2022 Form 10-K.


98			Wells Fargo & Company

Table 11.6 shows the net gains (losses), recognized by income statement lines, related to derivatives not designated as hedging instruments.

Table 11.6:Gains (Losses) on Derivatives Not Designated as Hedging Instruments


	Noninterest income					Noninterest expense
(in millions)	Mortgage banking		Net gains from trading and securities	Other	Total		Personnel expense

Quarter ended March 31, 2023
Net gains (losses) recognized on economic hedges derivatives:
Interest contracts (1)	$	146	—	48	194		—
Equity contracts	—		—	(80)	(80)		(191)
Foreign exchange contracts	—		—	(366)	(366)		—
Credit contracts	—		—	(1)	(1)		—
Subtotal	146		—	(399)	(253)		(191)
Net gains (losses) recognized on customer accommodation trading and other derivatives:
Interest contracts	(2)		(336)	—	(338)		—
Commodity contracts	—		112	—	112		—
Equity contracts	—		(1,470)	(64)	(1,534)		—
Foreign exchange contracts	—		(99)	—	(99)		—
Credit contracts	—		(7)	—	(7)		—
Subtotal	(2)		(1,800)	(64)	(1,866)		—
Net gains (losses) recognized related to derivatives not designated as hedging instruments	$	144	(1,800)	(463)	(2,119)		(191)

Quarter ended March 31, 2022
Net gains (losses) recognized on economic hedges derivatives:
Interest contracts (1)	$	(368)	—	(26)	(394)		—
Equity contracts (2)	—		—	5	5		266
Foreign exchange contracts	—		—	231	231		—
Credit contracts	—		—	5	5		—
Subtotal	(368)		—	215	(153)		266
Net gains (losses) recognized on customer accommodation trading and other derivatives:
Interest contracts	(498)		3,214	—	2,716		—
Commodity contracts	—		113	—	113		—
Equity contracts	—		1,003	(38)	965		—
Foreign exchange contracts	—		327	—	327		—
Credit contracts	—		12	—	12		—
Subtotal	(498)		4,669	(38)	4,133		—
Net gains (losses) recognized related to derivatives not designated as hedging instruments	$	(866)	4,669	177	3,980		266

(1)Mortgage banking amounts for first quarter 2023 are comprised of gains (losses) of $185 million related to derivatives used as economic hedges of MSRs measured at fair value offset by gains (losses) of $(39) million related to derivatives used as economic hedges of mortgage loans held for sale and derivative loan commitments. The corresponding amounts for first quarter 2022 are comprised of gain (losses) of $(1.6) billion offset by gains (losses) of $1.3 billion.


			Wells Fargo & Company			99

Note 11: Derivatives (continued)

Credit Derivatives

Credit derivative contracts are arrangements whose value is derived from the transfer of credit risk of a reference asset or entity from one party (the purchaser of credit protection) to another party (the seller of credit protection). We generally use credit derivatives to assist customers with their risk management objectives by purchasing and selling credit protection on corporate debt obligations through the use of credit default swaps or through risk participation swaps to help manage counterparty exposure. We would be required to perform under the credit derivatives we sold in the event of default by the referenced obligors. Events of default include events such as bankruptcy, capital restructuring or lack of principal and/or interest payment.

Table 11.7 provides details of sold credit derivatives.

Table 11.7:Sold Credit Derivatives


	Notional amount
(in millions)	Protection sold		Protection sold – non-investment grade
March 31, 2023
Credit default swaps	$	17,033	2,200
Risk participation swaps	6,782		6,571
Total credit derivatives	$	23,815	8,771
December 31, 2022
Credit default swaps	$	12,733	1,860
Risk participation swaps	6,728		6,518
Total credit derivatives	$	19,461	8,378

Protection sold represents the estimated maximum exposure to loss that would be incurred if, upon an event of default, the value of our interests and any associated collateral declined to zero, and does not take into consideration any of recovery value from the referenced obligation or offset from collateral held or any economic hedges.

The amounts under non-investment grade represent the notional amounts of those credit derivatives on which we have a higher risk of being required to perform under the terms of the credit derivative and are a function of the underlying assets.

We consider the credit risk to be low if the underlying assets under the credit derivative have an external rating that is investment grade. If an external rating is not available, we classify the credit derivative as non-investment grade.

Our maximum exposure to sold credit derivatives is managed through posted collateral and purchased credit derivatives with identical or similar reference positions in order to achieve our desired credit risk profile. The credit risk management is designed to provide an ability to recover a significant portion of any amounts that would be paid under sold credit derivatives.

Credit-Risk Contingent Features

Certain of our derivative contracts contain provisions whereby if the credit rating of our debt were to be downgraded by certain major credit rating agencies, the counterparty could demand additional collateral or require termination or replacement of derivative instruments in a net liability position. Table 11.8 illustrates our exposure to OTC bilateral derivative contracts with credit-risk contingent features, collateral we have posted, and the additional collateral we would be required to post if the credit rating of our debt was downgraded below investment grade.

Table 11.8:Credit-Risk Contingent Features


(in billions)	Mar 31, 2023		Dec 31, 2022
Net derivative liabilities with credit-risk contingent features	$	17.4	20.7
Collateral posted	17.3		17.4
Additional collateral to be posted upon a below investment grade credit rating (1)	0.1		3.3

(1)Any credit rating below investment grade requires us to post the maximum amount of collateral.


100			Wells Fargo & Company


Note 12: Fair Values of Assets and Liabilities

We use fair value measurements to record fair value adjustments to certain assets and liabilities and to fulfill fair value disclosure requirements. Assets and liabilities recorded at fair value on a recurring basis, such as derivatives, residential MSRs, and trading or AFS debt securities, are presented in Table 12.1 in this Note. Additionally, from time to time, we record fair value adjustments on a nonrecurring basis. These nonrecurring adjustments typically involve application of lower of cost or fair value (LOCOM) accounting, write-downs of individual assets or application of the measurement alternative for nonmarketable equity securities. Assets recorded at fair value on a nonrecurring basis are presented in Table 12.4 in this Note. We provide in Table 12.9 estimates of fair value for financial instruments that are not recorded at fair value, such as loans and debt liabilities carried at amortized cost.

See Note 1 (Summary of Significant Accounting Policies) in our 2022 Form 10-K for discussion of how we determine fair value. For descriptions of the valuation methodologies we use for assets and liabilities recorded at fair value on a recurring or nonrecurring basis, see Note 15 (Fair Values of Assets and Liabilities) in our 2022 Form 10-K.

FAIR VALUE HIERARCHY We classify our assets and liabilities recorded at fair value as either Level 1, 2, or 3 in the fair value hierarchy. The highest priority (Level 1) is assigned to valuations based on unadjusted quoted prices in active markets and the lowest priority (Level 3) is assigned to valuations based on significant unobservable inputs. See Note 1 (Summary of Significant Accounting Policies) in our 2022 Form 10-K for a detailed description of the fair value hierarchy.

In the determination of the classification of financial instruments in Level 2 or Level 3 of the fair value hierarchy, we consider all available information, including observable market data, indications of market liquidity and orderliness, and our understanding of the valuation techniques and significant inputs used. This determination is ultimately based upon the specific facts and circumstances of each instrument or instrument category and judgments are made regarding the significance of the unobservable inputs to the instruments’ fair value measurement in its entirety. If unobservable inputs are considered significant, the instrument is classified as Level 3.


			Wells Fargo & Company			101

Note 12: Fair Values of Assets and Liabilities (continued)

Assets and Liabilities Recorded at Fair Value on a Recurring Basis

Table 12.1 presents the balances of assets and liabilities recorded at fair value on a recurring basis.

Table 12.1:Fair Value on a Recurring Basis


	March 31, 2023							December 31, 2022
(in millions)	Level 1		Level 2		Level 3	Total		Level 1	Level 2	Level 3	Total
Trading debt securities:
Securities of U.S. Treasury and federal agencies	$	29,984	4,132		—	34,116		28,844	4,530	—	33,374
Collateralized loan obligations	—		555		117	672		—	540	150	690
Corporate debt securities	—		11,447		15	11,462		—	10,344	23	10,367
Federal agency mortgage-backed securities	—		33,776		—	33,776		—	34,447	—	34,447
Non-agency mortgage-backed securities	—		1,277		—	1,277		—	1,243	12	1,255
Other debt securities	—		8,749		—	8,749		—	6,022	—	6,022
Total trading debt securities	29,984		59,936		132	90,052		28,844	57,126	185	86,155
Available-for-sale debt securities:
Securities of U.S. Treasury and federal agencies	58,043		—		—	58,043		45,285	—	—	45,285
Non-U.S. government securities	—		162		—	162		—	162	—	162
Securities of U.S. states and political subdivisions	—		21,403		357	21,760		—	10,332	113	10,445
Federal agency mortgage-backed securities	—		55,205		—	55,205		—	48,137	—	48,137
Non-agency mortgage-backed securities	—		3,144		—	3,144		—	3,284	—	3,284
Collateralized loan obligations	—		3,905		—	3,905		—	3,981	—	3,981
Other debt securities	—		2,031		148	2,179		—	2,137	163	2,300
Total available-for-sale debt securities	58,043		85,850		505	144,398		45,285	68,033	276	113,594
Loans held for sale	—		2,863		564	3,427		—	3,427	793	4,220
Mortgage servicing rights (residential)	—		—		8,819	8,819		—	—	9,310	9,310
Derivative assets (gross):
Interest rate contracts	234		32,841		559	33,634		262	40,503	321	41,086
Commodity contracts	—		3,723		25	3,748		—	5,866	134	6,000
Equity contracts	167		10,739		199	11,105		112	9,051	410	9,573
Foreign exchange contracts	27		13,659		11	13,697		27	22,175	11	22,213
Credit contracts	—		46		22	68		—	44	22	66

Total derivative assets (gross)	428		61,008		816	62,252		401	77,639	898	78,938
Equity securities:
Marketable	14,319		95		4	14,418		18,527	86	3	18,616
Nonmarketable	—		10,557		28	10,585		—	9,750	17	9,767
Total equity securities	14,319		10,652		32	25,003		18,527	9,836	20	28,383
Total assets prior to derivative netting	$	102,774	220,309		10,868	333,951		93,057	216,061	11,482	320,600
Derivative netting (1)						(45,135)					(56,164)
Total assets after derivative netting						$	288,816				264,436
Derivative liabilities (gross):
Interest rate contracts	$	(209)	(32,636)		(3,311)	(36,156)		(193)	(40,377)	(2,903)	(43,473)
Commodity contracts	—		(3,013)		(38)	(3,051)		—	(3,325)	(120)	(3,445)
Equity contracts (2)	(155)		(9,635)		(1,477)	(11,267)		(118)	(6,502)	(1,634)	(8,254)
Foreign exchange contracts	(37)		(16,263)		(27)	(16,327)		(29)	(26,622)	(35)	(26,686)
Credit contracts	—		(29)		(3)	(32)		—	(33)	(3)	(36)

Total derivative liabilities (gross)	(401)		(61,576)		(4,856)	(66,833)		(340)	(76,859)	(4,695)	(81,894)






Short-sale and other liabilities (2)	(17,951)		(4,983)		(193)	(23,127)		(14,791)	(5,513)	(167)	(20,471)
Long-term debt	—		(1,506)		—	(1,506)		—	(1,346)	—	(1,346)
Total liabilities prior to derivative netting	$	(18,352)	$	(68,065)	(5,049)	(91,466)		(15,131)	(83,718)	(4,862)	(103,711)
Derivative netting (1)						49,936					61,827
Total liabilities after derivative netting						$	(41,530)				(41,884)

(1)Represents balance sheet netting of derivative asset and liability balances, related cash collateral and portfolio level counterparty valuation adjustments. See Note 11 (Derivatives) for additional information.


102			Wells Fargo & Company

Level 3 Assets and Liabilities Recorded at Fair Value on a Recurring Basis

Table 12.2 presents the changes in Level 3 assets and liabilities measured at fair value on a recurring basis.

Table 12.2:Changes in Level 3 Fair Value Assets and Liabilities on a Recurring Basis


										Net unrealized gains (losses) related to assets and liabilities held at period end
(in millions)	Balance, beginning of period		Net gains/(losses) (1)	Purchases (2)	Sales	Settlements	Transfers into Level 3 (3)	Transfers out of Level 3 (4)	Balance, end of period		(5)























Quarter ended March 31, 2023
Trading debt securities	$	185	1	76	(112)	(1)	—	(17)	132	1	(6)
Available-for-sale debt securities	276		(20)	69	—	(6)	233	(47)	505	(19)	(6)
Loans held for sale	793		10	73	(49)	(39)	16	(240)	564	10	(7)
Mortgage servicing rights (residential) (8)	9,310		(546)	48	7	—	—	—	8,819	(225)	(7)
Net derivative assets and liabilities:
Interest rate contracts	(2,582)		295	—	—	267	(746)	14	(2,752)	509
Equity contracts	(1,224)		(303)	—	—	285	(38)	2	(1,278)	(2)
Other derivative contracts	9		(55)	2	(1)	37	(2)	—	(10)	(41)
Total derivative contracts	(3,797)		(63)	2	(1)	589	(786)	16	(4,040)	466	(9)
Equity securities	20		(1)	—	—	—	13	—	32	(1)	(6)

Other liabilities	(167)		(26)	—	—	—	—	—	(193)	(26)	(10)
Quarter ended March 31, 2022
Trading debt securities	$	241	(15)	47	(14)	(35)	5	(28)	201	(17)	(6)
Available-for-sale debt securities	186		(21)	52	—	(5)	126	—	338	(21)	(6)
Loans held for sale	1,033		(57)	63	(43)	(73)	102	(6)	1,019	(57)	(7)
Mortgage servicing rights (residential) (8)	6,920		1,248	342	1	—	—	—	8,511	1,605	(7)
Net derivative assets and liabilities:
Interest rate contracts	127		(578)	—	—	275	—	—	(176)	(259)
Equity contracts (11)	(417)		(216)	—	—	589	(80)	(1,292)	(1,416)	266
Other derivative contracts	5		(22)	—	—	44	—	—	27	18
Total derivative contracts	(285)		(816)	—	—	908	(80)	(1,292)	(1,565)	25	(9)
Equity securities	8,910		(1)	—	—	—	2	(8,885)	26	(2)	(6)
Other liabilities (11)	(791)		153	—	—	—	—	—	(638)	153	(10)

(1)Includes net gains (losses) included in both net income and other comprehensive income. All amounts represent net gains (losses) included in net income except for $(16) million and $(21) million included in other comprehensive income from AFS debt securities, and $0 and $14 million in other comprehensive income from other liabilities for first quarter 2023 and 2022, respectively.

(2)Includes originations of mortgage servicing rights and loans held for sale.

(3)All assets and liabilities transferred into Level 3 were previously classified within Level 2.

(4)All assets and liabilities transferred out of Level 3 are classified as Level 2. During first quarter 2022, we transferred $8.9 billion of non-marketable equity securities and $1.4 billion of related economic hedging derivative assets (equity contracts) out of Level 3 due to our election to measure fair value of these instruments as a portfolio. Under this election, the unit of valuation is the portfolio-level, rather than each individual instrument. The unobservable inputs previously significant to the valuation of the instruments individually are no longer significant, as those unobservable inputs offset under the portfolio election.

(5)Includes net unrealized gains (losses) related to assets and liabilities held at period end included in both net income and other comprehensive income. All amounts represent net unrealized gains (losses) included in net income except for $(15) million and $(21) million included in other comprehensive income from AFS debt securities, and $0 and $14 million in other comprehensive income from other liabilities for first quarter 2023 and 2022, respectively.

(6)Included in net gains from trading and securities on our consolidated statement of income.

(7)Included in mortgage banking income on our consolidated statement of income.

(8)For additional information on the changes in mortgage servicing rights, see Note 6 (Mortgage Banking Activities).

(9)Included in mortgage banking income, net gains from trading and securities, and other noninterest income on our consolidated statement of income.

(10)Included in other noninterest income on our consolidated statement of income.

(11)In first quarter 2023, we adopted ASU 2018-12 – Financial Services – Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts. For additional information, see Note 1 (Summary of Significant Accounting Policies).

Table 12.3 provides quantitative information about the valuation techniques and significant unobservable inputs used in the valuation of our Level 3 assets and liabilities measured at fair value on a recurring basis.

The significant unobservable inputs for Level 3 assets inherent in the fair values obtained from third-party vendors are not included in the table, as the specific inputs applied are not

provided by the vendor (for additional information on vendor-developed valuations, see Note 15 (Fair Values of Assets and Liabilities) in our 2022 Form 10-K).

Weighted averages of inputs are calculated using outstanding unpaid principal balance for cash instruments, such as loans and securities, and notional amounts for derivative instruments.


			Wells Fargo & Company			103

Note 12: Fair Values of Assets and Liabilities (continued)

Table 12.3:Valuation Techniques – Recurring Basis


($ in millions, except cost to service amounts)	Fair Value Level 3			Valuation Technique	Significant Unobservable Input	Range of Inputs					Weighted Average
March 31, 2023
Trading and available-for-sale debt securities	$	398		Discounted cash flow	Discount rate	2.5		-	12.5	%	5.5

	132			Market comparable pricing	Comparability adjustment	(24.4)		-	47.1		(2.6)
	107			Market comparable pricing	Multiples	1.1x		-	7.4x		3.9x
Loans held for sale	564			Discounted cash flow	Default rate	0.0		-	29.8	%	0.9
					Discount rate	2.9		-	13.9		9.2
					Loss severity	0.0		-	55.7		17.1
					Prepayment rate	3.1		-	13.9		10.5
Mortgage servicing rights (residential)	8,819			Discounted cash flow	Cost to service per loan (1)	$	52	-	533		101
					Discount rate	8.5		-	13.6	%	8.9
					Prepayment rate (2)	8.3		-	24.2		9.7
Net derivative assets and (liabilities):
Interest rate contracts	(2,632)			Discounted cash flow	Discount rate	3.0		-	4.9		4.0
	(39)			Discounted cash flow	Default rate	0.4		-	5.0		2.2
					Loss severity	50.0		-	50.0		50.0
					Prepayment rate	2.8		-	22.0		18.6
Interest rate contracts: derivative loan commitments	(81)			Discounted cash flow	Fall-out factor	1.0		-	99.0		35.3
					Initial-value servicing	(153.1)		-	141.0	bps	(112.8)
Equity contracts	(948)			Discounted cash flow	Conversion factor	(8.7)		-	0.0	%	(6.4)
					Weighted average life	0.8		-	1.8	yrs	1.2
	(330)			Option model	Correlation factor	(77.0)		-	99.0	%	64.9
					Volatility factor	6.5		-	96.5		36.6







Insignificant Level 3 liabilities, net of assets (3)	(171)
Total Level 3 assets, net of liabilities	$	5,819	(4)
December 31, 2022
Trading and available-for-sale debt securities	$	157		Discounted cash flow	Discount rate	2.7		-	12.5	%	6.4
	185			Market comparable pricing	Comparability adjustment	(33.6)		-	14.1		(4.8)

	119			Market comparable pricing	Multiples	1.1x		-	7.4x		4.0x
Loans held for sale	793			Discounted cash flow	Default rate	0.0		-	25.0	%	0.7
					Discount rate	2.9		-	13.4		9.5
					Loss severity	0.0		-	53.6		15.7
					Prepayment rate	3.5		-	14.2		10.7
Mortgage servicing rights (residential)	9,310			Discounted cash flow	Cost to service per loan (1)	$	52	-	550		102
					Discount rate	8.7		-	14.1	%	9.1
					Prepayment rate (2)	8.1		-	21.9		9.4
Net derivative assets and (liabilities):
Interest rate contracts	(2,411)			Discounted cash flow	Discount rate	3.2		-	4.9		4.2
	(63)			Discounted cash flow	Default rate	0.4		-	5.0		2.3
					Loss severity	50.0		-	50.0		50.0
					Prepayment rate	2.8		-	22.0		18.7
Interest rate contracts: derivative loan commitments	(108)			Discounted cash flow	Fall-out factor	1.0		-	99.0		41.0
					Initial-value servicing	(9.3)		-	141.0	bps	11.5
Equity contracts (3)	(1,000)			Discounted cash flow	Conversion factor	(12.2)		-	0.0	%	(9.9)
					Weighted average life	0.5		-	1.5	yrs	0.8
	(224)			Option model	Correlation factor	(77.0)		-	99.0	%	49.5
					Volatility factor	6.5		-	96.5		37.3






Insignificant Level 3 liabilities, net of assets (3)	(138)
Total Level 3 assets, net of liabilities	$	6,620	(4)

(1)The high end of the range of inputs is for servicing modified loans. For non-modified loans, the range is $52 - $177 at March 31, 2023, and $52 - $178 at December 31, 2022.

(2)Includes a blend of prepayment speeds and expected defaults. Prepayment speeds are influenced by mortgage interest rates as well as our estimation of drivers of borrower behavior.

(3)In first quarter 2023, we adopted ASU 2018-12 – Financial Services – Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts. For additional information, see Note 1 (Summary of Significant Accounting Policies).

(4)Consists of total Level 3 assets of $10.9 billion and $11.5 billion and total Level 3 liabilities of $5.0 billion and $4.9 billion, before netting of derivative balances, at March 31, 2023, and December 31, 2022, respectively.

For additional information on the valuation techniques and significant unobservable inputs used in the valuation of our Level 3 assets and liabilities, including how changes in these inputs affect fair value estimates, see Note 15 (Fair Values of Assets and Liabilities) in our 2022 Form 10-K.


104			Wells Fargo & Company

Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis

We may be required, from time to time, to measure certain assets at fair value on a nonrecurring basis in accordance with GAAP. These adjustments to fair value usually result from application of LOCOM accounting, write-downs of individual assets, or application of the measurement alternative for certain nonmarketable equity securities.

Table 12.4 provides the fair value hierarchy and fair value at the date of the nonrecurring fair value adjustment for all assets that were still held as of March 31, 2023, and December 31, 2022, and for which a nonrecurring fair value adjustment was recorded during the quarter ended March 31, 2023, and the year ended December 31, 2022.

Table 12.4:Fair Value on a Nonrecurring Basis


	March 31, 2023				December 31, 2022
(in millions)	Level 2		Level 3	Total	Level 2	Level 3	Total
Loans held for sale (1)	$	1,184	354	1,538	838	554	1,392
Loans:
Commercial	204		—	204	285	—	285
Consumer	44		—	44	512	—	512
Total loans	248		—	248	797	—	797
Mortgage servicing rights (commercial)	—		—	—	—	75	75
Nonmarketable equity securities	553		1,005	1,558	1,926	2,818	4,744
Other assets	1,683		1	1,684	1,862	296	2,158
Total assets at fair value on a nonrecurring basis	$	3,668	1,360	5,028	5,423	3,743	9,166

(1)Consists of commercial mortgages and residential mortgage – first lien loans.

Table 12.5 presents the gains (losses) on certain assets held at the end of the reporting periods presented for which a nonrecurring fair value adjustment was recognized in earnings during the respective periods.

Table 12.5:Gains (Losses) on Assets with Nonrecurring Fair Value Adjustment


	Quarter ended March 31,
(in millions)	2023		2022
Loans held for sale	$	(8)	(59)
Loans:
Commercial	(68)		(12)
Consumer	(214)		(206)
Total loans	(282)		(218)
Mortgage servicing rights (commercial)	—		4
Nonmarketable equity securities (1)	(339)		295

Other assets (2)	20		(52)
Total	$	(609)	(30)

(1)Includes impairment of nonmarketable equity securities and observable price changes related to nonmarketable equity securities accounted for under the measurement alternative.

(2)Includes impairment of operating lease ROU assets, valuation of physical commodities, valuation losses on foreclosed real estate and other collateral owned, and impairment of private equity and venture capital investments in consolidated portfolio companies.

Table 12.6 provides quantitative information about the valuation techniques and significant unobservable inputs used in the valuation of our Level 3 assets that are measured at fair value on a nonrecurring basis and determined using an internal model. The table is limited to financial instruments that had nonrecurring fair value adjustments during the periods presented. Weighted averages of inputs are calculated using outstanding unpaid principal balance for cash instruments, such as loans, and carrying value prior to the nonrecurring fair value measurement for nonmarketable equity securities and private equity and venture capital investments in consolidated portfolio companies.


			Wells Fargo & Company			105

Note 12: Fair Values of Assets and Liabilities (continued)

Table 12.6:Valuation Techniques – Nonrecurring Basis


($ in millions)	Fair Value Level 3		Valuation Technique (1)	Significant Unobservable Input (1)		Range of Inputs Positive (Negative)					Weighted Average
March 31, 2023
Loans held for sale (2)	$	354	Discounted cash flow	Default rate	(3)	0.1		-	89.7	%	14.9
				Discount rate		0.6		-	13.6		5.5
				Loss severity		0.5		-	49.1		11.8
				Prepayment rate	(4)	2.8		-	100.0		40.4




Nonmarketable equity securities	64		Market comparable pricing	Comparability adjustment		(100.0)		-	(12.0)		(28.0)

	938		Market comparable pricing	Multiples		3.0x		-	27.1x		9.7x





Insignificant Level 3 assets	4
Total	$	1,360
December 31, 2022
Loans held for sale (2)	$	143	Discounted cash flow	Default rate	(3)	0.1		-	86.1	%	13.8
				Discount rate		3.8		-	13.8		9.0
				Loss severity		8.1		-	43.8		18.6
				Prepayment rate	(4)	2.3		-	23.4		18.6
	411		Market comparable pricing	Comparability adjustment		(8.2)		-	(0.9)		(4.3)
Mortgage servicing rights (commercial)	75		Discounted cash flow	Cost to service per loan		$	3,775	-	3,775		3,775
				Discount rate		5.2		-	5.2	%	5.2
				Prepayment rate		0.0		-	20.6		6.7
Nonmarketable equity securities	1,461		Market comparable pricing	Comparability adjustment		(100.0)		-	(4.0)		(30.1)

	1,352		Market comparable pricing	Multiples		0.8x		-	18.7x		9.9x




Other assets (5)	234		Market comparable pricing	Multiples		6.4		-	8.0		7.1
Insignificant Level 3 assets	67
Total	$	3,743

(1)See Note 15 (Fair Values of Assets and Liabilities) in our 2022 Form 10-K for additional information on the valuation technique(s) and significant unobservable inputs used in the valuation of Level 3 assets.

(2)Consists of approximately $220 million and $400 million of government insured/guaranteed loans purchased from GNMA-guaranteed mortgage securitizations at March 31, 2023, and December 31, 2022, respectively, and approximately $130 million and $150 million of other mortgage loans that are not government insured/guaranteed at March 31, 2023, and December 31, 2022, respectively.

(3)Applies only to non-government insured/guaranteed loans.

(4)Includes the impact on prepayment rate of expected defaults for government insured/guaranteed loans, which impact the frequency and timing of early resolution of loans.

(5)Represents private equity and venture capital investments in consolidated portfolio companies.


106			Wells Fargo & Company

Fair Value Option

portfolios for which we elected the fair value option. For additional information, including the basis for our fair value option elections, see Note 15 (Fair Values of Assets and Liabilities) in our 2022 Form 10-K.

Table 12.7 reflects differences between the fair value carrying amount of the assets and liabilities for which we have elected the fair value option and the contractual aggregate unpaid principal amount at maturity.

Table 12.7:Fair Value Option


	March 31, 2023				December 31, 2022
(in millions)	Fair value carrying amount		Aggregate unpaid principal	Fair value carrying amount less aggregate unpaid principal	Fair value carrying amount	Aggregate unpaid principal	Fair value carrying amount less aggregate unpaid principal
Loans held for sale (1)	$	3,427	3,742	(315)	4,220	4,614	(394)
Long-term debt	(1,506)		(1,919)	413	(1,346)	(1,775)	429

(1)Nonaccrual loans and loans 90 days or more past due and still accruing included in LHFS for which we have elected the fair value option were insignificant at March 31, 2023, and December 31, 2022.

Table 12.8 reflects amounts included in earnings related to initial measurement and subsequent changes in fair value, by income statement line item, for assets and liabilities for which

the fair value option was elected. Amounts recorded in net interest income are excluded from the table below.

Table 12.8:Gains (Losses) on Changes in Fair Value Included in Earnings



	2023				2022
(in millions)	Mortgage banking noninterest income		Net gains from trading and securities	Other noninterest income	Mortgage banking noninterest income	Net gains from trading and securities	Other noninterest income



Quarter ended March 31,
Loans held for sale	$	97	12	(4)	(365)	9	—
Long-term debt	—		(30)	—	—	12	—

For performing loans, instrument-specific credit risk gains or losses are derived principally by determining the change in fair value of the loans due to changes in the observable or implied credit spread. Credit spread is the market yield on the loans less the relevant risk-free benchmark interest rate. For nonperforming loans, we attribute all changes in fair value to instrument-specific credit risk. For LHFS accounted for under the fair value option, instrument-specific credit gains or losses were insignificant during the first quarter of both 2023 and 2022.

For long-term debt, instrument-specific credit risk gains or losses represent the impact of changes in fair value due to changes in our credit spread and are derived using observable secondary bond market information. These impacts are recorded within the debit valuation adjustments (DVA) in OCI. See

Note 20 (Other Comprehensive Income) for additional information.


			Wells Fargo & Company			107

Note 12: Fair Values of Assets and Liabilities (continued)

Disclosures about Fair Value of Financial Instruments

Loan commitments, standby letters of credit and commercial and similar letters of credit are not included in

Table 12.9. A reasonable estimate of the fair value of these instruments is the carrying value of deferred fees plus the allowance for unfunded credit commitments, which totaled $689 million and $737 million at March 31, 2023, and December 31, 2022, respectively.

The total of the fair value calculations presented does not represent, and should not be construed to represent, the underlying fair value of the Company.

Table 12.9:Fair Value Estimates for Financial Instruments


			Estimated fair value
(in millions)	Carrying amount		Level 1	Level 2	Level 3	Total
March 31, 2023
Financial assets
Cash and due from banks (1)	$	31,958	31,958	—	—	31,958
Interest-earning deposits with banks (1)	130,478		125,379	5,099	—	130,478
Federal funds sold and securities purchased under resale agreements (1)	67,288		—	67,288	—	67,288
Held-to-maturity debt securities	277,147		2,448	235,501	2,739	240,688
Loans held for sale	2,772		—	2,304	526	2,830
Loans, net (2)	920,121		—	56,715	832,899	889,614
Nonmarketable equity securities (cost method)	4,699		—	—	4,764	4,764
Total financial assets	$	1,434,463	159,785	366,907	840,928	1,367,620
Financial liabilities
Deposits (3)	$	90,420	—	57,971	30,658	88,629
Short-term borrowings	80,817		—	80,799	—	80,799
Long-term debt (4)	171,939		—	170,874	1,023	171,897
Total financial liabilities	$	343,176	—	309,644	31,681	341,325
December 31, 2022
Financial assets
Cash and due from banks (1)	$	34,596	34,596	—	—	34,596
Interest-earning deposits with banks (1)	124,561		124,338	223	—	124,561
Federal funds sold and securities purchased under resale agreements (1)	68,036		—	68,036	—	68,036
Held-to-maturity debt securities	297,059		14,285	238,552	2,684	255,521
Loans held for sale	2,884		—	2,208	719	2,927
Loans, net (2)	928,049		—	57,532	836,831	894,363
Nonmarketable equity securities (cost method)	4,900		—	—	4,961	4,961
Total financial assets	$	1,460,085	173,219	366,551	845,195	1,384,965
Financial liabilities
Deposits (3)	$	66,887	—	46,745	18,719	65,464
Short-term borrowings	50,964		—	50,970	—	50,970
Long-term debt (4)	173,502		—	172,783	999	173,782
Total financial liabilities	$	291,353	—	270,498	19,718	290,216

(1)Amounts consist of financial instruments for which carrying value approximates fair value.

(2)Excludes lease financing with a carrying amount of $14.6 billion and $14.7 billion at March 31, 2023, and December 31, 2022, respectively.

(3)Excludes deposit liabilities with no defined or contractual maturity of $1.3 trillion and $1.3 trillion at March 31, 2023, and December 31, 2022, respectively.

(4)Excludes obligations under finance leases of $21 million and $22 million at March 31, 2023, and December 31, 2022, respectively.


108			Wells Fargo & Company


Note 13: Securitizations and Variable Interest Entities

Involvement with Variable Interest Entities (VIEs)

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. SPEs are often formed in connection with securitization transactions whereby financial assets are transferred to an SPE. SPEs formed in connection with securitization transactions are generally considered variable interest entities (VIEs). The VIE may alter the risk profile of the asset by entering into derivative transactions or obtaining credit support, and issues various forms of interests in those assets to investors. When we transfer financial assets from our consolidated balance sheet to a VIE in connection with a securitization, we typically receive cash and sometimes other interests in the VIE as proceeds for the assets we transfer. In certain transactions with VIEs, we may retain the right to service the transferred assets and repurchase the transferred assets if the outstanding balance of the assets falls below the level at which the cost to service the assets exceed the benefits. In addition, we may purchase the right to service loans transferred to a VIE by a third party.

In connection with our securitization or other VIE activities, we have various forms of ongoing involvement with VIEs, which may include:

•underwriting securities issued by VIEs and subsequently making markets in those securities;

•providing credit enhancement on securities issued by VIEs through the use of letters of credit or financial guarantees;

•entering into other derivative contracts with VIEs;

•holding senior or subordinated interests in VIEs;

•acting as servicer or investment manager for VIEs;

•providing administrative or trustee services to VIEs; and

•providing seller financing to VIEs.

Loan Sales and Securitization Activity

We periodically transfer consumer and commercial loans and other types of financial assets in securitization and whole loan sale transactions.

MORTGAGE LOANS SOLD TO U.S. GOVERNMENT SPONSORED ENTITIES AND TRANSACTIONS WITH GINNIE MAE In the normal course of business we sell originated and purchased residential and commercial mortgage loans to government-sponsored entities (GSEs). These loans are generally transferred into securitizations sponsored by the GSEs, which provide certain credit guarantees to investors and servicers. We also transfer mortgage loans into ~~securitizations~~securitization pools pursuant to Government National Mortgage Association (GNMA) guidelines which are insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA). Mortgage loans eligible for securitization with the GSEs or GNMA are considered conforming loans. The GSEs or GNMA design the structure of these securitizations, sponsor the involved VIEs, and have power over the activities most significant to the VIE.

We account for loans transferred in conforming mortgage loan securitization transactions as sales and do not consolidate the VIEs as we are not the primary beneficiary. In exchange for the transfer of loans, we typically receive securities issued by the VIEs which we sell to third parties for cash or hold for investment purposes as HTM or AFS securities. We also retain servicing rights on the transferred loans. As a 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. During the quarters ended March 31, ~~2022~~2023 and ~~2021,~~2022, we repurchased loans of $92 million and $933 million, ~~and $1.9 billion,~~ respectively, which ~~predominantly~~primarily represented repurchases of government insured loans. We recorded assets and related liabilities of ~~$35~~$935 million and ~~$107~~$743 million at March 31, ~~2022,~~2023, and December 31, ~~2021,~~2022, respectively, where we did not exercise our option to repurchase eligible loans.

Upon transfers of loans, we also provide indemnification for losses incurred due to material breaches of contractual representations and warranties as well as other recourse arrangements. At March 31, ~~2022,~~2023, and December 31, ~~2021,~~2022, our liability for these repurchase and recourse arrangements was ~~$164~~$165 million and ~~$173~~$167 million, respectively, and the maximum exposure to loss was ~~$13.3~~$13.9 billion and $13.8 billion at ~~both~~ March 31, ~~2022,~~2023, and December 31, ~~2021.~~2022, respectively.

~~Loans serviced for others presented in~~Substantially all ~~Table 8.3 are predominantly loans securitized by the GSEs~~residential servicing activity is related to assets transferred to GSE and ~~GNMA.~~GNMA securitizations. See Note 96 (Mortgage Banking Activities) for additional information about residential and commercial servicing rights, advances and servicing fees. ~~Substantially all residential servicing activity is related to assets transferred to GSE and GNMA securitizations.~~

NONCONFORMING MORTGAGE LOAN SECURITIZATIONS In the normal course of business, we sell nonconforming residential and commercial mortgage loans in securitization transactions that we design and sponsor. Nonconforming mortgage loan securitizations do not involve a government credit guarantee, and accordingly, beneficial interest holders are subject to credit risk of the underlying assets held by the securitization VIE. We typically originate the transferred loans and account for the transfers as ~~sales and do not consolidate the VIE.~~sales. We also typically retain the right to service the loans and may hold other beneficial interests issued by the VIEs, such as debt securities held for investment purposes. Our servicing role related to nonconforming commercial mortgage loan securitizations is limited to primary or master ~~servicer and~~servicer. We do not consolidate the VIE because the most significant decisions impacting the performance of the VIE are generally made by the special servicer or the controlling class security holder. For our residential nonconforming mortgage loan securitizations accounted for as sales, we either do not hold variable interests that we consider potentially significant or are not the primary servicer for a majority of the VIE assets.

WHOLE LOAN SALE TRANSACTIONS We may also sell whole loans to VIEs where we have continuing involvement in the form of financing. We account for these transfers as sales, and do not consolidate the VIEs as we do not have the power to direct the most significant activities of the VIEs.

Table ~~8.1~~13.1 presents information about transfers of assets during the ~~period~~periods presented for which we recorded the transfers as sales and have continuing involvement with the transferred assets. In connection with these transfers, we received proceeds and recorded servicing assets ~~securities,~~ and ~~loans.~~securities. Each of these interests are initially measured at fair value. Servicing rights are classified as Level 3 measurements, and generally securities are classified as Level 2. ~~Substantially all~~The majority of our transfers ~~were related~~relate to residential mortgage securitizations with the GSEs or GNMA and ~~resulted~~generally result in no gain or loss because the loans are ~~already~~ measured at fair value on a recurring basis. Additionally, we may transfer certain government insured loans that we previously


92			Wells Fargo & Company			109

Note 13: Securitizations and Variable Interest Entities (continued)

repurchased. These loans are carried at the lower of cost or market, and we recognize gains on such transfers when the

market value is greater than the carrying value of the loan when it is sold.

Table ~~8.1:~~13.1: Transfers with Continuing Involvement


		2022			2021		2023				2022
(in millions)	(in millions)	Residential mortgages		Commercial mortgages	Residential mortgages	Commercial mortgages		(in millions)	Residential mortgages		Commercial mortgages	Residential mortgages	Commercial mortgages
Quarter ended March 31,	Quarter ended March 31,							Quarter ended March 31,

Assets sold	Assets sold	$	26,174	4,033	40,586	3,191		Assets sold	$	4,461	1,499	26,174	4,033
Proceeds from transfer (1)	Proceeds from transfer (1)	26,226		4,097	40,691	3,282		Proceeds from transfer (1)	4,461		1,540	26,226	4,097
Net gains (losses) on sale	Net gains (losses) on sale	52		64	105	91		Net gains (losses) on sale	—		41	52	64

Continuing involvement (2):	Continuing involvement (2):							Continuing involvement (2):
Servicing rights recognized	Servicing rights recognized	$	327	29	407	47		Servicing rights recognized	$	47	18	327	29
Securities recognized (3)	Securities recognized (3)	1,587		104	10,223	29		Securities recognized (3)	—		26	1,587	104
Loans recognized		—		—	926	—

(1)Represents cash proceeds and the fair value of non-cash beneficial interests recognized at securitization settlement.

(2)Represents assets or liabilities recognized at securitization settlement date related to our continuing involvement in the transferred assets.

(3)Represents debt securities obtained at securitization settlement held for investment purposes that are classified as available-for-sale or ~~held-to-maturity, which~~held-to-maturity. In 2022, these predominantly ~~relate~~related to agency securities. Excludes trading debt securities held temporarily for market-marking purposes, which are sold to third parties at or shortly after securitization settlement, of ~~$6.7~~$1.9 billion and ~~$6.8~~$6.7 billion, during the quarters ended March 31, ~~2022~~2023 and ~~2021,~~2022, respectively.

In the normal course of business, we purchase certain

non-agency securities at initial securitization or subsequently in the secondary market, which we hold for investment. We also provide seller financing in the form of loans. During the quarters ended March 31, ~~2022~~2023 and ~~2021,~~2022, we received cash flows of ~~$136~~$50 million and ~~$75~~$136 million, respectively, related to principal and interest payments on these securities and loans, which exclude cash flows related to trading ~~activities and to the sale of our student loan portfolio.~~activities.

Table ~~8.2~~13.2 presents the key weighted-average assumptions we used to initially measure residential MSRs recognized during the periods presented.

Table ~~8.2:~~13.2: Residential ~~Mortgage Servicing Rights~~MSRs – Assumptions at Securitization Date


		2022			2021		2023			2022
Quarter ended March 31,	Quarter ended March 31,					Quarter ended March 31,

Prepayment rate (1)	Prepayment rate (1)	11.1		%	14.4	Prepayment rate (1)	18.6		%	11.1
Discount rate	Discount rate	7.0			6.0	Discount rate	9.7			7.0
Cost to service ($ per loan)	Cost to service ($ per loan)	$	112		82	Cost to service ($ per loan)	$	193		112

(1)Includes a blend of prepayment speeds and expected defaults. Prepayment speeds are influenced by mortgage interest rates as well as our estimation of drivers of borrower behavior.

See Note 1512 (Fair Values of Assets and Liabilities) and

Note 96 (Mortgage Banking Activities) for additional information on key ~~economic~~ assumptions for residential MSRs.

RESECURITIZATION ACTIVITIES We enter into resecuritization transactions as part of our trading activities to accommodate the investment and risk management activities of our customers. In resecuritization transactions, we transfer trading debt securities to VIEs in exchange for new beneficial interests that are sold to third parties at or shortly after securitization settlement. This activity is performed for customers seeking a specific return or risk profile. Substantially all of our transactions involve the resecuritization of conforming mortgage-backed securities issued by the GSEs or guaranteed by GNMA. We do not consolidate the resecuritization VIEs as we share in the decision-making power with third parties and do not hold significant economic interests in the VIEs other than for market-making activities. ~~We transferred $6.4 billion and $17.4 billion of securities to re-securitization VIEs during~~During the quarters ended March 31, 2023 and 2022, we transferred securities of $3.2 billion and ~~2021,~~$6.4 billion, respectively, to resecuritization VIEs, and retained securities of $198 million and $738 million, respectively. These amounts are not included in

Table ~~8.1.~~13.1. Related total VIE assets were ~~$115.9~~$111.6 billion and ~~$117.7~~$112.0 billion at March 31, ~~2022~~2023, and December 31, ~~2021,~~2022, respectively. As of March 31, ~~2022~~2023, and December 31, ~~2021~~2022, we held $1.3 billion and ~~$817~~$793 million of securities, respectively. ~~$738 million and $1.0 billion of these securities related to resecuritizations transacted during the quarters ended March 31, 2022 and 2021, respectively.~~


110			Wells Fargo & Company			93

~~Note 8:~~ ~~Securitizations and Variable Interest Entities~~ ~~(continued)~~

Sold or Securitized Loans Serviced for Others

Table ~~8.3~~13.3 presents information about loans that we sold or securitized in which we have ongoing involvement as servicer. ~~These are primarily residential mortgage loans sold to the GSEs or GNMA.~~ Delinquent loans include loans 90 days or more past due and loans in bankruptcy, regardless of delinquency status.

For loans sold or securitized where servicing is our only form of continuing involvement, we generally experience a loss only if we were required to repurchase a delinquent loan or foreclosed asset due

to a breach in representations and warranties associated with our loan sale or servicing contracts. Table 13.3 excludes mortgage loans in GSE or GNMA securitizations of $693.2 billion and $704.5 billion at March 31, 2023, and December 31, 2022, respectively. Delinquent loans and foreclosed assets related to loans in GSE and GNMA securitizations were $3.6 billion and $4.6 billion at March 31, 2023, and December 31, 2022, respectively.

Table ~~8.3:~~13.3: Sold or Securitized Loans Serviced for Others


							Net charge-offs (2)								Net charge-offs
		Total loans			Delinquent loans and foreclosed assets (1)		Quarter ended March 31,			Total loans			Delinquent loans and foreclosed assets (1)		Quarter ended March 31,
(in millions)	(in millions)	Mar 31, 2022		Dec 31, 2021	Mar 31, 2022	Dec 31, 2021	2022	2021	(in millions)	Mar 31, 2023		Dec 31, 2022	Mar 31, 2023	Dec 31, 2022	2023	2022
Commercial	Commercial	$	122,487	120,962	1,809	1,923	4	115	Commercial	$	66,844	67,029	1,140	912	14	4
Residential	Residential	679,687		690,813	8,407	10,714	3	6	Residential	9,003		9,201	457	501	5	3
Total off-balance sheet sold or securitized loans ~~(3)~~	Total off-balance sheet sold or securitized loans ~~(3)~~	$	802,174	811,775	10,216	12,637	7	121	Total off-balance sheet sold or securitized loans ~~(3)~~	$	75,847	76,230	1,597	1,413	19	7

(1)Includes ~~$444~~$290 million and ~~$403~~$274 million of commercial foreclosed assets and ~~$145~~$29 million and ~~$129~~$25 million of residential foreclosed assets at March 31, ~~2022~~2023, and December 31, ~~2021,~~2022, respectively.

~~(2)Net charge-offs exclude loans sold to FNMA, FHLMC and GNMA as we do not service or manage the underlying real estate upon foreclosure and, as such, do not have access to net charge-off information.~~

~~(3)~~At March 31, 2022 and December 31, 2021, the table includes total loans of $725.5 billion and $736.8 billion, delinquent loans of $8.0 billion and $10.2 billion, and foreclosed assets of $114 million and $100 million, respectively, for FNMA, FHLMC and GNMA.

~~Transactions with Unconsolidated VIEs~~Derivatives Not Designated as Hedging Instruments

~~MORTGAGE LOAN SECURITIZATIONS~~ ~~Table 8.4 includes nonconforming mortgage loan securitizations where we originate~~Derivatives not designated as hedging instruments include economic hedges and ~~transfer~~derivatives entered into for customer accommodation trading purposes.

We use economic hedge derivatives to manage our exposure to interest rate risk, equity price risk, foreign currency risk, and credit risk. We also use economic hedge derivatives to mitigate the ~~loans~~periodic earnings volatility caused by mismatches between the changes in fair value of the hedged item and hedging instrument recognized on our fair value accounting hedges.

Changes in the fair values of derivatives used to economically hedge the ~~unconsolidated securitization VIEs that we sponsor.~~ deferred compensation plan are reported in personnel expense.

For additional information ~~about these VIEs,~~on our derivatives activities, see the “Loan Sales and Securitization Activity” section within this Note. Nonconforming mortgage loan securitizations also include commercial mortgage loan securitizations sponsored by third parties where we did not originate or transfer the loans but serve as master servicer and investNote 14 (Derivatives) in ~~securities that could be potentially significant to the VIE.~~

Conforming loan securitization and resecuritization transactions involving the GSEs and GNMA are excluded from Table 8.4 because we are not the sponsor or we do not have power over the activities most significant to the VIEs. Additionally, due to the nature of the guarantees provided by the GSEs and the FHA and VA, our credit risk associated with these VIEs is limited. For additional information about conforming mortgage loan securitizations and resecuritizations, see the “Loan Sales and Securitization Activity” and “Resecuritization Activities” sections within this Note.

~~TAX CREDIT STRUCTURES~~We co-sponsor and make investments in affordable housing projects that are designed to generate a return primarily through the realization of federal tax credits. The projects are typically managed by project sponsors who have the power over the VIE’s assets. In some instances, our investments in these structures may require that we fund future capital commitments at the discretion of the project sponsors.2022 Form 10-K.

~~COMMERCIAL REAL ESTATE LOANS~~ We may transfer purchased industrial development bonds and GSE credit enhancements to VIEs in exchange for beneficial interests. We may also acquire such beneficial interests in transactions where we do not act as a transferor. We own all of the beneficial interests and may also service the underlying mortgages that serve as collateral to the bonds.

~~OTHER VIE STRUCTURES~~We engage in various forms of structured finance arrangements with other VIEs, including asset-backed finance structures and other securitizations collateralized by asset classes other than mortgages. Collateral may include rental properties, asset-backed securities, student loans and mortgage loans. We may participate in structuring or marketing the arrangements, as well as provide financing, service one or more of the underlying assets, or enter into derivatives with the VIEs. We may also receive fees for those services. We are not the primary beneficiary of these structures because we do not have power to direct the most significant activities of the VIEs.


9498			Wells Fargo & Company

Table ~~8.4 provides a summary of our exposure to~~11.6 shows the unconsolidated VIEs described above, which includes investments in securities, loans, guarantees, liquidity agreements, commitments and certain derivatives. We exclude certain transactions with unconsolidated VIEs when our continuing involvement is temporary or administrative in nature or insignificant in size.

~~In Table 8.4, “Total VIE assets” represents the remaining principal balance of assets held~~net gains (losses), recognized by ~~unconsolidated VIEs using the most current information available. “Carrying value” is the amount in our consolidated balance sheet~~income statement lines, related to ~~our involvement with the unconsolidated VIEs. “Maximum exposure to loss” is determined~~derivatives not designated as the carrying value of our investment in the VIEs excluding the unconditional repurchase options that have not been exercised, plus the remaining undrawn liquidity and lending commitments, the notional amount of net written derivative contracts, and generally the notional amount of, or stressed loss estimate for, other commitments and guarantees.hedging instruments.

Debt, guarantees and other commitments include amounts related to loans sold that we may be required to repurchase, or otherwise indemnify or reimburse the investor or insurer for losses incurred, due to material breach of contractual representations and warranties as well as other retained recourse arrangements. The maximum exposure to loss for material breach of contractual representations and warranties represents a stressed case estimate we utilize for determining stressed case regulatory capital needs and is considered to be a remote scenario.

“Maximum exposure to loss” represents estimated loss that would be incurred under severe, hypothetical circumstances, for which we believe the possibility is extremely remote, such as where the value of our interests and any associated collateral declines to zero, without any consideration of recovery or offset from any economic hedges. Accordingly, this disclosure is not an indication of expected loss.

Table ~~8.4:~~11.6: ~~Unconsolidated VIEs~~Gains (Losses) on Derivatives Not Designated as Hedging Instruments

Carrying value – asset (liability)
(in millions) Total
VIE assets Loans Debt
securities (1) Equity securities All other
assets (2) Debt and other liabilities Net assets
March 31, 2022
Nonconforming mortgage loan securitizations $ 149,765 — 2,773 — 708 (1) 3,480
Tax credit structures 45,264 1,704 — 12,206 — (4,696) 9,214
Commercial real estate loans 5,482 5,473 — — 9 — 5,482
Other 2,842 472 2 55 37 (1) 565
Total $ 203,353 7,649 2,775 12,261 754 (4,698) 18,741
Maximum exposure to loss
Loans Debt
securities (1) Equity securities All other
assets (2) Debt, guarantees,
and other commitments Total exposure
Nonconforming mortgage loan securitizations $ — 2,773 — 708 1 3,482
Tax credit structures 1,704 — 12,206 — 3,818 17,728
Commercial real estate loans 5,473 — — 9 709 6,191
Other 472 2 55 37 229 795
Total $ 7,649 2,775 12,261 754 4,757 28,196
Carrying value – asset (liability)

(in millions)
Total
VIE assets Loans Debt
securities (1) Equity
securities All other
assets (2) Debt and other liabilities Net assets
December 31, 2021
Nonconforming mortgage loan securitizations $ 146,482 — 2,620 — 694 — 3,314
Tax credit structures 44,528 1,904 — 12,322 — (4,941) 9,285
Commercial real estate loans 5,489 5,481 — — 8 — 5,489
Other 3,196 531 3 62 49 (1) 644
Total $ 199,695 7,916 2,623 12,384 751 (4,942) 18,732
Maximum exposure to loss
Loans Debt
securities (1) Equity
securities All other
assets (2) Debt,
guarantees,
and other commitments Total exposure
Nonconforming mortgage loan securitizations $ — 2,620 — 694 27 3,341
Tax credit structures 1,904 — 12,322 — 3,730 17,956
Commercial real estate loans 5,481 — — 8 710 6,199
Other 531 3 62 49 229 874
Total $ 7,916 2,623 12,384 751 4,696 28,370


	Noninterest income					Noninterest expense
(in millions)	Mortgage banking		Net gains from trading and securities	Other	Total		Personnel expense

Quarter ended March 31, 2023
Net gains (losses) recognized on economic hedges derivatives:
Interest contracts (1)	$	146	—	48	194		—
Equity contracts	—		—	(80)	(80)		(191)
Foreign exchange contracts	—		—	(366)	(366)		—
Credit contracts	—		—	(1)	(1)		—
Subtotal	146		—	(399)	(253)		(191)
Net gains (losses) recognized on customer accommodation trading and other derivatives:
Interest contracts	(2)		(336)	—	(338)		—
Commodity contracts	—		112	—	112		—
Equity contracts	—		(1,470)	(64)	(1,534)		—
Foreign exchange contracts	—		(99)	—	(99)		—
Credit contracts	—		(7)	—	(7)		—
Subtotal	(2)		(1,800)	(64)	(1,866)		—
Net gains (losses) recognized related to derivatives not designated as hedging instruments	$	144	(1,800)	(463)	(2,119)		(191)

Quarter ended March 31, 2022
Net gains (losses) recognized on economic hedges derivatives:
Interest contracts (1)	$	(368)	—	(26)	(394)		—
Equity contracts (2)	—		—	5	5		266
Foreign exchange contracts	—		—	231	231		—
Credit contracts	—		—	5	5		—
Subtotal	(368)		—	215	(153)		266
Net gains (losses) recognized on customer accommodation trading and other derivatives:
Interest contracts	(498)		3,214	—	2,716		—
Commodity contracts	—		113	—	113		—
Equity contracts	—		1,003	(38)	965		—
Foreign exchange contracts	—		327	—	327		—
Credit contracts	—		12	—	12		—
Subtotal	(498)		4,669	(38)	4,133		—
Net gains (losses) recognized related to derivatives not designated as hedging instruments	$	(866)	4,669	177	3,980		266

(1)~~Includes $336~~Mortgage banking amounts for first quarter 2023 are comprised of gains (losses) of $185 million related to derivatives used as economic hedges of MSRs measured at fair value offset by gains (losses) of $(39) million related to derivatives used as economic hedges of mortgage loans held for sale and ~~$352 million~~derivative loan commitments. The corresponding amounts for first quarter 2022 are comprised of ~~securities classified as trading at March 31, 2022 and December 31, 2021, respectively.~~gain (losses) of $(1.6) billion offset by gains (losses) of $1.3 billion.

(2)~~All other assets includes mortgage servicing rights, derivative assets, and other assets (predominantly servicing advances)~~In first quarter 2023, we adopted ASU 2018-12 – Financial Services – Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts. For additional information, see Note 1 (Summary of Significant Accounting Policies).


			Wells Fargo & Company			9599

Note 8:11: ~~Securitizations and Variable Interest Entities~~Derivatives (continued)

~~Consolidated VIEs~~

~~We consolidate VIEs where we are the primary beneficiary. We are the primary beneficiary of the following structure types:~~

~~COMMERCIAL AND INDUSTRIAL LOANS AND LEASES~~ We securitize dealer floor plan loans and leases in a revolving master trust entity and hold the subordinated notes and residual equity interests. As servicer and residual interest holder, we control the key decisions of the trust and consolidate the entity. The total VIE assets held by the master trust represent a majority of the total VIE assets presented for this category in Table 8.5. In a separate transaction structure, we also provide the majority of debt and equity financing to an SPE that engages in lending and leasing to specific vendors and service the underlying collateral.

~~OTHER VIE STRUCTURES~~

Credit Derivatives~~Other VIEs~~

Credit derivative contracts are ~~primarily related~~arrangements whose value is derived from the transfer of credit risk of a reference asset or entity from one party (the purchaser of credit protection) to ~~municipal tender option bond (MTOB) transactions~~another party (the seller of credit protection). We generally use credit derivatives to assist customers with their risk management objectives by purchasing and ~~nonconforming mortgage loan securitizations that we sponsor. MTOBs are vehicles to finance the purchase of municipal bonds~~selling credit protection on corporate debt obligations through the ~~issuance~~use of ~~short-term debt~~credit default swaps or through risk participation swaps to ~~investors. Our~~

~~involvement with MTOBs includes serving as~~help manage counterparty exposure. We would be required to perform under the ~~residual interest holder, which provides control over~~credit derivatives we sold in the ~~key decisions~~event of the VIE, as well as the remarketing agent or liquidity provider related to the debt issued to investors. We also securitize nonconforming mortgage loans, in which our involvement includes servicer of the underlying assets and holder of subordinate or senior securities issueddefault by the ~~VIE.~~

referenced obligors. Events of default include events such as bankruptcy, capital restructuring or lack of principal and/or interest payment.

Table ~~8.5 presents a summary~~11.7 provides details of financial assets and liabilities of our consolidated VIEs. The carrying value represents assets and liabilities recorded on our consolidated balance sheet. Carrying values of assets are presented using GAAP measurement methods, which may include fair value,sold credit ~~impairment or other adjustments, and therefore in some instances will differ from “Total VIE assets.”~~

On our consolidated balance sheet, we separately disclose (1) the consolidated assets of certain VIEs that can only be used to settle the liabilities of those VIEs, and (2) the consolidated liabilities of certain VIEs for which the VIE creditors do not have recourse to Wells Fargo.

~~Table 8.5:Transactions with Consolidated VIEs~~

Carrying value – asset (liability)
(in millions) Total
VIE assets Loans Debt
securities All other
assets (1) Long-term debt All other liabilities (2)
March 31, 2022
Commercial and industrial loans and leases $ 7,026 4,534 — 226 — (194)
Other 471 336 71 3 (133) (71)
Total consolidated VIEs $ 7,497 4,870 71 229 (133) (265)
December 31, 2021
Commercial and industrial loans and leases $ 7,013 4,099 — 231 — (188)
Other 516 377 71 3 (149) (71)
Total consolidated VIEs $ 7,529 4,476 71 234 (149) (259)

~~(1)All other assets includes cash and due from banks, interest-earning deposits with banks, derivative assets, equity securities, and other assets.~~

~~(2)All other liabilities includes short-term borrowings, derivative liabilities, and accrued expenses and other liabilities.~~

~~Other Transactions~~

In addition to the transactions included in the previous tables, we have used wholly-owned trust preferred security VIEs to issue debt securities or preferred equity exclusively to third-party investors. As the sole assets of the VIEs are receivables from us, we do not consolidate the VIEs even though we own all of the voting equity shares of the VIEs, have fully guaranteed the obligations of the VIEs, and may have the right to redeem the third-party securities under certain circumstances. In our consolidated balance sheet we reported the debt securities issued to the VIEs as long-term junior subordinated debt with a carrying value of $391 million and $388 million at March 31, 2022, and December 31, 2021, respectively. See Note 16 (Preferred Stock) for additional information about trust preferred securities.


96			~~Wells Fargo & Company~~


~~Note 9:~~ ~~Mortgage Banking Activities~~

~~Mortgage banking activities consist of residential and commercial mortgage originations, sales and servicing.~~

~~We apply the amortization method to commercial MSRs and apply the fair value method to residential MSRs. The amortized~~

cost of commercial MSRs was $1.2 billion and $1.3 billion, with an estimated fair value of $1.9 billion and $1.7 billion, at March 31, 2022 and 2021, respectively. Table 9.1 presents the changes in MSRs measured using the fair value method.

derivatives.

Table ~~9.1:~~11.7: ~~Analysis of Changes in Fair Value MSRs~~Sold Credit Derivatives

Quarter ended March 31,
(in millions) 2022 2021
Fair value, beginning of period $ 6,920 6,125
Servicing from securitizations or asset transfers (1) 342 406
Sales and other (2) 1 (1)
Net additions 343 405
Changes in fair value:
Due to valuation inputs or assumptions:
Mortgage interest rates (3) 1,699 1,630
Servicing and foreclosure costs (4) (3) 9
Discount rates 55 47
Prepayment estimates and other (5) (146) (95)
Net changes in valuation inputs or assumptions 1,605 1,591
Changes due to collection/realization of expected cash flows (6) (357) (585)
Total changes in fair value 1,248 1,006
Fair value, end of period $ 8,511 7,536

~~(1)~~Includes impacts associated with exercising cleanup calls on securitizations and our right to repurchase delinquent loans from GNMA loan securitization pools. MSRs may increase upon repurchase due to servicing liabilities associated with these delinquent GNMA loans.

~~(2)Includes sales and transfers of MSRs, which can result in an increase in MSRs if related to portfolios with servicing liabilities.~~

~~(3)Includes prepayment rate changes as well as other valuation changes due to changes in mortgage interest rates.~~

~~(4)Includes costs to service and unreimbursed foreclosure costs.~~

~~(5)Represents other changes in valuation model inputs or assumptions including prepayment rate estimation changes that are independent of mortgage interest rate changes.~~

~~(6)Represents the reduction in the MSR fair value for the cash flows expected to be collected during the period, net of income accreted due to the passage of time.~~

Table 9.2 provides key economic assumptions and sensitivity of the current fair value of residential MSRs to immediate adverse changes in those assumptions. Amounts for residential MSRs include purchased servicing rights as well as servicing

~~rights resulting from the transfer of loans. See Note 15 (Fair Values of Assets and Liabilities) for additional information on key economic assumptions for residential MSRs.~~


	Notional amount
(in millions)	Protection sold		Protection sold – non-investment grade
March 31, 2023
Credit default swaps	$	17,033	2,200
Risk participation swaps	6,782		6,571
Total credit derivatives	$	23,815	8,771
December 31, 2022
Credit default swaps	$	12,733	1,860
Risk participation swaps	6,728		6,518
Total credit derivatives	$	19,461	8,378

~~Table 9.2:~~ ~~Economic Assumptions and Sensitivity of Residential MSRs~~

($ in millions, except cost to service amounts) Mar 31, 2022 Dec 31, 2021
Fair value of interests held $ 8,511 6,920
Expected weighted-average life (in years) 5.7 4.7
Key economic assumptions:
Prepayment rate assumption (1) 11.1 % 14.7
Impact on fair value from 10% adverse change $ 339 356
Impact on fair value from 25% adverse change 803 834
Discount rate assumption 7.4 % 6.4
Impact on fair value from 100 basis point increase $ 337 276
Impact on fair value from 200 basis point increase 646 529
Cost to service assumption ($ per loan) 102 106
Impact on fair value from 10% adverse change 177 165
Impact on fair value from 25% adverse change 441 411

~~(1)Includes a blend of prepayment speeds and expected defaults. Prepayment speeds are influenced by mortgage interest rates as well as our estimation of drivers of borrower behavior.~~

~~The sensitivities in~~Protection sold represents the preceding table are hypothetical and caution should be exercised when relying on this data. Changes in value based on variations in assumptions generally cannot be extrapolated because the relationship of the change in the assumption to the change in value may not be linear. Also, the effect of a variation in a particular assumption on the value of the other interests held is calculated independently without changing

~~any other assumptions. In reality, changes in one factor may result in changes in others, which might magnify or counteract the sensitivities.~~


			~~Wells Fargo & Company~~			97

~~Note 9:~~ ~~Mortgage Banking Activities~~ ~~(continued)~~

~~We present the components of our managed servicing portfolio in Table 9.3 at unpaid principal balance for loans serviced and subserviced for others and at book value for owned loans serviced.~~

~~Table 9.3:Managed Servicing Portfolio~~

(in billions) Mar 31, 2022 Dec 31, 2021
Residential mortgage servicing:
Serviced and subserviced for others $ 705 718
Owned loans serviced 273 276
Total residential servicing 978 994
Commercial mortgage servicing:
Serviced and subserviced for others 598 597
Owned loans serviced 132 130
Total commercial servicing 730 727
Total managed servicing portfolio $ 1,708 1,721
Total serviced for others, excluding subserviced for others $ 1,293 1,304
MSRs as a percentage of loans serviced for others 0.75 % 0.63
Weighted average note rate (mortgage loans serviced for others) 3.81 3.82

At March 31, 2022, and December 31, 2021, we had servicer advances, net of an allowance for uncollectible amounts, of $2.9 billion and $3.2 billion, respectively. As the servicer of loans for others, we advance certain payments of principal, interest, taxes, insurance, and default-related expenses which are generally reimbursed within a short timeframe from cash flows from the trust, GSEs, insurer or borrower. The credit risk related to these advances is limited since the reimbursement is generally senior to cash payments to investors. We also advance payments of taxes and insurance for our owned loans which are collectible

from the borrower. We maintain an allowance for uncollectible amounts for advances on loans serviced for others that may not be reimbursed if the payments were not made in accordance with applicable servicing agreements or if the insurance or servicing agreements contain limitations on reimbursements. Servicing advances on owned loans are charged-off when deemed uncollectible.

~~Table 9.4 presents the components of mortgage banking noninterest income.~~

~~Table 9.4:Mortgage Banking Noninterest Income~~

Quarter ended March 31,
(in millions) 2022 2021
Servicing fees:
Contractually specified servicing fees, late charges and ancillary fees $ 635 724
Unreimbursed direct servicing costs (1) (24) (124)
Servicing fees 611 600
Amortization (2) (59) (65)
Changes due to collection/realization of expected cash flows (3) (A) (357) (585)
Net servicing fees 195 (50)
Changes in fair value of MSRs due to valuation inputs or assumptions (4) (B) 1,605 1,591
Net derivative gains (losses) from economic hedges (5) (1,646) (1,640)
Market-related valuation changes to MSRs, net of hedge results (41) (49)
Total net servicing income 154 (99)
Net gains on mortgage loan originations/sales (6) 539 1,425
Total mortgage banking noninterest income 693 1,326
Total changes in fair value of MSRs carried at fair value (A)+(B) $ 1,248 1,006

~~(1)Includes costs associated with foreclosures, unreimbursed interest advances to investors, and other interest costs.~~

~~(2)Includes a $4 million reversal of impairment recorded in first quarter 2022 on the commercial amortized MSRs. There was no impairment recorded in first quarter 2021 on the commercial amortized MSRs.~~

~~(3)Represents the reduction in the MSR fair value for the cash flows expected to be collected during the period, net of income accreted due to the passage of time.~~

~~(4)Refer to the analysis of changes in fair value MSRs presented in Table 9.1 in this Note for more detail.~~

~~(5)See Note 14 (Derivatives) for additional discussion and detail on economic hedges.~~

~~(6)Includes net gains (losses) of $1.3 billion in both first quarter 2022 and 2021, related to derivatives used as economic hedges of mortgage loans held for sale and derivative loan commitments.~~


98			~~Wells Fargo & Company~~


~~Note 10:~~ ~~Intangible Assets~~

~~Table 10.1 presents the gross carrying value of intangible assets and accumulated amortization.~~

~~Table 10.1:Intangible Assets~~

March 31, 2022 December 31, 2021
(in millions) Gross carrying value Accumulated amortization Net carrying value Gross carrying value Accumulated amortization Net carrying value
Amortized intangible assets (1):
MSRs (2) $ 4,826 (3,584) 1,242 4,794 (3,525) 1,269
Customer relationship and other intangibles 754 (558) 196 842 (631) 211
Total amortized intangible assets $ 5,580 (4,142) 1,438 5,636 (4,156) 1,480
Unamortized intangible assets:
MSRs (carried at fair value) $ 8,511 6,920
Goodwill 25,181 25,180

~~(1)Balances are excluded commencing in the period following full amortization.~~

~~(2)Includes a $4 million valuation allowance recorded for amortized MSRs at December 31, 2021. See Note 9 (Mortgage Banking Activities) for additional information on MSRs.~~

~~Table 10.2 provides the current year and~~ estimated ~~future amortization expense for amortized intangible assets. We based our projections of amortization expense shown below on existing~~

~~asset balances at March 31, 2022. Future amortization expense may vary from these projections.~~

~~Table 10.2:Amortization Expense for Intangible Assets~~

(in millions) Amortized MSRs Customer relationship and other intangibles Total
Three months ended March 31, 2022 (actual) $ 59 15 74
Estimate for the remainder of 2022 $ 187 44 231
Estimate for year ended December 31,
2023 218 51 269
2024 190 41 231
2025 167 33 200
2026 133 27 160
2027 102 — 102

~~Table 10.3 shows the allocation of goodwill to our reportable operating segments.~~

~~Table 10.3:Goodwill~~

(in millions) Consumer Banking and Lending Commercial Banking Corporate and Investment Banking Wealth and Investment Management Corporate Consolidated Company
December 31, 2020 $ 16,418 3,018 5,375 1,276 305 26,392
Foreign currency translation — 2 — — — 2
Transfers of goodwill — — — (932) 932 —
Divestitures $ — — — — (104) (104)
March 31, 2021 $ 16,418 3,020 5,375 344 1,133 26,290
December 31, 2021 $ 16,418 2,938 5,375 344 105 25,180
Foreign currency translation — 1 — — — 1
March 31, 2022 $ 16,418 2,939 5,375 344 105 25,181


			~~Wells Fargo & Company~~			99


~~Note 11:~~ ~~Guarantees and Other Commitments~~

~~arrangements. For additional descriptions of our guarantees, see Note 13 (Guarantees and Other Commitments) in our 2021 Form 10-K. Table 11.1 shows carrying value,~~ maximum exposure to ~~loss on our guarantees and the related non-investment grade amounts.~~

~~Table 11.1:Guarantees – Carrying Value and Maximum Exposure to Loss~~

Maximum exposure to loss
(in millions) Carrying value of obligation (asset) Expires in one year or less Expires after one year through three years Expires after three years through five years Expires after five years Total Non-investment grade
March 31, 2022
Standby letters of credit
$ 116 14,658 4,952 1,664 433 21,707 6,969
Direct pay letters of credit 12 1,738 1,934 1,216 4 4,892 1,328
Written options (1) (125) 12,202 4,464 553 36 17,255 14,097
Loans and LHFS sold with recourse (2) 17 164 924 3,787 8,506 13,381 11,385
Exchange and clearing house guarantees — — — — 5,590 5,590 —
Other guarantees and indemnifications (3) — 687 1 — 277 965 594
Total guarantees $ 20 29,449 12,275 7,220 14,846 63,790 34,373
December 31, 2021
Standby letters of credit $ 119 13,816 5,260 1,572 460 21,108 6,939
Direct pay letters of credit 6 1,597 2,137 1,283 4 5,021 1,373
Written options (1) (280) 12,107 4,575 513 36 17,231 13,645
Loans and LHFS sold with recourse (2) 20 71 943 3,610 8,650 13,274 11,268
Exchange and clearing house guarantees — — — — 8,100 8,100 —
Other guarantees and indemnifications (3) — 797 2 12 263 1,074 756
Total guarantees $ (135) 28,388 12,917 6,990 17,513 65,808 33,981

~~(1)~~Written options, which are in the form of derivatives, are also included in the derivative disclosures in Note 14 (Derivatives). Carrying value net asset position is a result of certain deferred premium option trades.

~~(2)Represents recourse provided, predominantly to the GSEs, on loans sold under various programs and arrangements.~~

~~(3)~~Includes indemnifications provided to certain third-party clearing agents. Estimated maximum exposure to loss was $218 million and $216 million with related collateral of $2.2 billion and $2.3 billion as of March 31, 2022 and December 31, 2021, respectively.

~~“Maximum exposure to loss” and “Non-investment grade” are required disclosures under GAAP. Maximum exposure to loss represents the estimated~~ loss that would be incurred ~~under~~if, upon an ~~assumed hypothetical circumstance, despite what we believe is a remote possibility, where~~event of default, the value of our interests and any associated collateral ~~declines~~declined to ~~zero. Maximum exposure to loss estimates in Table 11.1 do~~zero, and does not ~~reflect~~take into consideration any of recovery value from the referenced obligation or offset from collateral held or any economic ~~hedges or collateral we could use to offset or recover losses we may incur~~hedges.

The amounts under ~~our guarantee agreements. Accordingly, this required disclosure is not an indication~~non-investment grade represent the notional amounts of expected loss. We believe the carrying value is more representative of our exposure to loss than maximum exposure to loss. The carrying value represents the fair value of the guarantee, if any, and also includes an ACL for guarantees, if applicable. In determining the ACL for guarantees, we consider thethose credit ~~risk of the related contingent obligation.~~

~~Non-investment grade represents those guarantees~~derivatives on which we have a higher risk of ~~performance~~being required to perform under the terms of the ~~guarantee. If~~credit derivative and are a function of the underlying assets.

We consider the credit risk to be low if the underlying assets under the ~~guarantee are non-investment grade (that is,~~credit derivative have an external rating that is investment grade. If an external rating is not available, we classify the credit derivative as non-investment grade.

Credit-Risk Contingent Features

Table 11.8:Credit-Risk Contingent Features


(in billions)	Mar 31, 2023		Dec 31, 2022
Net derivative liabilities with credit-risk contingent features	$	17.4	20.7
Collateral posted	17.3		17.4
Additional collateral to be posted upon a below investment grade credit rating (1)	0.1		3.3

(1)Any credit rating below investment grade ~~or an internal credit default grade that is equivalent~~requires us to ~~a below investment grade external rating), we consider~~post the ~~risk~~maximum amount of performance to be high. Internal credit default grades are determined based upon the same credit policies that we use to evaluate the risk of payment or performance when making loans and other extensions of credit. Credit quality indicators we usually consider in evaluating risk of payments or performance are described in Note 4 (Loans and Related Allowance for Credit Losses).

collateral.

We provide debit and credit card transaction processing services through payment networks directly for merchants and as a sponsor for merchant processing servicers, including our joint venture with a third party that is accounted for as an equity method investment. In our role as the merchant acquiring bank, we have a potential obligation in connection with payment and delivery disputes between the merchant and the cardholder that are resolved in favor of the cardholder, referred to as a charge-back transaction. We estimate our potential maximum exposure to be the total merchant transaction volume processed in the preceding four months, which is generally the lifecycle for a charge-back transaction. As of March 31, 2022, our potential maximum exposure was approximately $748.8 billion, and related losses, including those from our joint venture entity, were insignificant.

The Parent fully and unconditionally guarantees the payment of principal, interest, and any other amounts that may be due on securities that its 100% owned finance subsidiary, Wells Fargo Finance LLC, may issue. These securities are not guaranteed by any other subsidiary of the Parent. The guaranteed liabilities were $1.1 billion and $1.2 billion at March 31, 2022 and December 31, 2021, respectively. These guarantees rank on parity with all of the Parent’s other unsecured and unsubordinated indebtedness.


100			Wells Fargo & Company


Note 12: Fair Values of Assets and Liabilities

~~OTHER COMMITMENTS~~ FAIR VALUE HIERARCHY~~To meet~~ We classify our assets and liabilities recorded at fair value as either Level 1, 2, or 3 in the ~~financing needs~~fair value hierarchy. The highest priority (Level 1) is assigned to valuations based on unadjusted quoted prices in active markets and the lowest priority (Level 3) is assigned to valuations based on significant unobservable inputs. See Note 1 (Summary of Significant Accounting Policies) in our ~~customers,~~2022 Form 10-K for a detailed description of the fair value hierarchy.

In the determination of the classification of financial instruments in Level 2 or Level 3 of the fair value hierarchy, we ~~may enter into commitments~~consider all available information, including observable market data, indications of market liquidity and orderliness, and our understanding of the valuation techniques and significant inputs used. This determination is ultimately based upon the specific facts and circumstances of each instrument or instrument category and judgments are made regarding the significance of the unobservable inputs to ~~purchase debt and~~the instruments’ fair value measurement in its entirety. If unobservable inputs are considered significant, the instrument is classified as Level 3.

We do not classify nonmarketable equity securities in the fair value hierarchy if we use the non-published net asset value (NAV) per share (or its equivalent) as a practical expedient to provide capital for their funding, liquidity or other future needs. As of both March 31, 2022 and December 31, 2021, we had commitments to purchase debt securities of $18 million and commitments to purchasemeasure fair value. Marketable equity securities ~~of $2.3 billion and $2.4 billion, respectively.~~

~~As part of maintaining our memberships in certain clearing organizations, we~~with published NAVs are ~~required to stand ready to provide liquidity to sustain market clearing activity~~classified in the event unforeseen events occur or are deemed likely to occur. Certain of these obligations are guarantees of other members’ performance and accordingly are included in Table 11.1 in Other guarantees and indemnifications.fair value hierarchy.

Also, we have commitments to purchase loans and securities under resale agreements from certain counterparties, including central clearing organizations. The amount of our unfunded contractual commitments was $13.2 billion and $11.0 billion as of March 31, 2022 and December 31, 2021, respectively.

~~Given the nature of these commitments, they are excluded from Table 4.4 (Unfunded Credit Commitments) in Note 4 (Loans and Related Allowance for Credit Losses).~~


			Wells Fargo & Company			101

Note 12: Fair Values of Assets and Liabilities (continued)


~~Note 12:~~ ~~Pledged Assets and Collateral~~

~~Pledged~~ Assets and Liabilities Recorded at Fair Value on a Recurring Basis

Table 12.1 ~~provides~~presents the ~~carrying amount~~balances of ~~on-balance sheet pledged~~ assets and ~~the~~liabilities recorded at fair value ~~of other pledged collateral. Other pledged collateral is collateral we have received from third parties, have the right to repledge and is not recognized~~ on ~~our consolidated balance sheet.~~a recurring basis.

~~TRADING RELATED ACTIVITY~~Our trading businesses may pledge debt and equity securities in connection with securities sold under agreements to repurchase (repurchase agreements) and securities lending arrangements. The collateral that we pledge related to our trading activities may include our own collateral as well as collateral that we have received from third parties and have the right to repledge. All of the collateral we pledge related to trading activity is eligible to be repledged or sold by the secured party.

~~NON-TRADING RELATED ACTIVITY~~ ~~As part of our liquidity management strategy, we may pledge loans, debt securities, and~~

other financial assets to secure trust and public deposits, borrowings and letters of credit from the Federal Home Loan Bank (FHLB) and the Board of Governors of the Federal Reserve System (FRB) and for other purposes as required or permitted by law or insurance statutory requirements. Substantially all of the non-trading activity pledged collateral is not eligible to be repledged or sold by the secured party.

~~VIE RELATED~~ ~~We pledge assets in connection with various types of transactions entered into with VIEs. These pledged assets can only be used to settle the liabilities of those entities.~~

We also have loans recorded on our consolidated balance sheet which represent certain delinquent loans that are eligible for repurchase from GNMA loan securitizations. See Note 8 (Securitizations and Variable Interest Entities) for additional information on consolidated VIE assets.

Table 12.1: ~~Pledged Assets~~Fair Value on a Recurring Basis

(in millions) Mar 31,
2022 Dec 31,
2021
Related to trading activities:
Repledged third-party owned debt and equity securities $ 28,120 31,087
Trading debt securities and other 18,464 14,216
Equity securities 1,276 984
Total pledged assets related to trading activities 47,860 46,287
Related to non-trading activities:
Loans 285,659 288,698
Debt securities:
Available-for-sale 57,663 65,198
Held-to-maturity 11,475 13,843
Other financial assets 565 1,600
Total pledged assets related to non-trading activities 355,362 369,339
Related to VIEs:
Consolidated VIE assets 5,170 4,781
Loans eligible for repurchase from GNMA securitizations 36 109
Total pledged assets related to VIEs 5,206 4,890
Total pledged assets $ 408,428 420,516

~~Securities Financing Activities~~

We enter into resale and repurchase agreements and securities borrowing and lending agreements (collectively, “securities financing activities”) typically to finance trading positions (including securities and derivatives), acquire securities to cover short trading positions, accommodate customers’ financing needs, and settle other securities obligations. These activities are conducted through our broker-dealer subsidiaries and, to a lesser extent, through other bank entities. Our securities financing activities primarily involve high-quality, liquid securities such as U.S. Treasury securities and government agency securities and, to a lesser extent, less liquid securities, including equity securities, corporate bonds and asset-backed securities. We account for these transactions as collateralized financings in which we typically receive or pledge securities as collateral. We believe these financing transactions generally do not have material credit risk given the collateral provided and the related monitoring processes.


	March 31, 2023							December 31, 2022
(in millions)	Level 1		Level 2		Level 3	Total		Level 1	Level 2	Level 3	Total
Trading debt securities:
Securities of U.S. Treasury and federal agencies	$	29,984	4,132		—	34,116		28,844	4,530	—	33,374
Collateralized loan obligations	—		555		117	672		—	540	150	690
Corporate debt securities	—		11,447		15	11,462		—	10,344	23	10,367
Federal agency mortgage-backed securities	—		33,776		—	33,776		—	34,447	—	34,447
Non-agency mortgage-backed securities	—		1,277		—	1,277		—	1,243	12	1,255
Other debt securities	—		8,749		—	8,749		—	6,022	—	6,022
Total trading debt securities	29,984		59,936		132	90,052		28,844	57,126	185	86,155
Available-for-sale debt securities:
Securities of U.S. Treasury and federal agencies	58,043		—		—	58,043		45,285	—	—	45,285
Non-U.S. government securities	—		162		—	162		—	162	—	162
Securities of U.S. states and political subdivisions	—		21,403		357	21,760		—	10,332	113	10,445
Federal agency mortgage-backed securities	—		55,205		—	55,205		—	48,137	—	48,137
Non-agency mortgage-backed securities	—		3,144		—	3,144		—	3,284	—	3,284
Collateralized loan obligations	—		3,905		—	3,905		—	3,981	—	3,981
Other debt securities	—		2,031		148	2,179		—	2,137	163	2,300
Total available-for-sale debt securities	58,043		85,850		505	144,398		45,285	68,033	276	113,594
Loans held for sale	—		2,863		564	3,427		—	3,427	793	4,220
Mortgage servicing rights (residential)	—		—		8,819	8,819		—	—	9,310	9,310
Derivative assets (gross):
Interest rate contracts	234		32,841		559	33,634		262	40,503	321	41,086
Commodity contracts	—		3,723		25	3,748		—	5,866	134	6,000
Equity contracts	167		10,739		199	11,105		112	9,051	410	9,573
Foreign exchange contracts	27		13,659		11	13,697		27	22,175	11	22,213
Credit contracts	—		46		22	68		—	44	22	66

Total derivative assets (gross)	428		61,008		816	62,252		401	77,639	898	78,938
Equity securities:
Marketable	14,319		95		4	14,418		18,527	86	3	18,616
Nonmarketable	—		10,557		28	10,585		—	9,750	17	9,767
Total equity securities	14,319		10,652		32	25,003		18,527	9,836	20	28,383
Total assets prior to derivative netting	$	102,774	220,309		10,868	333,951		93,057	216,061	11,482	320,600
Derivative netting (1)						(45,135)					(56,164)
Total assets after derivative netting						$	288,816				264,436
Derivative liabilities (gross):
Interest rate contracts	$	(209)	(32,636)		(3,311)	(36,156)		(193)	(40,377)	(2,903)	(43,473)
Commodity contracts	—		(3,013)		(38)	(3,051)		—	(3,325)	(120)	(3,445)
Equity contracts (2)	(155)		(9,635)		(1,477)	(11,267)		(118)	(6,502)	(1,634)	(8,254)
Foreign exchange contracts	(37)		(16,263)		(27)	(16,327)		(29)	(26,622)	(35)	(26,686)
Credit contracts	—		(29)		(3)	(32)		—	(33)	(3)	(36)

Total derivative liabilities (gross)	(401)		(61,576)		(4,856)	(66,833)		(340)	(76,859)	(4,695)	(81,894)






Short-sale and other liabilities (2)	(17,951)		(4,983)		(193)	(23,127)		(14,791)	(5,513)	(167)	(20,471)
Long-term debt	—		(1,506)		—	(1,506)		—	(1,346)	—	(1,346)
Total liabilities prior to derivative netting	$	(18,352)	$	(68,065)	(5,049)	(91,466)		(15,131)	(83,718)	(4,862)	(103,711)
Derivative netting (1)						49,936					61,827
Total liabilities after derivative netting						$	(41,530)				(41,884)

~~OFFSETTING OF SECURITIES FINANCING ACTIVITIES~~ (1)Table 12.2 presents resale and repurchase agreements subject to master repurchase agreements (MRA) and securities borrowing and lending agreements subject to master securities lending agreements (MSLA). Collateralized financings, and those with a single counterparty, are presented net on our consolidatedRepresents balance sheet ~~provided certain criteria are met that permit balance sheet netting. The majority~~netting of ~~transactions subject~~derivative asset and liability balances, related cash collateral and portfolio level counterparty valuation adjustments. See Note 11 (Derivatives) for additional information.

(2)In first quarter 2023, we adopted ASU 2018-12 – Financial Services – Insurance (Topic 944): Targeted Improvements to ~~these agreements do not meet those criteria and thus are not eligible~~the Accounting for ~~balance sheet netting.~~Long-Duration Contracts

~~Collateral we pledged consists~~. For additional information, see Note 1 (Summary of non-cash instruments, such as securities or loans, and is not netted on the consolidated balance sheet against the related liability. Collateral we received includes securities or loans and is not recognized on our consolidated balance sheet. Collateral pledged or received may be increased or decreased over time to maintain certain contractual thresholds, as the assets underlying each arrangement fluctuate in value. Generally, these agreements require collateral to exceed the asset or liability recognized on

Significant Accounting Policies).


102			Wells Fargo & Company

Level 3 Assets and Liabilities Recorded at Fair Value on a Recurring Basis

Table 12.2 presents the balance sheet. The following table includes the amount of collateral pledged or received related to exposures subject to enforceable MRAs or MSLAs. While these agreements are typically over-collateralized, U.S. GAAP requires disclosurechanges in ~~this table to limit the reported amount of such collateral to the~~Level 3 assets and liabilities measured at fair value on a recurring basis.

~~amount of the related recognized asset or liability for each counterparty.~~

~~In addition to the amounts included in Table 12.2, we also have balance sheet netting related to derivatives that is disclosed in Note 14 (Derivatives).~~

Table 12.2: ~~Offsetting – Securities Financing Activities~~Changes in Level 3 Fair Value Assets and Liabilities on a Recurring Basis

(in millions)
Mar 31,
2022 Dec 31,
2021
Assets:
Resale and securities borrowing agreements
Gross amounts recognized $ 105,614 103,140
Gross amounts offset in consolidated balance sheet (1) (14,992) (14,074)
Net amounts in consolidated balance sheet (2) 90,622 89,066
Collateral not recognized in consolidated balance sheet (3) (89,845) (88,330)
Net amount (4) $ 777 736
Liabilities:
Repurchase and securities lending agreements
Gross amounts recognized $ 34,752 35,043
Gross amounts offset in consolidated balance sheet (1) (14,992) (14,074)
Net amounts in consolidated balance sheet (5) 19,760 20,969
Collateral pledged but not netted in consolidated balance sheet (6) (19,555) (20,820)
Net amount (4) $ 205 149


										Net unrealized gains (losses) related to assets and liabilities held at period end
(in millions)	Balance, beginning of period		Net gains/(losses) (1)	Purchases (2)	Sales	Settlements	Transfers into Level 3 (3)	Transfers out of Level 3 (4)	Balance, end of period		(5)























Quarter ended March 31, 2023
Trading debt securities	$	185	1	76	(112)	(1)	—	(17)	132	1	(6)
Available-for-sale debt securities	276		(20)	69	—	(6)	233	(47)	505	(19)	(6)
Loans held for sale	793		10	73	(49)	(39)	16	(240)	564	10	(7)
Mortgage servicing rights (residential) (8)	9,310		(546)	48	7	—	—	—	8,819	(225)	(7)
Net derivative assets and liabilities:
Interest rate contracts	(2,582)		295	—	—	267	(746)	14	(2,752)	509
Equity contracts	(1,224)		(303)	—	—	285	(38)	2	(1,278)	(2)
Other derivative contracts	9		(55)	2	(1)	37	(2)	—	(10)	(41)
Total derivative contracts	(3,797)		(63)	2	(1)	589	(786)	16	(4,040)	466	(9)
Equity securities	20		(1)	—	—	—	13	—	32	(1)	(6)

Other liabilities	(167)		(26)	—	—	—	—	—	(193)	(26)	(10)
Quarter ended March 31, 2022
Trading debt securities	$	241	(15)	47	(14)	(35)	5	(28)	201	(17)	(6)
Available-for-sale debt securities	186		(21)	52	—	(5)	126	—	338	(21)	(6)
Loans held for sale	1,033		(57)	63	(43)	(73)	102	(6)	1,019	(57)	(7)
Mortgage servicing rights (residential) (8)	6,920		1,248	342	1	—	—	—	8,511	1,605	(7)
Net derivative assets and liabilities:
Interest rate contracts	127		(578)	—	—	275	—	—	(176)	(259)
Equity contracts (11)	(417)		(216)	—	—	589	(80)	(1,292)	(1,416)	266
Other derivative contracts	5		(22)	—	—	44	—	—	27	18
Total derivative contracts	(285)		(816)	—	—	908	(80)	(1,292)	(1,565)	25	(9)
Equity securities	8,910		(1)	—	—	—	2	(8,885)	26	(2)	(6)
Other liabilities (11)	(791)		153	—	—	—	—	—	(638)	153	(10)

(1)~~Represents recognized amount of resale~~Includes net gains (losses) included in both net income and ~~repurchase agreements with counterparties subject to enforceable MRAs that have been offset~~other comprehensive income. All amounts represent net gains (losses) included in ~~the consolidated balance sheet.~~net income except for $(16) million and $(21) million included in other comprehensive income from AFS debt securities, and $0 and $14 million in other comprehensive income from other liabilities for first quarter 2023 and 2022, respectively.

(2)Includes ~~$67.7~~originations of mortgage servicing rights and loans held for sale.

(3)All assets and liabilities transferred into Level 3 were previously classified within Level 2.

(4)All assets and liabilities transferred out of Level 3 are classified as Level 2. During first quarter 2022, we transferred $8.9 billion of non-marketable equity securities and ~~$66.2~~$1.4 billion ~~classified~~of related economic hedging derivative assets (equity contracts) out of Level 3 due to our election to measure fair value of these instruments as a portfolio. Under this election, the unit of valuation is the portfolio-level, rather than each individual instrument. The unobservable inputs previously significant to the valuation of the instruments individually are no longer significant, as those unobservable inputs offset under the portfolio election.

(6)Included in net gains from trading and securities on our consolidated ~~balance sheet~~statement of income.

(7)Included in ~~federal funds sold~~mortgage banking income on our consolidated statement of income.

(8)For additional information on the changes in mortgage servicing rights, see Note 6 (Mortgage Banking Activities).

(9)Included in mortgage banking income, net gains from trading and securities, ~~purchased under resale agreements at March 31, 2022,~~ and December 31, 2021, respectively. Also includes securities purchased under long-term resale agreements (generally one year or more) classified in loans, which totaled $22.9 billion and $22.9 billion, at March 31, 2022, and December 31, 2021, respectively.other noninterest income on our consolidated statement of income.

~~(3)~~(10)~~Represents~~Included in other noninterest income on our consolidated statement of income.

The significant unobservable inputs for Level 3 assets inherent in the fair ~~value of collateral we have received under enforceable MRAs or MSLAs, limited~~values obtained from third-party vendors are not included in the table, ~~above to~~as the amount of the recognized asset due from each counterparty. At March 31, 2022, and December 31, 2021, we have received total collateral with a fair value of $128.2 billion and $124.4 billion, respectively, all of which we have the right to sell or repledge. These amounts include securities we have sold or repledged to others with a fair value of $26.3 billion and $28.8 billion at March 31, 2022, and December 31, 2021, respectively.specific inputs applied are not

~~(4)Represents the amount of our exposure (assets) or obligation (liabilities) that is not collateralized and/or is not subject to an enforceable MRA or MSLA.~~

~~(5)Amount is classified in short-term borrowings on our consolidated balance sheet.~~

~~(6)~~Represents the fair value of collateral we have pledged, related to enforceable MRAs or MSLAs, limited in the table above to the amount of the recognized liability owed to each counterparty. At March 31, 2022, and December 31, 2021, we have pledged total collateral with a fair value of $35.7 billion and $35.9 billion, respectively, substantially all of which may be sold or repledgedprovided by the ~~counterparty.~~vendor (for additional information on vendor-developed valuations, see Note 15 (Fair Values of Assets and Liabilities) in our 2022 Form 10-K).

~~REPURCHASE AND SECURITIES LENDING AGREEMENTS~~ ~~Securities sold under repurchase agreements~~Weighted averages of inputs are calculated using outstanding unpaid principal balance for cash instruments, such as loans and securities, ~~lending arrangements are effectively short-term collateralized borrowings. In these transactions, we receive cash in exchange~~and notional amounts for transferring securities as collateral and recognize an obligation to reacquire the securities for cash at the transaction’s maturity. These types of transactions create risks, including (1) the counterparty may fail to return the securities at maturity, (2) the fair value of the securities transferred may decline below the amount of our obligation to reacquire the securities, and therefore create an obligation for us to pledge additional amounts, and (3) the counterparty may accelerate the maturity on demand, requiring us to reacquire the security prior to contractual maturity. We attempt to mitigate these risks in various ways. Our collateral primarily consists of highly liquid securities. In addition, we underwrite and monitor the financial strength of our counterparties, monitor the fair value of collateral pledged relative to contractually required repurchase amounts, and monitor that our collateral is properly returned through the clearing and settlement process in advance of our cash repayment. Table 12.3 provides the gross amounts recognized on the consolidated balance sheet (before the effects of offsetting) of our liabilities for repurchase and securities lending agreements disaggregated by underlying collateral type.derivative instruments.


			Wells Fargo & Company			103

Note 12: ~~Pledged~~Fair Values of Assets and ~~Collateral~~Liabilities (continued)

Table 12.3: ~~Gross Obligations by Underlying Collateral Type~~Valuation Techniques – Recurring Basis

(in millions) Mar 31,
2022 Dec 31,
2021
Repurchase agreements:
Securities of U.S. Treasury and federal agencies $ 16,141 14,956
Securities of U.S. States and political subdivisions 1 1
Federal agency mortgage-backed securities 2,326 3,432
Non-agency mortgage-backed securities 759 809
Corporate debt securities 8,215 8,899
Asset-backed securities 473 358
Equity securities 1,217 919
Other 241 409
Total repurchases 29,373 29,783
Securities lending arrangements:
Securities of U.S. Treasury and federal agencies 117 33
Federal agency mortgage-backed securities 17 17
Corporate debt securities 126 80
Equity securities (1) 5,067 5,050
Other 52 80
Total securities lending 5,379 5,260
Total repurchases and securities lending $ 34,752 35,043


($ in millions, except cost to service amounts)	Fair Value Level 3			Valuation Technique	Significant Unobservable Input	Range of Inputs					Weighted Average
March 31, 2023
Trading and available-for-sale debt securities	$	398		Discounted cash flow	Discount rate	2.5		-	12.5	%	5.5

	132			Market comparable pricing	Comparability adjustment	(24.4)		-	47.1		(2.6)
	107			Market comparable pricing	Multiples	1.1x		-	7.4x		3.9x
Loans held for sale	564			Discounted cash flow	Default rate	0.0		-	29.8	%	0.9
					Discount rate	2.9		-	13.9		9.2
					Loss severity	0.0		-	55.7		17.1
					Prepayment rate	3.1		-	13.9		10.5
Mortgage servicing rights (residential)	8,819			Discounted cash flow	Cost to service per loan (1)	$	52	-	533		101
					Discount rate	8.5		-	13.6	%	8.9
					Prepayment rate (2)	8.3		-	24.2		9.7
Net derivative assets and (liabilities):
Interest rate contracts	(2,632)			Discounted cash flow	Discount rate	3.0		-	4.9		4.0
	(39)			Discounted cash flow	Default rate	0.4		-	5.0		2.2
					Loss severity	50.0		-	50.0		50.0
					Prepayment rate	2.8		-	22.0		18.6
Interest rate contracts: derivative loan commitments	(81)			Discounted cash flow	Fall-out factor	1.0		-	99.0		35.3
					Initial-value servicing	(153.1)		-	141.0	bps	(112.8)
Equity contracts	(948)			Discounted cash flow	Conversion factor	(8.7)		-	0.0	%	(6.4)
					Weighted average life	0.8		-	1.8	yrs	1.2
	(330)			Option model	Correlation factor	(77.0)		-	99.0	%	64.9
					Volatility factor	6.5		-	96.5		36.6







Insignificant Level 3 liabilities, net of assets (3)	(171)
Total Level 3 assets, net of liabilities	$	5,819	(4)
December 31, 2022
Trading and available-for-sale debt securities	$	157		Discounted cash flow	Discount rate	2.7		-	12.5	%	6.4
	185			Market comparable pricing	Comparability adjustment	(33.6)		-	14.1		(4.8)

	119			Market comparable pricing	Multiples	1.1x		-	7.4x		4.0x
Loans held for sale	793			Discounted cash flow	Default rate	0.0		-	25.0	%	0.7
					Discount rate	2.9		-	13.4		9.5
					Loss severity	0.0		-	53.6		15.7
					Prepayment rate	3.5		-	14.2		10.7
Mortgage servicing rights (residential)	9,310			Discounted cash flow	Cost to service per loan (1)	$	52	-	550		102
					Discount rate	8.7		-	14.1	%	9.1
					Prepayment rate (2)	8.1		-	21.9		9.4
Net derivative assets and (liabilities):
Interest rate contracts	(2,411)			Discounted cash flow	Discount rate	3.2		-	4.9		4.2
	(63)			Discounted cash flow	Default rate	0.4		-	5.0		2.3
					Loss severity	50.0		-	50.0		50.0
					Prepayment rate	2.8		-	22.0		18.7
Interest rate contracts: derivative loan commitments	(108)			Discounted cash flow	Fall-out factor	1.0		-	99.0		41.0
					Initial-value servicing	(9.3)		-	141.0	bps	11.5
Equity contracts (3)	(1,000)			Discounted cash flow	Conversion factor	(12.2)		-	0.0	%	(9.9)
					Weighted average life	0.5		-	1.5	yrs	0.8
	(224)			Option model	Correlation factor	(77.0)		-	99.0	%	49.5
					Volatility factor	6.5		-	96.5		37.3






Insignificant Level 3 liabilities, net of assets (3)	(138)
Total Level 3 assets, net of liabilities	$	6,620	(4)

(1)~~Equity securities~~The high end of the range of inputs is for servicing modified loans. For non-modified loans, the range is $52 - $177 at March 31, 2023, and $52 - $178 at December 31, 2022.

(2)Includes a blend of prepayment speeds and expected defaults. Prepayment speeds are ~~generally exchange traded~~influenced by mortgage interest rates as well as our estimation of drivers of borrower behavior.

(4)Consists of total Level 3 assets of $10.9 billion and represent collateral received from third parties that has been repledged. We received the collateral through either margin lending agreements or contemporaneous securities borrowing transactions with other counterparties.$11.5 billion and total Level 3 liabilities of $5.0 billion and $4.9 billion, before netting of derivative balances, at March 31, 2023, and December 31, 2022, respectively.

~~Table 12.4 provides~~For additional information on the ~~contractual maturities~~valuation techniques and significant unobservable inputs used in the valuation of our ~~gross obligations under repurchase~~Level 3 assets and ~~securities lending agreements.~~liabilities, including how changes in these inputs affect fair value estimates, see Note 15 (Fair Values of Assets and Liabilities) in our 2022 Form 10-K.

~~Table 12.4:Contractual Maturities of Gross Obligations~~

(in millions) Overnight/continuous Up to 30 days 30-90 days >90 days Total gross obligation
March 31, 2022
Repurchase agreements $ 18,187 1,262 4,139 5,785 29,373
Securities lending arrangements 4,929 — — 450 5,379
Total repurchases and securities lending (1) $ 23,116 1,262 4,139 6,235 34,752
December 31, 2021
Repurchase agreements $ 16,452 3,570 4,276 5,485 29,783
Securities lending arrangements 4,810 — — 450 5,260
Total repurchases and securities lending (1) $ 21,262 3,570 4,276 5,935 35,043

~~(1)~~Securities lending is executed under agreements that allow either party to terminate the transaction without notice, while repurchase agreements have a term structure to them that technically matures at a point in time. The overnight/continuous repurchase agreements require election of both parties to roll the trade rather than the election to terminate the arrangement as in securities lending.


104			Wells Fargo & Company


~~Note 13:~~ ~~Legal Actions~~

~~Wells Fargo~~Assets and ~~certain of our subsidiaries are involved in~~Liabilities Recorded at Fair Value on a number of judicial, regulatory, governmental, arbitration, and other proceedings or investigations concerning matters arising from the conduct of our business activities, and many of those proceedings and investigations expose Wells Fargo to potential financial loss or other adverse consequences. These proceedings and investigations include actions brought against Wells Fargo and/or our subsidiaries with respect to corporate-related matters and transactions in which Wells Fargo and/or our subsidiaries were involved. In addition, Wells Fargo and our subsidiariesNonrecurring Basis

We may be ~~requested~~required, from time to ~~provide information~~time, to measure certain assets at fair value on a nonrecurring basis in accordance with GAAP. These adjustments to fair value usually result from application of LOCOM accounting, write-downs of individual assets, or ~~otherwise cooperate with government authorities in the conduct of investigations of other persons or industry groups.~~

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 endapplication of the range of those potential losses. There can be no assurance as to the ultimate outcome of legal actions, including the matters described below, and the actual costs of resolving legal actions may be substantially higher or lower than the amounts accruedmeasurement alternative for ~~those actions.~~

~~ATM ACCESS FEE LITIGATION~~ ~~In October 2011, plaintiffs filed a putative class action,~~ ~~Mackmin, et al. v. Visa, Inc. et al.~~, against Wells Fargo & Company, Wells Fargo Bank, N.A., Visa, MasterCard, and several other banks in the United States District Court for the District of Columbia. Plaintiffs allege that the Visa and MasterCard requirement that if an ATM operator charges an access fee on Visa and MasterCard transactions, then that fee cannot be greater than the access fee charged for transactions on other networks, violates antitrust rules. Plaintiffs seek treble damages, restitution, injunctive relief, and attorneys’ fees where available under federal and state law. Two other antitrust cases that make similar allegations were filed in the same court, but these cases did not name Wells Fargo as a defendant. On February 13, 2013, the district court granted defendants’ motions to dismiss the 3 actions. Plaintiffs appealed the dismissals and, on August 4, 2015, the United States Court of Appeals for the District of Columbia Circuit vacated the district court’s decisions and remanded the 3 cases to the district court for further proceedings. On June 28, 2016, the United States Supreme Court granted defendants’ petitions for writ of certiorari to review the decisions of the United States Court of Appeals for the District of Columbia. On November 17, 2016, the United States Supreme Court dismissed the petitions as improvidently granted, and the 3 cases returned to the district court for further proceedings. In November 2021, the district court granted preliminary approval of an agreement pursuant to which the Company will pay $20.8 million in order to resolve the cases.

~~AUTOMOBILE LENDING MATTERS~~ On April 20, 2018, the Company entered into consent orders with the Office of the Comptroller of the Currency (OCC) and the Consumer Financial Protection Bureau (CFPB) to resolve, among other things, investigations by the agencies into the Company’s compliance risk management program and its past practices involving certain ~~automobile collateral protection insurance (CPI) policies and certain mortgage interest rate lock extensions. The consent orders~~nonmarketable equity securities.

~~require remediation to customers~~Table 12.4 provides the fair value hierarchy and fair value at the date of the nonrecurring fair value adjustment for all assets that were still held as of March 31, 2023, and December 31, 2022, and for which a nonrecurring fair value adjustment was recorded during the quarter ended March 31, 2023, and the payment of a total of $1.0 billion in civil money penalties to the agencies. In July 2017, the Company announced a plan to remediate customers who may have been financially harmed due to issues related to automobile CPI policies purchased through a third-party vendor on their behalf. Multiple putative class actions alleging, among other things, unfair and deceptive practices relating to these CPI policies, were filed against the Company and consolidated into 1 multi-district litigation in the United States District Court for the Central District of California. As previously disclosed, the Company entered into a settlement to resolve the multi-district litigation. Shareholders also filed a putative securities fraud class action against the Company and its executive officers alleging material misstatements and omissions of CPI-related information in the Company’s public disclosures. In January 2020, the court dismissed this action as to all defendants except the Company and a former executive officer and limited the action to two alleged misstatements. In addition, the Company is subject to a class action in the United States District Court for the Central District of California alleging that customers are entitled to refunds related to the unused portion of guaranteed automobile protection (GAP) waiver or insurance agreements between the customer and dealer and, by assignment, the lender. In November 2021, the court granted final approval of an agreement pursuant to which the Company agreed to pay $45 million and make certain changes to its GAP refund practices in order to settle the action. Allegations related to the CPI and GAP programs were among the subjects of a shareholder derivative lawsuit in the United States District Court for the Northern District of California, which has been dismissed. In addition, federal and state government agencies, including the CFPB, have undertaken formal or informal inquiries, investigations, or examinations regarding these and other issues related to the origination, servicing, and collection of consumer auto loans, including related insurance products. As previously disclosed, the Company entered into an agreement to resolve investigations by state attorneys general.year ended December 31, 2022.

~~COMMERCIAL LENDING SHAREHOLDER LITIGATION~~ In October and November 2020, plaintiffs filed two putative securities fraud class actions, which were consolidated into 1 lawsuit pending in the United States District Court for the Northern District of California alleging that the Company and certain of its current and former officers made false and misleading statements or omissions regarding, among other things, the Company’s commercial lending underwriting practices, the credit quality of its commercial credit portfolios, and the value of its commercial loans, collateralized loan obligations and commercial mortgage-backed securities.

~~COMPANY 401(K) PLAN REGULATORY INVESTIGATIONS~~ Table 12.4:~~Federal government agencies, including~~Fair Value on a Nonrecurring Basis


	March 31, 2023				December 31, 2022
(in millions)	Level 2		Level 3	Total	Level 2	Level 3	Total
Loans held for sale (1)	$	1,184	354	1,538	838	554	1,392
Loans:
Commercial	204		—	204	285	—	285
Consumer	44		—	44	512	—	512
Total loans	248		—	248	797	—	797
Mortgage servicing rights (commercial)	—		—	—	—	75	75
Nonmarketable equity securities	553		1,005	1,558	1,926	2,818	4,744
Other assets	1,683		1	1,684	1,862	296	2,158
Total assets at fair value on a nonrecurring basis	$	3,668	1,360	5,028	5,423	3,743	9,166

(1)Consists of commercial mortgages and residential mortgage – first lien loans.

Table 12.5 presents the ~~United States Department of Labor, are reviewing~~gains (losses) on certain ~~transactions associated with~~assets held at the ~~Employee Stock Ownership Plan feature~~end of the ~~Company’s 401(k) plan, including~~reporting periods presented for which a nonrecurring fair value adjustment was recognized in earnings during the ~~manner~~respective periods.

Table 12.5:Gains (Losses) on Assets with Nonrecurring Fair Value Adjustment


	Quarter ended March 31,
(in millions)	2023		2022
Loans held for sale	$	(8)	(59)
Loans:
Commercial	(68)		(12)
Consumer	(214)		(206)
Total loans	(282)		(218)
Mortgage servicing rights (commercial)	—		4
Nonmarketable equity securities (1)	(339)		295

Other assets (2)	20		(52)
Total	$	(609)	(30)

(1)Includes impairment of nonmarketable equity securities and observable price changes related to nonmarketable equity securities accounted for under the measurement alternative.

Table 12.6 provides quantitative information about the ~~401(k) plan purchased certain securities~~valuation techniques and significant unobservable inputs used in ~~connection with~~ the ~~Company’s contributions~~valuation of our Level 3 assets that are measured at fair value on a nonrecurring basis and determined using an internal model. The table is limited to financial instruments that had nonrecurring fair value adjustments during the periods presented. Weighted averages of inputs are calculated using outstanding unpaid principal balance for cash instruments, such as loans, and carrying value prior to the ~~401(k) plan. The Company is~~nonrecurring fair value measurement for nonmarketable equity securities and private equity and venture capital investments in ~~resolution discussions with the Department of Labor, although there can be no assurance as to the outcome of these discussions.~~

consolidated portfolio companies.


			Wells Fargo & Company			105

Note ~~13:~~12: ~~Legal Actions~~Fair Values of Assets and Liabilities (continued)

Table 12.6:Valuation Techniques – Nonrecurring Basis


($ in millions)	Fair Value Level 3		Valuation Technique (1)	Significant Unobservable Input (1)		Range of Inputs Positive (Negative)					Weighted Average
March 31, 2023
Loans held for sale (2)	$	354	Discounted cash flow	Default rate	(3)	0.1		-	89.7	%	14.9
				Discount rate		0.6		-	13.6		5.5
				Loss severity		0.5		-	49.1		11.8
				Prepayment rate	(4)	2.8		-	100.0		40.4




Nonmarketable equity securities	64		Market comparable pricing	Comparability adjustment		(100.0)		-	(12.0)		(28.0)

	938		Market comparable pricing	Multiples		3.0x		-	27.1x		9.7x





Insignificant Level 3 assets	4
Total	$	1,360
December 31, 2022
Loans held for sale (2)	$	143	Discounted cash flow	Default rate	(3)	0.1		-	86.1	%	13.8
				Discount rate		3.8		-	13.8		9.0
				Loss severity		8.1		-	43.8		18.6
				Prepayment rate	(4)	2.3		-	23.4		18.6
	411		Market comparable pricing	Comparability adjustment		(8.2)		-	(0.9)		(4.3)
Mortgage servicing rights (commercial)	75		Discounted cash flow	Cost to service per loan		$	3,775	-	3,775		3,775
				Discount rate		5.2		-	5.2	%	5.2
				Prepayment rate		0.0		-	20.6		6.7
Nonmarketable equity securities	1,461		Market comparable pricing	Comparability adjustment		(100.0)		-	(4.0)		(30.1)

	1,352		Market comparable pricing	Multiples		0.8x		-	18.7x		9.9x




Other assets (5)	234		Market comparable pricing	Multiples		6.4		-	8.0		7.1
Insignificant Level 3 assets	67
Total	$	3,743

~~CONSENT ORDER DISCLOSURE LITIGATION~~ (1)~~Wells Fargo shareholders have brought a putative securities fraud class action~~See Note 15 (Fair Values of Assets and Liabilities) in our 2022 Form 10-K for additional information on the valuation technique(s) and significant unobservable inputs used in the ~~United States District Court for the Southern District~~valuation of New York alleging that the Company and certain of its current and former executive officers and directors made false or misleading statements regarding the Company’s efforts to comply with the February 2018 consent order with the Federal Reserve Board and the April 2018 consent orders with the CFPB and OCC. Allegations related to the Company’s efforts to comply with these three consent orders were also among the subjects of a shareholder derivative lawsuit filed in the United States District Court for the Northern District of California. On February 4, 2022, the district court granted the Company's motion to dismiss the shareholder derivative lawsuit. On April 19, 2022, shareholders filed a new derivative lawsuit in California state court making similar allegations.Level 3 assets.

~~CONSUMER DEPOSIT ACCOUNT RELATED REGULATORY INVESTIGATIONS~~(2) ~~The CFPB is conducting an investigation into whether customers were unduly harmed by the Company’s historical practices associated with the freezing (and, in many cases, closing)~~Consists of ~~consumer deposit accounts after the Company detected suspected fraudulent activity (by third parties or account holders)~~approximately $220 million and $400 million of government insured/guaranteed loans purchased from GNMA-guaranteed mortgage securitizations at March 31, 2023, and December 31, 2022, respectively, and approximately $130 million and $150 million of other mortgage loans that affected those accounts. The CFPB is also investigating certain of the Company’s past disclosures to customers regarding the minimum qualifying debit card usage required for customers to receive a waiver of monthly service fees on certain consumer deposit accounts.are not government insured/guaranteed at March 31, 2023, and December 31, 2022, respectively.

~~INTERCHANGE LITIGATION~~(3)Plaintiffs representing a class of merchants have filed putative class actions, and individual merchants have filed individual actions, against Wells Fargo Bank, N.A., Wells Fargo & Company, Wachovia Bank, N.A., and Wachovia Corporation regarding the interchange fees associated with Visa and MasterCard payment card transactions. Visa, MasterCard, and several other banks and bank holding companies are also named as defendants in these actions. These actions have been consolidated in the United States District Court for the Eastern District of New York. The amended and consolidated complaint asserts claims against defendants based on alleged violations of federal and state antitrust laws and seeks damages, as well as injunctive relief. Plaintiff merchants allege that Visa, MasterCard, and payment card issuing banks unlawfully colludedApplies only to set interchange rates. Plaintiffs also allege that enforcement of certain Visa and MasterCard rules and alleged tying and bundling of services offered to merchants are anticompetitive. Wells Fargo and Wachovia, along with other defendants and entities, are parties to Loss and Judgment Sharing Agreements, which provide that they, along with other entities, will share, based on a formula, in any losses from the Interchange Litigation. On July 13, 2012, Visa, MasterCard, and the financial institution defendants, including Wells Fargo, signed a memorandum of understanding with plaintiff merchants to resolve the consolidated class action and reached a separate settlement in principle of the consolidated individual actions. The settlement payments to be made by all defendants in the consolidated class and individual actions totaled approximately $6.6 billion before reductions applicable to certain merchants opting out of the settlement. The class settlement also provided for the distribution to class merchants of 10 basis points of default interchange across all credit rate categories for a period of eight consecutive months. The district court granted final approval of the settlement, which was appealed to the United States Court of Appeals for the Second Circuit by settlement objector merchants. Other merchants opted out of thenon-government insured/guaranteed loans.

settlement and are pursuing several individual actions. On June 30, 2016, the Second Circuit vacated the settlement agreement and reversed and remanded the consolidated action to the United States District Court for the Eastern District of New York for further proceedings. On November 23, 2016, prior class counsel filed a petition to the United States Supreme Court, seeking review of the reversal of the settlement by the Second Circuit, and the Supreme Court denied the petition on March 27, 2017. On November 30, 2016, the district court appointed lead class counsel for a damages class and an equitable relief class. The parties have entered into a settlement agreement to resolve the money damages class claims pursuant to which defendants will pay a total of approximately $6.2 billion, which includes approximately $5.3 billion of funds remaining from the 2012 settlement and $900 million in additional funding. The Company’s allocated responsibility for the additional funding is approximately $94.5 million. The court granted final approval of the settlement on December 13, 2019, which was appealed to the United States Court of Appeals for the Second Circuit by settlement objector merchants. On September 27, 2021, the district court granted the plaintiffs’ motion for class certification in the equitable relief case. Several of the opt-out and direct action litigations have been settled while others remain pending.

~~MORTGAGE LENDING MATTERS~~(4) ~~Plaintiffs representing a class~~Includes the impact on prepayment rate of ~~mortgage borrowers filed separate putative class actions,~~ expected defaults for government insured/guaranteed loans, which impact the frequency and timing of early resolution of loans.

(5)~~Hernandez v. Wells Fargo, et al.~~, ~~Coordes v. Wells Fargo, et al.~~, ~~Ryder v. Wells Fargo~~, ~~Liguori v. Wells Fargo~~,Represents private equity and ~~Dore v. Wells Fargo, against Wells Fargo Bank, N.A.,~~venture capital investments in the United States District Court for the Northern District of California, the United States District Court for the District of Washington, the United States District Court for the Southern District of Ohio, the United States District Court for the Southern District of New York, and the United States District Court for the Western District of Pennsylvania, respectively. Plaintiffs alleged that Wells Fargo improperly denied mortgage loan modifications or repayment plans to customers in the foreclosure process due to the overstatement of foreclosure attorneys’ fees that were included for purposes of determining whether a customer in the foreclosure process qualified for a mortgage loan modification or repayment plan. The Company entered into agreements to settle the consolidated portfolio companies.~~Hernandez~~ case in two phases, an initial $18.5 million class settlement that was approved by the district court in October 2020 and an additional $22 million class settlement that was approved by the district court in January 2022 in order to include additional borrowers who should have been included in the initial settlement class. In addition, the Company entered into an agreement in the ~~Ryder~~ ~~case pursuant to which the Company paid $12 million to cover other impacted borrowers who were not included in the~~ ~~Hernandez~~ ~~case, which was approved by the district court in January 2022. The~~ ~~Dore,Coordes,~~ ~~and~~ ~~Liguori~~ cases have been voluntarily dismissed. In addition, federal and state government agencies, including the CFPB, have undertaken formal or informal inquiries or investigations regarding these and other mortgage servicing matters. On September 9, 2021, the OCC assessed a $250 million civil money penalty against the Company regarding loss mitigation activities in the Company’s Home Lending business and insufficient progress in addressing requirements under the OCC’s April 2018 consent order. In addition, 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.


106			Wells Fargo & Company

~~NOMURA/NATIXIS MORTGAGE-RELATED LITIGATION~~ ~~In August 2014 and August 2015, Nomura Credit & Capital Inc. (Nomura) and Natixis Real Estate Holdings, LLC (Natixis) filed~~Fair Value Option

The fair value option is an irrevocable election, generally only permitted upon initial recognition of financial assets or liabilities, to measure eligible financial instruments at fair value with changes in fair value reflected in earnings. We may elect the fair value option to align the measurement model with how the financial assets or liabilities are managed or to reduce complexity or accounting asymmetry. Following is a ~~total~~discussion of ~~7 third-party complaints against Wells Fargo Bank, N.A., in New York state court. In~~ the underlying first-party actions, Nomura and Natixis have been sued for alleged breaches of representations and warranties made in connection with residential mortgage-backed securities sponsored by them. In the third-party actions, Nomura and Natixis allege that Wells Fargo, as master servicer, primary servicer or securities administrator, failed to notify Nomura and Natixis of their own breaches, failed to properly oversee the primary servicers, and failed to adhere to accepted servicing practices. Natixis additionally alleges that Wells Fargo failed to perform default oversight duties. In March 2022, Wells Fargo entered into an agreement to settle the six actions filed by Nomura, and the actions have been voluntarily dismissed. In the remaining action filed by Natixis, Wells Fargo has asserted counterclaims alleging that Natixis failed to provide Wells Fargo notice of its representation and warranty breaches.

~~OFAC RELATED INVESTIGATION~~ The Company has self-identified an issue whereby certain foreign banks utilized a Wells Fargo software-based solution to conduct import/export trade-related financing transactions with countries and entities prohibited by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury. We do not believe any funds related to these transactions flowed through accounts at Wells Fargo as a result of the aforementioned conduct. The Company has made voluntary self-disclosures to OFAC and has been cooperating with investigations or inquiries arising out of this matter by federal government agencies. The Company is in resolution discussions with certain of these agencies, although there can be no assurance as to the outcome of these discussions.

~~RETAIL SALES PRACTICES MATTERS~~Federal and state government agencies, including the United States Department of Justice (Department of Justice) and the United States Securities and Exchange Commission (SEC), have undertaken formal or informal inquiries or investigations arising out of certain retail sales practices of the Company that were the subject of settlements with the CFPB, the OCC, and the Office of the Los Angeles City Attorney announced by the Company on September 8, 2016. On February 21, 2020, the Company entered into an agreement with the Department of Justice to resolve the Department of Justice’s criminal investigation into the Company’s retail sales practices, as well as a separate agreement to resolve the Department of Justice’s civil investigation. As part of the Department of Justice criminal settlement, no charges will be filed against the Company provided the Company abides by all the terms of the agreement. The Department of Justice criminal settlement also includes the Company’s agreement that the facts set forth in the settlement document constitute sufficient facts for the finding of criminal violations of statutes regarding bank records and personal information. On February 21, 2020, the Company also entered into an order to resolve the SEC’s investigation arising out of the Company’s retail sales practices. The SEC order contains a finding, to which the Company consented, that the facts set forth include violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. As part of the resolution of the Department of Justice and SEC investigations, the Company made payments totaling $3.0 billion. The Company has also entered into agreements to resolve other government agency investigations, including investigations by the state attorneys general. In addition, a number of lawsuits were filed by

~~non-governmental parties seeking damages or other remedies related to these retail sales practices. As previously disclosed,~~portfolios for which we elected the ~~Company entered into various settlements to resolve these lawsuits.~~fair value option. For additional information, including the basis for our fair value option elections, see Note 15 (Fair Values of Assets and Liabilities) in our 2022 Form 10-K.

~~RMBS TRUSTEE LITIGATION~~ InTable 12.7:Fair Value Option


	March 31, 2023				December 31, 2022
(in millions)	Fair value carrying amount		Aggregate unpaid principal	Fair value carrying amount less aggregate unpaid principal	Fair value carrying amount	Aggregate unpaid principal	Fair value carrying amount less aggregate unpaid principal
Loans held for sale (1)	$	3,427	3,742	(315)	4,220	4,614	(394)
Long-term debt	(1,506)		(1,919)	413	(1,346)	(1,775)	429

(1)Nonaccrual loans and loans 90 days or more past due and still accruing included in LHFS for which we have elected the fair value option were insignificant at March 31, 2023, and December ~~2014, Phoenix Light SF Limited~~31, 2022.

Table 12.8 reflects amounts included in earnings related to initial measurement and ~~certain related entities filed a complaint~~subsequent changes in fair value, by income statement line item, for assets and liabilities for which

the ~~United States District Court for~~fair value option was elected. Amounts recorded in net interest income are excluded from the Southern District of New York alleging claims against Wells Fargo Bank, N.A., in its capacity as trustee for a number of residential mortgage-backed securities (RMBS) trusts. Complaints raising similar allegations have been filed by Commerzbank AG in the Southern District of New York and by IKB International and IKB Deutsche Industriebank in New York state court. In each case, the plaintiffs allege that Wells Fargo Bank, N.A., as trustee, caused losses to investors, and plaintiffs assert causes of action based upon, among other things, the trustee’s alleged failure to notify and enforce repurchase obligations of mortgage loan sellers for purported breaches of representations and warranties, notify investors of alleged events of default, and abide by appropriate standards of care following alleged events of default. The Company previously settled 2 class actions filed by institutional investors and an action filed by the National Credit Union Administration with similar allegations. In addition, Park Royal I LLC and Park Royal II LLC have filed complaints that were consolidated in New York state court alleging Wells Fargo Bank, N.A., as trustee, failed to take appropriate actions upon learning of defective mortgage loan documentation.table below.

~~SEMINOLE TRIBE TRUSTEE LITIGATION~~ Table 12.8:~~The Seminole Tribe of Florida filed a complaint~~Gains (Losses) on Changes in ~~Florida state court alleging that Wells Fargo, as trustee, charged excess fees~~Fair Value Included in ~~connection with~~Earnings



	2023				2022
(in millions)	Mortgage banking noninterest income		Net gains from trading and securities	Other noninterest income	Mortgage banking noninterest income	Net gains from trading and securities	Other noninterest income



Quarter ended March 31,
Loans held for sale	$	97	12	(4)	(365)	9	—
Long-term debt	—		(30)	—	—	12	—

For performing loans, instrument-specific credit risk gains or losses are derived principally by determining the ~~administration of a minor’s trust and failed to invest the assets~~change in fair value of the ~~trust prudently. The complaint was later amended~~loans due to ~~include 3 individual current and former beneficiaries as plaintiffs and to remove the Tribe as a party to the case. Wells Fargo filed a petition to remove the case to federal court.~~

~~OUTLOOK~~As described above, the Company establishes accruals for legal actions when potential losses associated with the actions become probable and the costs can be reasonably estimated. The high end of the range of reasonably possible potential losses in excess of the Company’s accrual for probable and estimable losses was approximately $2.8 billion as of March 31, 2022. 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. Based on information currently available, advice of counsel, available insurance coverage, and established reserves, Wells Fargo believes that the eventual outcome of the actions against Wells Fargo and/or its subsidiaries will not, individually orchanges in the ~~aggregate, have a material adverse effect~~observable or implied credit spread. Credit spread is the market yield on ~~Wells Fargo’s consolidated financial condition. However, it is possible that~~ the ~~ultimate resolution~~loans less the relevant risk-free benchmark interest rate. For nonperforming loans, we attribute all changes in fair value to instrument-specific credit risk. For LHFS accounted for under the fair value option, instrument-specific credit gains or losses were insignificant during the first quarter of ~~a matter, if unfavorable, may be material~~both 2023 and 2022.

For long-term debt, instrument-specific credit risk gains or losses represent the impact of changes in fair value due to ~~Wells Fargo’s results of operations~~changes in our credit spread and are derived using observable secondary bond market information. These impacts are recorded within the debit valuation adjustments (DVA) in OCI. See

Note 20 (Other Comprehensive Income) for ~~any particular period.~~additional information.


			Wells Fargo & Company			107


~~Note 14:~~ ~~Derivatives~~Note 12: Fair Values of Assets and Liabilities (continued)

~~We use derivatives to manage exposure to market risk, including interest rate risk,~~Disclosures about Fair Value of Financial Instruments

Table 12.9 presents a summary of fair value estimates for financial instruments that are not carried at fair value on a recurring basis. Some financial instruments are excluded from the scope of this table, such as certain insurance contracts, certain nonmarketable equity securities, and leases. This table also excludes assets and liabilities that are not financial instruments such as the value of the long-term relationships with our deposit, credit ~~risk~~card and ~~foreign currency risk,~~trust customers, MSRs, premises and to assist customers with their risk management objectives. We designate certain derivatives as hedging instruments in qualifying hedge accounting relationships (fair value or cash flow hedges). Our remaining derivatives consist of economic hedges that do not qualify for hedge accountingequipment, goodwill and ~~derivatives held for customer accommodation trading or other purposes. For additional information on our derivative activities, see Note 16 (Derivatives) in our 2021 Form 10-K.~~deferred taxes.

Loan commitments, standby letters of credit and commercial and similar letters of credit are not included in

Table ~~14.1 presents the total notional or contractual amounts and fair values for our derivatives. Derivative transactions can be measured in terms~~12.9. A reasonable estimate of the ~~notional amount, but this amount~~fair value of these instruments is ~~not recorded on our consolidated balance sheet~~the carrying value of deferred fees plus the allowance for unfunded credit commitments, which totaled $689 million and ~~is not, when viewed in isolation, a meaningful measure~~$737 million at March 31, 2023, and December 31, 2022, respectively.

The total of the ~~risk profile~~fair value calculations presented does not represent, and should not be construed to represent, the underlying fair value of the ~~instruments. The notional amount is generally not exchanged, but is used only as the basis on which interest and other payments are determined.~~Company.

Table ~~14.1:~~12.9: ~~Notional~~Fair Value Estimates for Financial Instruments


			Estimated fair value
(in millions)	Carrying amount		Level 1	Level 2	Level 3	Total
March 31, 2023
Financial assets
Cash and due from banks (1)	$	31,958	31,958	—	—	31,958
Interest-earning deposits with banks (1)	130,478		125,379	5,099	—	130,478
Federal funds sold and securities purchased under resale agreements (1)	67,288		—	67,288	—	67,288
Held-to-maturity debt securities	277,147		2,448	235,501	2,739	240,688
Loans held for sale	2,772		—	2,304	526	2,830
Loans, net (2)	920,121		—	56,715	832,899	889,614
Nonmarketable equity securities (cost method)	4,699		—	—	4,764	4,764
Total financial assets	$	1,434,463	159,785	366,907	840,928	1,367,620
Financial liabilities
Deposits (3)	$	90,420	—	57,971	30,658	88,629
Short-term borrowings	80,817		—	80,799	—	80,799
Long-term debt (4)	171,939		—	170,874	1,023	171,897
Total financial liabilities	$	343,176	—	309,644	31,681	341,325
December 31, 2022
Financial assets
Cash and due from banks (1)	$	34,596	34,596	—	—	34,596
Interest-earning deposits with banks (1)	124,561		124,338	223	—	124,561
Federal funds sold and securities purchased under resale agreements (1)	68,036		—	68,036	—	68,036
Held-to-maturity debt securities	297,059		14,285	238,552	2,684	255,521
Loans held for sale	2,884		—	2,208	719	2,927
Loans, net (2)	928,049		—	57,532	836,831	894,363
Nonmarketable equity securities (cost method)	4,900		—	—	4,961	4,961
Total financial assets	$	1,460,085	173,219	366,551	845,195	1,384,965
Financial liabilities
Deposits (3)	$	66,887	—	46,745	18,719	65,464
Short-term borrowings	50,964		—	50,970	—	50,970
Long-term debt (4)	173,502		—	172,783	999	173,782
Total financial liabilities	$	291,353	—	270,498	19,718	290,216

(1)Amounts consist of financial instruments for which carrying value approximates fair value.

(2)Excludes lease financing with a carrying amount of $14.6 billion and $14.7 billion at March 31, 2023, and December 31, 2022, respectively.

(3)Excludes deposit liabilities with no defined or ~~Contractual Amounts~~contractual maturity of $1.3 trillion and ~~Fair Values~~$1.3 trillion at March 31, 2023, and December 31, 2022, respectively.

(4)Excludes obligations under finance leases of ~~Derivatives~~

March 31, 2022 December 31, 2021
Notional or Fair value Notional or Fair value
contractual Derivative Derivative contractual Derivative Derivative
(in millions) amount assets liabilities amount assets liabilities
Derivatives designated as hedging instruments
Interest rate contracts $ 158,877 1,604 194 153,993 2,212 327
Foreign exchange contracts 22,326 137 827 24,949 281 669
Total derivatives designated as qualifying hedging instruments 1,741 1,021 2,493 996
Derivatives not designated as hedging instruments
Economic hedges:
Interest rate contracts 127,600 604 283 142,234 40 41
Equity contracts (1) 4,468 56 60 26,263 1,493 1,194
Foreign exchange contracts 34,236 694 123 28,192 395 88
Credit contracts 290 12 — 290 7 —
Subtotal 1,366 466 1,935 1,323
Customer accommodation trading and other derivatives:
Interest rate contracts 10,645,520 28,330 27,232 7,976,534 20,286 17,435
Commodity contracts 105,256 13,847 5,851 76,642 5,965 2,417
Equity contracts (1) 351,655 12,856 13,452 321,863 16,278 17,827
Foreign exchange contracts 637,869 8,130 8,144 560,049 5,912 5,915
Credit contracts 48,160 38 38 38,318 39 43
Subtotal 63,201 54,717 48,480 43,637
Total derivatives not designated as hedging instruments 64,567 55,183 50,415 44,960
Total derivatives before netting 66,308 56,204 52,908 45,956
Netting (38,943) (40,705) (31,430) (36,532)
Total $ 27,365 15,499 21,478 9,424

~~(1) In first quarter~~$21 million and $22 million at March 31, 2023, and December 31, 2022, we prospectively reclassified certain equity securities and related economic hedge derivatives from "not held for trading activities" to "held for trading activities" to better reflect the business activity of those financial instruments. For additional information on Trading Activities, see Note 1 (Summary of Significant Accounting Policies) in our 2021 Form 10-K.

Table 14.2 provides information on the fair values of derivative assets and liabilities subject to enforceable master netting arrangements, the balance sheet netting adjustments and the resulting net fair value amount recorded on our consolidated balance sheet, as well as the non-cash collateral associated with such arrangements. We execute substantially all of our derivative transactions under master netting arrangements and reflect all derivative balances and related cash collateral subject to enforceable master netting arrangements on a net basis within our consolidated balance sheet. We determine the balance sheet netting adjustments based on the terms specified within each master netting arrangement, which are

determined at the counterparty level. We do not net non-cash collateral that we receive and pledge on our consolidated balance sheet. For disclosure purposes, we present “Total Derivatives, net” which represents the aggregate of our net exposure to each counterparty after considering the balance sheet and disclosure-only netting adjustments. We manage derivative exposure by monitoring the credit risk associated with each counterparty using counterparty-specific credit risk limits, using master netting arrangements and obtaining collateral. In addition to the netting amounts included in the table, we also have balance sheet netting related to resale and repurchase agreements that are disclosed within Note 12 (Pledged Assets and Collateral).

respectively.


108			Wells Fargo & Company

~~Table 14.2:Fair Values~~


Note 13: Securitizations and Variable Interest Entities

Involvement with Variable Interest Entities (VIEs)

In the normal course of ~~Derivative Assets~~business, we enter into various types of on- and ~~Liabilities~~
March 31, 2022 December 31, 2021
(in millions) Derivative Assets Derivative Liabilities Derivative Assets Derivative Liabilities
Interest rate contracts
Over-the-counter (OTC) $ 26,017 23,939 20,067 16,654
OTC cleared 1,544 1,659 168 192
Exchange traded 241 131 52 28
Total interest rate contracts 27,802 25,729 20,287 16,874
Commodity contracts
OTC 11,968 2,859 5,040 1,249
Exchange traded 1,153 2,677 557 1,047
Total commodity contracts 13,121 5,536 5,597 2,296
Equity contracts
OTC 4,478 8,045 6,132 9,730
Exchange traded 4,561 2,871 7,493 6,086
Total equity contracts 9,039 10,916 13,625 15,816
Foreign exchange contracts
OTC 8,617 8,417 6,335 6,221
Total foreign exchange contracts 8,617 8,417 6,335 6,221
Credit contracts
OTC 32 27 32 31
Total credit contracts 32 27 32 31
Total derivatives subject to enforceable master netting arrangements, gross 58,611 50,625 45,876 41,238
Less: Gross amounts offset
Counterparty netting (1) (32,575) (32,479) (27,172) (27,046)
Cash collateral netting (6,368) (8,226) (4,258) (9,486)
Total derivatives subject to enforceable master netting arrangements, net 19,668 9,920 14,446 4,706
Derivatives not subject to enforceable master netting arrangements 7,697 5,579 7,032 4,718
Total derivatives recognized in consolidated balance sheet, net 27,365 15,499 21,478 9,424
Non-cash collateral (1,949) (1,121) (1,432) (412)
Total Derivatives, net $ 25,416 14,378 20,046 9,012

~~(1)Represents amounts~~off-balance sheet transactions with ~~counterparties subject~~special purpose entities (SPEs), which are corporations, trusts, limited liability companies or partnerships that are established for a limited purpose. SPEs are often formed in connection with securitization transactions whereby financial assets are transferred to ~~enforceable master netting arrangements that have been offset~~an SPE. SPEs formed in connection with securitization transactions are generally considered variable interest entities (VIEs). The VIE may alter the risk profile of the asset by entering into derivative transactions or obtaining credit support, and issues various forms of interests in those assets to investors. When we transfer financial assets from our consolidated balance sheet ~~including portfolio~~to a VIE in connection with a securitization, we typically receive cash and sometimes other interests in the VIE as proceeds for the assets we transfer. In certain transactions with VIEs, we may retain the right to service the transferred assets and repurchase the transferred assets if the outstanding balance of the assets falls below the level ~~counterparty valuation adjustments related~~at which the cost to ~~customer accommodation~~service the assets exceed the benefits. In addition, we may purchase the right to service loans transferred to a VIE by a third party.

In connection with our securitization or other VIE activities, we have various forms of ongoing involvement with VIEs, which may include:

•underwriting securities issued by VIEs and subsequently making markets in those securities;

•providing credit enhancement on securities issued by VIEs through the use of letters of credit or financial guarantees;

•entering into other derivative contracts with VIEs;

•holding senior or subordinated interests in VIEs;

•acting as servicer or investment manager for VIEs;

•providing administrative or trustee services to VIEs; and

•providing seller financing to VIEs.

Loan Sales and Securitization Activity

We periodically transfer consumer and commercial loans and other ~~trading derivatives. Counterparty valuation adjustments related~~types of financial assets in securitization and whole loan sale transactions.

MORTGAGE LOANS SOLD TO U.S. GOVERNMENT SPONSORED ENTITIES AND TRANSACTIONS WITH GINNIE MAE In the normal course of business we sell originated and purchased residential and commercial mortgage loans to ~~derivative assets were $341~~government-sponsored entities (GSEs). These loans are generally transferred into securitizations sponsored by the GSEs, which provide certain credit guarantees to investors and servicers. We also transfer mortgage loans into securitization pools pursuant to Government National Mortgage Association (GNMA) guidelines which are insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA). Mortgage loans eligible for securitization with the GSEs or GNMA are considered conforming loans. The GSEs or GNMA design the structure of these securitizations, sponsor the involved VIEs, and have power over the activities most significant to the VIE.

to repurchase loans from GNMA loan securitization pools, which becomes exercisable when three scheduled loan payments remain unpaid by the borrower. During the quarters ended March 31, 2023 and 2022, we repurchased loans of $92 million and ~~$284~~$933 million, respectively, which primarily represented repurchases of government insured loans. We recorded assets and related liabilities of $935 million and ~~debit valuation adjustments related to derivative liabilities were $244~~$743 million ~~and $158 million as of~~at March 31, ~~2022,~~2023, and December 31, ~~2021,~~2022, respectively, where we did not exercise our option to repurchase eligible loans.

Upon transfers of loans, we also provide indemnification for losses incurred due to material breaches of contractual representations and warranties as well as other recourse arrangements. At March 31, 2023, and December 31, 2022, our liability for these repurchase and recourse arrangements was $165 million and $167 million, respectively, and ~~were primarily related to interest rate contracts.~~

~~Fair Value and Cash Flow Hedges~~

~~For fair value hedges, we use interest rate swaps to convert certain of our fixed-rate long-term debt and time certificates of deposit to floating rates to hedge our~~the maximum exposure to ~~interest rate risk. We also enter into cross-currency swaps, cross-currency interest rate swaps~~loss was $13.9 billion and forward contracts to hedge our exposure to foreign currency risk and interest rate risk associated with the issuance of non-U.S. dollar denominated long-term debt. In addition, we use interest rate swaps, cross-currency swaps, cross-currency interest rate swaps and forward contracts to hedge against changes in fair value of certain investments in available-for-sale debt securities due to changes in interest rates, foreign currency rates, or both. For certain fair value hedges of foreign currency risk, changes in fair value of cross-currency swaps attributable to changes in cross-currency basis spreads are excluded from the assessment of hedge effectiveness and recorded in other comprehensive income. See Note 21 (Other Comprehensive Income) for the amounts recognized in other comprehensive income.

~~We estimate $17 million pre-tax of deferred net losses related to cash flow hedges in OCI~~$13.8 billion at March 31, 2023, and December 31, 2022, ~~will be reclassified into net~~respectively.

Substantially allresidential servicing activity is related to assets transferred to GSE and GNMA securitizations. See Note 6 (Mortgage Banking Activities) for additional information about residential and commercial servicing rights, advances and servicing fees.

NONCONFORMING MORTGAGE LOAN SECURITIZATIONS In the normal course of business, we sell nonconforming residential and commercial mortgage loans in securitization transactions that we design and sponsor. Nonconforming mortgage loan securitizations do not involve a government credit guarantee, and accordingly, beneficial interest ~~income~~holders are subject to credit risk of the underlying assets held by the securitization VIE. We typically originate the transferred loans and account for the transfers as sales. We also typically retain the right to service the loans and may hold other beneficial interests issued by the VIEs, such as debt securities held for investment purposes. Our servicing role related to nonconforming commercial mortgage loan securitizations is limited to primary or master servicer. We do not consolidate the VIE because the most significant decisions impacting the performance of the VIE are generally made by the special servicer or the controlling class security holder. For our residential nonconforming mortgage loan securitizations accounted for as sales, we either do not hold variable interests that we consider potentially significant or are not the primary servicer for a majority of the VIE assets.

Table 13.1 presents information about transfers of assets during the ~~next twelve months.~~periods presented for which we recorded the transfers as sales and have continuing involvement with the transferred assets. In connection with these transfers, we received proceeds and recorded servicing assets and securities. Each of these interests are initially measured at fair value. Servicing rights are classified as Level 3 measurements, and generally securities are classified as Level 2. The ~~deferred losses expected~~majority of our transfers relate to ~~be reclassified into net interest income~~residential mortgage securitizations with the GSEs or GNMA and generally result in no gain or loss because the loans are ~~primarily related to discontinued hedges of floating rate loans. For cash flow hedges as of March 31, 2022,~~measured at fair value on a recurring basis. Additionally, we are hedging our interest rate and foreign currency exposure to the variability of future cash flows for all forecasted transactions for a maximum of 10 years. For additional information on our accounting hedges, see Note 1 (Summary of Significant Accounting Policies) in our 2021 Form 10-K.

may transfer certain government insured loans that we previously


			Wells Fargo & Company			109

Note ~~14:~~13: ~~Derivatives~~Securitizations and Variable Interest Entities (continued)

~~Table 14.3~~repurchased. These loans are carried at the lower of cost or market, and ~~Table 14.4 show~~we recognize gains on such transfers when the ~~net gains (losses) related to derivatives in fair value and cash flow hedging relationships, respectively.~~

market value is greater than the carrying value of the loan when it is sold.

Table ~~14.3:~~13.1: ~~Gains (Losses) Recognized~~Transfers with Continuing Involvement



	2023			2022
(in millions)	Residential mortgages		Commercial mortgages	Residential mortgages	Commercial mortgages
Quarter ended March 31,









Assets sold	$	4,461	1,499	26,174	4,033
Proceeds from transfer (1)	4,461		1,540	26,226	4,097
Net gains (losses) on sale	—		41	52	64

Continuing involvement (2):
Servicing rights recognized	$	47	18	327	29
Securities recognized (3)	—		26	1,587	104

(1)Represents cash proceeds and the fair value of non-cash beneficial interests recognized at securitization settlement.

(2)Represents assets or liabilities recognized at securitization settlement date related to our continuing involvement in the transferred assets.

(3)Represents debt securities obtained at securitization settlement held for investment purposes that are classified as available-for-sale or held-to-maturity. In 2022, these predominantly related to agency securities. Excludes trading debt securities held temporarily for market-marking purposes, which are sold to third parties at or shortly after securitization settlement, of $1.9 billion and $6.7 billion, during the quarters ended March 31, 2023 and 2022, respectively.

In the normal course of business, we purchase certain

non-agency securities at initial securitization or subsequently in the secondary market, which we hold for investment. We also provide seller financing in the form of loans. During the quarters ended March 31, 2023 and 2022, we received cash flows of $50 million and $136 million, respectively, related to principal and interest payments on ~~Fair Value Hedging Relationships~~these securities and loans, which exclude cash flows related to trading activities.

Net interest income Noninterest income Total recorded in net income Total recorded in OCI
(in millions) Debt securities Deposits Long-term debt Other Derivative gains (losses) Derivative gains (losses)
Quarter ended March 31, 2022
Total amounts presented in the consolidated statement of income and other comprehensive income $ 2,563 (83) (761) 556 N/A 27
Interest contracts
Amounts related to interest settlements on derivatives (41) 41 481 — 481 N/A
Recognized on derivatives 1,262 (145) (6,869) — (5,752) —
Recognized on hedged items (1,248) 143 6,813 — 5,708 N/A
Total gains (losses) (pre-tax) on interest rate contracts (27) 39 425 — 437 —
Foreign exchange contracts
Amounts related to interest settlements on derivatives — — 4 — 4 N/A
Recognized on derivatives — — (456) (242) (698) 64
Recognized on hedged items — — 445 241 686 N/A
Total gains (losses) (pre-tax) on foreign exchange contracts — — (7) (1) (8) 64
Total gains (losses) (pre-tax) recognized on fair value hedges $ (27) 39 418 (1) 429 64
Quarter ended March 31, 2021
Total amounts presented in the consolidated statement of income and other comprehensive income $ 2,312 (112) (1,026) 982 N/A 47
Interest contracts
Amounts related to interest settlements on derivatives (67) 91 550 — 574 N/A
Recognized on derivatives 1,294 (123) (7,071) — (5,900) —
Recognized on hedged items (1,258) 119 6,944 — 5,805 N/A
Total gains (losses) (pre-tax) on interest rate contracts (31) 87 423 — 479 —
Foreign exchange contracts
Amounts related to interest settlements on derivatives 28 — (1) — 27 N/A
Recognized on derivatives 1 — (227) 307 81 25
Recognized on hedged items (1) — 194 (317) (124) N/A
Total gains (losses) (pre-tax) on foreign exchange contracts 28 — (34) (10) (16) 25
Total gains (losses) (pre-tax) recognized on fair value hedges $ (3) 87 389 (10) 463 25
Table 13.2 presents the key weighted-average assumptions we used to initially measure residential MSRs recognized during the periods presented.

Table 13.2:Residential MSRs – Assumptions at Securitization Date



	2023			2022
Quarter ended March 31,




Prepayment rate (1)	18.6		%	11.1
Discount rate	9.7			7.0
Cost to service ($ per loan)	$	193		112

(1)Includes a blend of prepayment speeds and expected defaults. Prepayment speeds are influenced by mortgage interest rates as well as our estimation of drivers of borrower behavior.

See Note 12 (Fair Values of Assets and Liabilities) and

Note 6 (Mortgage Banking Activities) for additional information on key assumptions for residential MSRs.

RESECURITIZATION ACTIVITIES We enter into resecuritization transactions as part of our trading activities to accommodate the investment and risk management activities of our customers. In resecuritization transactions, we transfer trading debt securities to VIEs in exchange for new beneficial interests that are sold to third parties at or shortly after securitization settlement. This activity is performed for customers seeking a specific return or risk profile. Substantially all of our transactions involve the resecuritization of conforming mortgage-backed securities issued by the GSEs or guaranteed by GNMA. We do not consolidate the resecuritization VIEs as we share in the decision-making power with third parties and do not hold significant economic interests in the VIEs other than for market-making activities. During the quarters ended March 31, 2023 and 2022, we transferred securities of $3.2 billion and $6.4 billion, respectively, to resecuritization VIEs, and retained securities of $198 million and $738 million, respectively. These amounts are not included in Table 13.1. Related total VIE assets were $111.6 billion and $112.0 billion at March 31, 2023, and December 31, 2022, respectively. As of March 31, 2023, and December 31, 2022, we held $1.3 billion and $793 million of securities, respectively.


110			Wells Fargo & Company

~~Table 14.4:Gains (Losses) Recognized on Cash Flow Hedging Relationships~~
Net interest income Total recorded in net income Total recorded in OCI
(in millions) Loans Other interest income Long-term debt Derivative gains (losses) Derivative gains (losses)
Quarter ended March 31, 2022
Total amounts presented in the consolidated statement of income and other comprehensive income $ 7,218 90 (761) N/A 27
Interest rate contracts:
Realized gains (losses) (pre-tax) reclassified from OCI into net income (16) 4 — (12) 12
Net unrealized gains (losses) (pre-tax) recognized in OCI N/A N/A N/A N/A (48)
Total gains (losses) (pre-tax) on interest rate contracts (16) 4 — (12) (36)
Foreign exchange contracts:
Realized gains (losses) (pre-tax) reclassified from OCI into net income — — (2) (2) 2
Net unrealized gains (losses) (pre-tax) recognized in OCI N/A N/A N/A N/A (3)
Total gains (losses) (pre-tax) on foreign exchange contracts — — (2) (2) (1)
Total gains (losses) (pre-tax) recognized on cash flow hedges $ (16) 4 (2) (14) (37)
Quarter ended March 31, 2021
Total amounts presented in the consolidated statement of income and other comprehensive income $ 7,201 65 (1,026) N/A 47
Interest rate contracts:
Realized gains (losses) (pre-tax) reclassified from OCI into net income (52) — — (52) 52
Net unrealized gains (losses) (pre-tax) recognized in OCI N/A N/A N/A N/A (20)
Total gains (losses) (pre-tax) on interest rate contracts (52) — — (52) 32
Foreign exchange contracts:
Realized gains (losses) (pre-tax) reclassified from OCI into net income — — (1) (1) 1
Net unrealized gains (losses) (pre-tax) recognized in OCI N/A N/A N/A N/A (11)
Total gains (losses) (pre-tax) on foreign exchange contracts — — (1) (1) (10)
Total gains (losses) (pre-tax) recognized on cash flow hedges $ (52) — (1) (53) 22

Sold or Securitized Loans Serviced for Others


			~~Wells Fargo & Company~~			~~111~~

~~Note 14:~~ ~~Derivatives~~ ~~(continued)~~

Table ~~14.5 shows the carrying amount~~13.3 presents information about loans that we sold or securitized in which we have ongoing involvement as servicer. Delinquent loans include loans 90 days or more past due and ~~associated cumulative basis adjustment related~~loans in bankruptcy, regardless of delinquency status. For loans sold or securitized where servicing is our only form of continuing involvement, we generally experience a loss only if we were required to ~~the application of hedge accounting that is included in the carrying amount of hedged assets and liabilities in fair value hedging relationships.~~repurchase a delinquent loan or foreclosed asset due

Table ~~14.5:~~13.3: ~~Hedged Items in Fair Value Hedging Relationships~~Sold or Securitized Loans Serviced for Others

Hedged items currently designated Hedged items no longer designated
(in millions) Carrying amount of assets/(liabilities) (1)(2) Hedge accounting
basis adjustment
assets/(liabilities) (3) Carrying amount of assets/(liabilities) (2) Hedge accounting basis adjustment
assets/(liabilities)
March 31, 2022
Available-for-sale debt securities (4) $ 22,937 (1,818) 17,723 903
Deposits (7,135) (1) (11) —
Long-term debt (134,848) 2,096 (6) —
December 31, 2021
Available-for-sale debt securities (4) $ 24,144 (559) 17,962 965
Deposits (10,187) (144) — —
Long-term debt (138,801) (5,192) — —


						Net charge-offs
	Total loans			Delinquent loans and foreclosed assets (1)		Quarter ended March 31,
(in millions)	Mar 31, 2023		Dec 31, 2022	Mar 31, 2023	Dec 31, 2022	2023	2022
Commercial	$	66,844	67,029	1,140	912	14	4
Residential	9,003		9,201	457	501	5	3
Total off-balance sheet sold or securitized loans	$	75,847	76,230	1,597	1,413	19	7

(1)~~Does not include the carrying amount of hedged items where only foreign currency risk is the designated hedged risk. The carrying amount excluded for debt securities is $848~~Includes $290 million and ~~for long-term debt is $(412)~~$274 million as of commercial foreclosed assets and $29 million and $25 million of residential foreclosed assets at March 31, ~~2022,~~2023, and ~~$873 million for debt securities and $(2.7) billion for long-term debt as of~~ December 31, ~~2021.~~

~~(2)~~Represents the full carrying amount of the hedged asset or liability item as of the balance sheet date, except for circumstances in which only a portion of the asset or liability was designated as the hedged item in which case only the portion designated is presented.

~~(3)The balance includes $124 million and $203 million of debt securities and long-term debt cumulative basis adjustments as of March 31,~~ 2022, respectively, and $136 million and $188 million of debt securities and long-term debt cumulative basis adjustments as of December 31, 2021, respectively, on terminated hedges whereby the hedged items have subsequently been re-designated into existing hedges.

~~(4)Carrying amount represents the amortized cost.~~respectively.

Derivatives Not Designated as Hedging Instruments

Derivatives not designated as hedging instruments include economic hedges and derivatives entered into for customer accommodation trading purposes.

Changes in the fair values of derivatives used to economically hedge the deferred compensation plan are reported in personnel expense.

For additional information on ~~economic hedges and other~~our derivatives activities, see Note 1614 (Derivatives) in our ~~2021~~2022 Form 10-K.


~~112~~98			Wells Fargo & Company

Table ~~14.6~~11.6 shows the net gains (losses), recognized by income statement lines, related to derivatives not designated as hedging instruments.

Table ~~14.6:~~11.6: Gains (Losses) on Derivatives Not Designated as Hedging Instruments


		Noninterest income					Noninterest expense		Noninterest income						Noninterest expense
(in millions)	(in millions)	Mortgage banking		Net gains from trading and securities	Other	Total		Personnel expense		(in millions)	Mortgage banking		Net gains from trading and securities	Other	Total	Personnel expense

Quarter ended March 31, 2022
Quarter ended March 31, 2023										Quarter ended March 31, 2023
Net gains (losses) recognized on economic hedges derivatives:	Net gains (losses) recognized on economic hedges derivatives:									Net gains (losses) recognized on economic hedges derivatives:
Interest contracts (1)	Interest contracts (1)	$	(368)	—	(26)	(394)		—		Interest contracts (1)	$	146	—	48	194	—
Equity contracts ~~(2)~~	Equity contracts ~~(2)~~	—		—	8	8		266		Equity contracts ~~(2)~~	—		—	(80)	(80)	(191)
Foreign exchange contracts	Foreign exchange contracts	—		—	231	231		—		Foreign exchange contracts	—		—	(366)	(366)	—
Credit contracts	Credit contracts	—		—	5	5		—		Credit contracts	—		—	(1)	(1)	—
Subtotal	Subtotal	(368)		—	218	(150)		266		Subtotal	146		—	(399)	(253)	(191)
Net gains (losses) recognized on customer accommodation trading and other derivatives:	Net gains (losses) recognized on customer accommodation trading and other derivatives:									Net gains (losses) recognized on customer accommodation trading and other derivatives:
Interest contracts	Interest contracts	(498)		3,214	—	2,716		—		Interest contracts	(2)		(336)	—	(338)	—
Commodity contracts	Commodity contracts	—		113	—	113		—		Commodity contracts	—		112	—	112	—
Equity contracts ~~(2)~~	Equity contracts ~~(2)~~	—		1,003	(38)	965		—		Equity contracts ~~(2)~~	—		(1,470)	(64)	(1,534)	—
Foreign exchange contracts	Foreign exchange contracts	—		327	—	327		—		Foreign exchange contracts	—		(99)	—	(99)	—
Credit contracts	Credit contracts	—		12	—	12		—		Credit contracts	—		(7)	—	(7)	—
Subtotal	Subtotal	(498)		4,669	(38)	4,133		—		Subtotal	(2)		(1,800)	(64)	(1,866)	—
Net gains (losses) recognized related to derivatives not designated as hedging instruments	Net gains (losses) recognized related to derivatives not designated as hedging instruments	$	(866)	4,669	180	3,983		266		Net gains (losses) recognized related to derivatives not designated as hedging instruments	$	144	(1,800)	(463)	(2,119)	(191)

Quarter ended March 31, 2021
Quarter ended March 31, 2022										Quarter ended March 31, 2022
Net gains (losses) recognized on economic hedges derivatives:	Net gains (losses) recognized on economic hedges derivatives:									Net gains (losses) recognized on economic hedges derivatives:
Interest contracts (1)	Interest contracts (1)	$	(375)	—	(20)	(395)		—		Interest contracts (1)	$	(368)	—	(26)	(394)	—
Equity contracts(2)	Equity contracts(2)	—		425	5	430		(160)		Equity contracts(2)	—		—	5	5	266
Foreign exchange contracts	Foreign exchange contracts	—		—	71	71		—		Foreign exchange contracts	—		—	231	231	—
Credit contracts	Credit contracts	—		—	—	—		—		Credit contracts	—		—	5	5	—
Subtotal	Subtotal	(375)		425	56	106		(160)		Subtotal	(368)		—	215	(153)	266
Net gains (losses) recognized on customer accommodation trading and other derivatives:	Net gains (losses) recognized on customer accommodation trading and other derivatives:									Net gains (losses) recognized on customer accommodation trading and other derivatives:
Interest contracts	Interest contracts	(531)		1,924	—	1,393		—		Interest contracts	(498)		3,214	—	2,716	—
Commodity contracts	Commodity contracts	—		80	—	80		—		Commodity contracts	—		113	—	113	—
Equity contracts	Equity contracts	—		(1,163)	(89)	(1,252)		—		Equity contracts	—		1,003	(38)	965	—
Foreign exchange contracts	Foreign exchange contracts	—		464	—	464		—		Foreign exchange contracts	—		327	—	327	—
Credit contracts	Credit contracts	—		(28)	—	(28)		—		Credit contracts	—		12	—	12	—
Subtotal	Subtotal	(531)		1,277	(89)	657		—		Subtotal	(498)		4,669	(38)	4,133	—
Net gains (losses) recognized related to derivatives not designated as hedging instruments	Net gains (losses) recognized related to derivatives not designated as hedging instruments	$	(906)	1,702	(33)	763		(160)		Net gains (losses) recognized related to derivatives not designated as hedging instruments	$	(866)	4,669	177	3,980	266

(1)Mortgage banking amounts for first quarter ~~2022~~2023 are comprised of gains (losses) of ~~$(1.6) billion~~$185 million related to derivatives used as economic hedges of MSRs measured at fair value offset by gains (losses) of ~~$1.3 billion~~$(39) million related to derivatives used as economic hedges of mortgage loans held for sale and derivative loan commitments. The corresponding amounts for first quarter ~~2021~~2022 are comprised of ~~gains~~gain (losses) of $(1.6) billion offset by gains (losses) of $1.3 billion.

(2)In first quarter ~~2022,~~2023, we ~~prospectively reclassified certain equity securities and related economic hedge derivatives from “not held~~adopted ASU 2018-12 – Financial Services – Insurance (Topic 944): Targeted Improvements to the Accounting for ~~trading activities” to “held for trading activities” to better reflect the business activity of those financial instruments.~~Long-Duration Contracts. For additional information, ~~on Trading Activities,~~ see Note 1 (Summary of Significant Accounting Policies) ~~in our 2021 Form 10-K.~~.


			Wells Fargo & Company			~~113~~99

Note ~~14:~~11: Derivatives (continued)

Credit Derivatives

Table ~~14.7~~11.7 provides details of sold credit derivatives.

Table ~~14.7:~~11.7: Sold Credit Derivatives


		Notional amount				Notional amount
(in millions)	(in millions)	Protection sold		Protection sold – non-investment grade	(in millions)	Protection sold		Protection sold – non-investment grade
March 31, 2022
March 31, 2023					March 31, 2023
Credit default swaps	Credit default swaps	$	12,438	2,622	Credit default swaps	$	17,033	2,200
Risk participation swaps	Risk participation swaps	6,288		6,143	Risk participation swaps	6,782		6,571
Total credit derivatives	Total credit derivatives	18,726		8,765	Total credit derivatives	$	23,815	8,771
December 31, 2021
December 31, 2022					December 31, 2022
Credit default swaps	Credit default swaps	8,033		1,982	Credit default swaps	$	12,733	1,860
Risk participation swaps	Risk participation swaps	6,756		6,012	Risk participation swaps	6,728		6,518
Total credit derivatives	Total credit derivatives	14,789		7,994	Total credit derivatives	$	19,461	8,378

Credit-Risk Contingent Features

Certain of our derivative contracts contain provisions whereby if the credit rating of our debt were to be downgraded by certain major credit rating agencies, the counterparty could demand additional collateral or require termination or replacement of derivative instruments in a net liability position. Table ~~14.8~~11.8 illustrates our exposure to OTC bilateral derivative contracts with credit-risk contingent features, collateral we have posted, and the additional collateral we would be required to post if the credit rating of our debt was downgraded below investment grade.

Table ~~14.8:~~11.8: Credit-Risk Contingent Features


(in billions)	(in billions)	Mar 31, 2022		Dec 31, 2021	(in billions)	Mar 31, 2023		Dec 31, 2022
Net derivative liabilities with credit-risk contingent features	Net derivative liabilities with credit-risk contingent features	$	11.6	12.2	Net derivative liabilities with credit-risk contingent features	$	17.4	20.7
Collateral posted	Collateral posted	10.1		11.0	Collateral posted	17.3		17.4
Additional collateral to be posted upon a below investment grade credit rating (1)	Additional collateral to be posted upon a below investment grade credit rating (1)	1.5		1.2	Additional collateral to be posted upon a below investment grade credit rating (1)	0.1		3.3

(1)Any credit rating below investment grade requires us to post the maximum amount of collateral.


~~114~~100			Wells Fargo & Company


Note ~~15:~~12: Fair Values of Assets and Liabilities

We use fair value measurements to record fair value adjustments to certain assets and liabilities and to fulfill fair value disclosure requirements. Assets and liabilities recorded at fair value on a recurring basis, such as derivatives, residential MSRs, and trading or AFS debt securities, are presented in Table ~~15.1~~12.1 in this Note. Additionally, from time to time, we record fair value adjustments on a nonrecurring basis. These nonrecurring adjustments typically involve application of lower of cost or fair value (LOCOM) accounting, write-downs of individual assets or application of the measurement alternative for nonmarketable equity securities. Assets recorded at fair value on a nonrecurring basis are presented in Table ~~15.4~~12.4 in this Note. We provide in Table ~~15.8~~12.9 estimates of fair value for financial instruments that are not recorded at fair value, such as loans and debt liabilities carried at amortized cost.

See Note 1 (Summary of Significant Accounting Policies) in our ~~2021~~2022 Form 10-K for discussion of how we determine fair value. For descriptions of the valuation methodologies we use for assets and liabilities recorded at fair value on a recurring or nonrecurring basis, see Note 1715 (Fair Values of Assets and Liabilities) in our ~~2021~~2022 Form 10-K.

FAIR VALUE HIERARCHY We classify our assets and liabilities recorded at fair value as either Level 1, 2, or 3 in the fair value hierarchy. The highest priority (Level 1) is assigned to valuations based on unadjusted quoted prices in active markets and the lowest priority (Level 3) is assigned to valuations based on significant unobservable inputs. See Note 1 (Summary of Significant Accounting Policies) in our ~~2021~~2022 Form 10-K for a detailed description of the fair value hierarchy.


			Wells Fargo & Company			~~115~~101

Note ~~15:~~12: Fair Values of Assets and Liabilities (continued)

Assets and Liabilities Recorded at Fair Value on a Recurring Basis

Table ~~15.1~~12.1 presents the balances of assets and liabilities recorded at fair value on a recurring basis.

Table ~~15.1:~~12.1: Fair Value on a Recurring Basis


		March 31, 2022					December 31, 2021						March 31, 2023							December 31, 2022
(in millions)	(in millions)	Level 1		Level 2	Level 3	Total	Level 1		Level 2	Level 3	Total	(in millions)	Level 1		Level 2		Level 3	Total		Level 1	Level 2	Level 3	Total
Trading debt securities:	Trading debt securities:											Trading debt securities:
Securities of U.S. Treasury and federal agencies	Securities of U.S. Treasury and federal agencies	$	29,706	3,317	—	33,023	$	27,607	2,249	—	29,856	Securities of U.S. Treasury and federal agencies	$	29,984	4,132		—	34,116		28,844	4,530	—	33,374
Collateralized loan obligations	Collateralized loan obligations	—		683	179	862	—		655	211	866	Collateralized loan obligations	—		555		117	672		—	540	150	690
Corporate debt securities	Corporate debt securities	—		11,096	18	11,114	—		9,987	18	10,005	Corporate debt securities	—		11,447		15	11,462		—	10,344	23	10,367
Federal agency mortgage-backed securities	Federal agency mortgage-backed securities	—		32,788	—	32,788	—		40,350	—	40,350	Federal agency mortgage-backed securities	—		33,776		—	33,776		—	34,447	—	34,447
Non-agency mortgage-backed securities	Non-agency mortgage-backed securities	—		1,518	4	1,522	—		1,531	11	1,542	Non-agency mortgage-backed securities	—		1,277		—	1,277		—	1,243	12	1,255
Other debt securities	Other debt securities	—		7,363	—	7,363	—		5,645	1	5,646	Other debt securities	—		8,749		—	8,749		—	6,022	—	6,022
Total trading debt securities	Total trading debt securities	29,706		56,765	201	86,672	27,607		60,417	241	88,265	Total trading debt securities	29,984		59,936		132	90,052		28,844	57,126	185	86,155
Available-for-sale debt securities:	Available-for-sale debt securities:											Available-for-sale debt securities:
Securities of U.S. Treasury and federal agencies	Securities of U.S. Treasury and federal agencies	46,433		—	—	46,433	39,661		—	—	39,661	Securities of U.S. Treasury and federal agencies	58,043		—		—	58,043		45,285	—	—	45,285
Non-U.S. government securities	Non-U.S. government securities	—		116	—	116	—		71	—	71	Non-U.S. government securities	—		162		—	162		—	162	—	162
Securities of U.S. states and political subdivisions	Securities of U.S. states and political subdivisions	—		16,354	132	16,486	—		16,832	85	16,917	Securities of U.S. states and political subdivisions	—		21,403		357	21,760		—	10,332	113	10,445
Federal agency mortgage-backed securities	Federal agency mortgage-backed securities	—		91,437	—	91,437	—		105,886	—	105,886	Federal agency mortgage-backed securities	—		55,205		—	55,205		—	48,137	—	48,137
Non-agency mortgage-backed securities	Non-agency mortgage-backed securities	—		4,597	11	4,608	—		4,522	10	4,532	Non-agency mortgage-backed securities	—		3,144		—	3,144		—	3,284	—	3,284
Collateralized loan obligations	Collateralized loan obligations	—		5,197	—	5,197	—		5,708	—	5,708	Collateralized loan obligations	—		3,905		—	3,905		—	3,981	—	3,981
Other debt securities	Other debt securities	—		3,964	195	4,159	—		4,378	91	4,469	Other debt securities	—		2,031		148	2,179		—	2,137	163	2,300
Total available-for-sale debt securities	Total available-for-sale debt securities	46,433		121,665	338	168,436	39,661		137,397	186	177,244	Total available-for-sale debt securities	58,043		85,850		505	144,398		45,285	68,033	276	113,594
Loans held for sale	Loans held for sale	—		12,136	1,019	13,155	—		14,862	1,033	15,895	Loans held for sale	—		2,863		564	3,427		—	3,427	793	4,220
Mortgage servicing rights (residential)	Mortgage servicing rights (residential)	—		—	8,511	8,511	—		—	6,920	6,920	Mortgage servicing rights (residential)	—		—		8,819	8,819		—	—	9,310	9,310
Derivative assets (gross):	Derivative assets (gross):											Derivative assets (gross):
Interest rate contracts	Interest rate contracts	241		30,251	46	30,538	52		22,296	190	22,538	Interest rate contracts	234		32,841		559	33,634		262	40,503	321	41,086
Commodity contracts	Commodity contracts	—		13,531	316	13,847	—		5,902	63	5,965	Commodity contracts	—		3,723		25	3,748		—	5,866	134	6,000
Equity contracts	Equity contracts	3,752		8,555	605	12,912	6,402		9,350	2,019	17,771	Equity contracts	167		10,739		199	11,105		112	9,051	410	9,573
Foreign exchange contracts	Foreign exchange contracts	33		8,912	16	8,961	8		6,573	7	6,588	Foreign exchange contracts	27		13,659		11	13,697		27	22,175	11	22,213
Credit contracts	Credit contracts	—		32	18	50	—		32	14	46	Credit contracts	—		46		22	68		—	44	22	66

Total derivative assets (gross)	Total derivative assets (gross)	4,026		61,281	1,001	66,308	6,462		44,153	2,293	52,908	Total derivative assets (gross)	428		61,008		816	62,252		401	77,639	898	78,938
Equity securities:	Equity securities:											Equity securities:
Marketable	Marketable	25,526		236	4	25,766	29,968		82	4	30,054	Marketable	14,319		95		4	14,418		18,527	86	3	18,616
Nonmarketable ~~(1)~~	Nonmarketable ~~(1)~~	—		10,487	22	10,509	—		57	8,906	8,963	Nonmarketable ~~(1)~~	—		10,557		28	10,585		—	9,750	17	9,767
Total equity securities	Total equity securities	25,526		10,723	26	36,275	29,968		139	8,910	39,017	Total equity securities	14,319		10,652		32	25,003		18,527	9,836	20	28,383
Total assets prior to derivative netting	Total assets prior to derivative netting	$	105,691	262,570	11,096	379,357	$	103,698	256,968	19,583	380,249	Total assets prior to derivative netting	$	102,774	220,309		10,868	333,951		93,057	216,061	11,482	320,600
Derivative netting (2)						(38,943)					(31,430)
Derivative netting (1)												Derivative netting (1)						(45,135)					(56,164)
Total assets after derivative netting	Total assets after derivative netting					340,414					348,819	Total assets after derivative netting						$	288,816				264,436
Derivative liabilities (gross):	Derivative liabilities (gross):											Derivative liabilities (gross):
Interest rate contracts	Interest rate contracts	$	(131)	(27,356)	(222)	(27,709)	$	(28)	(17,712)	(63)	(17,803)	Interest rate contracts	$	(209)	(32,636)		(3,311)	(36,156)		(193)	(40,377)	(2,903)	(43,473)
Commodity contracts	Commodity contracts	—		(5,543)	(308)	(5,851)	—		(2,351)	(66)	(2,417)	Commodity contracts	—		(3,013)		(38)	(3,051)		—	(3,325)	(120)	(3,445)
Equity contracts		(2,620)		(8,862)	(2,030)	(13,512)	(5,820)		(10,753)	(2,448)	(19,021)
Equity contracts (2)												Equity contracts (2)	(155)		(9,635)		(1,477)	(11,267)		(118)	(6,502)	(1,634)	(8,254)
Foreign exchange contracts	Foreign exchange contracts	(30)		(9,051)	(13)	(9,094)	(8)		(6,654)	(10)	(6,672)	Foreign exchange contracts	(37)		(16,263)		(27)	(16,327)		(29)	(26,622)	(35)	(26,686)
Credit contracts	Credit contracts	—		(36)	(2)	(38)	—		(40)	(3)	(43)	Credit contracts	—		(29)		(3)	(32)		—	(33)	(3)	(36)

Total derivative liabilities (gross)	Total derivative liabilities (gross)	(2,781)		(50,848)	(2,575)	(56,204)	(5,856)		(37,510)	(2,590)	(45,956)	Total derivative liabilities (gross)	(401)		(61,576)		(4,856)	(66,833)		(340)	(76,859)	(4,695)	(81,894)

Short-sale and other trading liabilities		(20,180)		(6,202)	—	(26,382)	(15,436)		(5,249)	—	(20,685)
Short-sale and other liabilities (2)												Short-sale and other liabilities (2)	(17,951)		(4,983)		(193)	(23,127)		(14,791)	(5,513)	(167)	(20,471)
Long-term debt												Long-term debt	—		(1,506)		—	(1,506)		—	(1,346)	—	(1,346)
Total liabilities prior to derivative netting	Total liabilities prior to derivative netting	$	(22,961)	(57,050)	(2,575)	(82,586)	$	(21,292)	(42,759)	(2,590)	(66,641)	Total liabilities prior to derivative netting	$	(18,352)	$	(68,065)	(5,049)	(91,466)		(15,131)	(83,718)	(4,862)	(103,711)
Derivative netting (2)						40,705					36,532
Derivative netting (1)												Derivative netting (1)						49,936					61,827
Total liabilities after derivative netting	Total liabilities after derivative netting					(41,881)					(30,109)	Total liabilities after derivative netting						$	(41,530)				(41,884)

(1)Excludes $87 million and $81 million of nonmarketable equity securities as of March 31, 2022, and December 31, 2021, respectively, that are measured at fair value using non-published NAV per share (or its equivalent) as a practical expedient that are not classified in the fair value hierarchy.

~~(2)~~Represents balance sheet netting of derivative asset and liability balances, related cash collateral and portfolio level counterparty valuation adjustments. See Note 1411 (Derivatives) for additional information.


~~116~~102			Wells Fargo & Company

Level 3 Assets and Liabilities Recorded at Fair Value on a Recurring Basis

Table ~~15.2~~12.2 presents the changes in Level 3 assets and liabilities measured at fair value on a recurring basis.

Table ~~15.2:~~12.2: Changes in Level 3 Fair Value Assets and Liabilities on a Recurring Basis


											Net unrealized gains (losses) related to assets and liabilities held at period end												Net unrealized gains (losses) related to assets and liabilities held at period end
(in millions)	(in millions)	Balance, beginning of period		Net gains/(losses) (1)	Purchases (2)	Sales	Settlements	Transfers into Level 3 (3)	Transfers out of Level 3 (4)	Balance, end of period		(5)	(in millions)	Balance, beginning of period		Net gains/(losses) (1)	Purchases (2)	Sales	Settlements	Transfers into Level 3 (3)	Transfers out of Level 3 (4)	Balance, end of period		(5)

Quarter ended March 31, 2022
Trading debt securities		$	241	(15)	47	(14)	(35)	5	(28)	201	(17)	(6)
Available-for-sale debt securities		186		(21)	52	—	(5)	126	—	338	(21)	(6)
Loans held for sale		1,033		(57)	63	(43)	(73)	102	(6)	1,019	(57)	(7)
Mortgage servicing rights (residential) (8)		6,920		1,248	342	1	—	—	—	8,511	1,605	(7)
Net derivative assets and liabilities:
Interest rate contracts		127		(578)	—	—	275	—	—	(176)	(259)
Equity contracts		(429)		(213)	—	—	589	(80)	(1,292)	(1,425)	269
Other derivative contracts		5		(22)	—	—	44	—	—	27	18
Total derivative contracts		(297)		(813)	—	—	908	(80)	(1,292)	(1,574)	28	(9)
Equity securities		8,910		(1)	—	—	—	2	(8,885)	26	(2)	(6)
Quarter ended March 31, 2021

Quarter ended March 31, 2023													Quarter ended March 31, 2023
Trading debt securities	Trading debt securities	$	173	16	169	(173)	—	7	—	192	8	(6)	Trading debt securities	$	185	1	76	(112)	(1)	—	(17)	132	1	(6)
Available-for-sale debt securities	Available-for-sale debt securities	2,994		(7)	15	—	(68)	242	(34)	3,142	(27)	(6)	Available-for-sale debt securities	276		(20)	69	—	(6)	233	(47)	505	(19)	(6)
Loans held for sale	Loans held for sale	1,234		(19)	129	(148)	(110)	81	(1)	1,166	(17)	(7)	Loans held for sale	793		10	73	(49)	(39)	16	(240)	564	10	(7)
Mortgage servicing rights (residential) (8)	Mortgage servicing rights (residential) (8)	6,125		1,006	406	(1)	—	—	—	7,536	1,591	(7)	Mortgage servicing rights (residential) (8)	9,310		(546)	48	7	—	—	—	8,819	(225)	(7)
Net derivative assets and liabilities:	Net derivative assets and liabilities:												Net derivative assets and liabilities:
Interest rate contracts	Interest rate contracts	446		(541)	—	—	101	—	(5)	1	(225)		Interest rate contracts	(2,582)		295	—	—	267	(746)	14	(2,752)	509
Equity contracts	Equity contracts	(314)		(168)	—	—	40	(27)	40	(429)	(177)		Equity contracts	(1,224)		(303)	—	—	285	(38)	2	(1,278)	(2)
Other derivative contracts	Other derivative contracts	39		27	—	—	(10)	—	—	56	16		Other derivative contracts	9		(55)	2	(1)	37	(2)	—	(10)	(41)
Total derivative contracts	Total derivative contracts	171		(682)	—	—	131	(27)	35	(372)	(386)	(9)	Total derivative contracts	(3,797)		(63)	2	(1)	589	(786)	16	(4,040)	466	(9)
Equity securities	Equity securities	9,233		(365)	—	(5)	—	2	—	8,865	(365)	(6)	Equity securities	20		(1)	—	—	—	13	—	32	(1)	(6)

Other liabilities													Other liabilities	(167)		(26)	—	—	—	—	—	(193)	(26)	(10)
Quarter ended March 31, 2022													Quarter ended March 31, 2022
Trading debt securities													Trading debt securities	$	241	(15)	47	(14)	(35)	5	(28)	201	(17)	(6)
Available-for-sale debt securities													Available-for-sale debt securities	186		(21)	52	—	(5)	126	—	338	(21)	(6)
Loans held for sale													Loans held for sale	1,033		(57)	63	(43)	(73)	102	(6)	1,019	(57)	(7)
Mortgage servicing rights (residential) (8)													Mortgage servicing rights (residential) (8)	6,920		1,248	342	1	—	—	—	8,511	1,605	(7)
Net derivative assets and liabilities:													Net derivative assets and liabilities:
Interest rate contracts													Interest rate contracts	127		(578)	—	—	275	—	—	(176)	(259)
Equity contracts (11)													Equity contracts (11)	(417)		(216)	—	—	589	(80)	(1,292)	(1,416)	266
Other derivative contracts													Other derivative contracts	5		(22)	—	—	44	—	—	27	18
Total derivative contracts													Total derivative contracts	(285)		(816)	—	—	908	(80)	(1,292)	(1,565)	25	(9)
Equity securities													Equity securities	8,910		(1)	—	—	—	2	(8,885)	26	(2)	(6)
Other liabilities (11)													Other liabilities (11)	(791)		153	—	—	—	—	—	(638)	153	(10)

(1)Includes net gains (losses) included in both net income and other comprehensive income. All amounts represent net gains (losses) included in net income except for ~~$(21)~~$(16) million and ~~$14~~$(21) million included in other comprehensive income from AFS debt securities, and $0 and $14 million in other comprehensive income from other liabilities for first quarter ~~2022~~2023 and ~~2021,~~2022, respectively.

(2)Includes originations of mortgage servicing rights and loans held for sale.

(3)All assets and liabilities transferred into Level 3 were previously classified within Level 2.

(5)Includes net unrealized gains (losses) related to assets and liabilities held at period end included in both net income and other comprehensive income. All amounts represent net unrealized gains (losses) included in net income except for ~~$(21)~~$(15) million and $0$(21) million included in other comprehensive income from AFS debt securities, and $0 and $14 million in other comprehensive income from other liabilities for first quarter ~~2022~~2023 and ~~2021,~~2022, respectively.

(6)Included in net gains from trading and securities ~~in the~~on our consolidated statement of income.

(7)Included in mortgage banking income ~~in the~~on our consolidated statement of income.

(8)For additional information on the changes in mortgage servicing rights, see Note 96 (Mortgage Banking Activities).

(9)Included in mortgage banking income, net gains from trading and securities, and other noninterest income ~~in the~~on our consolidated statement of income.


			~~Wells Fargo & Company~~			~~117~~

(10)Included in other noninterest income on our consolidated statement of income.

Table ~~15.3~~12.3 provides quantitative information about the valuation techniques and significant unobservable inputs used in the valuation of our Level 3 assets and liabilities measured at fair value on a recurring basis.

The significant unobservable inputs for Level 3 assets inherent in the fair values obtained from third-party vendors are not included in the table, as the specific inputs applied are not

provided by the vendor (for additional information on vendor-developed valuations, see Note 1715 (Fair Values of Assets and Liabilities) in our ~~2021~~2022 Form 10-K).

Weighted averages of inputs are calculated using outstanding unpaid principal balance for cash instruments, such as loans and securities, and notional amounts for derivative instruments.


			Wells Fargo & Company			103

Note 12: Fair Values of Assets and Liabilities (continued)

Table ~~15.3:~~12.3: Valuation Techniques – Recurring Basis


($ in millions, except cost to service amounts)	($ in millions, except cost to service amounts)	Fair Value Level 3			Valuation Technique	Significant Unobservable Input	Range of Inputs					Weighted Average	($ in millions, except cost to service amounts)	Fair Value Level 3			Valuation Technique	Significant Unobservable Input	Range of Inputs					Weighted Average
March 31, 2022
March 31, 2023													March 31, 2023
Trading and available-for-sale debt securities	Trading and available-for-sale debt securities	$	182		Discounted cash flow	Discount rate	1.1		-	12.5	%	4.8	Trading and available-for-sale debt securities	$	398		Discounted cash flow	Discount rate	2.5		-	12.5	%	5.5
		12			Vendor priced
		240			Market comparable pricing	Comparability adjustment	(29.2)		-	13.7		(5.9)		132			Market comparable pricing	Comparability adjustment	(24.4)		-	47.1		(2.6)
		105			Market comparable pricing	Multiples	5.6x		-	5.6x		5.6x		107			Market comparable pricing	Multiples	1.1x		-	7.4x		3.9x
Loans held for sale	Loans held for sale	1,019			Discounted cash flow	Default rate	0.0		-	39.9	%	1.2	Loans held for sale	564			Discounted cash flow	Default rate	0.0		-	29.8	%	0.9
						Discount rate	0.7		-	13.6		6.2						Discount rate	2.9		-	13.9		9.2
						Loss severity	0.0		-	46.1		14.8						Loss severity	0.0		-	55.7		17.1
						Prepayment rate	6.7		-	17.2		12.4						Prepayment rate	3.1		-	13.9		10.5
Mortgage servicing rights (residential)	Mortgage servicing rights (residential)	8,511			Discounted cash flow	Cost to service per loan (1)	$	52	-	555		102	Mortgage servicing rights (residential)	8,819			Discounted cash flow	Cost to service per loan (1)	$	52	-	533		101
						Discount rate	6.8		-	9.9	%	7.4						Discount rate	8.5		-	13.6	%	8.9
						Prepayment rate (2)	10.0		-	17.0		11.1						Prepayment rate (2)	8.3		-	24.2		9.7
Net derivative assets and (liabilities):	Net derivative assets and (liabilities):												Net derivative assets and (liabilities):
Interest rate contracts	Interest rate contracts	9			Discounted cash flow	Default rate	0.0		-	5.0		2.2	Interest rate contracts	(2,632)			Discounted cash flow	Discount rate	3.0		-	4.9		4.0
						Loss severity	50.0		-	50.0		50.0		(39)			Discounted cash flow	Default rate	0.4		-	5.0		2.2
						Prepayment rate	2.8		-	22.0		18.8						Loss severity	50.0		-	50.0		50.0
																		Prepayment rate	2.8		-	22.0		18.6
Interest rate contracts: derivative loan commitments	Interest rate contracts: derivative loan commitments	(185)			Discounted cash flow	Fall-out factor	1.0		-	99.0		15.1	Interest rate contracts: derivative loan commitments	(81)			Discounted cash flow	Fall-out factor	1.0		-	99.0		35.3
						Initial-value servicing	(69.0)		-	168.0	bps	33.4						Initial-value servicing	(153.1)		-	141.0	bps	(112.8)
Equity contracts	Equity contracts	(1,070)			Discounted cash flow	Conversion factor	(10.1)		-	0.0	%	(9.6)	Equity contracts	(948)			Discounted cash flow	Conversion factor	(8.7)		-	0.0	%	(6.4)
						Weighted average life	0.3		-	1.8	yrs	0.9						Weighted average life	0.8		-	1.8	yrs	1.2
		(355)			Option model	Correlation factor	(77.0)		-	99.0	%	56.5		(330)			Option model	Correlation factor	(77.0)		-	99.0	%	64.9
						Volatility factor	6.5		-	83.5		31.1						Volatility factor	6.5		-	96.5		36.6

Insignificant Level 3 assets, net of liabilities		53

Insignificant Level 3 liabilities, net of assets (3)													Insignificant Level 3 liabilities, net of assets (3)	(171)
Total Level 3 assets, net of liabilities	Total Level 3 assets, net of liabilities	$	8,521	(3)									Total Level 3 assets, net of liabilities	$	5,819	(4)
December 31, 2021
December 31, 2022													December 31, 2022
Trading and available-for-sale debt securities	Trading and available-for-sale debt securities	$	136		Discounted cash flow	Discount rate	0.4		-	12.5	%	5.5	Trading and available-for-sale debt securities	$	157		Discounted cash flow	Discount rate	2.7		-	12.5	%	6.4
		11			Vendor priced									185			Market comparable pricing	Comparability adjustment	(33.6)		-	14.1		(4.8)
		280			Market comparable pricing	Comparability adjustment	(30.2)		-	19.2		(4.6)
														119			Market comparable pricing	Multiples	1.1x		-	7.4x		4.0x
Loans held for sale	Loans held for sale	1,033			Discounted cash flow	Default rate	0.0		-	29.2	%	1.2	Loans held for sale	793			Discounted cash flow	Default rate	0.0		-	25.0	%	0.7
						Discount rate	1.6		-	11.9		5.1						Discount rate	2.9		-	13.4		9.5
						Loss severity	0.0		-	46.9		15.4						Loss severity	0.0		-	53.6		15.7
						Prepayment rate	7.5		-	18.2		13.1						Prepayment rate	3.5		-	14.2		10.7
Mortgage servicing rights (residential)	Mortgage servicing rights (residential)	6,920			Discounted cash flow	Cost to service per loan (1)	$	54	-	585		106	Mortgage servicing rights (residential)	9,310			Discounted cash flow	Cost to service per loan (1)	$	52	-	550		102
						Discount rate	5.8		-	8.8	%	6.4						Discount rate	8.7		-	14.1	%	9.1
						Prepayment rate (2)	12.5		-	21.1		14.7						Prepayment rate (2)	8.1		-	21.9		9.4
Net derivative assets and (liabilities):	Net derivative assets and (liabilities):												Net derivative assets and (liabilities):
Interest rate contracts	Interest rate contracts	87			Discounted cash flow	Default rate	0.0		-	5.0		2.1	Interest rate contracts	(2,411)			Discounted cash flow	Discount rate	3.2		-	4.9		4.2
						Loss severity	50.0		-	50.0		50.0		(63)			Discounted cash flow	Default rate	0.4		-	5.0		2.3
						Prepayment rate	2.8		-	22.0		18.7						Loss severity	50.0		-	50.0		50.0
																		Prepayment rate	2.8		-	22.0		18.7
Interest rate contracts: derivative loan commitments	Interest rate contracts: derivative loan commitments	40			Discounted cash flow	Fall-out factor	1.0		-	99.0		16.8	Interest rate contracts: derivative loan commitments	(108)			Discounted cash flow	Fall-out factor	1.0		-	99.0		41.0
						Initial-value servicing	(74.8)		-	146.0	bps	50.9						Initial-value servicing	(9.3)		-	141.0	bps	11.5
Equity contracts		253			Discounted cash flow	Conversion factor	(10.2)		-	0.0	%	(9.7)
Equity contracts (3)													Equity contracts (3)	(1,000)			Discounted cash flow	Conversion factor	(12.2)		-	0.0	%	(9.9)
						Weighted average life	0.5		-	2.0	yrs	1.1						Weighted average life	0.5		-	1.5	yrs	0.8
		(682)			Option model	Correlation factor	(77.0)		-	99.0	%	23.2		(224)			Option model	Correlation factor	(77.0)		-	99.0	%	49.5
						Volatility factor	6.5		-	72.0		29.1						Volatility factor	6.5		-	96.5		37.3
Nonmarketable equity securities		8,906			Market comparable pricing	Comparability adjustment	(21.6)		-	(7.7)		(15.5)
Insignificant Level 3 assets, net of liabilities		9

Insignificant Level 3 liabilities, net of assets (3)													Insignificant Level 3 liabilities, net of assets (3)	(138)
Total Level 3 assets, net of liabilities	Total Level 3 assets, net of liabilities	$	16,993	(3)									Total Level 3 assets, net of liabilities	$	6,620	(4)

(1)The high end of the range of inputs is for servicing modified loans. For non-modified loans, the range is $52 - ~~$196~~$177 at March 31, ~~2022,~~2023, and ~~$54~~$52 - ~~$199~~$178 at December 31, ~~2021.~~2022.

(2)Includes a blend of prepayment speeds and expected defaults. Prepayment speeds are influenced by mortgage interest rates as well as our estimation of drivers of borrower behavior.

(4)Consists of total Level 3 assets of ~~$11.1~~$10.9 billion and ~~$19.6~~$11.5 billion and total Level 3 liabilities of ~~$2.6~~$5.0 billion and ~~$2.6~~$4.9 billion, before netting of derivative balances, at March 31, ~~2022,~~2023, and December 31, ~~2021,~~2022, respectively.

For additional information on the valuation techniques and significant unobservable inputs used in the valuation of our Level 3 assets and liabilities, including how changes in these inputs affect fair value estimates, see Note 1715 (Fair Values of Assets and Liabilities) in our ~~2021~~2022 Form ~~10-K).~~10-K.

~~Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis~~


~~118~~104			Wells Fargo & Company

Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis

Table ~~15.4~~12.4 provides the fair value hierarchy and fair value at the date of the nonrecurring fair value adjustment for all assets that were still held as of March 31, ~~2022~~2023, and December 31, ~~2021,~~2022, and for which a nonrecurring fair value adjustment was recorded during the quarter ended March 31, ~~2022,~~2023, and the year ended December 31, ~~2021.~~2022.

Table ~~15.4:~~12.4: Fair Value on a Nonrecurring Basis


		March 31, 2022				December 31, 2021				March 31, 2023				December 31, 2022
(in millions)	(in millions)	Level 2		Level 3	Total	Level 2	Level 3	Total	(in millions)	Level 2		Level 3	Total	Level 2	Level 3	Total
Loans held for sale (1)	Loans held for sale (1)	$	3,125	1,422	4,547	3,911	1,407	5,318	Loans held for sale (1)	$	1,184	354	1,538	838	554	1,392
Loans:	Loans:								Loans:
Commercial	Commercial	29		—	29	476	—	476	Commercial	204		—	204	285	—	285
Consumer	Consumer	392		—	392	380	—	380	Consumer	44		—	44	512	—	512
Total loans	Total loans	421		—	421	856	—	856	Total loans	248		—	248	797	—	797
Mortgage servicing rights (commercial)	Mortgage servicing rights (commercial)	—		75	75	—	567	567	Mortgage servicing rights (commercial)	—		—	—	—	75	75
Nonmarketable equity securities	Nonmarketable equity securities	1,275		1,048	2,323	6,262	765	7,027	Nonmarketable equity securities	553		1,005	1,558	1,926	2,818	4,744
Other assets	Other assets	1,746		102	1,848	1,373	175	1,548	Other assets	1,683		1	1,684	1,862	296	2,158
Total assets at fair value on a nonrecurring basis	Total assets at fair value on a nonrecurring basis	$	6,567	2,647	9,214	12,402	2,914	15,316	Total assets at fair value on a nonrecurring basis	$	3,668	1,360	5,028	5,423	3,743	9,166

(1)~~Predominantly consists~~Consists of commercial mortgages and residential mortgage – first lien loans.

Table ~~15.5~~12.5 presents the gains (losses) on certain assets held at the end of the reporting periods presented for which a nonrecurring fair value adjustment was recognized in earnings during the respective periods.

Table ~~15.5:~~12.5: Gains (Losses) on Assets with Nonrecurring Fair Value Adjustment


		Quarter ended March 31,			Quarter ended March 31,
(in millions)	(in millions)	2022		2021		(in millions)	2023		2022
Loans held for sale	Loans held for sale	$	(59)	25		Loans held for sale	$	(8)	(59)
Loans:	Loans:					Loans:
Commercial	Commercial	(12)		(130)		Commercial	(68)		(12)
Consumer	Consumer	(206)		(47)		Consumer	(214)		(206)
Total loans	Total loans	(218)		(177)		Total loans	(282)		(218)
Mortgage servicing rights (commercial)	Mortgage servicing rights (commercial)	4		—		Mortgage servicing rights (commercial)	—		4
Nonmarketable equity securities (1)	Nonmarketable equity securities (1)	295		210		Nonmarketable equity securities (1)	(339)		295

Other assets (2)	Other assets (2)	(52)		(19)		Other assets (2)	20		(52)
Total	Total	$	(30)	39		Total	$	(609)	(30)

(1)Includes impairment of nonmarketable equity securities and observable price changes related to nonmarketable equity securities accounted for under the measurement alternative.

Table ~~15.6~~12.6 provides quantitative information about the valuation techniques and significant unobservable inputs used in the valuation of our Level 3 assets that are measured at fair value on a nonrecurring basis and determined using an internal model. The table is limited to financial instruments that had nonrecurring fair value adjustments during the periods presented. Weighted averages of inputs are calculated using outstanding unpaid principal balance for cash instruments, such as loans, and carrying value prior to the nonrecurring fair value measurement for nonmarketable equity securities and private equity and venture capital investments in consolidated portfolio companies.


			Wells Fargo & Company			~~119~~105

Note ~~15:~~12: Fair Values of Assets and Liabilities (continued)

Table ~~15.6:~~12.6: Valuation Techniques – Nonrecurring Basis


($ in millions)	($ in millions)	Fair Value Level 3		Valuation Technique (1)	Significant Unobservable Input (1)		Range of Inputs Positive (Negative)					Weighted Average	($ in millions)	Fair Value Level 3		Valuation Technique (1)	Significant Unobservable Input (1)		Range of Inputs Positive (Negative)					Weighted Average
March 31, 2022
March 31, 2023													March 31, 2023
Loans held for sale (2)													Loans held for sale (2)	$	354	Discounted cash flow	Default rate	(3)	0.1		-	89.7	%	14.9
																	Discount rate		0.6		-	13.6		5.5
																	Loss severity		0.5		-	49.1		11.8
																	Prepayment rate	(4)	2.8		-	100.0		40.4

Nonmarketable equity securities													Nonmarketable equity securities	64		Market comparable pricing	Comparability adjustment		(100.0)		-	(12.0)		(28.0)

														938		Market comparable pricing	Multiples		3.0x		-	27.1x		9.7x

Insignificant Level 3 assets													Insignificant Level 3 assets	4
Total													Total	$	1,360
December 31, 2022													December 31, 2022
Loans held for sale (2)	Loans held for sale (2)	$	1,422	Discounted cash flow	Default rate	(3)	0.2		-	83.0	%	23.1	Loans held for sale (2)	$	143	Discounted cash flow	Default rate	(3)	0.1		-	86.1	%	13.8
					Discount rate		0.6		-	12.7		3.6					Discount rate		3.8		-	13.8		9.0
					Loss severity		0.3		-	42.9		4.1					Loss severity		8.1		-	43.8		18.6
					Prepayment rate	(4)	4.1		-	100.0		36.3					Prepayment rate	(4)	2.3		-	23.4		18.6
														411		Market comparable pricing	Comparability adjustment		(8.2)		-	(0.9)		(4.3)
Mortgage servicing rights (commercial)	Mortgage servicing rights (commercial)	75		Discounted cash flow	Cost to service per loan		$	3,775	-	3,775		3,775	Mortgage servicing rights (commercial)	75		Discounted cash flow	Cost to service per loan		$	3,775	-	3,775		3,775
					Discount rate		5.2		-	5.2	%	5.2					Discount rate		5.2		-	5.2	%	5.2
					Prepayment rate		0.0		-	20.6		6.7					Prepayment rate		0.0		-	20.6		6.7
Nonmarketable equity securities	Nonmarketable equity securities	916		Market comparable pricing	Comparability adjustment		(82.0)		-	(8.0)		(21.0)	Nonmarketable equity securities	1,461		Market comparable pricing	Comparability adjustment		(100.0)		-	(4.0)		(30.1)

		129		Market comparable pricing	Multiples		1.1x		-	4.0x		2.6x		1,352		Market comparable pricing	Multiples		0.8x		-	18.7x		9.9x

Other assets (5)	Other assets (5)	102		Market comparable pricing	Multiples		8.0		-	8.0		8.0	Other assets (5)	234		Market comparable pricing	Multiples		6.4		-	8.0		7.1
Insignificant Level 3 assets	Insignificant Level 3 assets	3											Insignificant Level 3 assets	67
Total	Total	$	2,647										Total	$	3,743
December 31, 2021
Loans held for sale (2)		$	1,407	Discounted cash flow	Default rate	(3)	0.2		-	78.3	%	25.6
					Discount rate		0.6		-	12.0		3.3
					Loss severity		0.4		-	45.6		4.8
					Prepayment rate	(4)	5.4		-	100.0		38.9

Mortgage servicing rights (commercial)		567		Discounted cash flow	Cost to service per loan		$	150	-	3,381		2,771
					Discount rate		4.0		-	4.5	%	4.0
					Prepayment rate		0.0		-	20.6		5.5
Nonmarketable equity securities		745		Market comparable pricing	Comparability adjustment		(100.0)		-	(33.0)		(59.0)
		15		Market comparable pricing	Multiples		2.0x		-	3.3x		2.8x
		5		Discounted cash flow	Discount rate		10.5		-	10.5	%	10.5
Other assets		175		Discounted cash flow	Discount rate		0.2		-	4.4		2.9
Total		$	2,914

(1)See Note 1715 (Fair Values of Assets and Liabilities) in our ~~2021~~2022 Form 10-K for additional information on the valuation ~~technique~~technique(s) and significant unobservable inputs used in the valuation of Level 3 assets.

(2)Consists of approximately ~~$1.2 billion~~$220 million and $400 million of government insured/guaranteed loans purchased from GNMA-guaranteed mortgage securitizations at ~~both~~ March 31, ~~2022,~~2023, and December 31, ~~2021,~~2022, respectively, and approximately ~~$200~~$130 million and $150 million of other mortgage loans that are not government insured/guaranteed at ~~both~~ March 31, ~~2022,~~2023, and December 31, ~~2021.~~2022, respectively.

(3)Applies only to non-government insured/guaranteed loans.

(4)Includes the impact on prepayment rate of expected defaults for government insured/guaranteed loans, which impact the frequency and timing of early resolution of loans.

(5)Represents private equity and venture capital investments in consolidated portfolio companies.


106			Wells Fargo & Company

Fair Value Option

portfolios for which we elected the fair value option. For additional information, including the basis for our fair value

option elections, see Note 1715 (Fair Values of Assets and Liabilities) in our ~~2021~~2022 Form 10-K.

Table ~~15.7~~12.7 reflects differences between the fair value carrying amount of the assets and liabilities for which we have elected the fair value option and the contractual aggregate unpaid principal amount at maturity.

Table 12.7:Fair Value Option


	March 31, 2023				December 31, 2022
(in millions)	Fair value carrying amount		Aggregate unpaid principal	Fair value carrying amount less aggregate unpaid principal	Fair value carrying amount	Aggregate unpaid principal	Fair value carrying amount less aggregate unpaid principal
Loans held for sale (1)	$	3,427	3,742	(315)	4,220	4,614	(394)
Long-term debt	(1,506)		(1,919)	413	(1,346)	(1,775)	429

(1)Nonaccrual loans and loans 90 days or more past due and still accruing included in LHFS for which we have elected the fair value option were insignificant at March 31, ~~2022,~~2023, and December 31, ~~2021.~~

2022.

~~Table 15.7:Fair Value Option~~

March 31, 2022 December 31, 2021
(in millions) Fair value carrying amount Aggregate unpaid principal Fair value carrying amount less aggregate unpaid principal Fair value carrying amount Aggregate unpaid principal Fair value carrying amount less aggregate
unpaid
principal
Loans held for sale $ 13,155 13,471 (316) 15,895 15,750 145

~~The changes~~Table 12.8 reflects amounts included in ~~fair value~~earnings related to initial measurement and subsequent changes in fair value, ~~included in earnings~~by income statement line item, for ~~LHFS accounted~~assets and liabilities for ~~under~~ which

the fair value option ~~were $(357) million and $363 million for~~was elected. Amounts recorded in net interest income are excluded from the ~~quarters ended March 31, 2022 and 2021, respectively. Substantially all of these amounts were included~~table below.

Table 12.8:Gains (Losses) on Changes in ~~the mortgage banking noninterest income line of the consolidated statement of income.~~ Fair Value Included in Earnings



	2023				2022
(in millions)	Mortgage banking noninterest income		Net gains from trading and securities	Other noninterest income	Mortgage banking noninterest income	Net gains from trading and securities	Other noninterest income



Quarter ended March 31,
Loans held for sale	$	97	12	(4)	(365)	9	—
Long-term debt	—		(30)	—	—	12	—

For performing loans, instrument-specific credit risk gains or losses ~~were~~are derived principally by determining the change in fair value of the loans due to changes in the observable or implied credit spread. Credit spread is the market yield on the loans less the relevant risk-free benchmark interest rate. For nonperforming loans, we attribute all changes in fair value to instrument-specific credit risk. ~~Gains~~

~~and losses attributable to instrument-specific credit risk related to assets~~For LHFS accounted for under the fair value option, instrument-specific credit gains or losses were insignificant during the first quarter of both 2023 and 2022.

Note 20 (Other Comprehensive Income) for ~~the quarters ended March 31, 2022 and 2021, were insignificant.~~additional information.


~~120~~			Wells Fargo & Company			107

Note 12: Fair Values of Assets and Liabilities (continued)

Disclosures about Fair Value of Financial Instruments

Table ~~15.8~~12.9 presents a summary of fair value estimates for financial instruments that are not carried at fair value on a recurring basis. Some financial instruments are excluded from the scope of this table, such as certain insurance contracts, certain nonmarketable equity securities, and leases. This table also excludes assets and liabilities that are not financial instruments such as the value of the long-term relationships with our deposit, credit card and trust customers, MSRs, premises and equipment, goodwill and deferred taxes.

Loan commitments, standby letters of credit and commercial and similar letters of credit are not included in

Table ~~15.8.~~12.9. A reasonable estimate of the fair value of these instruments is the carrying value of deferred fees plus the allowance for unfunded credit commitments, which totaled ~~$1.3 billion~~$689 million and ~~$1.4 billion~~$737 million at March 31, ~~2022~~2023, and December 31, ~~2021,~~2022, respectively.

The total of the fair value calculations presented does not represent, and should not be construed to represent, the underlying fair value of the Company.

Table ~~15.8:~~12.9: Fair Value Estimates for Financial Instruments


				Estimated fair value							Estimated fair value
(in millions)	(in millions)	Carrying amount		Level 1	Level 2	Level 3	Total	(in millions)	Carrying amount		Level 1	Level 2	Level 3	Total
March 31, 2022
March 31, 2023								March 31, 2023
Financial assets	Financial assets							Financial assets
Cash and due from banks (1)	Cash and due from banks (1)	$	27,454	27,454	—	—	27,454	Cash and due from banks (1)	$	31,958	31,958	—	—	31,958
Interest-earning deposits with banks (1)	Interest-earning deposits with banks (1)	174,441		174,296	145	—	174,441	Interest-earning deposits with banks (1)	130,478		125,379	5,099	—	130,478
Federal funds sold and securities purchased under resale agreements (1)	Federal funds sold and securities purchased under resale agreements (1)	67,764		—	67,764	—	67,764	Federal funds sold and securities purchased under resale agreements (1)	67,288		—	67,288	—	67,288
Held-to-maturity debt securities	Held-to-maturity debt securities	280,808		15,551	246,325	2,765	264,641	Held-to-maturity debt securities	277,147		2,448	235,501	2,739	240,688
Loans held for sale	Loans held for sale	6,669		—	5,097	1,656	6,753	Loans held for sale	2,772		—	2,304	526	2,830
Loans, net (2)	Loans, net (2)	885,950		—	62,483	816,122	878,605	Loans, net (2)	920,121		—	56,715	832,899	889,614
Nonmarketable equity securities (cost method)	Nonmarketable equity securities (cost method)	3,584		—	—	3,648	3,648	Nonmarketable equity securities (cost method)	4,699		—	—	4,764	4,764
Total financial assets	Total financial assets	$	1,446,670	217,301	381,814	824,191	1,423,306	Total financial assets	$	1,434,463	159,785	366,907	840,928	1,367,620
Financial liabilities	Financial liabilities							Financial liabilities
Deposits (3)	Deposits (3)	$	26,648	—	11,542	14,659	26,201	Deposits (3)	$	90,420	—	57,971	30,658	88,629
Short-term borrowings	Short-term borrowings	33,433		—	33,433	—	33,433	Short-term borrowings	80,817		—	80,799	—	80,799
Long-term debt (4)	Long-term debt (4)	153,243		—	156,237	1,221	157,458	Long-term debt (4)	171,939		—	170,874	1,023	171,897
Total financial liabilities	Total financial liabilities	$	213,324	—	201,212	15,880	217,092	Total financial liabilities	$	343,176	—	309,644	31,681	341,325
December 31, 2021
December 31, 2022								December 31, 2022
Financial assets	Financial assets							Financial assets
Cash and due from banks (1)	Cash and due from banks (1)	$	24,616	24,616	—	—	24,616	Cash and due from banks (1)	$	34,596	34,596	—	—	34,596
Interest-earning deposits with banks (1)	Interest-earning deposits with banks (1)	209,614		209,452	162	—	209,614	Interest-earning deposits with banks (1)	124,561		124,338	223	—	124,561
Federal funds sold and securities purchased under resale agreements (1)	Federal funds sold and securities purchased under resale agreements (1)	66,223		—	66,223	—	66,223	Federal funds sold and securities purchased under resale agreements (1)	68,036		—	68,036	—	68,036
Held-to-maturity debt securities	Held-to-maturity debt securities	272,022		16,825	252,717	2,844	272,386	Held-to-maturity debt securities	297,059		14,285	238,552	2,684	255,521
Loans held for sale	Loans held for sale	7,722		—	6,300	1,629	7,929	Loans held for sale	2,884		—	2,208	719	2,927
Loans, net (2)	Loans, net (2)	868,278		—	63,404	820,559	883,963	Loans, net (2)	928,049		—	57,532	836,831	894,363
Nonmarketable equity securities (cost method)	Nonmarketable equity securities (cost method)	3,584		—	—	3,646	3,646	Nonmarketable equity securities (cost method)	4,900		—	—	4,961	4,961
Total financial assets	Total financial assets	$	1,452,059	250,893	388,806	828,678	1,468,377	Total financial assets	$	1,460,085	173,219	366,551	845,195	1,384,965
Financial liabilities	Financial liabilities							Financial liabilities
Deposits (3)	Deposits (3)	$	30,012	—	14,401	15,601	30,002	Deposits (3)	$	66,887	—	46,745	18,719	65,464
Short-term borrowings	Short-term borrowings	34,409		—	34,409	—	34,409	Short-term borrowings	50,964		—	50,970	—	50,970
Long-term debt (4)	Long-term debt (4)	160,660		—	166,682	1,402	168,084	Long-term debt (4)	173,502		—	172,783	999	173,782
Total financial liabilities	Total financial liabilities	$	225,081	—	215,492	17,003	232,495	Total financial liabilities	$	291,353	—	270,498	19,718	290,216

(1)Amounts consist of financial instruments for which carrying value approximates fair value.

(2)Excludes lease financing with a carrying amount of ~~$14.2~~$14.6 billion and ~~$14.5~~$14.7 billion at March 31, ~~2022,~~2023, and December 31, ~~2021,~~2022, respectively.

(3)Excludes deposit liabilities with no defined or contractual maturity of ~~$1.5~~$1.3 trillion and $1.3 trillion at ~~both~~ March 31, ~~2022,~~2023, and December 31, ~~2021.~~2022, respectively.

(4)Excludes obligations under finance leases of ~~$25~~$21 million and ~~$26~~$22 million at March 31, ~~2022,~~2023, and December 31, ~~2021,~~2022, respectively.


108			Wells Fargo & Company


Note 13: Securitizations and Variable Interest Entities

Involvement with Variable Interest Entities (VIEs)

In connection with our securitization or other VIE activities, we have various forms of ongoing involvement with VIEs, which may include:

•underwriting securities issued by VIEs and subsequently making markets in those securities;

•providing credit enhancement on securities issued by VIEs through the use of letters of credit or financial guarantees;

•entering into other derivative contracts with VIEs;

•holding senior or subordinated interests in VIEs;

•acting as servicer or investment manager for VIEs;

•providing administrative or trustee services to VIEs; and

•providing seller financing to VIEs.

Loan Sales and Securitization Activity

We periodically transfer consumer and commercial loans and other types of financial assets in securitization and whole loan sale transactions.

MORTGAGE LOANS SOLD TO U.S. GOVERNMENT SPONSORED ENTITIES AND TRANSACTIONS WITH GINNIE MAE In the normal course of business we sell originated and purchased residential and commercial mortgage loans to government-sponsored entities (GSEs). These loans are generally transferred into securitizations sponsored by the GSEs, which provide certain credit guarantees to investors and servicers. We also transfer mortgage loans into securitization pools pursuant to Government National Mortgage Association (GNMA) guidelines which are insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA). Mortgage loans eligible for securitization with the GSEs or GNMA are considered conforming loans. The GSEs or GNMA design the structure of these securitizations, sponsor the involved VIEs, and have power over the activities most significant to the VIE.

to repurchase loans from GNMA loan securitization pools, which becomes exercisable when three scheduled loan payments remain unpaid by the borrower. During the quarters ended March 31, 2023 and 2022, we repurchased loans of $92 million and $933 million, respectively, which primarily represented repurchases of government insured loans. We recorded assets and related liabilities of $935 million and $743 million at March 31, 2023, and December 31, 2022, respectively, where we did not exercise our option to repurchase eligible loans.

Upon transfers of loans, we also provide indemnification for losses incurred due to material breaches of contractual representations and warranties as well as other recourse arrangements. At March 31, 2023, and December 31, 2022, our liability for these repurchase and recourse arrangements was $165 million and $167 million, respectively, and the maximum exposure to loss was $13.9 billion and $13.8 billion at March 31, 2023, and December 31, 2022, respectively.

NONCONFORMING MORTGAGE LOAN SECURITIZATIONS In the normal course of business, we sell nonconforming residential and commercial mortgage loans in securitization transactions that we design and sponsor. Nonconforming mortgage loan securitizations do not involve a government credit guarantee, and accordingly, beneficial interest holders are subject to credit risk of the underlying assets held by the securitization VIE. We typically originate the transferred loans and account for the transfers as sales. We also typically retain the right to service the loans and may hold other beneficial interests issued by the VIEs, such as debt securities held for investment purposes. Our servicing role related to nonconforming commercial mortgage loan securitizations is limited to primary or master servicer. We do not consolidate the VIE because the most significant decisions impacting the performance of the VIE are generally made by the special servicer or the controlling class security holder. For our residential nonconforming mortgage loan securitizations accounted for as sales, we either do not hold variable interests that we consider potentially significant or are not the primary servicer for a majority of the VIE assets.

Table 13.1 presents information about transfers of assets during the periods presented for which we recorded the transfers as sales and have continuing involvement with the transferred assets. In connection with these transfers, we received proceeds and recorded servicing assets and securities. Each of these interests are initially measured at fair value. Servicing rights are classified as Level 3 measurements, and generally securities are classified as Level 2. The majority of our transfers relate to residential mortgage securitizations with the GSEs or GNMA and generally result in no gain or loss because the loans are measured at fair value on a recurring basis. Additionally, we may transfer certain government insured loans that we previously


			Wells Fargo & Company			~~121~~109


~~Note 16:~~ ~~Preferred Stock~~Note 13: Securitizations and Variable Interest Entities (continued)

Werepurchased. These loans are ~~authorized to issue 20 million shares~~carried at the lower of ~~preferred stock~~cost or market, and 4 million shares of preference stock, both without par value. Preferred shares outstanding rank senior to common shares both as to dividends and liquidation preference but have no general voting rights. We have not issued any preference shares underwe recognize gains on such transfers when the

~~this authorization. If issued, preference shares would be limited to 1 vote per share. Table 16.1 summarizes information about our preferred stock including~~market value is greater than the ~~Employee Stock Ownership Plan (ESOP) Cumulative Convertible Preferred Stock.~~

carrying value of the loan when it is sold.

Table ~~16.1:~~13.1: ~~Preferred Stock~~Transfers with Continuing Involvement

March 31, 2022 December 31, 2021
(in millions, except shares) Shares
authorized
and designated Shares issued and outstanding Liquidation preference value Carrying
value Shares
authorized
and designated Shares
issued and outstanding Liquidation preference value Carrying value
DEP Shares
Dividend Equalization Preferred Shares (DEP) 97,000 96,546 $ — — 97,000 96,546 $ — —
Series L (1)
7.50% Non-Cumulative Perpetual Convertible Class A Preferred Stock 4,025,000 3,967,986 3,968 3,200 4,025,000 3,967,995 3,968 3,200
Series Q
5.85% Fixed-to-Floating Non-Cumulative Perpetual Class A Preferred Stock 69,000 69,000 1,725 1,725 69,000 69,000 1,725 1,725
Series R
6.625% Fixed-to-Floating Non-Cumulative Perpetual Class A Preferred Stock 34,500 33,600 840 840 34,500 33,600 840 840
Series S
5.90% Fixed-to-Floating Non-Cumulative Perpetual Class A Preferred Stock 80,000 80,000 2,000 2,000 80,000 80,000 2,000 2,000
Series U
5.875% Fixed-to-Floating Non-Cumulative Perpetual Class A Preferred Stock 80,000 80,000 2,000 2,000 80,000 80,000 2,000 2,000
Series Y
5.625% Non-Cumulative Perpetual Class A Preferred Stock 27,600 27,600 690 690 27,600 27,600 690 690
Series Z
4.75% Non-Cumulative Perpetual Class A Preferred Stock 80,500 80,500 2,013 2,013 80,500 80,500 2,013 2,013
Series AA
4.70% Non-Cumulative Perpetual Class A Preferred Stock 46,800 46,800 1,170 1,170 46,800 46,800 1,170 1,170
Series BB
3.90% Fixed-Reset Non-Cumulative Perpetual Class A Preferred Stock 140,400 140,400 3,510 3,510 140,400 140,400 3,510 3,510
Series CC
4.375% Non-Cumulative Perpetual Class A Preferred Stock 46,000 42,000 1,050 1,050 46,000 42,000 1,050 1,050
Series DD
4.25% Non-Cumulative Perpetual Class A Preferred Stock 50,000 50,000 1,250 1,250 50,000 50,000 1,250 1,250
ESOP (2)
Cumulative Convertible Preferred Stock 609,434 609,434 609 609 609,434 609,434 609 609
Total 5,386,234 5,323,866 $ 20,825 20,057 5,386,234 5,323,875 $ 20,825 20,057



	2023			2022
(in millions)	Residential mortgages		Commercial mortgages	Residential mortgages	Commercial mortgages
Quarter ended March 31,









Assets sold	$	4,461	1,499	26,174	4,033
Proceeds from transfer (1)	4,461		1,540	26,226	4,097
Net gains (losses) on sale	—		41	52	64

Continuing involvement (2):
Servicing rights recognized	$	47	18	327	29
Securities recognized (3)	—		26	1,587	104

(1)~~Preferred Stock, Series L, may be converted~~Represents cash proceeds and the fair value of non-cash beneficial interests recognized at ~~any time, at the option of the holder, into 6.3814 shares of our common stock, plus cash in lieu of fractional shares, subject to anti-dilution adjustments.~~securitization settlement.

(2)Represents assets or liabilities recognized at securitization settlement date related to our continuing involvement in the transferred assets.

In the normal course of business, we purchase certain

non-agency securities at initial securitization or subsequently in the secondary market, which we hold for investment. We also provide seller financing in the form of loans. During the quarters ended March 31, 2023 and 2022, we received cash flows of $50 million and $136 million, respectively, related to principal and interest payments on these securities and loans, which exclude cash flows related to trading activities.

Table 13.2 presents the key weighted-average assumptions we used to initially measure residential MSRs recognized during the periods presented.

Table 13.2:Residential MSRs – Assumptions at Securitization Date



	2023			2022
Quarter ended March 31,




Prepayment rate (1)	18.6		%	11.1
Discount rate	9.7			7.0
Cost to service ($ per loan)	$	193		112

(1)Includes a blend of prepayment speeds and expected defaults. Prepayment speeds are influenced by mortgage interest rates as well as our estimation of drivers of borrower behavior.

See ~~the “ESOP Cumulative Convertible Preferred Stock” section in this~~ Note 12 (Fair Values of Assets and Liabilities) and

Note 6 (Mortgage Banking Activities) for additional information ~~about the liquidation preference~~on key assumptions for ~~the ESOP Cumulative Convertible Preferred Stock.~~residential MSRs.

RESECURITIZATION ACTIVITIES We enter into resecuritization transactions as part of our trading activities to accommodate the investment and risk management activities of our customers. In resecuritization transactions, we transfer trading debt securities to VIEs in exchange for new beneficial interests that are sold to third parties at or shortly after securitization settlement. This activity is performed for customers seeking a specific return or risk profile. Substantially all of our transactions involve the resecuritization of conforming mortgage-backed securities issued by the GSEs or guaranteed by GNMA. We do not consolidate the resecuritization VIEs as we share in the decision-making power with third parties and do not hold significant economic interests in the VIEs other than for market-making activities. During the quarters ended March 31, 2023 and 2022, we transferred securities of $3.2 billion and $6.4 billion, respectively, to resecuritization VIEs, and retained securities of $198 million and $738 million, respectively. These amounts are not included in Table 13.1. Related total VIE assets were $111.6 billion and $112.0 billion at March 31, 2023, and December 31, 2022, respectively. As of March 31, 2023, and December 31, 2022, we held $1.3 billion and $793 million of securities, respectively.


~~122~~110			Wells Fargo & Company

~~ESOP CUMULATIVE CONVERTIBLE PREFERRED STOCK~~ ~~All shares~~Sold or Securitized Loans Serviced for Others

Table 13.3 presents information about loans that we sold or securitized in which we have ongoing involvement as servicer. Delinquent loans include loans 90 days or more past due and loans in bankruptcy, regardless of delinquency status. For loans sold or securitized where servicing is our ~~ESOP Cumulative Convertible Preferred Stock (ESOP Preferred Stock)~~only form of continuing involvement, we generally experience a loss only if we were ~~issued~~required to repurchase a trustee acting on behalf of the Wells Fargo & Company 401(k) Plan (the 401(k) Plan). Dividends on the ESOP Preferred Stock are cumulative from the date of initial issuance and are payable quarterly at annual rates based upon the year of issuance. Each share of ESOP Preferred Stock released from the unallocated reserve of the 401(k) Plan is converted into shares of our common stock based on the stateddelinquent loan or foreclosed asset due

~~value~~to a breach in representations and warranties associated with our loan sale or servicing contracts. Table 13.3 excludes mortgage loans in GSE or GNMA securitizations of $693.2 billion and $704.5 billion at March 31, 2023, and December 31, 2022, respectively. Delinquent loans and foreclosed assets related to loans in GSE and GNMA securitizations were $3.6 billion and $4.6 billion at March 31, 2023, and December 31, 2022, respectively.

Table 13.3:Sold or Securitized Loans Serviced for Others


						Net charge-offs
	Total loans			Delinquent loans and foreclosed assets (1)		Quarter ended March 31,
(in millions)	Mar 31, 2023		Dec 31, 2022	Mar 31, 2023	Dec 31, 2022	2023	2022
Commercial	$	66,844	67,029	1,140	912	14	4
Residential	9,003		9,201	457	501	5	3
Total off-balance sheet sold or securitized loans	$	75,847	76,230	1,597	1,413	19	7

(1)Includes $290 million and $274 million of commercial foreclosed assets and $29 million and $25 million of residential foreclosed assets at March 31, 2023, and December 31, 2022, respectively.

Transactions with Unconsolidated VIEs

MORTGAGE LOAN SECURITIZATIONS Table 13.4 includes nonconforming mortgage loan securitizations where we originate and transfer the loans to the unconsolidated securitization VIEs that we sponsor. For additional information about these VIEs, see the “Loan Sales and Securitization Activity” section within this Note. Nonconforming mortgage loan securitizations also include commercial mortgage loan securitizations sponsored by third parties where we did not originate or transfer the loans but serve as master servicer and invest in securities that could be potentially significant to the VIE.

Conforming loan securitization and resecuritization transactions involving the GSEs and GNMA are excluded from Table 13.4 because we are not the sponsor or we do not have power over the activities most significant to the VIEs. Additionally, due to the nature of the ~~ESOP Preferred Stock~~guarantees provided by the GSEs and the ~~then current market price of~~FHA and VA, our ~~common stock. The ESOP Preferred Stock~~credit risk associated with these VIEs is ~~also convertible at~~limited. For additional information about conforming mortgage loan securitizations and resecuritizations, see the option of the holder at any time, unless previously redeemed. We have the option to redeem the ESOP Preferred Stock at any time, in whole or in part, at a redemption price per share equal to the higher of (a) $1,000 per share plus accrued“Loan Sales and ~~unpaid dividends or (b) the fair market value, as defined in the Certificates of Designation for the ESOP Preferred Stock.~~

Securitization Activity” and “Resecuritization Activities” sections within this Note.

~~Table 16.2:~~COMMERCIAL REAL ESTATE LOANS We may transfer purchased industrial development bonds and GSE credit enhancements to VIEs in exchange for beneficial interests. We may also acquire such beneficial interests in transactions where we do not act as a transferor. We own all of the beneficial interests and may also service the underlying mortgages that serve as collateral to the bonds. The GSEs have the power to direct the servicing and workout activities of the VIE in the event of a default, therefore we do not have control over the key decisions of the VIEs.

OTHER VIE STRUCTURES ~~ESOP Preferred Stock~~We engage in various forms of structured finance arrangements with other VIEs, including asset-backed finance structures and other securitizations collateralized by asset classes other than mortgages. Collateral may include rental properties, asset-backed securities, student loans and mortgage loans. We may participate in structuring or marketing the arrangements as well as provide financing, service one or more of the underlying assets, or enter into derivatives with the VIEs. We may also receive fees for those services. We are not the primary beneficiary of these structures because we do not have power to direct the most significant activities of the VIEs.

Shares issued and outstanding Carrying value Adjustable dividend rate
(in millions, except shares) Mar 31,
2022 Dec 31,
2021 Mar 31,
2022 Dec 31,
2021 Minimum Maximum
ESOP Preferred Stock
$1,000 liquidation preference per share
2018 189,225 189,225 $ 189 189 7.00 % 8.00 %
2017 135,135 135,135 135 135 7.00 8.00
2016 128,380 128,380 128 128 9.30 10.30
2015 68,106 68,106 68 68 8.90 9.90
2014 62,420 62,420 63 63 8.70 9.70
2013 26,168 26,168 26 26 8.50 9.50
Total ESOP Preferred Stock (1) 609,434 609,434 $ 609 609
Unearned ESOP shares (2) $ (646) (646)
Table 13.4 provides a summary of our exposure to the unconsolidated VIEs described above, which includes investments in securities, loans, guarantees, liquidity agreements, commitments and certain derivatives. We exclude certain transactions with unconsolidated VIEs when our continuing involvement is temporary or administrative in nature or insignificant in size.

~~(1)At both March 31, 2022 and December 31, 2021, additional paid-in capital included $37 million~~In Table 13.4, “Total VIE assets” represents the remaining principal balance of assets held by unconsolidated VIEs using the most current information available. “Carrying value” is the amount in our consolidated balance sheet related to ~~ESOP preferred stock.~~

~~(2)We recorded a corresponding charge to unearned ESOP shares in connection~~our involvement with the ~~issuance~~unconsolidated VIEs. “Maximum exposure to loss” is determined as the carrying value of our investment in the ~~ESOP Preferred Stock. The unearned ESOP shares are reduced~~VIEs excluding the unconditional repurchase options that have not been exercised, plus the remaining undrawn liquidity and lending commitments, the notional amount of net written derivative contracts, and generally the notional amount of, or stressed loss estimate for, other commitments and guarantees.

Debt, guarantees and other commitments include amounts related to lending arrangements, liquidity agreements, and certain loss sharing obligations associated with loans originated, sold, and serviced under certain GSE programs.

“Maximum exposure to loss” represents estimated loss that would be incurred under severe, hypothetical circumstances, for which we believe the possibility is extremely remote, such as ~~shares~~where the value of ~~the ESOP Preferred Stock are committed~~our interests and any associated collateral declines to ~~be released.~~zero, without any consideration of recovery or offset from any economic hedges. Accordingly, this disclosure is not an indication of expected loss.


			Wells Fargo & Company			~~123~~111


~~Note 17:~~ ~~Revenue from Contracts with Customers~~

~~Our revenue includes net interest income on financial instruments~~Note 13: Securitizations and ~~noninterest income. Table 17.1 presents our revenue by operating segment. For additional description of our~~

~~operating segments, including additional financial information~~

~~and the underlying management accounting process, see~~

~~Note 22 (Operating Segments). For a description of our revenue from contracts with customers, see Note 20 (Revenue from Contracts with Customers) in our 2021 Form 10-K.~~

Variable Interest Entities (continued)

Table ~~17.1:~~13.4: ~~Revenue by Operating Segment~~Unconsolidated VIEs

(in millions)
Consumer Banking and Lending Commercial Banking Corporate and Investment Banking Wealth and Investment Management Corporate Reconciling
Items (1) Consolidated
Company
Quarter ended March 31, 2022
Net interest income (2) $ 5,996 1,361 1,990 799 (818) (107) 9,221
Noninterest income:
Deposit-related fees 845 328 293 7 — — 1,473
Lending-related fees (2) 34 121 185 2 — — 342
Investment advisory and other asset-based fees (3) — 2 12 2,476 8 — 2,498
Commissions and brokerage services fees — — 83 454 — — 537
Investment banking fees (1) 15 462 — (29) — 447
Card fees:
Card interchange and network revenues (4) 834 53 14 1 — — 902
Other card fees (2) 127 — — — — — 127
Total card fees 961 53 14 1 — — 1,029
Mortgage banking (2) 654 — 42 (3) — — 693
Net gains (losses) from trading activities (2) — — 228 1 (11) — 218
Net gains from debt securities (2) — — — — 2 — 2
Net gains (losses) from equity securities (2) (9) 86 (5) — 504 — 576
Lease income (2) — 179 2 — 146 — 327
Other (2) 83 182 164 20 186 (406) 229
Total noninterest income 2,567 966 1,480 2,958 806 (406) 8,371
Total revenue $ 8,563 2,327 3,470 3,757 (12) (513) 17,592
Quarter ended March 31, 2021
Net interest income (2) $ 5,615 1,254 1,779 657 (390) (107) 8,808
Noninterest income:
Deposit-related fees 661 317 266 7 4 — 1,255
Lending-related fees (2) 40 136 183 2 — — 361
Investment advisory and other asset-based fees (3) — 5 22 2,306 423 — 2,756
Commissions and brokerage services fees — — 81 555 — — 636
Investment banking fees (6) 13 611 (1) (49) — 568
Card fees:
Card interchange and network revenues (4) 778 45 10 1 — — 834
Other card fees (2) 114 — — — 1 — 115
Total card fees 892 45 10 1 1 — 949
Mortgage banking (2) 1,259 — 70 (3) — — 1,326
Net gains from trading activities (2) 1 2 331 6 8 — 348
Net gains from debt securities (2) — — — — 151 — 151
Net gains from equity securities (2) 34 13 75 — 270 — 392
Lease income (2) — 174 1 — 140 — 315
Other (2) 158 122 175 14 469 (271) 667
Total noninterest income 3,039 827 1,825 2,887 1,417 (271) 9,724
Total revenue $ 8,654 2,081 3,604 3,544 1,027 (378) 18,532


			Carrying value – asset (liability)
(in millions)	Total VIE assets		Loans		Debt securities (1)	Equity securities	All other assets (2)	Debt and other liabilities	Net assets
March 31, 2023


Nonconforming mortgage loan securitizations	$	153,867	—		2,471	—	604	(10)	3,065
Commercial real estate loans	5,616		5,600		—	—	16	—	5,616
Other	2,147		273		—	43	22	—	338
Total	$	161,630	5,873		2,471	43	642	(10)	9,019
			Maximum exposure to loss
			Loans		Debt securities (1)	Equity securities	All other assets (2)	Debt, guarantees, and other commitments	Total exposure


Nonconforming mortgage loan securitizations			$	—	2,471	—	604	10	3,085
Commercial real estate loans			5,600		—	—	16	704	6,320
Other			273		—	43	22	229	567
Total			$	5,873	2,471	43	642	943	9,972
			Carrying value – asset (liability)
(in millions)	Total VIE assets		Loans		Debt securities (1)	Equity securities	All other assets (2)	Debt and other liabilities	Net assets
December 31, 2022


Nonconforming mortgage loan securitizations	$	154,464	—		2,420	—	617	(13)	3,024
Commercial real estate loans	5,627		5,611		—	—	16	—	5,627
Other	2,174		292		1	43	21	—	357
Total	$	162,265	5,903		2,421	43	654	(13)	9,008
			Maximum exposure to loss
			Loans		Debt securities (1)	Equity securities	All other assets (2)	Debt, guarantees, and other commitments	Total exposure


Nonconforming mortgage loan securitizations			$	—	2,420	—	617	13	3,050
Commercial real estate loans			5,611		—	—	16	705	6,332
Other			292		1	43	21	228	585
Total			$	5,903	2,421	43	654	946	9,967

(1)~~Taxable-equivalent adjustments related to tax-exempt income on certain loans~~Includes $205 million and ~~debt~~$172 million of securities ~~are included in net interest income, while taxable-equivalent adjustments related to income tax credits for low-income housing~~classified as trading at March 31, 2023, 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.December 31, 2022, respectively.

(2)~~These revenues are related to financial~~All other assets includes mortgage servicing rights, derivative assets, and ~~liabilities, including~~other assets (predominantly servicing advances).

INVOLVEMENT WITH TAX CREDIT VIES In addition to the unconsolidated VIEs in Table 13.4, we may invest in or provide funding to affordable housing, renewable energy or similar projects that are designed to generate a return primarily through the realization of federal tax credits and other tax benefits. The projects are typically managed by third-party sponsors who have the power over the VIE’s assets, therefore, we do not consolidate the VIEs. The carrying value of our equity investments in tax credit VIEs was $18.6 billion and $18.7 billion at March 31, 2023, and December 31, 2022, respectively. We also had loans ~~leases, securities~~to tax credit VIEs with a carrying value of $1.9 billion and ~~derivatives, with~~$2.0 billion at March 31, 2023, and December 31, 2022, respectively.

Our maximum exposure to loss for tax credit VIEs at March 31, 2023, and December 31, 2022, was $28.7 billion and $28.0 billion, respectively. Our maximum exposure to loss included total unfunded equity and lending commitments of $8.2 billion and $7.3 billion at March 31, 2023, and December 31, 2022, respectively. See Note 14 (Guarantees and Other Commitments) for additional ~~details included in other footnotes~~information about commitments to ~~our financial statements.~~purchase equity securities.

~~(3)We earned trailing commissions of $271 million and $298 million~~Our affordable housing equity investments qualify for the ~~quarters ended March 31,~~low-income housing tax credit (LIHTC). For additional information on our LIHTC investments, see Note 16 (Securitizations and Variable Interest Entities) in our 2022 ~~and 2021, respectively.~~Form 10-K.

~~(4)The cost of credit card rewards and rebates of $482 million and $310 million for the quarters ended March 31, 2022 and 2021, respectively, are presented net against the related revenues.~~

Consolidated VIEs

We consolidate VIEs where we are the primary beneficiary. We are the primary beneficiary of the following structure types:

COMMERCIAL AND INDUSTRIAL LOANS AND LEASES We may securitize dealer floor plan loans in a revolving master trust entity. As servicer and residual interest holder, we control the key decisions of the trust and consolidate the entity. The total VIE assets held by the master trust represent a majority of the total VIE assets presented for this category in Table 13.5. In a separate transaction structure, we may provide the majority of debt and equity financing to an SPE that engages in lending and leasing to specific vendors and service the underlying collateral.

OTHER VIE STRUCTURESOther VIEs are predominantly related to municipal tender option bond (MTOB) transactions. MTOBs are vehicles to finance the purchase of municipal bonds through the issuance of short-term debt to investors. Our involvement with MTOBs includes serving as the residual interest holder, which provides control over the key decisions of the VIE, as well as the remarketing agent or liquidity provider related to the debt issued to investors.We may also securitize nonconforming mortgage loans, in which our involvement includes servicer of the underlying assets and holder of subordinate or senior securities issued by the VIE. During second quarter 2022, we purchased the outstanding mortgage loans from the VIEs and extinguished the related debt associated with such securitizations.


~~124~~112			Wells Fargo & Company

Table 13.5 presents a summary of financial assets and liabilities of our consolidated VIEs. The carrying value represents assets and liabilities recorded on our consolidated balance sheet. “Total VIE assets” includes affiliate balances that are eliminated upon consolidation, and therefore in some instances will differ from the carrying value of assets.

Table 13.5:Transactions with Consolidated VIEs


			Carrying value – asset (liability)
(in millions)	Total VIE assets		Loans	Debt securities	All other assets (1)	Liabilities (2)
March 31, 2023
Commercial and industrial loans and leases	$	7,231	5,309	—	195	(138)
Other	72		—	71	1	(72)
Total consolidated VIEs	$	7,303	5,309	71	196	(210)
December 31, 2022
Commercial and industrial loans and leases	$	7,148	4,802	—	190	(129)
Other	72		—	71	1	(72)
Total consolidated VIEs	$	7,220	4,802	71	191	(201)

(1)All other assets includes cash and due from banks, and other assets.

(2)Liabilities include short-term borrowings, and accrued expenses and other liabilities.

Other Transactions

In addition to the transactions included in the previous tables, we have used wholly-owned trust preferred security VIEs to issue debt securities or preferred equity exclusively to third-party investors. As the sole assets of the VIEs are receivables from us, we do not consolidate the VIEs even though we own all of the voting equity shares of the VIEs, have fully guaranteed the obligations of the VIEs, and may have the right to redeem the third-party securities under certain circumstances. On our consolidated balance sheet, we reported the debt securities issued to the VIEs as long-term junior subordinated debt with a carrying value of $404 million and $401 million at March 31, 2023, and December 31, 2022, respectively.


			Wells Fargo & Company			113


Note ~~18:~~14: ~~Employee Benefits~~Guarantees and Other ~~Expenses~~Commitments

~~Pension and Postretirement Plans~~

~~We sponsor~~Guarantees are contracts that contingently require us to make payments to a frozen noncontributory qualified defined benefit retirement plan, the Wells Fargo & Company Cash Balance Plan (Cash Balance Plan), which covers eligible employees of Wells Fargo. The Cash Balance Plan was frozen on July 1, 2009, and no new benefits accrue after that date. For additional information on our pension and postretirement plans, including plan assumptions, investment strategy and asset allocation, projected benefit payments, and valuation methodologies used for assets measured at fair value, see Note 1 (Summary of Significant Accounting Policies) and Note 21 (Employee Benefits and Other Expenses) in our 2021 Form 10-K.

~~We recognize settlement losses for our Cash Balance Plan~~guaranteed party based on an ~~assessment of whether lump sum benefit payments will,~~event or a change in aggregate for the year, exceed the sum of its annual service and interest cost (threshold). Settlement losses of $47 million were recognized during first quarter 2022, representing the pro rata portion of the net loss in cumulative other comprehensive income based on the percentage reductionan underlying asset, liability, rate or index. For additional

descriptions of our guarantees, see Note 17 (Guarantees and Other Commitments) in ~~the Cash Balance Plan’s projected benefit obligation attributable~~our 2022 Form 10-K. Table 14.1 shows carrying value and maximum exposure to lump sum benefit payments during first quarter 2022. There were 0 settlement losses recognized during first quarter 2021. As a result of the settlement losses, we remeasured the Cash Balance Plan obligation and plan assets as of March 31, 2022, and used a discount rate of 3.65%. In first quarter 2022, the result of the settlement losses and remeasurement was:

•~~an increase of $10 million in the Cash Balance Plan asset; and~~

•~~an increase of $57 million in other comprehensive income (pre-tax).~~

~~Table 18.1 presents the components of net periodic benefit cost. The expected long-term rate of return~~loss on plan assets and interest cost discount rate in determining net periodic benefit cost for first quarter 2022 were 5.00% and 2.47%, respectively. Service cost is reported in personnel expense and all other components of net periodic benefit cost are reported in other noninterest expense on the consolidated statement of income.our guarantees.

Table ~~18.1:~~14.1: ~~Net Periodic Benefit Cost~~Guarantees – Carrying Value and Maximum Exposure to Loss

2022 2021
Pension benefits Pension benefits
(in millions) Qualified
Non-
qualified
Other
benefits
Qualified
Non-
qualified
Other
benefits
Quarter ended March 31,
Service cost $ 5 — — 4 — —
Interest cost 67 2 2 71 3 3
Expected return on plan assets (139) — (5) (152) — (5)
Amortization of net actuarial loss (gain) 33 3 (5) 37 4 (5)
Amortization of prior service credit — — (3) — — (2)
Settlement loss 47 1 — — 2 —
Net periodic benefit cost $ 13 6 (11) (40) 9 (9)


			Maximum exposure to loss
(in millions)	Carrying value of obligation		Expires in one year or less	Expires after one year through three years	Expires after three years through five years	Expires after five years	Total	Non-investment grade
March 31, 2023
Standby letters of credit (1)	$	101	14,938	3,865	3,281	19	22,103	7,365
Direct pay letters of credit (1)	10		1,384	3,035	329	5	4,753	1,241
Loans and LHFS sold with recourse (2)	19		319	1,947	2,754	8,815	13,835	11,320
Exchange and clearing house guarantees	—		5,022	—	—	—	5,022	—
Other guarantees and indemnifications (3)	—		513	—	9	254	776	486
Total guarantees	$	130	22,176	8,847	6,373	9,093	46,489	20,412
December 31, 2022
Standby letters of credit (1)	$	112	14,014	4,694	3,058	53	21,819	7,071
Direct pay letters of credit (1)	13		1,593	2,734	465	5	4,797	1,283
Loans and LHFS sold with recourse (2)	16		322	1,078	3,408	8,906	13,714	11,399
Exchange and clearing house guarantees	—		4,623	—	—	—	4,623	—
Other guarantees and indemnifications (3)	—		548	1	10	201	760	515
Total guarantees	$	141	21,100	8,507	6,941	9,165	45,713	20,268

(1)Standby and direct pay letters of credit are reported net of syndications and participations.

(2)Represents recourse provided, predominantly to the GSEs, on loans sold under various programs and arrangements.

(3)Includes indemnifications provided to certain third-party clearing agents. Estimated maximum exposure to loss was $210 million and $157 million with related collateral of $1.5 billion and $1.3 billion as of March 31, 2023, and December 31, 2022, respectively.

Maximum exposure to loss represents the estimated loss that would be incurred under an assumed hypothetical circumstance, despite what we believe is a remote possibility, where the value of our interests and any associated collateral declines to zero. Maximum exposure to loss estimates in

Table 14.1 do not reflect economic hedges or collateral we could use to offset or recover losses we may incur under our guarantee agreements. Accordingly, these amounts are not an indication of expected loss. We believe the carrying value is more representative of our current exposure to loss than maximum exposure to loss. The carrying value represents the fair value of the guarantee, if any, and also includes an ACL for guarantees, if applicable. In determining the ACL for guarantees, we consider the credit risk of the related contingent obligation.

For our guarantees in Table 14.1, non-investment grade represents those guarantees on which we have a higher risk of performance under the terms of the guarantee, which is determined based on an external rating or an internal credit grade that is below investment grade.

WRITTEN OPTIONS We enter into written foreign currency options and over-the-counter written equity put options that are derivative contracts that have the characteristics of a guarantee. The fair value of written options represents our view of the probability that we will be required to perform under the contract. The fair value of these written options was a liability of $150 million and $15 million at March 31, 2023, and December 31, 2022, respectively. The fair value may be an asset as a result of deferred premiums on certain option trades. The maximum exposure to loss represents the notional value of these derivative contracts. At March 31, 2023, the maximum exposure to loss was $32.1 billion, with $29.8 billion expiring in three years or less compared with $23.4 billion and $21.3 billion,

respectively, at December 31, 2022. See Note 11 (Derivatives) for additional information regarding written derivative contracts.

MERCHANT PROCESSING SERVICES We provide debit and credit card transaction processing services through payment networks directly for merchants and as a sponsor for merchant processing servicers, including our joint venture with a third party that is accounted for as an equity method investment. In our role as the merchant acquiring bank, we have a potential obligation in connection with payment and delivery disputes between the merchant and the cardholder that are resolved in favor of the cardholder, referred to as a charge-back transaction. We estimate our potential maximum exposure to be the total merchant transaction volume processed in the preceding four months, which is generally the lifecycle for a charge-back transaction. As of March 31, 2023, our potential maximum exposure was approximately $757.6 billion, and related losses, including those from our joint venture entity, were insignificant.

GUARANTEES OF SUBSIDIARIES The Parent fully and unconditionally guarantees the payment of principal, interest, and any other amounts that may be due on securities that its 100% owned finance subsidiary, Wells Fargo Finance LLC, may issue. These securities are not guaranteed by any other subsidiary of the Parent. The guaranteed liabilities were $891 million and $948 million at March 31, 2023, and December 31, 2022, respectively. These guarantees rank on parity with all of the Parent’s other unsecured and unsubordinated indebtedness.

OTHER COMMITMENTS To meet the financing needs of our customers, we may enter into commitments to purchase debt and equity securities to provide capital for their funding, liquidity or other future needs. As of March 31, 2023, and December 31,


114			Wells Fargo & Company

~~Other Expenses~~

~~Regulatory Charges~~

2022, we had commitments to purchase debt securities of $249 million and ~~Assessments expense, which is~~$100 million and commitments to purchase equity securities of $4.7 billion and $3.8 billion, respectively.

As part of maintaining our memberships in certain clearing organizations, we are required to stand ready to provide liquidity to sustain market clearing activity in the event unforeseen events occur or are deemed likely to occur. Certain of these obligations are guarantees of other members’ performance and accordingly are included in ~~other noninterest expense,~~Table 14.1 in Other guarantees and indemnifications.

We have commitments to enter into resale and securities borrowing agreements as well as repurchase and securities lending agreements with certain counterparties, including central clearing organizations. The amount of our unfunded contractual commitments for resale and securities borrowing agreements was ~~$225 million~~$17.6 billion and $19.9 billion as of March 31, 2023, and December 31, 2022, respectively. The amount of our unfunded contractual commitments for repurchase and securities lending agreements was $2.5 billion and $1.6 billion as of March 31, 2023, and December 31, 2022, respectively.

Given the nature of these commitments, they are excluded from Table 5.4 (Unfunded Credit Commitments) in ~~first quarter 2022, compared with $217 million in the same period a year ago,~~Note 5 (Loans and ~~primarily consisted of Federal Deposit Insurance Corporation (FDIC) deposit assessment expense.~~Related Allowance for Credit Losses).


			Wells Fargo & Company			~~125~~115


Note ~~19:~~15: ~~Restructuring Charges~~Pledged Assets and Collateral

Pledged Assets

Table 15.1 provides the carrying amount of on-balance sheet pledged assets as well as the fair value of other pledged collateral not recognized on our consolidated balance sheet, which we have received from third parties, have the right to repledge and have repledged. These amounts include assets pledged in transactions accounted for as secured borrowings, which are presented parenthetically on our consolidated balance sheet.

TRADING RELATED ACTIVITYOur trading businesses may pledge debt and equity securities in connection with securities sold under agreements to repurchase (repurchase agreements) and securities lending arrangements. The ~~Company began pursuing various initiatives~~collateral that we pledge related to ~~reduce expenses~~our trading activities may include our own collateral as well as collateral that we have received from third parties and ~~create a more efficient~~have the right to repledge. All of the collateral we pledge related to trading activity is eligible to be repledged or sold by the secured party.

NON-TRADING RELATED ACTIVITY As part of our liquidity management strategy, we may pledge loans, debt securities, and ~~streamlined organization in third quarter 2020. Actions~~other financial assets to secure trust and public deposits, borrowings and letters of credit from ~~these initiatives included (i) reorganizing and simplifying business processes and structures to improve internal operations~~Federal Home Loan Banks (FHLBs) and the ~~customer experience, (ii) reducing headcount, (iii) optimizing third-party spending, including~~Board of Governors of the Federal Reserve System (FRB) and for ~~our technology infrastructure, and (iv) rationalizing our branch and administrative locations, which may include consolidations and closures.~~other purposes as required or permitted by law or insurance statutory requirements. Substantially all of the ~~restructuring charges were personnel expenses related~~non-trading activity pledged collateral is not eligible to ~~severance costs associated with headcount reductions with~~

~~payments made over time in accordance with our severance plan, as well as payments for other employee benefit costs such as incentive compensation.~~

Restructuring charges are recorded as a component of noninterest expense on our consolidated statement of income. Changes in estimates represent adjustments to noninterest expense based on refinements to previously estimated amounts, which may reflect trends such as higher voluntary employee attrition, as well as changes in business activities.

~~Table 19.1 provides details on our restructuring charges.~~

~~Table 19.1:~~be repledged or sold by the secured party.~~Accruals for Restructuring Charges~~

Quarter ended March 31,
(in millions) 2022 2021
Balance, beginning of period $ 565 1,214
Restructuring charges — 145
Changes in estimates 5 (132)
Payments and utilization (99) (173)
Balance, end of period $ 471 1,054

VIE RELATED We pledge assets in connection with various types of transactions entered into with VIEs. These pledged assets can only be used to settle the liabilities of those entities.

We also have loans recorded on our consolidated balance sheet which represent certain delinquent loans that are eligible for repurchase from GNMA loan securitizations. See Note 13 (Securitizations and Variable Interest Entities) for additional information on consolidated VIE assets.

Table 15.1:Pledged Assets


(in millions)	Mar 31, 2023		Dec 31, 2022
Related to trading activities:
Off-balance sheet repledged third-party owned debt and equity securities	$	53,127	38,191
Trading debt securities and other	50,259		28,284
Equity securities	1,625		1,477
Total pledged assets related to trading activities	105,011		67,952
Related to non-trading activities:
Loans	355,979		344,000
Debt securities:

Available-for-sale	48,135		50,538
Held-to-maturity	15,626		17,477
Equity securities	169		141
Total pledged assets related to non-trading activities	419,909		412,156
Related to VIEs:
Consolidated VIE assets	5,576		5,064
Loans eligible for repurchase from GNMA securitizations	942		749
Total pledged assets related to VIEs	6,518		5,813
Total pledged assets	$	531,438	485,921

Securities and Other Collateralized Financing Activities

involving collateral other than securities, such as loans, as part of our commercial lending business activities.

OFFSETTING OF SECURITIES AND OTHER COLLATERALIZED FINANCING ACTIVITIES Table 15.2 presents resale and repurchase agreements subject to master repurchase agreements (MRA) and securities borrowing and lending agreements subject to master securities lending agreements (MSLA). Where legally enforceable, these master netting arrangements give the ability, in the event of default by the counterparty, to liquidate securities held as collateral and to offset receivables and payables with the same counterparty. Collateralized financings, and those with a single counterparty, are presented net on our consolidated balance sheet, provided certain criteria are met that permit balance sheet netting. The majority of transactions subject to these agreements do not meet those criteria and thus are not eligible for balance sheet netting.

Collateral we pledged consists of non-cash instruments, such as securities or loans, and is not netted on our consolidated balance sheet against the related liability. Collateral we received


~~126~~116			Wells Fargo & Company


~~Note 20:~~ ~~Earnings and Dividends Per Common Share~~

~~Table 20.1 shows earnings per common share~~includes securities or loans and ~~diluted earnings per common share and reconciles~~is not recognized on our consolidated balance sheet. Collateral pledged or received may be increased or decreased over time to maintain certain contractual thresholds, as the ~~numerator and denominator~~assets underlying each arrangement fluctuate in value. Generally, these agreements require collateral to exceed the asset or liability recognized on the balance sheet. The following table includes the amount of ~~both earnings per common share calculations.~~collateral pledged or received related to exposures subject to

enforceable MRAs or MSLAs. While these agreements are typically over-collateralized, U.S. GAAP requires disclosure in this table to limit the reported amount of such collateral to the amount of the related recognized asset or liability for each counterparty.

In addition to the amounts included in Table 15.2, we also have balance sheet netting related to derivatives that is disclosed in Note 11 (Derivatives).

Table ~~20.1:~~15.2: ~~Earnings Per Common Share Calculations~~Offsetting – Securities and Other Collateralized Financing Activities
Quarter ended March 31,
(in millions, except per share amounts) 2022 2021
Wells Fargo net income $ 3,671 4,636
Less: Preferred stock dividends and other (1) 278 380
Wells Fargo net income applicable to common stock (numerator) $ 3,393 4,256
Earnings per common share
Average common shares outstanding (denominator) 3,831.1 4,141.3
Per share $ 0.89 1.03
Diluted earnings per common share
Average common shares outstanding 3,831.1 4,141.3
Add: Restricted share rights (2) 37.8 29.7
Diluted average common shares outstanding (denominator) 3,868.9 4,171.0
Per share $ 0.88 1.02


(in millions)	Mar 31, 2023		Dec 31, 2022
Assets:
Resale and securities borrowing agreements
Gross amounts recognized	$	117,461	114,729
Gross amounts offset in consolidated balance sheet (1)	(28,024)		(24,464)
Net amounts in consolidated balance sheet (2)	89,437		90,265
Collateral not recognized in consolidated balance sheet (3)	(89,052)		(89,592)
Net amount (4)	$	385	673
Liabilities:
Repurchase and securities lending agreements
Gross amounts recognized	$	90,248	55,054
Gross amounts offset in consolidated balance sheet (1)	(28,024)		(24,464)
Net amounts in consolidated balance sheet (5)	62,224		30,590
Collateral pledged but not netted in consolidated balance sheet (6)	(62,124)		(30,383)
Net amount (4)	$	100	207

(1)~~The quarter ended March 31, 2021,~~Represents recognized amount of resale and repurchase agreements with counterparties subject to enforceable MRAs that have been offset in our consolidated balance ~~includes $44 million from the elimination of discounts or issuance costs associated with redemptions of preferred stock.~~sheet.

(2)~~Calculated using~~Includes $67.2 billion and $68.0 billion classified on our consolidated balance sheet in federal funds sold and securities purchased under resale agreements at March 31, 2023, and December 31, 2022, respectively. Also includes $22.2 billion and $22.3 billion classified on our consolidated balance sheet in loans at March 31, 2023, and December 31, 2022, respectively.

(3)Represents the ~~treasury stock method.~~fair value of collateral we have received under enforceable MRAs or MSLAs, limited in the table above to the amount of the recognized asset due from each counterparty. At March 31, 2023, and December 31, 2022, we have received total collateral with a fair value of $141.1 billion and $136.6 billion, respectively, all of which we have the right to sell or repledge. These amounts include securities we have sold or repledged to others with a fair value of $76.3 billion and $59.1 billion at March 31, 2023, and December 31, 2022, respectively.

(4)Represents the amount of our exposure (assets) or obligation (liabilities) that is not collateralized and/or is not subject to an enforceable MRA or MSLA.

(5)Amount is classified in short-term borrowings on our consolidated balance sheet.

(6)Represents the fair value of collateral we have pledged, related to enforceable MRAs or MSLAs, limited in the table above to the amount of the recognized liability owed to each counterparty. At March 31, 2023, and December 31, 2022, we have pledged total collateral with a fair value of $92.6 billion and $56.3 billion, respectively, substantially all of which may be sold or repledged by the counterparty.

~~Table 20.2 presents~~REPURCHASE AND SECURITIES LENDING AGREEMENTS Securities sold under repurchase agreements and securities lending arrangements are effectively short-term collateralized borrowings. In these transactions, we receive cash in exchange for transferring securities as collateral and recognize an obligation to reacquire the ~~outstanding~~ securities ~~that were anti-dilutive~~for cash at the transaction’s maturity. These types of transactions create risks, including (1) the counterparty may fail to return the securities at maturity, (2) the fair value of the securities transferred may decline below the amount of our obligation to reacquire the securities, and therefore ~~not included~~create an obligation for us to pledge additional amounts, and (3) the counterparty may accelerate the maturity on demand, requiring us to reacquire the security prior to contractual maturity. We attempt to mitigate these risks in various ways. Our collateral primarily consists of highly liquid securities. In addition, we underwrite and monitor the ~~calculation~~financial strength of ~~diluted earnings per common share.~~our counterparties, monitor the fair value of collateral pledged relative to contractually required repurchase amounts, and monitor that our collateral is properly returned through the clearing and settlement process in advance of our cash repayment. Table 15.3 provides the gross amounts recognized on our consolidated balance sheet (before the effects of offsetting) of our liabilities for repurchase and securities lending agreements disaggregated by underlying collateral type.

~~Table 20.2:Outstanding Anti-Dilutive Securities~~

Weighted-average shares
Quarter ended March 31,
(in millions) 2022 2021
Convertible Preferred Stock, Series L (1) 25.3 25.3
Restricted share rights (2) 0.1 0.3

~~(1) Calculated using the if-converted method.~~

~~(2) Calculated using the treasury stock method.~~

~~Table 20.3 presents dividends declared per common share.~~

~~Table 20.3:Dividends Declared Per Common Share~~

Quarter ended March 31,
2022 2021
Per common share $ 0.25 0.10


			Wells Fargo & Company			~~127~~


~~Note 21:~~ ~~Other Comprehensive Income~~

~~Table 21.1 provides the components of other comprehensive income (OCI), reclassifications to net income by income statement line item, and the related tax effects.~~

~~Table 21.1:Summary of Other Comprehensive Income~~

Quarter ended March 31,
2022 2021
(in millions) Before
tax Tax
effect Net of
tax Before
tax Tax
effect Net of
tax
Debt securities:
Net unrealized gains (losses) arising during the period $ (6,888) 1,697 (5,191) (2,012) 500 (1,512)
Reclassification of net (gains) losses to net income 58 (15) 43 (14) 1 (13)
Net change (6,830) 1,682 (5,148) (2,026) 501 (1,525)
Derivatives and hedging activities:
Fair Value Hedges:
Change in fair value of excluded components on fair value hedges (1) 64 (16) 48 25 (6) 19
Cash Flow Hedges:
Net unrealized gains (losses) arising during the period on cash flow hedges (51) 13 (38) (31) 8 (23)
Reclassification of net (gains) losses to net income 14 (4) 10 53 (13) 40
Net change 27 (7) 20 47 (11) 36
Defined benefit plans adjustments:
Net actuarial and prior service gains (losses) arising during the period 19 (5) 14 10 (3) 7
Reclassification of amounts to noninterest expense (2) 76 (18) 58 36 (8) 28
Net change 95 (23) 72 46 (11) 35
Debit valuation adjustments (DVA):
Net unrealized gains (losses) arising during the period (4) 1 (3) — — —
Reclassification of net (gains) losses to net income — — — — — —
Net change (4) 1 (3) — — —
Foreign currency translation adjustments:
Net unrealized gains (losses) arising during the period (6) — (6) 13 (2) 11
Reclassification of net (gains) losses to net income — — — — — —
Net change (6) — (6) 13 (2) 11
Other comprehensive income (loss) $ (6,718) 1,653 (5,065) (1,920) 477 (1,443)
Less: Other comprehensive income from noncontrolling interests, net of tax — 1
Wells Fargo other comprehensive loss, net of tax $ (5,065) (1,444)

~~(1)~~Represents changes in fair value of cross-currency swaps attributable to changes in cross-currency basis spreads, which are excluded from the assessment of hedge effectiveness and recorded in other comprehensive income.

~~(2)These items are included in the computation of net periodic benefit cost (see Note 18 (Employee Benefits and Other Expenses) for additional information).~~


~~128~~			~~Wells Fargo & Company~~			117

Note 15: Pledged Assets and Collateral (continued)

Table 15.3:Gross Obligations by Underlying Collateral Type


(in millions)	Mar 31, 2023		Dec 31, 2022
Repurchase agreements:
Securities of U.S. Treasury and federal agencies	$	37,217	27,857
Securities of U.S. States and political subdivisions	73		83
Federal agency mortgage-backed securities	35,613		8,386
Non-agency mortgage-backed securities	670		682
Corporate debt securities	6,068		6,541
Asset-backed securities	1,949		1,529
Equity securities	416		711
Other	648		300
Total repurchases	82,654		46,089
Securities lending arrangements:
Securities of U.S. Treasury and federal agencies	301		278

Federal agency mortgage-backed securities	81		58

Corporate debt securities	293		206

Equity securities (1)	6,871		8,356
Other	48		67
Total securities lending	7,594		8,965
Total repurchases and securities lending	$	90,248	55,054

(1)Equity securities are generally exchange traded and represent collateral received from third parties that has been repledged. We received the collateral through either margin lending agreements or contemporaneous securities borrowing transactions with other counterparties.

Table ~~21.2~~15.4 provides the ~~cumulative OCI balance activity on an after-tax basis.~~contractual maturities of our gross obligations under repurchase and securities lending agreements.

Table ~~21.2:~~15.4: ~~Cumulative OCI Balances~~Contractual Maturities of Gross Obligations

(in millions) Debt
securities Fair value hedges (1) Cash flow hedges (2)
Defined
benefit
plans
adjustments
Debit valuation adjustments
(DVA)
Foreign
currency
translation
adjustments
Cumulative
other
comprehensive
income (loss)
Quarter ended March 31, 2022
Balance, beginning of period $ 665 (143) (27) (2,055) — (142) (1,702)
Net unrealized gains (losses) arising during the period (5,191) 48 (38) 14 (3) (6) (5,176)
Amounts reclassified from accumulated other comprehensive income 43 — 10 58 — — 111
Net change (5,148) 48 (28) 72 (3) (6) (5,065)
Less: Other comprehensive income from noncontrolling interests — — — — — — —
Balance, end of period $ (4,483) (95) (55) (1,983) (3) (148) (6,767)
Quarter ended March 31, 2021
Balance, beginning of period $ 3,039 (204) (125) (2,404) — (112) 194
Net unrealized gains (losses) arising during the period (1,512) 19 (23) 7 — 11 (1,498)
Amounts reclassified from accumulated other comprehensive income (13) — 40 28 — — 55
Net change (1,525) 19 17 35 — 11 (1,443)
Less: Other comprehensive income from noncontrolling interests — — — — — 1 1
Balance, end of period $ 1,514 (185) (108) (2,369) — (102) (1,250)


(in millions)	Overnight/continuous		Up to 30 days	30-90 days	>90 days	Total gross obligation
March 31, 2023
Repurchase agreements	$	72,070	1,215	2,609	6,760	82,654
Securities lending arrangements	7,494		—	—	100	7,594
Total repurchases and securities lending (1)	$	79,564	1,215	2,609	6,860	90,248
December 31, 2022
Repurchase agreements	$	36,251	734	2,884	6,220	46,089
Securities lending arrangements	8,965		—	—	—	8,965
Total repurchases and securities lending (1)	$	45,216	734	2,884	6,220	55,054

(1)~~Substantially all~~Securities lending is executed under agreements that allow either party to terminate the transaction without notice, while repurchase agreements have a term structure to them that technically matures at a point in time. The overnight/continuous repurchase agreements require election of both parties to roll the ~~amounts for fair value hedges are foreign exchange contracts.~~

~~(2)Majority of~~trade rather than the ~~amounts for cash flow hedges are interest rate contracts.~~election to terminate the arrangement as in securities lending.


118			Wells Fargo & Company			~~129~~


Note ~~22:~~16: Operating Segments

Our management reporting is organized into 4four 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 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 bywith our Chief Executive Officer and ~~Operating Committee.~~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 ~~revenues~~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.

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.

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 19 (Restructuring Charges) 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.

Basis of Presentation

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.

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.


~~130~~			Wells Fargo & Company			119

Note 16: Operating Segments (continued)

Table ~~22.1~~16.1 presents our results by operating segment.

Table ~~22.1:~~16.1: Operating Segments


(in millions)	(in millions)	Consumer Banking and Lending		Commercial Banking	Corporate and Investment Banking	Wealth and Investment Management	Corporate	Reconciling Items (1)	Consolidated Company	(in millions)	Consumer Banking and Lending		Commercial Banking	Corporate and Investment Banking	Wealth and Investment Management	Corporate (1)	Reconciling Items (2)	Consolidated Company

Quarter ended March 31, 2022
Net interest income (2)		$	5,996	1,361	1,990	799	(818)	(107)	9,221
Quarter ended March 31, 2023										Quarter ended March 31, 2023
Net interest income (3)										Net interest income (3)	$	7,433	2,489	2,461	1,044	16	(107)	13,336
Noninterest income	Noninterest income	2,567		966	1,480	2,958	806	(406)	8,371	Noninterest income	1,931		818	2,441	2,637	5	(439)	7,393
Total revenue	Total revenue	8,563		2,327	3,470	3,757	(12)	(513)	17,592	Total revenue	9,364		3,307	4,902	3,681	21	(546)	20,729
Provision for credit losses	Provision for credit losses	(190)		(344)	(196)	(37)	(20)	—	(787)	Provision for credit losses	867		(43)	252	11	120	—	1,207
Noninterest expense	Noninterest expense	6,395		1,531	1,983	3,175	786	—	13,870	Noninterest expense	6,038		1,752	2,217	3,061	608	—	13,676
Income (loss) before income tax expense (benefit)	Income (loss) before income tax expense (benefit)	2,358		1,140	1,683	619	(778)	(513)	4,509	Income (loss) before income tax expense (benefit)	2,459		1,598	2,433	609	(707)	(546)	5,846
Income tax expense (benefit)	Income tax expense (benefit)	588		280	425	154	(227)	(513)	707	Income tax expense (benefit)	618		399	615	152	(272)	(546)	966
Net income (loss) before noncontrolling interests	Net income (loss) before noncontrolling interests	1,770		860	1,258	465	(551)	—	3,802	Net income (loss) before noncontrolling interests	1,841		1,199	1,818	457	(435)	—	4,880
Less: Net income from noncontrolling interests		—		3	—	—	128	—	131
Less: Net income (loss) from noncontrolling interests										Less: Net income (loss) from noncontrolling interests	—		3	—	—	(114)	—	(111)
Net income (loss)	Net income (loss)	$	1,770	857	1,258	465	(679)	—	3,671	Net income (loss)	$	1,841	1,196	1,818	457	(321)	—	4,991
Quarter ended March 31, 2021
Quarter ended March 31, 2022										Quarter ended March 31, 2022
Net interest income ~~(2)~~(3)	Net interest income ~~(2)~~(3)	$	5,615	1,254	1,779	657	(390)	(107)	8,808	Net interest income ~~(2)~~(3)	$	5,996	1,361	1,990	799	(818)	(107)	9,221
Noninterest income	Noninterest income	3,039		827	1,825	2,887	1,417	(271)	9,724	Noninterest income	2,567		966	1,480	2,958	942	(406)	8,507
Total revenue	Total revenue	8,654		2,081	3,604	3,544	1,027	(378)	18,532	Total revenue	8,563		2,327	3,470	3,757	124	(513)	17,728
Provision for credit losses	Provision for credit losses	(419)		(399)	(284)	(43)	97	—	(1,048)	Provision for credit losses	(190)		(344)	(196)	(37)	(20)	—	(787)
Noninterest expense	Noninterest expense	6,267		1,630	1,833	3,028	1,231	—	13,989	Noninterest expense	6,395		1,531	1,983	3,175	767	—	13,851
Income (loss) before income tax expense (benefit)	Income (loss) before income tax expense (benefit)	2,806		850	2,055	559	(301)	(378)	5,591	Income (loss) before income tax expense (benefit)	2,358		1,140	1,683	619	(623)	(513)	4,664
Income tax expense (benefit)	Income tax expense (benefit)	702		212	500	140	(275)	(378)	901	Income tax expense (benefit)	588		280	425	154	(188)	(513)	746
Net income (loss) before noncontrolling interests	Net income (loss) before noncontrolling interests	2,104		638	1,555	419	(26)	—	4,690	Net income (loss) before noncontrolling interests	1,770		860	1,258	465	(435)	—	3,918
Less: Net income from noncontrolling interests	Less: Net income from noncontrolling interests	—		1	—	—	53	—	54	Less: Net income from noncontrolling interests	—		3	—	—	127	—	130
Net income (loss)	Net income (loss)	$	2,104	637	1,555	419	(79)	—	4,636	Net income (loss)	$	1,770	857	1,258	465	(562)	—	3,788

Quarter ended March 31, 2022 (3)
Quarter ended March 31, 2023										Quarter ended March 31, 2023
Loans (average)	Loans (average)	$	325,055	194,395	284,498	84,765	9,292	—	898,005	Loans (average)	$	338,308	222,826	294,742	83,621	9,154	—	948,651
Assets (average)	Assets (average)	374,869		214,937	551,404	90,841	687,341	—	1,919,392	Assets (average)	381,757		246,101	548,808	90,923	596,087	—	1,863,676
Deposits (average)	Deposits (average)	881,339		200,699	169,181	185,814	27,039	—	1,464,072	Deposits (average)	841,265		170,467	157,551	126,604	60,807	—	1,356,694

Loans (period-end)	Loans (period-end)	328,558		198,833	290,627	84,688	9,101	—	911,807	Loans (period-end)	337,511		226,599	291,817	82,817	9,247	—	947,991
Assets (period-end)	Assets (period-end)	379,115		221,886	564,976	90,820	682,912	—	1,939,709	Assets (period-end)	381,487		252,914	542,168	89,590	620,241	—	1,886,400
Deposits (period-end)	Deposits (period-end)	909,896		195,549	168,467	183,727	23,715	—	1,481,354	Deposits (period-end)	851,304		169,827	158,564	117,252	65,682	—	1,362,629

Quarter ended March 31, 2021
Quarter ended March 31, 2022										Quarter ended March 31, 2022
Loans (average)	Loans (average)	$	353,081	183,143	246,148	80,839	10,228	—	873,439	Loans (average)	$	325,055	194,395	284,498	84,765	9,292	—	898,005
Assets (average)	Assets (average)	408,553		199,361	511,528	87,355	727,628	—	1,934,425	Assets (average)	374,869		214,937	551,404	90,841	687,346	—	1,919,397
Deposits (average)	Deposits (average)	789,439		189,364	194,501	173,678	46,490	—	1,393,472	Deposits (average)	881,339		200,699	169,181	185,814	27,039	—	1,464,072

Loans (period-end)	Loans (period-end)	340,549		180,688	248,644	81,175	10,516	—	861,572	Loans (period-end)	328,558		198,833	290,627	84,688	9,101	—	911,807
Assets (period-end)	Assets (period-end)	405,597		198,684	512,045	87,039	753,899	—	1,957,264	Assets (period-end)	379,115		221,886	564,976	90,820	682,912	—	1,939,709
Deposits (period-end)	Deposits (period-end)	837,765		191,948	188,920	175,999	42,487	—	1,437,119	Deposits (period-end)	909,896		195,549	168,467	183,727	23,715	—	1,481,354

(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.

(3)Net interest income is interest earned on assets minus the interest paid on liabilities to fund those assets. Segment interest earned includes actual interest income on segment assets as well as a funding credit for their deposits. Segment interest paid on liabilities includes actual interest expense on segment liabilities as well as a funding charge for their assets.


120			Wells Fargo & Company


Note 17: Revenue and Expenses

Revenue

Our revenue includes net interest income on financial instruments and noninterest income. Table 17.1 presents our

revenue by operating segment. For additional description of our

operating segments, including additional financial information

and the underlying management accounting process, see

Note 16 (Operating Segments). For a description of our revenue from contracts with customers, see Note 20 (Revenue and Expenses) in our 2022 Form 10-K.

Table 17.1: Revenue by Operating Segment


(in millions)	Consumer Banking and Lending		Commercial Banking	Corporate and Investment Banking	Wealth and Investment Management	Corporate	Reconciling Items (1)	Consolidated Company








































Quarter ended March 31, 2023
Net interest income (2)	$	7,433	2,489	2,461	1,044	16	(107)	13,336
Noninterest income:
Deposit-related fees	672		236	236	5	(1)	—	1,148
Lending-related fees (2)	31		129	194	2	—	—	356
Investment advisory and other asset-based fees (3)	—		18	35	2,061	—	—	2,114
Commissions and brokerage services fees	—		—	78	541	—	—	619
Investment banking fees	—		20	314	—	(8)	—	326
Card fees:
Card interchange and network revenue (4)	863		56	17	1	1	—	938
Other card fees (2)	95		—	—	—	—	—	95
Total card fees	958		56	17	1	1	—	1,033
Mortgage banking (2)	160		—	75	(3)	—	—	232
Net gains (losses) from trading activities (2)	—		(1)	1,257	23	63	—	1,342
Net gains from debt securities (2)	—		—	—	—	—	—	—
Net losses from equity securities (2)	—		(12)	(1)	(2)	(342)	—	(357)
Lease income (2)	—		169	42	—	136	—	347
Other (2)	110		203	194	9	156	(439)	233
Total noninterest income	1,931		818	2,441	2,637	5	(439)	7,393
Total revenue	$	9,364	3,307	4,902	3,681	21	(546)	20,729





Quarter ended March 31, 2022
Net interest income (2)	$	5,996	1,361	1,990	799	(818)	(107)	9,221
Noninterest income:
Deposit-related fees	845		328	293	7	—	—	1,473
Lending-related fees (2)	34		121	185	2	—	—	342
Investment advisory and other asset-based fees (3)	—		2	12	2,476	8	—	2,498
Commissions and brokerage services fees	—		—	83	454	—	—	537
Investment banking fees	(1)		15	462	—	(29)	—	447
Card fees:
Card interchange and network revenue (4)	834		53	14	1	—	—	902
Other card fees (2)	127		—	—	—	—	—	127
Total card fees	961		53	14	1	—	—	1,029
Mortgage banking (2)	654		—	42	(3)	—	—	693
Net gains (losses) from trading activities (2)	—		—	228	1	(11)	—	218
Net gains from debt securities (2)	—		—	—	—	2	—	2
Net gains (losses) from equity securities (2)	(9)		86	(5)	—	504	—	576
Lease income (2)	—		179	2	—	146	—	327
Other (2)(5)	83		182	164	20	322	(406)	365
Total noninterest income	2,567		966	1,480	2,958	942	(406)	8,507
Total revenue	$	8,563	2,327	3,470	3,757	124	(513)	17,728

(1)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.

(2)~~Net interest income is interest earned on~~These revenue types are related to financial assets ~~minus the interest paid on~~and liabilities, including loans, leases, securities and derivatives, with additional details included in other footnotes to fund those assets. Segment interest earned includes actual interest income on segment assets as well as a funding credit for their deposits. Segment interest paid on liabilities includes actual interest expense on segment liabilities as well as a funding charge for their assets.our financial statements.

(3)We earned trailing commissions of $227 million and $271 million for the quarters ended March 31, 2023 and 2022, respectively.

(4)The cost of credit card rewards and rebates of $592 million and $482 million for the quarters ended March 31, 2023 and 2022, respectively, are presented net against the related revenue.

(5)In first quarter ~~2022,~~2023, we ~~prospectively transferred certain customer accounts from~~adopted ASU 2018-12 – Financial Services – Insurance (Topic 944): Targeted Improvements to the ~~Commercial Banking operating segment to Small Business Banking~~Accounting for Long-Duration Contracts. For additional information, see Note 1 (Summary of Significant Accounting Policies).

Expenses

OTHER EXPENSES Regulatory Charges and Assessments expense, which is included in other noninterest expense, was $271 million in first quarter 2023, compared with $225 million in the ~~Consumer Banking~~same period a year ago, and ~~Lending operating segment.~~primarily consisted of Federal Deposit Insurance Corporation (FDIC) deposit assessment expense.

On April 18, 2023, the FDIC announced it would recover by special assessment losses to the FDIC deposit insurance fund as a result of recent bank failures. We are not able to reasonably estimate the amount of any special assessment until additional information about the assessment is released by the FDIC. However, we expect our FDIC deposit assessment expense will increase.


			Wells Fargo & Company			~~131~~121


Note ~~23:~~18: Employee Benefits

Pension and Postretirement Plans

We sponsor a frozen noncontributory qualified defined benefit retirement plan, the Wells Fargo & Company Cash Balance Plan (Cash Balance Plan), which covers eligible employees of Wells Fargo. The Cash Balance Plan was frozen on July 1, 2009, and no new benefits accrue after that date. For additional information on our pension and postretirement plans, including plan assumptions, investment strategy and asset allocation, projected benefit payments, and valuation methodologies used

for assets measured at fair value, see Note 1 (Summary of Significant Accounting Policies) and Note 21 (Employee Benefits and Other Expenses) in our 2022 Form 10-K.

Table 18.1 presents the components of net periodic benefit cost. Service cost is reported in personnel expense and all other components of net periodic benefit cost are reported in other noninterest expense on our consolidated statement of income.

Table 18.1:Net Periodic Benefit Cost


	2023				2022
	Pension benefits				Pension benefits
(in millions)	Qualified		Non- qualified	Other benefits	Qualified	Non- qualified	Other benefits








Quarter ended March 31,
Service cost	$	6	—	—	5	—	—
Interest cost	101		5	4	67	2	2
Expected return on plan assets	(126)		—	(6)	(139)	—	(5)
Amortization of net actuarial loss (gain)	35		1	(6)	33	3	(5)
Amortization of prior service credit	—		—	(3)	—	—	(3)
Settlement loss	—		—	—	47	1	—
Net periodic benefit cost	$	16	6	(11)	13	6	(11)


122			Wells Fargo & Company


Note 19: Earnings and Dividends Per Common Share

Table 19.1 shows earnings per common share and diluted earnings per common share and reconciles the numerator and denominator of both earnings per common share calculations.

Table 19.1:Earnings Per Common Share Calculations


		Quarter ended March 31,
(in millions, except per share amounts)			2023		2022
Wells Fargo net income (1)			$	4,991	3,788
Less: Preferred stock dividends and other			278		279
Wells Fargo net income applicable to common stock (numerator) (1)			$	4,713	3,509
Earnings per common share
Average common shares outstanding (denominator)			3,785.6		3,831.1
Per share			$	1.24	0.92
Diluted earnings per common share
Average common shares outstanding			3,785.6		3,831.1

Add:	Restricted share rights (2)		33.1		37.8
Diluted average common shares outstanding (denominator)			3,818.7		3,868.9
Per share			$	1.23	0.91

(2)Calculated using the treasury stock method.

Table 19.2 presents the outstanding securities that were anti-dilutive and therefore not included in the calculation of diluted earnings per common share.

Table 19.2:Outstanding Anti-Dilutive Securities


	Weighted-average shares
	Quarter ended March 31,
(in millions)		2023	2022
Convertible Preferred Stock, Series L (1)		25.3	25.3
Restricted share rights (2)		0.4	0.1

(1) Calculated using the if-converted method.

(2) Calculated using the treasury stock method.

Table 19.3 presents dividends declared per common share.

Table 19.3:Dividends Declared Per Common Share


	Quarter ended March 31,
		2023		2022
Per common share		$	0.30	0.25


			Wells Fargo & Company			123


Note 20: Other Comprehensive Income

Table 20.1 provides the components of other comprehensive income (OCI), reclassifications to net income by income statement line item, and the related tax effects.

Table 20.1:Summary of Other Comprehensive Income


	Three months ended March 31,
		2023	2022
(in millions)				Before tax		Tax effect	Net of tax		Before tax	Tax effect	Net of tax
Debt securities:
Net unrealized gains (losses) arising during the period				$	358	(87)	271		(6,888)	1,697	(5,191)
Reclassification of net (gains) losses to net income				121		(30)	91		58	(15)	43
Net change				479		(117)	362		(6,830)	1,682	(5,148)
Derivatives and hedging activities:
Fair Value Hedges:
Change in fair value of excluded components on fair value hedges (1)				6		(2)	4		64	(16)	48
Cash Flow Hedges:
Net unrealized gains (losses) arising during the period on cash flow hedges				384		(95)	289		(51)	13	(38)
Reclassification of net (gains) losses to net income				113		(28)	85		14	(4)	10
Net change				503		(125)	378		27	(7)	20
Defined benefit plans adjustments:
Net actuarial and prior service gains (losses) arising during the period				—		—	—		19	(5)	14
Reclassification of amounts to noninterest expense (2)				27		(6)	21		76	(18)	58
Net change				27		(6)	21		95	(23)	72
Debit valuation adjustments (DVA) and other:
Net unrealized gains (losses) arising during the period (3)				4		(1)	3		12	(3)	9
Reclassification of net (gains) losses to net income				—		—	—		—	—	—
Net change				4		(1)	3		12	(3)	9
Foreign currency translation adjustments:
Net unrealized gains (losses) arising during the period				26		(1)	25		(5)	—	(5)
Reclassification of net (gains) losses to net income				—		—	—		—	—	—
Net change				26		(1)	25		(5)	—	(5)
Other comprehensive income (loss)				$	1,039	(250)	789		(6,701)	1,649	(5,052)
Less: Other comprehensive income (loss) from noncontrolling interests, net of tax							(1)				1
Wells Fargo other comprehensive income (loss), net of tax							$	790			(5,053)

(1)Represents changes in fair value of cross-currency swaps attributable to changes in cross-currency basis spreads, which are excluded from the assessment of hedge effectiveness and recorded in other comprehensive income.

(2)These items are included in the computation of net periodic benefit cost (see Note 18 (Employee Benefits) for additional information).


124			Wells Fargo & Company

Table 20.2 provides the accumulated OCI (AOCI) balance activity on an after-tax basis.

Table 20.2:Accumulated OCI Balances


(in millions)	Debt securities		Fair value hedges (1)	Cash flow hedges (2)	Defined benefit plans adjustments	Debit valuation adjustments (DVA) and other	Foreign currency translation adjustments	Accumulated other comprehensive income (loss)
Quarter ended March 31, 2023


















Balance, beginning of period	$	(9,835)	(77)	(1,183)	(1,901)	(6)	(380)	(13,382)
Transition adjustment (3)	—		—	—	—	20	—	20
Balance, beginning of period (3)	(9,835)		(77)	(1,183)	(1,901)	14	(380)	(13,362)
Net unrealized gains arising during the period	271		4	289	—	3	25	592
Amounts reclassified from accumulated other comprehensive income	91		—	85	21	—	—	197
Net change	362		4	374	21	3	25	789
Less: Other comprehensive loss from noncontrolling interests	—		—	—	—	—	(1)	(1)
Balance, end of period (3)(4)	$	(9,473)	(73)	(809)	(1,880)	17	(354)	(12,572)
Quarter ended March 31, 2022

Balance, beginning of period	$	665	(143)	(27)	(2,055)	—	(142)	(1,702)
Transition adjustment (3)	—		—	—	—	(44)	—	(44)
Balance, beginning of period (3)	665		(143)	(27)	(2,055)	(44)	(142)	(1,746)
Net unrealized gains (losses) arising during the period	(5,191)		48	(38)	14	9	(5)	(5,163)
Amounts reclassified from accumulated other comprehensive income	43		—	10	58	—	—	111
Net change	(5,148)		48	(28)	72	9	(5)	(5,052)
Less: Other comprehensive income from noncontrolling interests	—		—	—	—	—	1	1
Balance, end of period (3)(4)	$	(4,483)	(95)	(55)	(1,983)	(35)	(148)	(6,799)

(1)Substantially all of the amounts for fair value hedges are foreign exchange contracts.

(2)Substantially all of the amounts for cash flow hedges are interest rate contracts.

(4)AOCI related to debt securities includes after-tax unrealized gains or losses associated with the transfer of securities from AFS to HTM of $3.9 billion and $942 million at March 31, 2023 and 2022, respectively. These amounts are subsequently amortized from AOCI into earnings over the same period as the related unamortized premiums and discounts.


			Wells Fargo & Company			125


Note 21: Regulatory Capital Requirements and Other Restrictions

Regulatory Capital Requirements

The Company and each of its subsidiary banks are subject to regulatory capital adequacy requirements promulgated by federal banking regulators. The FRB establishes capital requirements for the consolidated financial holding company, and the ~~OCC~~Office of the Comptroller of the Currency (OCC) has similar requirements for the Company’s national banks, including Wells Fargo Bank, N.A. (the Bank).

Table ~~23.1~~21.1 presents regulatory capital information for ~~Wells Fargo &~~the Company and the Bank in accordance with Basel III capital requirements. We must calculate our risk-based capital ratios

~~ratios~~ under both the Standardized and Advanced Approaches. The Standardized Approach applies assigned risk weights to broad risk categories, while the calculation of risk-weighted assets (RWAs) under the Advanced Approach differs by requiring applicable banks to utilize a risk-sensitive methodology, which relies upon the use of internal credit models, and includes an operational risk component.

At March 31, ~~2022,~~2023, the Bank and our other insured depository institutions were considered well-capitalized under the requirements of the Federal Deposit Insurance Act.

Table ~~23.1:~~21.1: Regulatory Capital Information


		Wells Fargo & Company								Wells Fargo Bank, N.A.						Wells Fargo & Company								Wells Fargo Bank, N.A.
		Standardized Approach						Advanced Approach		Standardized Approach			Advanced Approach			Standardized Approach						Advanced Approach		Standardized Approach			Advanced Approach
(in millions, except ratios)	(in millions, except ratios)	March 31, 2022				December 31, 2021		March 31, 2022	December 31, 2021	March 31, 2022		December 31, 2021	March 31, 2022	December 31, 2021	(in millions, except ratios)	March 31, 2023				December 31, 2022		March 31, 2023	December 31, 2022	March 31, 2023		December 31, 2022	March 31, 2023	December 31, 2022
Regulatory capital:	Regulatory capital:														Regulatory capital:
Common Equity Tier 1	Common Equity Tier 1	$	132,298			140,643		132,298	140,643	143,732		149,318	143,732	149,318	Common Equity Tier 1	$	134,454			133,527		134,454	133,527	141,504		140,644	141,504	140,644
Tier 1	Tier 1	151,340				159,671		151,340	159,671	143,732		149,318	143,732	149,318	Tier 1	153,485				152,567		153,485	152,567	141,504		140,644	141,504	140,644
Total	Total	186,316				196,308		177,686	186,580	166,302		173,044	157,604	163,213	Total	187,626				186,747		177,963	177,258	165,030		163,885	155,163	154,292
Assets:	Assets:														Assets:
Risk-weighted assets	Risk-weighted assets	1,265,517				1,239,026		1,119,518	1,116,068	1,169,842		1,137,839	977,094	965,511	Risk-weighted assets	1,243,787				1,259,889		1,117,860	1,112,307	1,156,017		1,177,300	984,898	977,713
Adjusted average assets	Adjusted average assets	1,891,615				1,915,585		1,891,615	1,915,585	1,734,148		1,758,479	1,734,148	1,758,479	Adjusted average assets	1,835,448				1,846,954		1,835,448	1,846,954	1,661,558		1,685,401	1,661,558	1,685,401
Regulatory capital ratios:	Regulatory capital ratios:														Regulatory capital ratios:
Common Equity Tier 1 capital	Common Equity Tier 1 capital	10.45		%	*	11.35		11.82	12.60	12.29	*	13.12	14.71	15.47	Common Equity Tier 1 capital	10.81		%	*	10.60		12.03	12.00	12.24	*	11.95	14.37	14.39
Tier 1 capital	Tier 1 capital	11.96			*	12.89		13.52	14.31	12.29	*	13.12	14.71	15.47	Tier 1 capital	12.34			*	12.11		13.73	13.72	12.24	*	11.95	14.37	14.39
Total capital	Total capital	14.72			*	15.84		15.87	16.72	14.22	*	15.21	16.13	16.90	Total capital	15.09			*	14.82		15.92	15.94	14.28	*	13.92	15.75	15.78
Required minimum capital ratios:	Required minimum capital ratios:														Required minimum capital ratios:
Common Equity Tier 1 capital	Common Equity Tier 1 capital	9.10				9.60		8.50	9.00	7.00		7.00	7.00	7.00	Common Equity Tier 1 capital	9.20				9.20		8.50	8.50	7.00		7.00	7.00	7.00
Tier 1 capital	Tier 1 capital	10.60				11.10		10.00	10.50	8.50		8.50	8.50	8.50	Tier 1 capital	10.70				10.70		10.00	10.00	8.50		8.50	8.50	8.50
Total capital	Total capital	12.60				13.10		12.00	12.50	10.50		10.50	10.50	10.50	Total capital	12.70				12.70		12.00	12.00	10.50		10.50	10.50	10.50
		Wells Fargo & Company								Wells Fargo Bank, N.A.						Wells Fargo & Company								Wells Fargo Bank, N.A.
		March 31, 2022						December 31, 2021		March 31, 2022			December 31, 2021			March 31, 2023						December 31, 2022		March 31, 2023			December 31, 2022
Regulatory leverage:	Regulatory leverage:														Regulatory leverage:
Total leverage exposure (1)	Total leverage exposure (1)	$	2,289,114					2,316,079		2,117,033			2,133,798		Total leverage exposure (1)	$	2,206,375					2,224,789		2,023,955			2,058,568
Supplementary leverage ratio (SLR) (1)	Supplementary leverage ratio (SLR) (1)	6.61					%	6.89		6.79			7.00		Supplementary leverage ratio (SLR) (1)	6.96					%	6.86		6.99			6.83
Tier 1 leverage ratio (2)	Tier 1 leverage ratio (2)	8.00						8.34		8.29			8.49		Tier 1 leverage ratio (2)	8.36						8.26		8.52			8.34
Required minimum leverage:	Required minimum leverage:														Required minimum leverage:
Supplementary leverage ratio	Supplementary leverage ratio	5.00						5.00		6.00			6.00		Supplementary leverage ratio	5.00						5.00		6.00			6.00
Tier 1 leverage ratio	Tier 1 leverage ratio	4.00						4.00		4.00			4.00		Tier 1 leverage ratio	4.00						4.00		4.00			4.00

*Denotes the binding ratio under the Standardized and Advanced Approaches at March 31, ~~2022.~~2023.

(1)The SLR consists of ~~tier~~Tier 1 capital divided by total leverage exposure. Total leverage exposure consists of total average assets, less goodwill and other permitted ~~tier~~Tier 1 capital deductions (net of deferred tax liabilities), plus certain off-balance sheet exposures.

(2)The ~~tier~~Tier 1 leverage ratio consists of ~~tier~~Tier 1 capital divided by total average assets, excluding goodwill and certain other items as determined under the rule.

At March 31, ~~2022,~~2023, the ~~CET1, tier~~Common Equity Tier 1 (CET1), Tier 1 and total capital ratio requirements for the Company included a global systemically important bank (G-SIB) surcharge of 1.50%. The G-SIB surcharge is not applicable to the Bank. In addition, the CET1, ~~tier~~Tier 1 and total capital ratio requirements for the Company included a stress capital buffer of ~~3.10%~~3.20% under the Standardized Approach and a capital conservation buffer of 2.50% under the Advanced Approach. The capital ratio requirements for the Bank included a capital conservation buffer of 2.50% under both the Standardized and Advanced Approaches. The Company is required to maintain these risk-based capital ratios and to maintain an SLR of at least 5.00% (composed of a 3.00% minimum requirement plus a supplementary leverage buffer of 2.00%) to avoid restrictions on capital distributions and discretionary bonus payments. The Bank is required to maintain an SLR of at least 6.00% to be considered well-capitalized under applicable regulatory capital adequacy rules.

Capital Planning Requirements

The FRB’s c~~apital~~capital plan rule establishes capital planning and other requirements that govern capital distributions, including dividends and share repurchases, by certain large bank holding companies (BHCs), including Wells Fargo. The FRB conducts an annual Comprehensive Capital Analysis and Review exercise and has also published guidance regarding its supervisory expectations for capital planning, including capital policies regarding the process relating to common stock dividend and repurchase decisions in the FRB’s SR Letter 15-18. The Parent’s ability to make certain capital distributions is subject to the requirements of the capital plan rule and is also subject to the Parent meeting or exceeding certain regulatory capital minimums.


~~132~~126			Wells Fargo & Company

Loan and Dividend Restrictions

Federal law restricts the amount and the terms of both credit and non-credit transactions between a bank and its nonbank affiliates. Additionally, federal laws and regulations limit the dividends that a national bank may pay.

Our nonbank subsidiaries are also limited by certain federal and state statutory provisions and regulations covering the amount of dividends that may be paid in any given year. In addition, under a Support Agreement dated June 28, 2017, as amended and restated on June 26, 2019, among Wells Fargo & Company, the parent holding company ~~(the “Parent”)~~(Parent), WFC Holdings, LLC, an intermediate holding company and subsidiary of the Parent ~~(the “IHC”)~~(IHC), ~~Wells Fargo~~the Bank, ~~N.A.,~~ Wells Fargo Securities, LLC, Wells Fargo Clearing Services, LLC, and certain other subsidiaries of the Parent designated from time to time as material entities for resolution planning purposes or identified from time to time as related support entities in our resolution plan, the IHC may be restricted from making dividend payments to the Parent 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.

For additional information on loan and dividend restrictions, see Note 2825 (Regulatory Capital Requirements and Other Restrictions) in our ~~2021~~2022 Form 10-K.

Cash Restrictions

Cash and cash equivalents may be restricted as to usage or withdrawal. Table ~~23.2~~21.2 provides a summary of restrictions on cash and cash equivalents.

Table ~~23.2:~~21.2: Nature of Restrictions on Cash and Cash Equivalents


(in millions)	(in millions)	Mar 31, 2022		Dec 31, 2021	(in millions)	Mar 31, 2023		Dec 31, 2022
Reserve balance for non-U.S. central banks	Reserve balance for non-U.S. central banks	$	233	382	Reserve balance for non-U.S. central banks	$	243	238
Segregated for benefit of brokerage customers under federal and other brokerage regulations	Segregated for benefit of brokerage customers under federal and other brokerage regulations	694		830	Segregated for benefit of brokerage customers under federal and other brokerage regulations	548		898


			Wells Fargo & Company			~~133~~127


Glossary of Acronyms

ACL	Allowance for credit losses	HTM	Held-to-maturity
AFS	Available-for-sale	LCR	Liquidity coverage ratio
~~AFS~~AOCI	~~Available-for-sale~~Accumulated other comprehensive income	LHFS	Loans held for sale
ARM	Adjustable-rate mortgage	LIBOR	London Interbank Offered Rate
ASC	Accounting Standards Codification	LIHTC	Low-income housing tax credit
ASU	Accounting Standards Update	LOCOM	Lower of cost or fair value
AVM	Automated valuation model	LTV	Loan-to-value
BCBS	Basel Committee on Banking Supervision	MBS	Mortgage-backed securities
BHC	Bank holding company	MSR	Mortgage servicing right
CCAR	Comprehensive Capital Analysis and Review	NAV	Net asset value
CD	Certificate of deposit	NPA	Nonperforming asset
CECL	Current expected credit loss	NSFR	Net stable funding ratio
CET1	Common Equity Tier 1	OCC	Office of the Comptroller of the Currency
CFPB	Consumer Financial Protection Bureau	OCI	Other comprehensive income
CLO	Collateralized loan obligation	OTC	Over-the-counter
CLTV	Combined loan-to-value	PCD	Purchased credit-deteriorated
CPI	Collateral protection insurance	PTPP	Pre-tax pre-provision profit
CRE	Commercial real estate	RMBS	Residential mortgage-backed securities
DPD	Days past due	ROA	Return on average assets
ESOP	Employee Stock Ownership Plan	ROE	Return on average equity
FASB	Financial Accounting Standards Board	ROTCE	Return on average tangible common equity
FDIC	Federal Deposit Insurance Corporation	RWAs	Risk-weighted assets
FHA	Federal Housing Administration	SEC	Securities and Exchange Commission
FHLB	Federal Home Loan Bank	S&P	Standard & Poor’s Global Ratings ~~Services~~
FHLMC	Federal Home Loan Mortgage Corporation	SLR	Supplementary leverage ratio
FICO	Fair Isaac Corporation (credit rating)	SOFR	Secured Overnight Financing Rate
FNMA	Federal National Mortgage Association	SPE	Special purpose entity
FRB	Board of Governors of the Federal Reserve System	TDR	Troubled debt restructuring
GAAP	Generally accepted accounting principles	TLAC	Total Loss Absorbing Capacity
GNMA	Government National Mortgage Association	VA	Department of Veterans Affairs
GSE	Government-sponsored entity	VaR	Value-at-Risk
G-SIB	Global systemically important bank	VIE	Variable interest entity
HQLA	High-quality liquid assets	WIM	Wealth and Investment Management
~~HTM~~	~~Held-to-maturity~~


~~134~~128			Wells Fargo & Company

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

Information in response to this item can be found in Note 1310 (Legal Actions) to Financial Statements in this Report which information is incorporated by reference into this item.

Item 1A. Risk Factors

Information in response to this item can be found under the “Financial Review – Risk Factors” section in this Report which information is incorporated by reference into this item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table shows Company repurchases of its common stock for each calendar month in the quarter ended March 31, ~~2022.~~2023.


Calendar month	Calendar month	Total number of shares repurchased (1)	Weighted average price paid per share		Maximum number of shares that may yet be repurchased under the authorization	Calendar month	Total number of shares repurchased (1)	Weighted average price paid per share		Maximum number of shares that may yet be repurchased under the authorization
January	January	33,687,433	$	54.55	327,130,834	January	22,215,680	$	44.47	228,174,154
February	February	55,819,880	56.79		271,310,954	February	47,552,452	47.47		180,621,702
March	March	20,586,039	49.07		250,724,915	March	16,617,428	46.36		164,004,274
Total	Total	110,093,352				Total	86,385,560

(1)All shares were repurchased under an authorization covering up to 500 million shares of common stock approved by the Board of Directors (Board) and publicly announced by the Company on January 15, 2021. Unless modified or revoked by the Board, this authorization does not expire.


			Wells Fargo & Company			~~135~~129

Item 6. Exhibits

A list of exhibits to this Form 10-Q is set forth below.

The Company’s SEC file number is 001-2979. On and before November 2, 1998, the Company filed documents with the SEC under the name Norwest Corporation. The former Wells Fargo & Company filed documents under SEC file number 001-6214.

Exhibit

Number

Description

Location

3(a)

Restated Certificate of Incorporation, as amended and in effect on the date hereof.

Incorporated by reference to Exhibit 3(a) to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, ~~2021.~~2022.

3(b)

By-Laws.

Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed March 1, 2018.

4(a)

See Exhibits 3(a) and 3(b).

4(b)

The Company agrees to furnish upon request to the Commission a copy of each instrument defining the rights of holders of senior and subordinated debt of the Company.

~~10(a)~~

~~Amendment to Deferred Compensation Plan, effective January 1, 2022.~~

~~Filed herewith.~~

~~10(b)~~

~~Amendment to Supplemental 401(k) Plan, effective January 1, 2022.~~

~~Filed herewith.~~

~~10(c)~~

~~Amendment to Supplemental Cash Balance Plan, effective January 1, 2022.~~

~~Filed herewith.~~

~~10(d)~~

~~Amendment to the Wachovia Corporation Elective Deferral Plan, effective January 1, 2022.~~

~~Filed herewith.~~

~~10(e)~~

~~Amendment to the Wachovia Corporation Savings Restoration Plan, effective January 1, 2022.~~

~~Filed herewith.~~

~~10(f)~~

~~Description of Wells Fargo & Company Non-Employee Director Compensation Program, effective~~ ~~April 1, 2022~~.

~~Filed herewith.~~

~~10(g)~~

~~Description of Wells Fargo~~ ~~Bank, N.A.~~ ~~Non-Employee Director Compensation Program, effective~~ ~~April 1,2022.~~

~~Filed herewith.~~

~~10(h)~~

~~Wells Fargo & Company 2022 Long-Term Incentive Plan~~

~~Incorporated by reference to Exhibit 10(a) to the Company’s Current Report on Form 8-K filed April 29, 2022.~~

Subsidiary guarantors and issuers of guaranteed securities and affiliates whose securities collateralize securities of the registrant.

~~Incorporated by reference to Exhibit 22 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.~~Filed herewith.

31(a)

Certification of principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Filed herewith.

31(b)

Certification of principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Filed herewith.

32(a)

Certification of Periodic Financial Report by Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and 18 U.S.C. § 1350.

Furnished herewith.

32(b)

Certification of Periodic Financial Report by Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and 18 U.S.C. § 1350.

Furnished herewith.

101.INS

Inline XBRL Instance Document

The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.

101.SCH

Inline XBRL Taxonomy Extension Schema Document

Filed herewith.

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

Filed herewith.

101.DEF

Inline XBRL Taxonomy Extension Definitions Linkbase Document

Filed herewith.

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

Filed herewith.

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

Filed herewith.

104

Cover Page Interactive Data File

Formatted as Inline XBRL and contained in Exhibit 101.


~~136~~130			Wells Fargo & Company

SIGNATURE

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

Dated: May ~~3, 2022~~2, 2023 WELLS FARGO & COMPANY


By:			/s/ MUNEERA S. CARR
			Muneera S. Carr
			Executive Vice President, Chief Accounting Officer and Controller
			(Principal Accounting Officer)


			Wells Fargo & Company			~~137~~131


Summary Financial Data
	Quarter ended					Mar 31, 2022 % Change from
($ in millions, except per share amounts)	Mar 31, 2022			Dec 31, 2021	Mar 31, 2021	Dec 31, 2021		Mar 31, 2021
Selected Income Statement Data
Total revenue	$	17,592		20,856	18,532	(16)	%	(5)
Noninterest expense	13,870			13,198	13,989	5		(1)
Pre-tax pre-provision profit (PTPP) (1)	3,722			7,658	4,543	(51)		(18)
Provision for credit losses	(787)			(452)	(1,048)	(74)		25
Wells Fargo net income	3,671			5,750	4,636	(36)		(21)
Wells Fargo net income applicable to common stock	3,393			5,470	4,256	(38)		(20)
Common Share Data
Diluted earnings per common share	0.88			1.38	1.02	(36)		(14)
Dividends declared per common share	0.25			0.20	0.10	25		150
Common shares outstanding	3,789.9			3,885.8	4,141.1	(2)		(8)
Average common shares outstanding	3,831.1			3,927.6	4,141.3	(2)		(7)
Diluted average common shares outstanding	3,868.9			3,964.7	4,171.0	(2)		(7)
Book value per common share (2)	$	42.21		43.32	40.27	(3)		5
Tangible book value per common share (2)(3)	35.13			36.35	33.49	(3)		5
Selected Equity Data (period-end)
Total equity	181,689			190,110	188,034	(4)		(3)
Common stockholders’ equity	159,968			168,331	166,748	(5)		(4)
Tangible common equity (3)	133,144			141,254	138,702	(6)		(4)
Performance Ratios
Return on average assets (ROA) (4)	0.78		%	1.17	0.97
Return on average equity (ROE) (5)	8.4			12.8	10.3
Return on average tangible common equity (ROTCE) (3)	10.0			15.3	12.4
Efficiency ratio (6)	79			63	75
Net interest margin on a taxable-equivalent basis	2.16			2.11	2.05
Selected Balance Sheet Data (average)
Loans	$	898,005		875,036	873,439	3		3
Assets	1,919,392			1,943,430	1,934,425	(1)		(1)
Deposits	1,464,072			1,470,027	1,393,472	—		5
Selected Balance Sheet Data (period-end)
Debt securities	535,916			537,531	505,826	—		6
Loans	911,807			895,394	861,572	2		6
Allowance for credit losses for loans	12,681			13,788	18,043	(8)		(30)
Equity securities	70,755			72,886	57,702	(3)		23
Assets	1,939,709			1,948,068	1,957,264	—		(1)
Deposits	1,481,354			1,482,479	1,437,119	—		3

Headcount (#) (period-end)	246,577			249,435	264,513	(1)		(7)
Capital and other metrics
Risk-based capital ratios and components (7):
Standardized Approach:
Common equity tier 1 (CET1)	10.45		%	11.35	11.85
Tier 1 capital	11.96			12.89	13.54
Total capital	14.72			15.84	16.75
Risk-weighted assets (RWAs) (in billions)	$	1,265.5		1,239.0	1,179.0	2		7
Advanced Approach:
Common equity tier 1 (CET1)	11.82		%	12.60	12.60
Tier 1 capital	13.52			14.31	14.39
Total capital	15.87			16.72	16.92
Risk-weighted assets (RWAs) (in billions)	$	1,119.5		1,116.1	1,109.4	—		1
Tier 1 leverage ratio	8.00		%	8.34	8.36
Supplementary Leverage Ratio (SLR)	6.61			6.89	7.91
Total Loss Absorbing Capacity (TLAC) Ratio (8)	22.31			23.03	25.18
Liquidity Coverage Ratio (LCR) (9)	119			118	127


	March 31,		December 31,
(in millions)	2022		2021
Commercial:
Commercial and industrial	$	672	793
Real estate mortgage	530		543
Real estate construction	2		2
Lease financing	8		10
Total commercial TDRs	1,212		1,348
Consumer:
Residential mortgage – first lien	6,757		7,282
Residential mortgage – junior lien	906		946
Credit card	329		309
Auto	179		169
Other consumer	52		57
Trial modifications	277		71
Total consumer TDRs	8,500		8,834
Total TDRs	$	9,712	10,182
TDRs on nonaccrual status	$	3,270	3,142
TDRs on accrual status:
Government insured/guaranteed	2,068		2,462
Non-government insured/guaranteed	4,374		4,578
Total TDRs	$	9,712	10,182


	2Q 2022		4Q 2022	2Q 2023
Weighted blend of economic scenarios:
U.S. unemployment rate (1):


December 31, 2021	4.8	%	5.4	5.9
March 31, 2022	4.1		4.7	5.6

U.S. real GDP (2):


December 31, 2021	1.4		(0.3)	1.4
March 31, 2022	1.2		(0.6)	0.2

Home price index (3):


December 31, 2021	5.9		(4.3)	(6.0)
March 31, 2022	12.2		2.1	(3.1)

Commercial real estate asset prices (3):


December 31, 2021	5.0		(4.2)	(6.0)
March 31, 2022	13.0		2.8	(2.7)


(in millions)	Commercial and industrial		Real estate mortgage	Real estate construction	Lease financing	Total
March 31, 2022
By delinquency status:
Current-29 days past due (DPD) and still accruing	$	360,333	127,757	20,513	14,221	522,824
30-89 DPD and still accruing	819		625	95	131	1,670
90+ DPD and still accruing	186		80	1	—	267
Nonaccrual loans	799		1,033	4	117	1,953
Total commercial loans	$	362,137	129,495	20,613	14,469	526,714
December 31, 2021
By delinquency status:
Current-29 DPD and still accruing	$	348,033	126,184	19,900	14,568	508,685
30-89 DPD and still accruing	1,217		285	179	143	1,824
90+ DPD and still accruing	206		29	—	—	235
Nonaccrual loans	980		1,235	13	148	2,376
Total commercial loans	$	350,436	127,733	20,092	14,859	513,120


			Maximum exposure to loss
(in millions)	Carrying value of obligation (asset)		Expires in one year or less	Expires after one year through three years	Expires after three years through five years	Expires after five years	Total	Non-investment grade
March 31, 2022
Standby letters of credit	$	116	14,658	4,952	1,664	433	21,707	6,969
Direct pay letters of credit	12		1,738	1,934	1,216	4	4,892	1,328
Written options (1)	(125)		12,202	4,464	553	36	17,255	14,097
Loans and LHFS sold with recourse (2)	17		164	924	3,787	8,506	13,381	11,385
Exchange and clearing house guarantees	—		—	—	—	5,590	5,590	—
Other guarantees and indemnifications (3)	—		687	1	—	277	965	594
Total guarantees	$	20	29,449	12,275	7,220	14,846	63,790	34,373
December 31, 2021
Standby letters of credit	$	119	13,816	5,260	1,572	460	21,108	6,939
Direct pay letters of credit	6		1,597	2,137	1,283	4	5,021	1,373
Written options (1)	(280)		12,107	4,575	513	36	17,231	13,645
Loans and LHFS sold with recourse (2)	20		71	943	3,610	8,650	13,274	11,268
Exchange and clearing house guarantees	—		—	—	—	8,100	8,100	—
Other guarantees and indemnifications (3)	—		797	2	12	263	1,074	756
Total guarantees	$	(135)	28,388	12,917	6,990	17,513	65,808	33,981


	March 31, 2022					December 31, 2021
	Notional or		Fair value			Notional or	Fair value
	contractual		Derivative		Derivative	contractual	Derivative	Derivative
(in millions)	amount		assets		liabilities	amount	assets	liabilities
Derivatives designated as hedging instruments
Interest rate contracts	$	158,877	1,604		194	153,993	2,212	327
Foreign exchange contracts	22,326		137		827	24,949	281	669
Total derivatives designated as qualifying hedging instruments			1,741		1,021		2,493	996
Derivatives not designated as hedging instruments
Economic hedges:
Interest rate contracts	127,600		604		283	142,234	40	41
Equity contracts (1)	4,468		56		60	26,263	1,493	1,194
Foreign exchange contracts	34,236		694		123	28,192	395	88
Credit contracts	290		12		—	290	7	—
Subtotal			1,366		466		1,935	1,323
Customer accommodation trading and other derivatives:
Interest rate contracts	10,645,520		28,330		27,232	7,976,534	20,286	17,435
Commodity contracts	105,256		13,847		5,851	76,642	5,965	2,417
Equity contracts (1)	351,655		12,856		13,452	321,863	16,278	17,827
Foreign exchange contracts	637,869		8,130		8,144	560,049	5,912	5,915
Credit contracts	48,160		38		38	38,318	39	43

Subtotal			63,201		54,717		48,480	43,637
Total derivatives not designated as hedging instruments			64,567		55,183		50,415	44,960
Total derivatives before netting			66,308		56,204		52,908	45,956
Netting			(38,943)		(40,705)		(31,430)	(36,532)
Total			$	27,365	15,499		21,478	9,424


	Shares issued and outstanding		Carrying value			Adjustable dividend rate
(in millions, except shares)	Mar 31, 2022	Dec 31, 2021	Mar 31, 2022		Dec 31, 2021	Minimum		Maximum
ESOP Preferred Stock
$1,000 liquidation preference per share
2018	189,225	189,225	$	189	189	7.00	%	8.00	%
2017	135,135	135,135	135		135	7.00		8.00
2016	128,380	128,380	128		128	9.30		10.30
2015	68,106	68,106	68		68	8.90		9.90
2014	62,420	62,420	63		63	8.70		9.70
2013	26,168	26,168	26		26	8.50		9.50
Total ESOP Preferred Stock (1)	609,434	609,434	$	609	609
Unearned ESOP shares (2)			$	(646)	(646)